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Last Updated: August 30, 2018
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Market Watch

Headline crude prices for the week beginning 27 August 2018 – Brent: US$76/b; WTI: US$68/b

  • Having risen progressively over last week over a larger-than-expected fall in US crude stockpiles and signs that the sanctions on Iranian crude are beginning to bite, crude prices started the week off on even trends.
  • While the Trump administration has been starting fires over trade with allies and foes alike, news that the US and Mexico may have come to agreement over a new bilateral trade agreement to replace NAFTA has calmed markets, with Canada also reportedly mulling over concessions to secure a new trade deal.
  • Strong demand in Asia, particularly from China, and modest gains in OPEC output have also been helpful for prices, with OPEC reporting that its member nations had cut output in July by 9% more than was called for.
  • News that OPEC’s compliance level over the (previous) supply reduction agreement was 120% in June and 147% in May stoked some fears that the market balance could tighten increasingly over the rest of the year.
  • The Iranian question is still hanging like the Sword of Damocles over the market, and OPEC looks like it will be kicking the ball further down the road, announcing that it will only discuss if its members can compensate for a sudden drop in Iranian oil supply at its next bi-annual meeting in December.
  • The awkward introduction of the new sovereign bolivar in Venezuela – linked to its new petro-cryptocurrency and crude prices – raises worries that the implosion in Venezuelan could derail OPEC’s careful plans.
  • There is conflicting news over Saudi Aramco’s planned IPO – news has filtered out that the IPO is being shelved temporarily to concentrate on an acquisition in SABIC, but the government has just granted Aramco an official 40 year concession for exploration rights to bolster the company’s value.
  • With crude prices in flux, the active rig count in the US has also been very fluid, moving from a huge gain two weeks ago, to being flat last week, to dropping by 13 this week – the biggest drop in two years – as 9 oil rigs and 4 gas rigs stopped work.
  • Crude price outlook: Signs that the market is tightening will see crude prices on a rising tide this week. We expect Brent to trade in the US$76-78/b range, while WTI will inch up towards the US$70/b mark.


Headlines of the week

Upstream

  • ConocoPhillips and PDVSA have settled their long-running dispute over the nationalisation of the Venezuelan oil industry, with PDVSA agreeing to pay some US$2 billion in recovery fees to COP.
  • Angola has created a new regulator for its upstream industry, seeking to break Sonangol’s grip on the energy industry by transferring its role as the national concessionaire to the new National Agency of Petroleum and Gasin (NOGA) by 2020, with the goal on reviving flailing upstream output.

Downstream

  • Abu Dhabi’s Adnoc is looking to sell minority stakes in its US$20 billion refining business, with Eni and Austria’s OMV – already its existing partners with Adnoc on the upstream side – reportedly being the front-runners.
  • CNPC has completed the planned upgrade of its Shymkent refinery in Kazakhstan, installing a new catalytic cracker unit to boost fuel quality from Euro II to Euro IV/V.
  • Petronas is on the hunt for specialty chemicals acquisitions, for both ‘technology and market penetration’, as it prepares to capitalise on its upcoming jump in petrochemicals production through the RAPID project.
  • Indonesia has allowed nine new companies to sell biodiesel, including the local outfits of ExxonMobil and Shell, as it moves to implement a hard B20 biodiesel mandate across the country to reduce costly gasoil imports.
  • China has sold diesel to South Africa for the first time through Sinopec, a sign that Chinese refiners are struggling to deal with a domestic supply glut.
  • Glencore has been given the go-ahead by South Africa’s competition watchdog to purchase Chevron’s downstream assets in SA and Botswana for US$900 million, potentially scuppering an earlier sale to Sinopec.
  • Despite chaos at home over the introduction of a new cryptocurrency, PDVSA has reached an agreement with NuStar Energy to resume usage of the St. Eustatius storage facility in the Caribbean after settling outstanding fees.

