NrgEdge Editor

Sharing content and articles for users
Last Updated: August 23, 2018
50 views
Business Trends
image

Market Watch

Headline crude prices for the week beginning 20 August 2018 – Brent: US$72/b; WTI: US$66/b

  • Trade and geopolitical worries continue to dominate the short, mid and long-term outlook for oil, with crude prices staying entrenched in their current range, sandwiched by the opposing factors.
  • China and the US are going back to the negotiating table after a two month impasse, hoping to ease the escalating trade war between the two. Most observers, however, do not expect much, if any, progress given the aggressive position of America.
  • Though LNG remains exempt from Chinese tariffs for now, news that PetroChina has considered halting spot purchases of American LNG this winter in favour of sourcing from other countries rattled US exporters, at a time when LNG infrastructure is ramping up in the Gulf Coast.
  • Despite pledging to increase output to President Trump, Saudi Arabia appears to have actually cut production, with OPEC also forecasting lower demand for its crude in 2019 due to increased supply from Russia and the US.
  • The question of how Iranian volumes will be replaced remains unanswered, though the US is now pulling back from strict interpretation of its sanctions, dangling the possibility of waivers to allies who comply. India, for example, is now aiming to halve its imports from Iran to secure a waiver based on the new American guidelines.
  • Iran is putting pressure on the EU to ‘save the nuclear deal’ to avoid companies pulling out of Iran, with reports that even Chinese ship owners may be avoiding carrying Iranian crude due to the impending sanctions.
  • In an effort to counter the removal of Iranian crude, the US Department of Energy is offering 11 million barrels of crude from the US Strategic Petroleum Reserve from October 1-November 30 2018.
  • The largest weekly stockpile build in US crude inventories since March 2017 spooked crude prices last week, underscoring the risk of slowing demand.
  • With crude prices still stuck in range, the active American rig count is flat, as no new oil and gas rigs started up, keeping the total count at 1,057.
  • Crude price outlook: The fragile global situation over trade and sanctions will remain, and with the November deadline looming for Iranian crude, we expect crude prices to inch up. Brent should trade at US$73-75/b and WTI at US$66-68/b.

Headlines of the week

Upstream

  • Iraq and Petrofac has signed a US$369 million deal to build a new 200 kb/d crude processing facility, which would boost the output at the giant Majnoon field from 230,000 b/d to 450,000 b/d by 2021; the Majnoon oilfield is now operated by Basra Oil Co after Shell departed the field in June.
  • Eni has acquired the new Nour offshore exploration licence in the East Nile Delta basin in Egypt, and has also received a 10-year extension of the Abu Madi West Development Lease, which contains the prolific Nooros field.
  • The much-touted recent Gulf of Mexico US exploration auction proved to be a damp squib with bids received for only 1% of the 14,575 blocks on offer.
  • Total is aiming to drill up to five exploration wells offshore French Guiana next year, hoping to strike similar riches that have been discovered in Guyana.

Downstream

  • New Mexican President Andres Manuel Lopez Obrador has pledged more than US$11 billion to boost the country’s refining capacity, split between a US$2.6 billion modernisation plan and a new US$8.4 billion refinery.
  • Japanese firms are cashing in on US LPG cargoes for heating, cooking and transport, after Chinese buyers began eschewing American propane and butane due to escalating trade tensions between the two countries.
  • PDVSA’s American subsidiary Citgo plans to resume long-delayed work to refurbish the idled 235,000 b/d Aruba refinery in the Caribbean.
  • Nigeria’s NNPC is mulling over a consideration to allow private investors to install new 100 kb/d refineries on the sites of its existing Port Harcourt and Warri sites to overcome chronic underutilization of its refining system.
  • Shell’s global refining boss Lori Ryerkerk will be stepping down after five years, to be replaced by Robin Mooldijk, VP of Manufacturing Americas.

