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Last Updated: September 27, 2019
Business Trends

Market Watch  

Headline crude prices for the week beginning 23 September 2019 – Brent: US$64/b; WTI: US$58/b

  • Having retreated from the spike it saw immediately after the drone strikes on the Abqaiq crude plant and Khurais oil field in Saudi Arabia, oil prices still remain elevated over concerns on Saudi Arabia’s ability to return its capacity to normal levels and the (very high) risk of future attacks
  • Saudi Arabia has repeatedly promised that it will be able to restore all lost capacity from the attack by the end of September, even as the initial estimate of revived capacity fell from 70% to 41% three days after the attack
  • With some 73.1 million barrels of crude in storage across Saudi Arabia, there should be sufficient inventories to prevent a supply disruption even if capacity restoration falls behind schedule, although Aramco admitted that some loadings for October delivery may be ‘delayed’
  • Disruptions to pipeline and refineries directly connected to Saudi Arabia’s pipeline infrastructure have been kept to a minimum, with supplies to Bahrain already restored
  • The US has sent military equipment and defense personnel to Saudi Arabia in a show of force meant to prevent future attacks, but will most certainly raise the already high-level of tension in the Persian Gulf
  • Iran, in a pre-attack attempt to diffuse tensions, has allowed the UK-registered Stena Bulk oil tanker to depart after having been detained since July; the move is welcome, but does nothing to alleviate suspicions that Iran was directly behind the Abqaiq attack
  • Double-digit declines in the US active rig count continue, with a loss of 18 rigs – 14 oil and 5 gas – this week following a previous drop of 5; the US rig count has now fallen steeply for five consecutive weeks, raising some flags over the health of US production
  • With no major developments in the Persian Gulf crisis, tensions are at a standstill, though still elevated; against this backdrop, crude prices are likely to dwindle down further – to some US$60-62 for Brent and US$56-58/b for WTI

Headlines of the week


  • Offshore Guyana continues to be the oil world’s current treasure trove of discoveries, as ExxonMobil and partners announced the 14th oil discovery at the Staebroek Block, with the Tripletail-1 well bringing estimated recoverable resources at the block to over 6 billion boe
  • ExxonMobil has put up its oil and gas operations in southeast Australia – including the Gippsland Basin project offshore Victoria – for sale once again, after abandoning an attempt to offload the assets in February 2018
  • Despite the collapse of the Tullow Oil deal, Uganda is reportedly continuing to push the operators of its inland oil fields to commit to FIDs this year in order to begin producing first oil by 2022/23
  • Chevron is going ahead with a major waterflood project at its St Malo field in the Gulf of Mexico, which should boost recovery at the deepwater field by some 175 million boe and extend production by another 30 years


  • With the IMO deadline for marine fuels quickly approaching, Shell’s Pulau Bukom refinery in Singapore joins a group of key refineries that have begun to produce low sulfur fuel oil (LSFO) and very low sulfur fuel oil (VLSFO)
  • ExxonMobil shut down its 370 kb/d refinery and petrochemicals plant in Beaumont Texas as Tropical Storm Imelda caused flooding in the Gulf area
  • Saudi Aramco has acquired the remaining 50% of the SASREF refinery in Jubail, Saudi Arabia from Shell for an estimated US$631 million

Natural Gas/LNG

  • The government of Japan is planning to spearhead a US$10 billion expansion in global LNG infrastructure investment through public and private projects
  • Cheniere has announced a gas sales agreement with EOG, purchasing some 140 mmscf/d of gas to supply the Corpus Christi Stage 3 LNG project indexed to international LNG prices (Platts Japan Korea Marker) with the remaining 300 mmscf/d under the deal priced to the conventional Henry Hub marker
  • NextDecade Corporation and Enbridge have signed an MoU to develop the Rio Bravo Pipeline that will transport some 4.5 bcf/d natural gas from the Agua Dulce area to the Rio Grande LNG project in Brownsville, Texas
  • South Korea’s KOGAS and BP have signed a deal for the supply of 1.58 million tons of US LNG for 15 years beginning 2025
  • Total is preparing to drill four shallow water wells offshore Nigeria to feed into its NLNG Train 7 expansion that will add 7 million tpa of capacity, bringing the total capacity at the NLNG project to 22.9 million tpa
  • Pakistan has granted permission to firm companies – including joint ventures involving ExxonMobil, Shell and Trafigura – to develop LNG import terminals in the country as it looks to increase intake of natural gas
  • India’s Petronet LNG has signed a US$7.5 billion deal with Tellurian for a stake in the Driftwood LNG terminal in Louisiana, which will include an 18% stake in the terminal and purchase of 5 million tons per annum of LNG
  • Tellurian is also reportedly considering to build two additional LNG export projects in addition to the current Driftwood terminal in Louisiana, as it aims to expand its presence to 10% of the global LNG market
  • Gazprom is reportedly looking to build a small-scale LNG project in the Perevoznaya Bay area near the eastern port of Vladivostok by next year

