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Last Updated: October 5, 2018
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Market Watch

Headline crude prices for the week beginning 1 October 2018 – Brent: US$85/b; WTI: US$75/b

  • Both international crude markers have hit key levels this week, with Brent at US$85/b and WTI at US$75/b – the highest level for crude prices since 2014, as traders fret about a fragile supply situation due to ongoing and impending supply losses from Iran and Venezuela
  • President Trump’s Twitter tantrums against OPEC has failed to budge the organisation from its stance that oil prices should be allowed to rise, feeding even more into an already bullish market
  • Possible industrial action in Nigeria could drive prices up even further, as unions representing two-thirds of upstream workers in Africa’s largest oil producer could go on strike
  • US$100/b oil by the year’s end could become a reality; Total is accepting that the market is heading towards this and expressed reservations over its impact, while BP think the new sanctions will have a larger impact than the previous ones, contributing to volatility over the remainder of 2018 and into 2019
  • Iranian customers across Asia – even loyal ones – continue to abandon ship to appease the US, hoping to qualify for waivers that would allow them to import some Iranian crude; Japan’s Cosmo Oil announced it will replace all its Iranian volumes with other Middle Eastern crudes, while India’s state refiners have not placed any orders from Iran for November loading
  • Meanwhile, Iran’s fleet of oil tankers are starting to disappear from global satellite tracking systems – with the most likely explanation that the vessels’ transponder systems have been switched off to prevent tracking, and hamper American ability to track its sales
  • It has been suggested that the US could temper the oil bull run by releasing stocks from the Strategic Petroleum Reserve, but Energy Secretary Rick Perry has ruled out that option for now
  • The EU is reportedly working on a plan with Russia and China to sidestep the US sanctions by using an alternative payment system, but the interconnected nature of global finance means the risk of punitive actions by the US remains, scaring off potential users of the proposed payment channel
  • Meanwhile, despite strong price signals, American drillers are still being cautious on introducing new rigs. The active US oil rig count lost three sites last week, offset by four gas gains to leave the total at 1,029. Most losses were in the Permian, where infrastructure bottlenecks continue to be an issue
  • Crude price outlook: The rise in crude prices will continue, although the market could take a breather for some profit-taking and steady itself. We see Brent trading in the US$84-86/b and WTI in the US$75-77/b range.


Headlines of the week

Upstream

  • Nigeria’s two main oil unions are preparing for a possible nationwide strike, aimed at pressuring Chevron to reverse its plan to sack thousands of workers
  • Chevron has received expressions of interest for its 40% of the Rosebank project in the UK Continental Shelf, with potential volumes of some 300 million barrels
  • Total has agreed to purchase the entirety of Chevron Denmark Inc from Chevron, earning it a 12% interest in the Danish Underground Consortium, as well as shares in License 8/06 and the Tyra West pipeline
  • BP will be proceeding with the development of the Vorlich field in the North Sea after receiving approval from the UK upstream operator, expected to start in 2022 and produce some 20,000 b/d of oil at peak
  • ExxonMobil has won exploration rights for the Titã pre-salt block in Brazil, adding more than 71,500 acres to its already large position in Brazilian upstream

Downstream

  • Saudi Aramco has signed a long-term supply deal with Zhejiang Rongsheng, providing crude for the private firm’s new 400 kb/d refinery in eastern China
  • ExxonMobil has started up a new ultra-low sulfur fuels units at its refinery in Beaumont, Texas, boosting its capacity for clean fuels by some 45,000 b/d
  • Total has sanctioned the expansion of its Texas Bay port Polymer joint venture, doubling polyethylene capacity to 1.1 million tons per year
  • Petrobras will be slashing the price of gasoline provided by its refineries after average pump prices in Brazil jumped to a record high last week
  • India is looking to overcome land acquisition issues for its mammoth planned refinery in Maharashtra by setting up a panel to provide suggestions to mollify the strong farmer lobby, as well as environmental and ecological impact
  • Indonesia’s plan to roll out strict adherence to its biodiesel mandate has hit snags, as a shortage of palm methyl ester and distribution difficulties means that only half of Pertamina’s fuel depots have received biodiesel components