Natural Gas/LNG

  • PetroChina may temporarily halt its purchases of American LNG this winter, switching to spot cargoes on the open market to feed its winter demand as the US-China trade war threatens to grow to include tariffs on LNG.
  • Cheniere’s Corpus Christi LNG project enters its commissioning phase, having been granted approval to feed first gas by energy regulator FERC.
  • Panama and the US have signed an agreement to pave way for more private investment into LNG importation and distribution, aimed at boosting US LNG exports into Central and South America.
  • Bangladesh has started up its first LNG import terminal after a three-month delay as the Excellence FSRU is now permanently moored. This will help offset a prolonged decline in the country’s natural gas production.
  • Japan’s Mitsubishi Corp has acquired 25% of the Summit LNG terminal in Bangladesh, which involves an FSRU unit to be installed off Moheshkali in Cittagong, with a target for commercial operations to begin in Q1 2019.
  • BP has inked a 5-year deal with PNG LNG, with purchases starting at 450,000 tpa over the first three years, then rising to 900,000 ton for the remaining two years.


oil oil and gas news oil and gas industry LNG oil and gas companies news weekly update market watch market trends latest oil and gas trends
3
1 0

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

Latest NrgBuzz

Your Weekly Update: 5 - 9 November 2018

Market Watch

Headline crude prices for the week beginning 5 November 2018 – Brent: US$72/b; WTI: US$62/b

  • It’s down, down, down for crude oil prices as the impact of American sanctions on Iranian crude exports was muted by increased supply from OPEC+ nations, particularly Saudi Arabia and Russia
  • America granted waivers to eight nations – including India, Japan, South Korea and possibly China – which would allow them to continue importing Iranian crude after November 3, though the exact terms of the waivers are still in discussion
  • The number of waivers issued was larger than the market expected, but traders also remain worried about the growing trade spat between the US and China, although President Donald Trump has struck a more conciliatory tone recently
  • However, the midterm elections in the US resulted in the Democrats seizing the House but losing ground in the Senate – an imperfect result that could nonetheless still frustrate Trump’s economic and trade agenda
  • With the impact of Iranian sanctions proving to be less dramatic than expected – although fireworks should be expected at the upcoming OPEC meeting Vienna next month – crude prices have lost much of the supply-risk premium it gained over the past three months
  • With crude prices abated, American drillers are following suit, reducing the active American rig count by one with the closure of one oil rig
  • Crude price outlook: Prices should continue to head downwards as the risk of a supply crunch abates; Brent will test the US$70/b level again, with WTI likely to maintain its US$10/b discount to Brent

 

Headlines of the week

Upstream

  • BP has completed its US$10.5 billion acquisition of BHP Billiton’s US unconventional assets, which will add some 190,000 boe/d of production and 4.6 billion oil equivalent barrels in reserves to BP’s coffers
  • Total reports that its upstream production in the Republic of Congo has exceeded expectations, with current production at some 200,000 b/d
  • ConocoPhillips has completed the sales of its Barnett shale assets in North Texas to Lime Rock Resources for US$230 million
  • Apache is accelerating plans from its Garten discovery in the UK North Sea, bringing it forward from Q119 to Q418, with 1 million barrels recoverable
  • Also in the North Sea, the UK Oil and Gas Authority has approve Senrica Energy’s Field Development Plan for the Columbus Development, with target start-up aimed at mid-2021 with peak output at 7,800 boe/d
  • Total has received consent from Petroleum Safety Authority Norway to extend the operational life of the Skirne and Byggve fields to March 2024
  • Equinor has made a ‘significant new oil discovery’ at the Barents Sea Skruis well in the Johan Castberg licence, with 12-25 million recoverable barrels of oil
  • Algeria’s Sonatrach has signed two new agreements – with Total and Eni – in an exclusive partnership for offshore exploration in Algeria
  • Argentina has launched its first-ever offshore licensing round, putting up 38 blocks in the Austral Marine, West Malvinas and Argentina basins

Downstream

  • As Saudi Aramco prepares to buy a controlling stake in SABIC, the two Saudi Arabian giants have announced the development of an integrated 400 kb/d crude-to-chemicals project, to be located at Yanbu on the Red Sea
  • A spat of fuel thefts in Mexico has curtailed gasoline and diesel supply in Mexico, with BP, Total and Pemex all reporting shortages across the country
  • ExxonMobil has started up a new coker unit at its Antwerp refinery in Belgium, expanding capacity for heavy conversion by some 50,000 b/d
  • BASF has signed a new MoU with China’s Sinopec to build a steam cracker in Nanjing, the chemical giant’s second major Chinese investment in four months