Natural Gas/LNG

  • Total has sold off its 26% stake in India’s Hazira LNG project to Shell, boosting Shell’s share of the import project in Gujarat to 74%; as part of the same deal, Shell has also agreed to buy some 500,000 tpa of LNG over five years beginning in 2019 from Total, to be delivered into India and South Asia.
  • Carnavron Petroleum and Quadrant Energy have completed their initial assessment of the North West Shelf Dorado discovery, estimating that it has some 1.1 tcf of natural gas resources in place.
  • Sinopec and Zhejiang Energy Group are building a new 3 million tpa LNG plant in Wenzhou, Zhejiang, with the first phase of the project planned to be operational by 2021 as Sinopec’s fourth LNG receiving terminal.
  • Thailand’s state-run Electricity Generating Authority (EGAT) is looking to import LNG directly for the first time, as the country plans to boost competition in the power sector, breaking a monopoly held by PTT.

Corporate

  • Saudi Aramco is reportedly putting plans for a giant IPO on hold so that it can focus on a more immediate goal of purchasing a strategic stake in SABIC, a transaction that could cost as much as US$70 billion.
  • Santos has agreed to entirely purchase West Australian specialist Quadrant Energy – partner in the giant Dorado discovery – for US$2.15 billion.

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Your Weekly Update: 17 - 21 September 2018

Market Watch

Headline crude prices for the week beginning 17 September 2018 – Brent: US$78/b; WTI: US$68/b

  • International oil prices are keeping on the higher end of their price ranges, but unable to breach key psychological thresholds even as supply threats continue to weigh heavy on the mind of the industry
  • The Iranian question hovers like a spectre, but traders are also concerned about OPEC’s ability to offset losses not just from Iran, but also an imploding Venezuelan and strife-prone Libya
  • OPEC issued a statement stressing the need for continued global supply management with other oil producers, noting that global crude demand was starting to face some headwinds from high oil prices affecting consumption, as well as trade disputes and currency woes in major oil consumers like India
  • With the US Congress developing the anti-cartel NOPEC legislation – which could subject OPEC to antitrust lawsuits – Saudi Arabia has hired high-profile legal firms to lobby against the proposed act
  • The tight oil situation will hamper the upcoming American sanctions on Iranian oil exports, with Iran commenting that there is ‘no spare capacity anywhere’ even as major costumers like South Korea and China pare back on purchases and Iran resorts to floating storage in the Persian Gulf to store crude
  • With supply tethering on the edge, the International Energy Agency has warned that continued losses in Iran and Venezuela could send oil prices sustaining above US$80/b, the level at which oil demand destruction is observed to accelerate
  • In the US, WTI prices were shored up by data showing that US crude oil inventories had fallen more than expected, dipping below the 400 million barrel level as refiners ramped up production ahead of the winter season
  • With prices trending upwards, US drillers added 7 new oil rigs last week, but there has been inertia in adding new sites in the Permian as oil prices there have collapsed due to a lack of pipeline infrastructure
  • Crude price outlook: The China-US trade war continues, threatening to consume almost all trade between the two nations, which has sent more jitters through an already nervy market. We expect Brent prices to flirt with the US$80/b level again, while WTI trades in the US$70-71/b range


Headlines of the week

Upstream

  • Total has exercised its option to acquire a 25% interest in the Orinduik block offshore Guyana from Eco Oil & Gas, joining Tullow Oil in the world’s hottest upstream basin, where ExxonMobil has already made 9 blockbuster discoveries
  • Sierra Leone has delayed its fourth upstream licensing round for up to six months to improve transparency on orders of the new Petroleum Director
  • Oil supermajor BP has acquired a 61% interest in the onshore Gobustan product sharing agreement in Azerbaijan, deepening its presence in the country
  • Austria’s OMV has acquired 50% of Sapura Upstream, previously wholly-owned by Malaysia’s Sapura Energy Berhad, continuing a streak of acquisitions that has brought OMV interests in Malaysia, Turkey and New Zealand
  • Gazprom has increased the estimated reserves of its Neptune field – described as one of its ‘most important assets’ – by 1.6 times to 3.5 billion barrels
  • South Sudan has extended three upstream E&P agreements with China’s CNPC, India’s ONGC, Malaysia’s Petronas and local player Nile Petroleum Company as it seeks to ramp up production at oilfields halted due to prior violence
  • Venezuela has handed China more stakes in its oil industry – selling a 9.9% stake in the Sinovensa to CNPC along with an MoU for cooperation in the Orinoco Belt’s Ayacucho Block 6 – to support an ailing PDVSA
  • Rosneft and CNPC have signed a new E&P cooperation agreement, focusing on oil and gas fields in eastern and western Siberia
  • Ecuador has announced a new licensing round for eight onshore blocks, all in proximity to established fields, with submissions expected by January 2019