Natural Gas/LNG

  • PetroChina and Korea Gas have given the go-ahead for Shell’s LNG Canada project, and final approval could come this week as Petronas, Mitsubishi and Shell are also due to sanction the long-dormant project
  • Total has made a ‘major’ gas discovery in the Glendronach well in the Shetlands, with potential recoverable volumes of some 1 trillion cubic feet
  • Total’s Shwe Yee Htun-2 discovery in Myanmar’s A6 Block has completed a successful appraisal, adding to the earlier Shwe Yee Htun-1 and Pyi Thit-1 finds that have a cumulative estimate of 2-3 tcf of natural gas
  • Delek Drilling, Noble Energy and Egyptian East Gas – partners developing and commercialising the Tamar and Leviathan fields in Israel – have purchased control of the Eastern Mediterranean Gas pipeline for US$518 million to connect up to 64 million cubic metres of gas through the Sinai
  • Pointe LNG in the US has started applying for permission for a planned 6 mtpa LNG project in Plaquemines Parish, Louisiana using three 2 mtpa trains
  • Enable Midstream is proposing to build a US$550 million, 165-mile natural gas pipeline, connecting the Haynesville and nearby shale regions to new LNG export terminals in Texas and Louisiana

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New PNG Government Reviews Past Oil Agreements

A lot of complications arise when a government changes. Particularly if the new government comes in on a mandate to reverse alleged deficiencies and corruption of previous governments. This is amplified when significant natural resources are involved. It has happened in the past – when Iran nationalised its oil industry by kicking out BP – and it could happen again in the future – in Guyana where the promise of oil riches in the hands of foreign firms has already caused grumbles. And it is also happening right now in Papua New Guinea, as the new government led by Prime Minister James Marape took aim at the Papua LNG deal.

Negotiated by the previous government of Peter O’Neill, the state’s new position that is the current gas deal is ‘disadvantageous’ to country. A complex set of manoeuvres – accusing O’Neill of multiple levels of corruption – led to a proposed vote of no confidence and an eventual resignation. With the departure of O’Neill, public opinion on the Papua LNG project (as well as the PNG LNG project) switched from being viewed as a boon to the economy to one of unequal terms that would not compensate the nation fairly for its resources.

So, despite a previous assurance in early August that the new government of Papua New Guinea would stand by the previous gas deal agreed with the Papua LNG stakeholders in April, Marape sent a team led by the Minister of Petroleum Kerenga Kua to Singapore to renegotiate with the project’s lead operator Total.

As the meeting was announced, suggestions pointed to a hardline position by Papua New Guinea… that they could ‘walk away from a new deal’ if the new terms were not acceptable. In a statement, Kua stated that the negotiations could ‘work out well or even disastrously’. From Total’s part, CEO Patrick Pouyanne said in July that he expected the government to respect the gas deal while Oil Search stated that it was seeking ‘further clarity on the state’s position’. The gas deal covers framework of the Papua LNG project, which was scheduled to enter FEED phase this year with FID expected in 2020, drawing gas from the giant onshore Elk-Antelope fields ahead of planned first LNG by 2024. So, the stakes are high.

With both sides locked into their positions, reports from Singapore suggested that the negotiations broke down into a ‘Mexican standoff’. No grand new deal was announced, and it can therefore be inferred that no progress was made. There is a possibility that PNG could abandon the deal altogether and seek new partners under more favourable terms, but to do so would be a colossal waste of time, given that Papua LNG is nearing a decade in development. Total and ExxonMobil have already raised the possibility of legal moves if the deal is aborted, with compensation running into billions – billions that the PNG government will not have unless the Papua LNG project goes ahead.

But the implications of the deal or no-deal are even wider. The PNG state has already stated that it will look at the planned expansion of the PNG LNG project (led by ExxonMobil and Santos) next, which draws from the P’nyang field. Renegotiation of the current gas deals in PNG may have populist appeal but have serious implications – alienating two of the largest oil and gas supermajors and two of PNG’s largest foreign investors could lead to a monetary gap and a mood of distrust that PNG may be unable to ever fill. Hardline positions are a good starting position, but eventual moderation is required to ever strike a deal.

Papua LNG Factsheet:

  • Ownership: Total (31.1%), ExxonMobil (28.3%), Oil Search (17.7%), state (22.5%)
  • Feed: Elk-Antelope onshore fields,
  • Capacity: 5.4 million tons per annum
  • Structure: 2 trains of 2.7 mtpa capacity each
August, 22 2019
This Week in Petroleum: 2018 OPEC net oil export revenues highest since 2013, but likely to decline

The U.S. Energy Information Administration (EIA) estimates that members of the Organization of the Petroleum Exporting Countries (OPEC) earned almost $711 billion in net oil export revenues in 2018 (Figure 1). The estimate is up 29% from 2017, but about 40% lower than the record high of almost $1,200 billion in 2012. The 2018 earnings increase is mainly a result of higher crude oil prices. The Brent spot price rose from an annual average of $54 per barrel (b) in 2017 to $71/b in 2018. However, EIA forecasts annual OPEC net oil export revenues will decline to $593 billion in 2019 and to $556 billion in 2020. Decreasing OPEC revenues are primarily a result of decreasing production among a number of OPEC producers.