Natural Gas/LNG

  • Yet another US LNG facility has received its environmental impact statement from the US FERC, with Texas LNG’s Brownsville site receiving it just days after Venture Global LNG’s Calcasieu Pass LNG received theirs
  • The Cameron LNG project has begun the commissioning Phase 1 of its LNG export site in Hackberry, Louisiana, the first of a planned five phases that would have an eventual capacity of up to 24.92 mtpa
  • TransCanada Corporation has greenlit the US$1.5 billion NOVA Gas Transmission expansion, which will connect markets in North America to natural gas production sites in Alberta and British Columbia
  • Noble Energy announced that the Leviathan project is at 67% completion, and first gas from the Israeli gas project is expected by the end of 2019
  • India’s Petronet LNG and ONGC Videsh are reportedly in talks to buy a stake in the proposed Driftwood LNG project by Tellurian in Louisiana
  • Japan’s Osaka Gas says it will begin evaluating expanding its operations to developing markets in Southeast Asia like Vietnam, where shrinking demand supply and growing demand is creating a huge potential market for LNG
November, 09 2018
Risks of working in Oil and Gas sector

It is a well-known fact that the oil and gas industry has a lot to offer in terms of opportunities - paycheck, lifestyle, and work-life balance. However, like everything else in life, it has a flip side as well. If you are planning to make a career in oil and gas industry, it is important to know the cons as well. Here is a list of risks associated with working in oil and gas industry that you must know to make an informed decision.

Highly competitive: survival of the fittest 

Oil and gas industry is highly competitive and dynamic in nature. The job requires high level of expertise and productivity. With digitization and automation of the industry, the work functions are changing rapidly. The employees who cannot cope up and upskill with changing time and need will be automatically pushed out of the system. The foremost challenge in oil and gas industry is to stay relevant and keep upskilling.

Long work hours

Some job functions in oil industry like offshore rig workers have to work in 12-hours shift, seven days a week and for seven to 28 days in one stretch. Sometimes, overtime is also expected due to emergency or to manage the project deadlines. However, the oil companies do give equal amount of resting period to the rig workers to compensate for the long working hours. Even then, the continuous long hours is strenuous for the workforce.

The accident-prone work environment

Although rigorous safety trainings are provided to the workforce along with numerous safety measures and laws in place; accidents do occur. Sometimes, these accidents can be life-threatening. Here is quick overview of the possible accidents that you might encounter:

  • Vehicle accident- It is considered as the number 1 cause of fatality in oil and gas industry. It can happen while driving to pipelines, gas sites, pumping stations, transit between sites and any other place due to heavy loads, rash driving, fatigue or extreme weather conditions.
  • Explosion & fire- Oil companies are extremely cautious about fire and explosion safety and follow strict guidelines and standards to prevent fire hazard on drilling sites and injuries related to it. Emergency exits, action plans and fire prevention plan along with flame-resistant clothing are ensured. However, it is in best interest to stay updated about the latest in the safety measures.

Risk of confined space and fall- The line workers in oil and gas industry sometimes work in confined spaces like mud pits, reserve pits, storage tanks, sand storage, and other excavated areas, where they are exposed to potential risk of ignition of inflammable vapors, exposure to harmful chemicals, and asphyxiation. Additionally, these kinds of workplaces involve risk of falls, slips and trips too which can cause severe injuries and can even turn fatal. Though the companies are extremely careful and take all safety precautions, but the risk cannot be ruled out.

  • Chemical exposure- Chemical exposure at oil and gas industry is hazardous and it includes risk due to:
  • Mixed exposures of silica, DPM, VOCs, etc.
  • Multiple exposure through various routes like inhalation and ingestion
  • Dermal exposures risk due to Pb, Solvents, PAH’s

Additionally, frequent exposure to chemicals used in refineries and drilling operations can impact long-term health. To offset these dangers, oil and gas companies provide comprehensive training to employees to ensure safety protocols and site-specific features.