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EIA expects U.S. energy-related CO2 emissions to decrease annually through 2021

In its latest Short-Term Energy Outlook (STEO), released on January 14, the U.S. Energy Information Administration (EIA) forecasts year-over-year decreases in energy-related carbon dioxide (CO2) emissions through 2021. After decreasing by 2.1% in 2019, energy-related CO2 emissions will decrease by 2.0% in 2020 and again by 1.5% in 2021 for a third consecutive year of declines.

These declines come after an increase in 2018 when weather-related factors caused energy-related CO2 emissions to rise by 2.9%. If this forecast holds, energy-related CO2 emissions will have declined in 7 of the 10 years from 2012 to 2021. With the forecast declines, the 2021 level of fewer than 5 billion metric tons would be the first time emissions have been at that level since 1991.

After a slight decline in 2019, EIA expects petroleum-related CO2 emissions to be flat in 2020 and decline slightly in 2021. The transportation sector uses more than two-thirds of total U.S. petroleum consumption. Vehicle miles traveled (VMT) grow nearly 1% annually during the forecast period. In the short term, increases in VMT are largely offset by increases in vehicle efficiency.

Winter temperatures in New England, which were colder than normal in 2019, led to increased petroleum consumption for heating. New England uses more petroleum as a heating fuel than other parts of the United States. EIA expects winter temperatures will revert to normal, contributing to a flattening in overall petroleum demand.

Natural gas-related CO2 increased by 4.2% in 2019, and EIA expects that it will rise by 1.4% in 2020. However, EIA expects a 1.7% decline in natural gas-related CO2 in 2021 because of warmer winter weather and less demand for natural gas for heating.

Changes in the relative prices of coal and natural gas can cause fuel switching in the electric power sector. Small price changes can yield relatively large shifts in generation shares between coal and natural gas. EIA expects coal-related CO2 will decline by 10.8% in 2020 after declining by 12.7% in 2019 because of low natural gas prices. EIA expects the rate of coal-related CO2 to decline to be less in 2021 at 2.7%.

The declines in CO2 emissions are driven by two factors that continue from recent historical trends. EIA expects that less carbon-intensive and more efficient natural gas-fired generation will replace coal-fired generation and that generation from renewable energy—especially wind and solar—will increase.

As total generation declines during the forecast period, increases in renewable generation decrease the share of fossil-fueled generation. EIA estimates that coal and natural gas electric generation combined, which had a 63% share of generation in 2018, fell to 62% in 2019 and will drop to 59% in 2020 and 58% in 2021.

Coal-fired generation alone has fallen from 28% in 2018 to 24% in 2019 and will fall further to 21% in 2020 and 2021. The natural gas-fired generation share rises from 37% in 2019 to 38% in 2020, but it declines to 37% in 2021. In general, when the share of natural gas increases relative to coal, the carbon intensity of the electricity supply decreases. Increasing the share of renewable generation further decreases the carbon intensity.

U.S. annual carbon emissions by source

Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2020
Note: CO2 is carbon dioxide.

January, 21 2020
Latest issue of GEO ExPro magazine covers Europe and Frontier Exploration, Modelling and Mapping, and Geochemistry.

GEO ExPro Vol. 16, No. 6 was published on 9th December 2019 bringing light to the latest science and technology activity in the global geoscience community within the oil, gas and energy sector.

This issue focusses on oil and gas exploration in frontier regions within Europe, with stories and articles discussing new modelling and mapping technologies available to the industry. This issue also presents several articles discussing the discipline of geochemistry and how it can be used to further enhance hydrocarbon exploration.