Figure 1. OPEC net oil export revenues

EIA estimates net oil export revenues based on oil production—including crude oil, condensate, and natural gas plant liquids—and total petroleum consumption estimates, as well as crude oil prices forecast in the August 2019 Short-Term Energy Outlook (STEO). EIA’s net oil export revenues estimate assumes that exports are sold at prevailing spot prices and adjusts the prices for benchmark crude oils forecast in STEO (Brent, West Texas Intermediate, and the average imported refiner crude oil acquisition cost) with historical price differentials among spot prices for the different OPEC crude oil types. For countries that export several different varieties of oil, EIA assumes that the proportion of total net oil exports represented by each variety is the same as the proportion of the total domestic production represented by that variety. For example, if Arab Medium represents 20% of total oil production in Saudi Arabia, the estimate assumes that Arab Medium also represents 20% of total net oil exports from Saudi Arabia.

Although OPEC net export earnings include estimated Iranian revenues, they are not adjusted for possible price discounts that trade press reports indicatedIran may have offered its customers after the United States announced its withdrawal from the Joint Comprehensive Plan of Action in May 2018. The United States reinstated sanctions targeting Iranian oil exports in November 2018. Similarly, EIA does not adjust for Venezuelan crude oil exports to China or India for volumes that are sent for debt repayments to China and Russian energy company Rosneft, respectively, and thus do not generate cash revenue for Venezuela.

If the $711 billion in net oil export revenues by all of OPEC is divided by total population of its member countries and adjusted for inflation, then per capita net oil export revenues across OPEC totaled $1,416 in 2018, up 26% from 2017 (Figure 2). The increase in per capita revenues likely benefited member countries that rely heavily on oil sales to import goods, fund social programs, and otherwise support public services.

Figure 2. OPEC real net and per capita oil export revenues

In addition to benefiting from higher prices, some OPEC member countries have increased export revenues by reducing domestic consumption and consequently exporting more. For example, Saudi Arabia has significantly reduced the amount of crude oil burned for power generation. Limiting crude oil burn allowed Saudi Arabia to export more crude oil and to maximize revenues.

Others have been able to charge higher premiums based on the quality of their crude oil streams. As the global slate of crude oil has changed with more light crude oil production (with higher API gravity), OPEC members have benefited from a narrowing price discount for their heavy crude oils, which are typically priced lower than lighter crude oils because of quality differences. Smaller discounts for OPEC members’ heavier crude streams contributed to higher spot prices for the OPEC crude oil basket price, which incorporates spot prices for the major crude oil streams from all OPEC members (Figure 3).

Figure 3. Gasoline crack spreads (250-day moving average)

Despite the increase in annual average crude oil prices in 2018, OPEC revenues fell during the second half of 2018, mainly because of lower production and export volumes from Iran and Venezuela (Figure 4). EIA estimates that OPEC total petroleum liquids production decreased slightly in 2018 when increased production in Saudi Arabia, Iraq, and Libya could not offset significant declines in Iranian and Venezuelan production. Combined crude oil production in Iran and Venezuela fell by almost 800,000 barrels per day (b/d), or 14%, in 2018 and again by over 1.0 million b/d in the first seven months of 2019. Although Iranian net oil export revenues increased by 18% from 2017 to 2018, a year-to-date comparison indicates a significant decrease in revenues in 2019 (Figure 4). EIA estimates that from January to July 2018, Iran received about $40 billion in export revenues, compared with an estimated $17 billion from January to July 2019. Further decreases in OPEC members’ production beyond current EIA assumptions would further reduce EIA’s OPEC revenue estimates for 2019 and 2020.

Figure 4. Number of days Singapore had the highest and lowest gasoline crack spread among global refining centers

U.S. average regular gasoline and diesel prices fall

The U.S. average regular gasoline retail price fell nearly 3 cents from the previous week to $2.60 per gallon on August 19, 22 cents lower than the same time last year. The Gulf Coast price fell nearly 6 cents to $2.27 per gallon, the East Coast price fell nearly 4 cents to $2.52 per gallon, the West Coast and Rocky Mountain prices each fell nearly 2 cents to $3.24 per gallon and $2.67 per gallon, respectively, and the Midwest price fell nearly 1 cent, remaining at $2.52 per gallon.