Downstream

  • ExxonMobil is looking to upgrade its Fawley refinery – the UK’s largest refinery – to create higher-quality fuels by introducing a new hydrotreater and hydrogen plant at the 270 kb/d site with an estimated cost of US$650 million
  • Sinopec has joined a consortium building a 167 kb/d in Alberta, Canada, which would convert the region’s heavy oil sands into oil products for export
  • Ineos will be expanding its Grangemouth ethylene production site in the UK by adding a tenth furnace to convert American ethane into petrochemical products
  • Trafigura has lost its last big contract in Angola – once a core market – with its fuel oil contract handed over to Total as new president Joao Lourenco continues an upheaval of the country’s downstream fuels distribution industry
  • Saudi Arabia’s SABIC has signed an agreement with China’s Fujian provincial government to build a ‘major petrochemical complex’, continuing a streak of large petrochemical investments in China’s coastal provinces

Natural Gas/LNG

  • The US has threatened to scupper the Nord Stream 2 natural gas pipeline connecting Russia to Germany, having already characterised the controversial project as a form of resource influence and disruption on Europe
  • Ghana is reviving its US$350 million Tema LNG import terminal project, appointing two Chinese companies to build the FSRU and onshore facilities; LNG is expected to be sourced from Rosneft under a 12-year, 1.7 mtpa deal
  • Eni’s Zohr field offshore Egypt has hit 2 bcf/d in natural gas production, faster than expected, with the 3 bcf/d level expected to be achieved by mid-2019
  • Eni is fast-tracking its Evans Shoal gas field in Australia, a high-CO2 content field that is expected to provide backfill for the Darwin LNG plant by 2022
September, 20 2018
Storms Ahoy!

As weather systems batter the Atlantic and Pacific – Hurricane Florence hitting the Carolinas in the US and Typhoon Mangkhut cleaving its way through East Asia – the oil industry is watching for signs of continued turbulence, worried that it could add to a market jittery over upcoming Iranian sanctions. Particularly in the Atlantic, where the 2017 hurricane season was very disruptive over crude production in the Gulf of Mexico. A year later, with growing onshore production, the risk of disruption is now higher than ever, with tropical storms liable to cause major flooding in major shale basins like the Permian.

While destructive, the typhoons of the west Pacific generally do not have a large impact on crude prices. The major crude production areas of Southeast and East Asia tend to be relatively insulated from the direct path of storms, which will already have had their strength sapped after hitting the Pacific bulwark of the Philippines. The refining centres in Japan, South Korea and China do get impacted, but preparedness tend to dull the impact. However, the situation is different in the Atlantic. Two weeks ago, when Tropical Storm Gordon whipped its way through the Gulf Coast, WTI prices leapt in response as offshore rigs shut down and evacuated workers. Traditionally, the hurricane seasons of past will largely be confined in impact to WTI prices, but the increasingly international reach of American crude now has a direct discernible impact on the global Brent benchmark as well.

After Florence and Gordon, there are three more storms brewing in the Atlantic. Even though Gordon proved weaker than expected, some 160,000 b/d of production was shut down for over a week, while Florence avoided major output areas. Up next is Hurricane Helene, which looped back towards Europe after developing in West Africa. Hurricane Isaac headed straight towards the Caribbean, where refining infrastructure has been fragile due to PDVSA’s chronic woes, but has now weakened into a tropical depression. Tropical Storm Joyce started out looking like a direct threat, but now appears that it will peter out in the middle of the Atlantic without making landfall.

The Atlantic hurricane season is now at its peak, and will continue until the end of November. For now, the 2018 season does not look to be as disruptive as 2017 or even 2016, which is why the WTI discount to Brent has dropped down to US$10/b, down from US$7/b when Gordon started threatening. Major weather prediction agencies have also revised their forecast for storm numbers down, with the Colorado State University cutting its prediction of named storms from 14 to 11 in August. There is still time for a major hurricane to develop, but for now, the 2018 Atlantic season looks to be relatively benign for crude production and prices.

