NrgEdge Editor

Sharing content and articles for users
Last Updated: May 3, 2018
1 view
Business Trends
image

Market Watch

Headline crude prices for the week beginning 30 April 2017 – Brent: US$75/b; WTI: US$68/b

  • Crude oil remains priced at a premium over geopolitical tensions. While the sun seems to be shining on the South Korea-North Korea relationship, there are major storm clouds gathering over the Arabian Peninsula.
  • Israel’s claim that Iran has a secret plan to build nuclear weapons triggered alarm bells in the market, raising fears that US President Donald Trump may scrap the existing Iranian nuclear deal and re-impose sanctions, despite French President Emmanuel Macron’s attempts to preserve the deal.
  • President Trump is due to decide on the Iranian matter on May 12, with EU leaders pushing to preserve the landmark deal. Traders are increasingly unwilling to sign contracts for Iranian crude and products until there is clarity on the situation.
  • The situation between Saudi Arabia and Yemen remains delicate as well, playing into the larger Saudi Arabia-Iran conflict in the region.
  • However, traders are also watching for any change in the US Federal Reserve’s position, with the US dollar gaining against most major currencies to its highest level in three months.
  • Within OPEC, Venezuela’s falling crude production has raised some eyebrows that the cartel could be tightening supply too much, with output in Angola also attracting attention. Angolan production has plunged by more than three times what its supply cut pledge, highlighting structural problems in the country’s ageing fields.
  • Crude stockpiles in the US are estimated to have added some 1.23 million barrels this week, a second consecutive week of gains that points to increased American output.
  • Five new oil rigs entered service in the US again last week, with three new gas rigs as well. The total active rig count is now at 1021, its highest level since April 2015.  
  • Crude price outlook: The Iranian situation will continue to weigh on oil markets, but accelerating American production should pull things back slightly. We expect Brent to trade at US$73/b and WTI/Shanghai to US$67/b.


Headlines of the week

Upstream

  • BP and Azerbaijan’s SOCAR are deepening their ties with a new 25-year PSA covering the joint development of Block D230 in the Caspian Sea. BP is already a major stakeholder in the ACG oil and Shah Deniz gas fields.
  • An auction for 11 oil and gas blocks in Iraq’s border areas with Iran and Kuwait, turned out to be a bit of a bust, with Italy’s Eni being the only major international firm submitting a bid. Five of the blocks failed to attract any bids, with the rest going to smaller Iraqi and Chinese players – a sign of hard-to-access and sensitive position of the areas.
  • Egypt is stepping on the accelerator, aiming to complete a quick turnaround of energy importer to exporter, aiming to attracting some US$10 billion in oil and gas sector foreign investment over its 2018/19 fiscal year, focusing in particular on gas assets in the Mediterranean.
  • Also in Egypt, another onshore oil discovery has been made, at the Rabul 4 well in West Gharib, operated by SDX Energy, continuing a streak of encouraging discoveries in Egypt.
  • Mexico’s upstream regulator has allowed Pemex to tender for partners in seven onshore exploration blocks, with the stipulation that it must retain a 45% stake in the blocks.
  • Despite attracting rancour from Israel, Lebanon is preparing for a second oil and gas offshore licensing round, buoyed by the success of the first.

Downstream

  • Brazil’s Raizen Combustiveis has beaten Argentina’s YPF and PetroChina to acquire Shell’s downstream assets in Argentina for some US$950 million, which includes a 645-strong network of fuel stations, the Buenos Aires refinery, a lubricant plant and LPG/aviation fuel terminals. 
  • Abu Dhabi’s Adnoc is setting up a new trading unit to handle its crude oil and refined products business, part of a larger movement by Middle Eastern oil producers to become more commercially focused. 
  • The planned revamp of Sri Lanka’s 50 kb/d CPC refinery has been completed, the site’s first major upgrade in almost 50 years.

