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Last Updated: July 19, 2017
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Last week in the world oil:


  • Crude oil prices remain firmly stuck in their range – US$48/b for Brent and US$46/b for WTI – as the market hopes for signs that OPEC might make more aggressive moves to support prices. Goldman Sachs has said that crude prices run the risk of drifting down to below US$40/b unless OPEC does something to ‘shock and awe’, but internal squabbles between certain OPEC members make the possibility of a new move unlikely.

Upstream & Midstream

  • Mexico’s decision to allow private access to its upstream industry has paid off. A consortium of Premier Oil, Sierra Oil & Gas and Talos Energy announced a major discovery of at least a billion barrels in the Gulf of Mexico – one of the largest in the world over the past two decades. It comes two years after the licence was issued, with the new Zama field fuelling hopes that Mexico can reverse the decline in its oil output.
  • President Donald Trump has made good on one of his campaign promises to allow more American drilling, awarding Eni the first exploration licence in federal waters off Alaska since 2015 – a plan it has been sitting on for ten years. This could be the first of many new licences in the resource-rich Beaufort Sea. Elsewhere, Trump’s first offshore oil and gas lease sale in the Gulf of Mexico, planned for August 16, has reduced royalty rates in an attempt to encourage more drilling.
  • After rumblings that Venezuela might attempt to nationalise foreign companies operating in its upstream sector, state oil firm PDVSA has stepped in to guarantee legal security for all the international companies operating in the country. Under current laws, foreign firms like Chevron and Rosneft, are allowed minority stakes in oilfield joint ventures with PDSVA – a move that has helped shore up its production but now at risk.
  • Suriname state oil firm Staatsolie has signed new production sharing contracts with international majors for two exploration sites – Block 59 (ExxonMobil and Hess) and Block 60 (Statoil) – close to where ExxonMobil and Hess recently struck oil in nearby Guyana waters.
  • Only two new oil rigs started up in the US last week, offset by a loss of two gas rigs, leading to no net change in the total rig count. Pace of additions have slowed down in recent weeks as oil prices fell, as we approach saturation point to support operational rigs at current price levels.


  • A fire has broken out at the Syncrude oil sands plant in northern Alberta, continuing a plague of incidents at the Suncor plant that began with a massive fire in March that shut production down for over a month.

Natural Gas and LNG

  • Shell will be selling its 45% stake in Ireland Corrib gas field to the Canada Pension Plan Investment Board for up to US$1.23 billion. This would mark Shell’s complete exit from the upstream business in Ireland as it continues to liquidate assets to pay for its acquisition of the BG Group.


  • The UK’s Financial Conduct Authority is seeking to loosen rules on state companies listing IPO in London, in an attempt to woe the Saudi Aramco, along with other potential IPOs from Adnoc and Oman Oil Company.

Last week in Asian oil


  • Kuwait is planning to follow down a route that Saudi Aramco has blazed, seeking to build refineries in key Asian markets as captive demand sites for its crude. Kuwait Petroleum Corp has identified plants in China, India, Vietnam, the Philippines and Indonesia, as possible targets for investment. This will be to ensure that there will be buyers for its crude, which it is planning to ramp production up from a current 3.15 mmb/d to 4 mmb/d by 2020, and 4.75 mmb/d by 2040. One of the refining projects is Vietnam’s Nghi Son refinery, due to start operation this year and has already received its first crude shipment (from Kuwait). KPC is planning to double the plant’s capacity to 400 kb/d by 2025, adding significantly more petrochemical capacity in the process.
  • Construction has begun on the Zhejiang Petrochemical oil refining and petrochemical complex in Zhoushan, Zhejiang, near Shanghai. This will be the first major private refining complex in China, part of the Politiburo’s attempts to encourage private investment in an energy sector dominated by Sinopec and Petrochina. The Zhejiang project will consist of two 400 kb/d refineries and two 1.4 mtpa ethylene plants, with much of the refining output dedicated towards producing petrochemical feedstock. There are concerns, however, that the refinery will contribute to the growing glut of gasoline and diesel when it begins operations in 2020, which is already a concern with the prodigious output of the teapots.

Natural Gas & LNG

  • The growing spat between Qatar and its neighbours has not deterred work from going on. At least for French major Total. Output on the Al-Shaheen field – the largest oil field in Qatar - began last week, with the aim of maintaining production to 300 kb/d a day. Part of the North Oil joint venture with Qatar Petroleum, Total is bullish about the prospects of the US$3.5 billion project, and plans further investment in Qatar. This comes as Shell reports that Qatari exports of LNG remain stable and strong amidst the continuing tensions.
  • Thailand’s PTT is reportedly in talks with Petronas to acquire a 10% stake in one of its Malaysian LNG projects. Seeking to acquire more natural gas supplies to feed growing Thai demand and offset a decline in domestic supply, PTT is interested in buying a stake in the Block SK316 off Sarawak. PTT already has a 15-year contract to buy LNG from Petronas, which begins this year at 1 mtpa, rising up to 1.2 mtpa from 2019.