Working in remote location

The oil and gas professionals have to work on remote location for exploration, offshore duties, pumping stations, gas plants and more. The workers in remote location often feel isolated and they are on their own to cope up with numerous work-related accidents and health hazards.

Working in oil and gas industry is extremely rewarding in terms of career growth, travelling opportunities and compensation. However, the above points must also be considered before stepping into this industry. It is important to mention here that majority of oil and gas companies are aware of the risks associated and thus have sound safety measures in place to avoid any contingency. Moreover, the government and regulatory bodies also impose strict regulations for safety and security of the workforce. Therefore, in many cases, the risk associated is considerably reduced. So, before you accept any offer from any oil and gas companies, you must carefully verify the safety measures and policies of the company. Once, you are assured, your career in oil and gas will be highly rewarding.

If you are looking for relevant opportunities, check out NrgEdge.com to kickstart your career in oil and gas industry.

November, 12 2018
Impact of alternate energy on oil and gas sector

Due to shortage or limited availability of oil and gas, companies today are evaluating how they can harness alternative energy sources. The alternate fuel market is targeting hydro and thermal power plants, however solar and wind are catching up fast as preferred energy sources. There are still reservations about nuclear energy considering the risk of nuclear waste or manufacturing of nuclear weapons. However, strategies are shaping up to minimize the risk and maximize the profitability potential. Until then, sources such as solar and wind are being focused upon more and new sources like biofuels are explored extensively.

How will the shift towards alternate energy impact traditional oil and gas market?

There have been huge investments in the different alternate energy avenues by most of the big oil majors. These heavy investments on various alternate technologies by big oil majors and other oil companies around the world indicates a positive outlook towards the scope of clean fuel energy. However, the feasibility of its application is still questionable. Whether or not it will be able to meet the energy needs of the world while upholding its profitability is a question that is bothering the world.

Let us understand what the shift means for the companies in the energy sector.

Rate of employment

Among all renewable energy sources that have been studied, bio energy has been most influential. The fuel is created and transported within a confined space. The work is extremely labor-intensive and hence scope of employment increases. Hydropower and wind power will generate job opportunities during construction and project development phase. However, once the unit is commissioned only few operational staff will be required to perform the operational work. 

Enhanced cost-efficiency

Traditional energy is more expensive than renewable energy. If renewable energy can be produced on large scale, it can eliminate the gas shortage. Even other forms of renewable energy are much cheaper in comparison to traditional oil and gas sector. The cost benefits will be transferred to the consumers and they’ll be able save considerable amount on utility bills.

Improved Brand Image

It makes good business sense to make a move from traditional energy resources to renewable ones. The environmentalists have been arguing about the negative impacts of using and overusing the non-renewable source of energy. The shift towards alternate energy will boost the brand image of the traditional oil and gas company.

Higher market penetration and Mass access to energy 

Due to dependence on fossil fuels which are non-renewable sources and expensive, a significant number of people in the world have no access to power. A chunk of people in Asian and Sub-Saharan Africa area are still using traditional biomass for cooking. However, if the alternate energy can completely replace the traditional oil and gas then it will have a deeper penetration into the market and majority of people will have access to it.

Ethical Investment Avenue

Renewable sector is considered as an attractive and ethical investment avenue for the ones who wish to invest outside traditional channels and are futuristic in outlook. The rising investment on alternate energy is impacting the job creation and community cohesion, which is again a positive move.

How the alternate energy is transitioning the oil and gas?

Big oil companies and other oil companies are making practical, well-researched, and steady approach towards renewable energy spanning from solar panels to genetically engineered algae. However, there are still many companies which are in research/experimentation phase and do have a concrete plan in place.

The pathway to clean fuel technology that operates with efficiency and profitability is getting paved. More than 100 countries in developing as well as developed nations have set a clean fuel target and are working towards it. The European Union has set a goal to meet its 20% energy requirements via renewable sources by 2020.

The world has acknowledged climate change and are working together to shift from carbon-intensive to carbon-neutral environment which might pave the way for generations to come.

November, 12 2018