The U.S. average diesel fuel price fell nearly 2 cents to $2.99 per gallon on August 19, 21 cents lower than a year ago. The Midwest price fell over 2 cents to $2.90 per gallon, the West Coast and East Coast prices each fell nearly 2 cents to $3.56 per gallon and $3.02 per gallon, respectively, the Gulf Coast price fell more than 1 cent to $2.75 per gallon, and the Rocky Mountain price fell less than 1 cent, remaining at $2.94 per gallon.

Propane/propylene inventories rise

U.S. propane/propylene stocks increased by 4.0 million barrels last week to 90.5 million barrels as of August 16, 2019, 10.2 million barrels (12.7%) greater than the five-year (2014-18) average inventory levels for this same time of year. Gulf Coast, East Coast, Midwest, and Rocky Mountain/West Coast inventories increased by 2.0 million barrels, 1.0 million barrels, 0.7 million barrels, and 0.4 million barrels, respectively. Propylene non-fuel-use inventories represented 4.4% of total propane/propylene inventories.

August, 22 2019
The Australian 590 Student Guardian Visa Process In A Nutshell

Student guardian visa subclass 590 allows you to stay in Australia as a guardian or custodian or relative of an overseas student who is pursuing an education course in Australia. With 590 student guardian visa, You can stay with your child to take care of him/her in Australia until the course complete. Your child age must below then 18th years old before applying for a student guardian visa 590. If you're a relative then you can stay with the child by submitting written permission of a child’s caretakers like a guardian or grandparents. If your child is older then eighteen years then to apply for visa subclass 590 you need to show that you have special emergency circumstances. You can apply for a 590 student guardian visa outside from Australia and acquire enrollment in alternative courses up to three months with a 590 visa. You will be authorized to take care more then one child if you have. You can do the other study or coach just for 3 months with this Student Guardian Visa Subclass 590

Step By Step Process About 590 Visa

1.Before Applying for Visa

Meet Eligibility Criteria

    • You must be a parent or grandparents or relative of a non-Australian child who is below 18th of age.

    • If you want to apply from inside of Australia then you need to hold a substantive visa except for domestic worker, temporary work visa, transit visa, visitor visa, etc.

    • If your another child who is below 18th and not coming to Australia with you then you need to give evidence that you have made welfare arrangement for the child.

    • You have to account for your all healthcare expenses so make sure that medical insurance can only reduce your expenses.

    • Your past immigration history must be credible like you must not have any visa cancellation history.

    • Your intention should be genuine at the time of applying for student guardian visa 590 and it should be not against Australian culture and policies.

    • If your family members are also applying with you then they also need to meet health policies of the Australian government

    • Only a parent or grandparents or custodian or step parents of an overseas student visa 500 holder can apply for this student guardian visa subclass 590.

    • If parents are not present due to any reason for looking after the visa subclass 500 holder student then any relative can apply for this 590 student guardian visa. 

    • You must be a guardian of an international student who must be below 18th of age except for exceptional circumstances.

    • You have to give assurance to immigration authorities that you will be able to provide welfare.

    • Your age must be above 21 years old before going to apply for a student guardian visa 590.

    • You have to pay back any type of debt to the Australian government if you have.

    • If you have another child aged 6 years old then you can bring him/her to Australia but if your child if older then 6           years then you need to show emergency condition to bring him/her to Australia.

  Collect Documents

    •Provide character certificate and other national identities.

    •Submit bank documents and salary slips to prove that you will be enough capable to give welfare to the student.

    •Provide guardianship documents to prove your credibility to that child.

    •Translate your non-English documents into English.

    •Submit legal student guardianship form.

    •Provide dependent under 6 documents if you bring your child who is under 6 years of age.

2. Processing Time And Cost Of This Visa

Visa subclass 590 cost starts from AUD 560. This visa 590 may proceed in 2 to 4 months. But in case you forget to submit any documents then you processing time of visa can be increased. Your visa application processing time can be increased if you provide incomplete information.

3. Apply For The Visa

You need to apply online for the 590 student guardian visa 6 weeks before the student’s course starts. At the time applying for the visa, you have to prove that you are genuine and legal applicant by submitting legal documents. If you submit illegal information to immigration authorities then they have the authority to cancel your visa application immediately. You and your relative which is listed in visa application will not able to get a visa for the next 10 years in case of any fraud by you. You should contact an experienced Immigration Agent Adelaide.

4. Conditions After You Have Applied For The Visa

    • You are not allowed to do any type of work in Australia.

    • You can study only for 3 months.

    • With visa subclass 590 you can’t apply for another visa

    • At the time of leaving Australia, you must have brought the student to your country.

    • If you have another child who is below 6th years of age then you can bring him/her to Australia.

Get The Direction To Migration Agent Adelaide - ISA Migrations and Education Consultants.



August, 21 2019