  • Abu Dhabi’s Adnoc is considering floating some of its units through IPOs, as more Gulf countries plan to go public. Unlike the planned Saudi Aramco IPO though, Adnoc only plans to list minority stakes in some of its service businesses in the local UAE equity market – making its approach more similar to Malaysia’s Petronas, where subsidiary units are public but the main holding company remains fully owned by the state.

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U.S. renewable electricity generation has doubled since 2008

U.S. annual renewable generation

Source: U.S. Energy Information Administration, Electric Power Monthly

Renewable generation provided a new record of 742 million megawatthours (MWh) of electricity in 2018, nearly double the 382 million MWh produced in 2008. Renewables provided 17.6% of electricity generation in the United States in 2018.

Nearly 90% of the increase in U.S. renewable electricity between 2008 and 2018 came from wind and solar generation. Wind generation rose from 55 million MWh in 2008 to 275 million MWh in 2018 (6.5% of total electricity generation), exceeded only by conventional hydroelectric at 292 million MWh (6.9% of total generation).

U.S. solar generation has increased from 2 million MWh in 2008 to 96 million MWh in 2018. Solar generation accounted for 2.3% of electricity generation in 2018. Solar generation is generally categorized as small-scale (customer-sited or rooftop) solar installations or utility-scale installations. In 2018, 69% of solar generation, or 67 million MWh, was utility-scale solar.

U.S. annual net generation, wind and solar

Source: U.S. Energy Information Administration, Electric Power Monthly

Increases in U.S. wind and solar generation are driven largely by capacity additions. In 2008, the United States had 25 gigawatts (GW) of wind generating capacity. By the end of 2018, 94 GW of wind generating capacity was operating on the electric grid. Almost all of this capacity is onshore; one offshore wind plant, located on Block Island, off the coast of Rhode Island, has a capacity of 30 megawatts. Similarly, installed solar capacity grew from an estimated less than 1 GW in 2008 to 51 GW in 2018. In 2018, 1.8 GW of this solar capacity was solar thermal, 30 GW was utility-scale solar photovoltaics (PV), and the remaining 20 GW was small-scale solar PV.

Growth in renewable technologies in the United States, particularly in wind and solar, has been driven by federal and state policies and declining costs. Federal policies such as the American Reinvestment and Recovery Act of 2009 and the Production Tax Credit and Investment Tax Credits for wind and solar have spurred project development.

In addition, state-level policies, such as renewable portfolio standards, which require a certain share of electricity to come from renewable sources, have increasing targets over time. As more wind and solar projects have come online, economies of scale have led to more efficient project development and financing mechanisms, which has led to continued cost declines.

Conventional hydroelectric capacity has remained relatively unchanged in the United States, increasing by 2% since 2008. Changes in hydroelectric generation year-over-year typically reflect changes in precipitation and drought conditions. Between 2008 and 2018, annual U.S. hydroelectric generation was as low as 249 million MWh and as high as 319 million MWh, with hydroelectric generation in 2018 totaling 292 million MWh. Generation from other renewable resources, including biomass and geothermal, increased from 70 million MWh to 79 million MWh in the United States between 2008 and 2018, and it collectively represented 1.9% of total generation in 2018.

March, 20 2019
Your Weekly Update: 11 - 15 March 2019

Market Watch

Headline crude prices for the week beginning 11 March 2019 – Brent: US$66/b; WTI: US$56/b

  • Global crude oil prices continue to remain rangebound despite bearish factors emerging
  • News that Libya was restarting its 300,000 b/d Sharara field could weaken the ability of OPEC to control supply, while a report from the US EIA hints that the market was moving into a glut
  • The EIA report showed that commercial crude inventories in the US rose by 7.1 million barrels, far higher than the 1.6 million barrel increase predicted, with a 873,000 barrel increase at Cushing and a 12% y-o-y drop in crude imports
  • By the end of 2019, with American output surging and Saudi Arabia curtailing production, the US could export more oil and liquids than the world’s largest exporter
  • Meanwhile in OPEC, PDVSA has received some aid from Russia with Rosneft agreeing to send heavy naphtha to Venezuela – a product necessary to thin heavy Venezuela crude to move by pipeline to the coast that have been affected by the American sanctions
  • On the demand side, Morgan Stanley has predicted that China’s oil consumption will peak in 2025, some 5-8 years earlier than most expectations, driven by a shift in cars towards electric vehicles and high-speed rail
  • The US active rig count fell for a third consecutive week, following a 9 rig fall with an 11 rig drop last week, with nine oil sites and two gas sites scrapped
  • Despite the bearish factors, it looks like crude has found a new comfortable range with Brent at US$65-67/b and WTI at US$56-58/b for the week