Natural Gas/LNG

  • India is aiming to split its state-run gas utility GAIL into two companies by next March, in an attempt to stimulate competition and boost gas consumption. GAIL will be split into a gas marketing firm and a gas pipeline operator, along the company’s existing financial structure.
  • Emphasizing ExxonMobil’s claim that production at its PNG LNG plant in Papua New Guinea were ‘back to normal’, the supermajor has offered a spot LNG cargo for delivery to the Japan, Korea, Taiwan region.
  • Inpex has purchased a cargo of LNG to cool its Ichthys LNG plant in Australia, a sign that the much-delayed export project is now entering its final start-up phase.
  • Kuwait Energy has begun producing natural gas from the Siba field in southern Iraq, with an initial rate of 25 mcf/d that is projected to rise to 100 mcf/d by the end of the year.
  • The second production unit at Eni’s Zohr gas project in Egypt has started up, bringing the total current capacity of Zohr to 800 mcf/d.

oilandgas oilandgasnews news weeklyupdate marketwatch
3
1 0

Something interesting to share?
Join NrgEdge and create your own NrgBuzz today

Latest NrgBuzz

Saudi Aramco Moves Into Russia’s Backyard

International expansions for Saudi Aramco – the largest oil company in the world – are not uncommon. But up to this point, those expansions have followed a certain logic: to create entrenched demand for Saudi crude in the world’s largest consuming markets. But Saudi champion’s latest expansion move defies, or perhaps, changes that logic, as Aramco returns to Europe. And not just any part of Europe, but Eastern Europe – an area of the world dominated by Russia – as Saudi Aramco acquires downstream assets from Poland’s PKN Orlen and signs quite a significant crude supply deal. How is this important? Let us examine.

First, the deal itself and its history. As part of the current Polish government’s plan to strengthen its national ‘crown jewels’ in line with its more nationalistic stance, state energy firm PKN Orlen announced plans to purchase its fellow Polish rival (and also state-owned) Grupa Lotos. The outright purchase fell afoul of EU anti-competition rules, which meant that PKN Orlen had to divest some Lotos assets in order to win approval of the deal. Some of the Lotos assets – including 417 fuel stations – are being sold to Hungary’s MOL, which will also sign a long-term fuel supply agreement with PKN Orlen for the newly-acquired sites, while PKN Orlen will gain fuel retail assets in Hungary and Slovakia as part of the deal. But, more interestingly, PKN Orlen has chosen to sell a 30% stake in the Lotos Gdansk refinery in Poland (with a crude processing capacity of 210,000 bd) to Saudi Aramco, alongside a stake in a fuel logistic subsidiary and jet fuel joint venture supply arrangement between Lotos and BP. In return, PKN Orlen will also sign a long-term contract to purchase between 200,000-337,000 b/d of crude from Aramco, which is an addition to the current contract for 100,000 b/d of Saudi crude that already exists. At a maximum, that figure will cover more than half of Poland’s crude oil requirements, but PKN Orlen has also said that it plans to direct some of that new supply to several of its other refineries elsewhere in Lithuania and the Czech Republic.

For Saudi Aramco, this is very interesting. While Aramco has always been a presence in Europe as a major crude supplier, its expansion plans over the past decade have been focused elsewhere. In the US, where it acquired full ownership of the Motiva joint venture from Shell in 2017. In doing so, it acquired control of Port Arthur, the largest refinery in North America, and has been on a petrochemicals-focused expansion since. In Asia, where Aramco has been busy creating significant nodes for its crude – in China, in India and in Malaysia (to serve the Southeast Asia and facilitate trade). And at home, where the focus has on expanding refining and petrochemical capacity, and strengthen its natural gas position. So this expansion in Europe – a mature market with a low ceiling for growth, even in Eastern Europe, is interesting. Why Poland, and not East or southern Africa? The answer seems fairly obvious: Russia.

The current era of relatively peaceful cooperation between Saudi Arabia and Russia in the oil sphere is recent. Very recent. It was not too long ago that Saudi Arabia and Russia were locked in a crude price war, which had devastating consequences, and ultimately led to the détente through OPEC+ that presaged an unprecedented supply control deal. That was through necessity, as the world faced the far ranging impact of the Covid-19 pandemic. But remove that lens of cooperation, and Saudi Arabia and Russia are actual rivals. With the current supply easing strategy through OPEC+ gradually coming to an end, this could remove the need for the that club (by say 2H 2022). And with Russia not being part of OPEC itself – where Saudi Arabia is the kingpin – cooperation is no longer necessary once the world returns to normality.

So the Polish deal is canny. In a statement, Aramco stated that ‘the investments will widen (our) presence in the European downstream sector and further expand (our) crude imports into Poland, which aligns with PKN Orlen’s strategy of diversifying its energy supplies’. Which hints at the other geopolitical aspect in play. Europe’s major reliance on Russia for its crude and natural gas has been a minefield – see the recent price chaos in the European natural gas markets – and countries that were formally under the Soviet sphere of influence have been trying to wean themselves off reliance from a politically unpredictable neighbour. Poland’s current disillusion with EU membership (at least from the ruling party) are well-documented, but its entanglement with Russia is existential. The Cold War is not more than 30 years gone.