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. 6

January, 20 2020
Your Weekly Update: 13 - 17 January 2020

Market Watch   

Headline crude prices for the week beginning 13 January 2020 – Brent: US$64/b; WTI: US$59/b

  • Tensions in the Persian Gulf have abated, but not disappeared, as both the US and Iran stepped back from going to war; the buck, so far, has stopped with Tehran’s retaliation to the US assassination of its top general with a barrage of missile strikes at US bases in Iraq
  • The underlying situation is still fragile, with the Iranian population swinging from supporting the government to protesting its accidental downing of a commercial Ukraine Airlines plane; with the risk of war easing, crude prices have fallen back to their pre-crisis levels
  • However, American and foreign oil companies have pulled their staff from crude fields in northern Iraq and Kurdistan, including Chevron, as the oil industry in Iraq monitors the risk – and consequences – of military action
  • In precaution, oil tankers have begun boosting their rates once again to haul crude through the Persian Gulf, with quoted rates now at their highest level since the 2019 attacks on ships passing through the narrow straight
  • Although political tensions remain fresh, Saudi Arabia said that OPEC and the OPEC+ club were instead focused on using their window of production cuts to reduce excess oil stockpiles to levels ‘within the contours of 2010-2014’
  • In the US, not only is shale output staying strong, but production in the US Gulf of Mexico also made history, exceeding 2 mmb/d for the first time ever in 2019, beating the previous high recorded in 2018
  • Worries about the health of global oil demand persist… although the US and China signed a Phase 1 trade deal, the agreement is more about halting escalation of the trade war than repairing inflicted damage; a slowdown in Chinese economic growth could lead to oil demand growth halving in 2020 in China according to CNPC
  • The US active rig count fell for a second consecutive week, losing 15 rigs – 11 oil and 4 gas – for the 17th weekly decline of the past 20 weeks; losses in the Permian were once again high, shedding a total of 6 rigs
  • Crude oil prices should remain rangebound with Brent at US$63-65/b and WTI at US$57-59/b, as the market retreats back to its ever-present worries about demand while geopolitical risk premiums scale back

Headlines of the week


  • Guyana’s success is now extending to its neighbours, with Total and Apache announcing a ‘significant’ oil discovery at their Maka Central-1 well in Suriname’s Block 58, which lies adjacent to the prolific Stabroek Block
  • BP has agreed to sell its operating interest in the UK North Sea’s Andrew assets – including the Andrew platform as well as the Andrew, Arundel, Cyrus, Farragon, and Kinnoull fields – along with its 27.5% non-operating interest in the Shearwater field to Premier Oil for some US$625 million
  • Liberia will kick start its next offshore licensing round in April 2020, offering nine blocks in the Harper basin, one of the few offshore regions in West Africa that remains unexplored and undrilled
  • Equinor has extended the life of its Statfjord assets beyond 2030, with plans to commission up to 100 new wells over the next decade, deferring decommissioning with a goal of maintaining current output levels beyond 2025
  • After Murphy Oil, Petrofac and ExxonMobil, Repsol is the latest major considering an upstream exit from Malaysia, covering assets that include six development blocks and the major Kinabalu oilfield in Sabah
  • Senegal’s government has approved Woodside’s offshore Sangomar Field Development, which will involve the drilling of 23 subsea wells and a FPSO with the capacity to process up to 100,000 b/d of crude
  • Equinor has announced plans to reduce greenhouse gas emissions from its offshore fields and onshore plants in Norway by 40% by 2030, 70% by 2040 and to near zero by 2050 from 2019 levels


  • Shell is reportedly seeking buyers for its 144 kb/d Anacortes refinery in Washington state, which would be its third North American sale in two years after divesting its Martinez refinery in California and Sarnia refinery in Ontario
  • Shell has announced plans to increase its share of the Mexican fuel market to 15%, which would require considerable growth in its network of 200 fuel stations in 12 states that currently represent 1% of the market
  • Occidental Petroleum plans to reduce its holdings in Western Midstream Partners – acquired as part of its controversial takeover of Anadarko – to less than 50%, potentially removing up to US$7.8 billion of debt

Natural Gas/LNG

  • Sempra Energy and Saudi Aramco have signed an agreement that will see the Saudi giant play a bigger part in the planned 22 million tpa Port Arthurt LNG project, following an existing agreement to purchase 5 mtpa signed in May 2019
  • Kuwait Petroleum Corp has agreed to purchase 3 million tpa of LNG from Qatar Petroleum for 15 years beginning 2022, with Kuwait remaining one of the few countries in the Middle East that remain neutral to the Saudi-Qatar standoff
  • ExxonMobil has signed an agreement with midstream company Outrigger Energy II to build a 250 mmscf/d cryogenic gas processing, gathering and pipeline system in the Bakken’s Williston Basin in North Dakota
  • The Larak gas field in Sarawak has achieved first gas, operated by SapuraOMV Upstream as part of the SK408 PSC that includes the Gorek and Bakong fields, with output planned to be processed into LNG at Petronas’ Bintulu complex
  • Russia’s TurkStream natural gas pipeline – connecting Russia, Turkey, Bulgaria and eventually Serbia and Hungary - has officially begun operations, delivering up to 13 bcm of Russian gas that can be rerouted from the Ukraine route
January, 17 2020