Headlines of the week


  • Despite security concerns, Libya has restarted its largest oil field, with output at 300,000 b/d Sharara expected to reach 80,000 b/d initially, throwing a new spanner in the OPEC goal of controlling supply
  • A one-year delay to Enbridge’s Line 3 conduit in Canada due to regulatory issues has thrown new troubles onto Alberta’s beleaguered crude industry
  • ExxonMobil is planning a major acceleration of its Permian assets, aiming to produce more than 1 mmboe/d by 2024, an increase of nearly 80%
  • China has announced plans to form a national oil and pipeline company, part of a natural energy industry overhaul that will give the new firm control over at least 112,000 km of oil, gas and fuel pipelines currently held by other state firms
  • Equinor, with Petoro, ConocoPhillips and Repsol, have announced a new oil discovery in the North Sea, with the Telesto well on the Visund A platform potentially yielding 12-28 million barrels of recoverable oil
  • Aker Energy has reported a new oil discovery at the Pecan South-1A well offshore Ghana, with the Pecan field expected to hold 450-550 mboe of oil
  • Production declines at Kazakhstan’s three main oil fields will see the country slash crude exports by 2% to 71 million tons this year, with cuts mostly to China

Midstream & Downstream

  • Canadian Natural Resources is looking to ease pressure on the Alberta crude complex by bringing its 80 kb/d North West Redwater refinery online this year
  • Work has begun on the upgrade and expansion of Egypt’s Middle East Oil Refinery near Alexandria, with the project expected to boost capacity to 160 kb/d and quality to Euro V through the installation of a new CDU and VDU
  • Bahrain’s BAPCO has announced plans to expand its Sitra oil refinery by early 2023, growing capacity from 267 kb/d to 360 kb/d

Natural Gas/LNG

  • India has started up its first LNG regasification facility on the east coast, with the Ennore terminal expected to service the major cities of Chennai and Madurai
  • Total has signed an agreement with Russia’s Novatek for the formal acquisition of a 10% stake in the Arctic LNG 2 project, bringing its total economic interest in the 19.8 mtpa project in the Yamal and Gydan peninsuals to 21.6%
  • Thailand’s PTTEP has announced a new offshore gas find in Australia’s portion of the Timor Sea, with the Orchid-1 well striking gas and expected to be incorporated into the Cash-Maple field with 3.5 tcf of resources
  • Crescent Petroleum and Dana Gas’s joint venture Pearl Petroleum Company is aiming to boost gas production at Khor Mor block in Iraq’s Kurdistan region by 63% with an additional 250 mmscf/d of output
  • Petronas’ 1.2 mtpa PFLNG Satu – the world’s first floating LNG vessel – has completed its stint at the Kanowit field and will now head to its second destination, the Kebabangan gas field offshore Sabah
  • Chevron is looking to revisit its Ubon wet gas project in Thailand after a period of hiatus as the supermajor recalibrated its development costs
  • Nigeria’s NLNG Train 7 LNG project is expected to reach FID in the third quarter of the year after multiple delays
  • ExxonMobil and BP have agreed to collaborate with the Alaska Gasline Development Corporation to advance the Alaska LNG project
  • Energean Oil and Gas has started its 2019 drilling programme in Israel, focusing on four wells, including one in Karish North near the Karish discovery
March, 15 2019
Latest issue of GEO ExPro magazine covers New Technologies and Training Geoscientists, with a geographical focus on Australasia and South East Asia

GEO ExPro Vol. 16, No. 1 was published on 4th March 2019 bringing light to the latest science and technology activity in the global geoscience community within the oil, gas and energy sector.

This issue focuses on new technologies available to the oil and gas industry and how they can be adapted to improve hydrocarbon exploration workflows and understanding around the world. The latest issue of GEO ExPro magazine also covers current training methods for educating geoscientists, with articles highlighting the essential pre-drill ‘toolbox’ and how we can harness virtual reality to bring world class geological locations to the classroom.

You can download the PDF of GEO ExPro magazine for FREE and sign up to GEO ExPro’s weekly updates and online exclusives to receive the latest articles direct to your inbox.

Download GEO ExPro Vol. 16, No. 1

March, 14 2019