For Saudi Aramco, the move aligns with its desire to optimise export sales from its Red Sea-facing terminals Yanbu, Jeddah, Shuqaiq and Rabigh, which have closer access to Europe through the Suez Canal. It is for the same reason that Aramco’s trading subsidiary ATC recently signed a deal with German refiner/trader Klesch Group for a 3-year supply of 110,000 b/d crude. It would seem that Saudi Arabia is anticipating an eventual end to the OPEC+ era of cooperative and a return to rivalry. And in a rivalry, that means having to make power moves. The PKN Orlen deal is a power move, since it brings Aramco squarely in Russia’s backyard, directly displacing Russian market share. Not just in Poland, but in other markets as well. And with a geopolitical situation that is fragile – see the recent tensions about Russian military build-up at the Ukrainian borders – that plays into Aramco’s hands. European sales make up only a fraction of the daily flotilla of Saudi crude to enters international markets, but even though European consumption is in structural decline, there are still volumes required.

How will Russia react? Politically, it is on the backfoot, but its entrenched positions in Europe allows it to hold plenty of sway. European reservations about the Putin administration and climate change goals do not detract from commercial reality that Europe needs energy now. The debate of the Nord Stream 2 pipeline is proof of that. Russian crude freed up from being directed to Eastern Europe means a surplus to sell elsewhere. Which means that Russia will be looking at deals with other countries and refiners, possibly in markets with Aramco is dominant. That level of tension won’t be seen for a while – these deals takes months and years to complete – but we can certainly expect that agitation to be reflected in upcoming OPEC+ discussions. The club recently endorsed another expected 400,000 b/d of supply easing for January. Reading the tea leaves – of which the PKN Orlen is one – makes it sound like there will not be much more cooperation beyond April, once the supply deal is anticipated to end.

End of Article

Get timely updates about latest developments in oil & gas delivered to your inbox. Join our email list and get your targeted content regularly for free or follow-us on LinkedIn.

Market Outlook:

-       Crude price trading range: Brent – US$86-88/b, WTI – US$84-86/b

-       Crude oil benchmarks globally continue their gain streak for a fifth week, as the market bounces back from the lows seen in early December as the threat of the Omicron virus variant fades and signs point to tightening balances on strong consumption

-       This could set the stage for US$100/b oil by midyear – as predicted by several key analysts – as consumption rebounds ahead of summer travel and OPEC+ remains locked into its gradual consumption easing schedule 

-------------------------------------------------------->

No alt text provided for this image

Learn more about this training course

January, 19 2022
Italy Together with Products Regarding Resuming Creation Following your Redu

The Third-party Inspection assertion given from the European authorities about May well 26 explained the European authorities provides in the short term accepted an idea to be able to routine lazy acrylic bore holes so that you can plan the particular resumption regarding acrylic creation following your international creation stops actions run out inside 2022.

Within the arrangement attained with all the Firm regarding Petroleum Transferring Nations around the world, Italy arranged inside May well and also Summer to cut back the everyday acrylic creation simply by concerning a couple of. Third Party Inspection Service 5 thousand barrels to be able to 8. 5 thousand barrels, the best stage inside higher than a ten years.

Any office regarding Russia’s initial deputy excellent minister, Andrey Belousov, mentioned any authorities associate achieved about Thursday and also consented to help the particular Ministry of energy and also Statutory Inspection ServiceFinance’s offer to aid acrylic makers create a great “unfinished well” finance.

January, 18 2022
Why choose Just Do My Homework?

The first thing that comes to mind when you think of college, university, or school is "Who can do my homework online?" It can be time-consuming to complete college assignments. We understand that college assignments can be time-consuming. 


This is why we offer a unique opportunity to pass your course, improve academic results, and save you time.

Over 100,000 high school and college students have used our best online writing service to get academic help. This is what you get when you use our service:


Could You Help me with my Assignment?

If you need to have your assignment done for you, look no further. Online homework help is available for any academic difficulty and complexity, whether it's a high school, college or university. We can help you with any type of assignment: case study, lab reports, research papers, etc. Our writers are available 24/7 to provide high-quality academic assistance, no matter what paper it is, such as math homework or case studies.


College homework help is available at any time

When you wonder “I need help with my homework online”, we respond quickly. Even if there is an urgent deadline, our skilled writers will complete any task efficiently and quickly. They have exceptional customer service in mind and can research, write essays, and double-check them for originality in a timely fashion. This entire process takes less time than research. 

Source


January, 12 2022