The impact of Atlantic hurricane seasons on GOM output

  • 2014: 1 hurricane, 0 major in the Gulf
  • 2015: 1 hurricane, 1 major in the Gulf
  • 2016: 3 hurricanes, 1 major in the Gulf
  • 2017: 6 hurricanes, 4 majors in the Gulf
  • 2018 (forecast): 2-3 hurricanes, 1 major in the Gulf
September, 20 2018
5 Tips to Create an Evergreen Resume (Dont Miss no 4!)

The Oil and Gas sector is still recovering from some difficult times in the recent past and has adapted a high-performing culture to generate more from less. That has also translated to replacing the older, expensive resources to younger, cheaper talents and leveraging the gig workforce.

Thus having a few decades of experience in your kitty might sound like a huge advantage but in reality, this might become a burden if you are in the job market and competing with your younger counterparts, especially in this dynamic energy industry. The reputation of being redundant and lack of acceptance of newer skills can precede you and shroud the recruiter’s decision.

However, there is always a demand for experience in the job market and the top oil and gas companies are in a lookout for personnel, who have relevant prior experiences and are ready to adjust to the evolving changes in this industry.

Upskilling to remain relevant in this industry is crucial for the ageing workforce but when you are seeking a new job, everything zeros down to getting an opportunity to demonstrate your ability to the recruiter.

The first hurdle is to have a cracking resume or curriculum vitae that get shortlisted for the next round.

Here we share some tricks to age-proof your resume and check all the right boxes in a recruiter’s mind within the first 6 seconds of their short attention span.*

1. Be creative to attract attention

The best weapons you have are the skills that were acquired during the long tenure spent in this industry. It can easily become a drawback for your resume if you tend you write extensively about all these skill-sets and fail to understand what the specific job opening demands from its candidates.

It is advisable to select your skills carefully and highlight them with more visuals and fewer words. Use graphs and percentages instead of long sentences to make your resume stand out. Try to feature them on the front page and showcase only the relevant skills for the job you are applying.

2. Downplay on dates

Now, this can be a little tricky but not difficult. Do not unnecessarily highlight personal information like age and if needed move it to an obscure corner of your resume where there are lesser chances of it to be noticed.

While, for some jobs, the academic credentials are necessary to be mentioned, we recommend to feature these on the front page with the degree and university name but try and avoid the graduation dates. The recruiter might indulge in quick math to estimate your age. Also, when you mention the job history, maintain the chronology but avoid mentioning the start and end dates.

Please note that none of the above implies for you to submit misleading information to your prospective employer at any given stage of the recruitment process.

3. Highlight the recent and relevant experiences

There has been a massive shift in oil and gas processes, equipment and technology in the last few decades. Improvements in drilling mechanism, data-collecting sensors, technology to improve worker’s safety, etc. have changed most upstream and downstream jobs.

You might have also gone through this age of transformation but your resume might look dated if you end up mentioning the entire history.

Keep it crisp and recent; bypass mentioning any experience that may not be relevant today and does minimal value-add showcasing your talent for the new job. If you have moved out of oil and gas industry sometime during your career, keep it off the resume unless that experience adds value to the current job opening.

You ideally should be showcasing all the accolades that came your way throughout your professional life. Craft your messaging around mentions about the impact of your performance on the employer’s top-line and bottom-line results.

Having said this, under no circumstance should you use incorrect career or skill information in your resume.

4. Speak the language of the recruiter

Pick terminologies mentioned in the job description and highlight them in your resume. Try to tailor-make the resume to befit the job description and hence easier for the recruiter to understand your relevancy.

Keep working on your resume on a constant basis and it will become an easy task to quickly modify the variable content based on each new application.

5. Provide Social Media Coordinates

Provide the LinkedIn, Twitter and other relevant Social Media coordinates in your resume. There is a high possibility that you will be scrutinized on your social media activity and hence it is good to keep your professional social platforms details updated on your resume.

This also signals about your ability to stay relevant with the time by adopting digital communications.

Update your profile picture and preferably get it done by a professional photographer who focuses to capture your positive attitude and energy.

Maturity and leadership skills come organically to older workforce due to their extensive experience; And half the job-search battle is won if that can be captured in your resume and featured to the potential employers.

While it is discriminating and unethical to deny a job due to your age, there are several instances of biased recruitment in every industry, including oil and gas.

Bonus Tip: It is said your network is your net-worth these days. Connect with other energy sector professionals and share your experience with the community to increase your professional network.

We wish you all the best in your next job search!

September, 18 2018