Monday, October 14, 2019

Oil Industry News

Digitalization: Oil Industry Could Save up to $100Bln

Graph: Rystad Energy

The global oil and gas industry can save as much as $100 billion through automation and digitalization in the 2020s, energy research firm Rystad Energy said."As much as $100 billion can be eliminated from E&P upstream budgets through automation and digitalization initiatives in the 2020s. Service companies are reinventing themselves to help operators unlock these savings," said the study by  Rystad.In 2018, $1 trillion was spent on operational expenditures, wells, facilities and subsea capital expenditures across more than 3,000 companies in the upstream space.

Norway Sovereign Fund to Divest E&P Firms

© galina_savina / Adobe Stock

Norway's $1.1 trillion sovereign fund will divest companies solely dedicated to oil and gas exploration and production in a bid to shield itself from a long-term fall in oil prices, the finance ministry said late on Tuesday.The move will partly shift the world's largest sovereign wealth fund away from oil and gas, as called for by the central bank, which had originally sought to remove all petroleum producers to protect the country if oil prices fell.The fund will continue to maintain stakes in refiners and other downstream firms.An earlier decision to maintain investments in so-called integrated oil firms…

Saudi Aramco Pursues IPO Planning Despite Attack

Saudi Aramco president and CEO 
Amin H. Nasser (Photo: Saudi Aramco)

Saudi Aramco is pressing ahead with its listing plans this week, although some investors and analysts doubt it can now meet its timeline as it has not said when oil output will be restored after attacks on its facilitiesReuters has reported it could take months for Aramco, the world's biggest oil firm, to restore output after Saturday's attacks, which cut production by 5.7 million barrels per day, some 5% of world oil supply.The state-owned oil group will meet local Saudi banks to discuss the initial public offering (IPO) plans…

Oil Price Spike after Saudi Attack Temporary

Graph: Rystad Energy

The drone attack on the world’s largest oil processing facility, Abqaiq in the heart of Saudi Arabia’s oil industry, forced Saudi Aramco to shut in 5.7 million barrels per day (bpd) of crude production, which equates to 7% of the current global crude and condensate production.Rystad Energy says that oil price spike will be short-lived. Bjørnar Tonhaugen, head of oil market research at Rystad Energy said: “The bullish reaction in oil prices will likely be limited by Saudi Arabia’s vast quantities of crude in storage…

Tax Breaks Approved for Russia's Largest Oilfield

(Photo: Gazprom Neft)

Russia's finance ministry has in principle approved tax breaks for developing the Priobskoye oilfield, Russia's largest, to oil giants Rosneft and Gazprom Neft, Alexei Sazanov, head of the ministry's tax department said on Thursday.He added that tax breaks for the oil companies could last for 10 years but no start date had yet been agreed.Sazanov told reporters Russia's budget should be compensated for revenue it will lose due to the tax breaks for Priobskoye and the finance ministry proposed to introduce a mineral extraction tax (MET) for associated petroleum gas (APG) for the oil industry, but no political decision on MET had been made

Cosmo Oil Builds IMO-compliant Fuel Stocks at Chiba Port

Japanese oil refiner Cosmo Oil is to build new storage capacity for IMO-compliant low-sulfur fuel at its Chiba facility. (Photo © Adobe Stock / show999)

Japan’s third-largest oil refining company, Cosmo Oil, , has started building stocks of very-low-sulfur fuel oil (VLSFO) for supply to domestic marine fuel markets from next month (October 2019) ahead of the IMO 2020 mandate requiring ships globally to reduce their bunker fuel sulfur content to 0.5% from the current 3.5% from January 2020.Cosmo Oil is using VLSFO produced at its residue desulfurizer (RDS) unit at its Chiba refinery near Tokyo to build the stocks, Cosmo Oil’sPresident Shunichi Tanaka said on Sunday…

Anadarko Shareholders Go for Cash in Oxy Buyout

(Photo: Anadarko)

Shareholders of Anadarko Petroleum Corp on Thursday voted overwhelmingly to sell the company for $38 billion to rival Occidental Petroleum Corp, ending a short-lived contest that pitted two of the most storied names in the oil industry against one another.Occidental in May beat out Chevron Corp to grab a major oil industry prize: Anadarko's nearly quarter million acres in the Permian Basin, the top U.S. shale field, where low-cost output has helped turn the United States into the world’s top oil producer at more…

Total Plans $5 Bln in Asset Sales

(File photo: Malfere Damien / Total)

French energy giant Total will sell around $5 billion worth of assets, mostly from its upstream exploration and production business, as it seeks to focus on low breakeven projects that can weather weak oil prices, it said on Thursday.The company reported a 19% year-on-year drop in adjusted net profit to $2.9 billion in the second quarter, which it attributed to a combination of unfavorable market factors.These include a 7% drop in oil prices since the second quarter of 2018, a sharp fall in gas prices, and a slide…

Trump Camp Split on Chevron's Venezuela License

U.S. Secretary of State Michael R. Pompeo (US State Department photo by Ron Przysucha/ Public Domain)

The Trump administration is split over whether to renew a license this week for energy company Chevron Corp's operations in Venezuela, with Secretary of State Mike Pompeo supporting a renewal and others opposing it, three sources with knowledge of the matter said on Tuesday.At issue is a six-month U.S. Treasury Department license that expires on July 27 that has allowed Chevron to keep operating its four joint ventures in Venezuela despite U.S. sanctions on the OPEC nation's oil sector.Washington imposed sanctions…

U.S. Oil Makes it to Ukraine, a blow to Moscow

© RealPhotoItaly/Adobe Stock

U.S. crude exports are gaining traction in Europe as even Ukraine turns into a significant consumer of American barrels at the expense of Russian supplies amid heightened U.S. political pressure on Moscow and problems over contaminated Russian oil.Ukraine this month received its first ever barrels from the United States, according to Refinitiv Eikon flows data, as the tanker Wisdom Venture unloaded 80,000 tonnes of Bakken crude in Odessa on July 6 for the Kremenchug refinery, the port said.Russia often struggles to export oil from the Black Sea via the narrow Turkish Bosphorus and Dardanelles straits due to congestion…

Maersk Firm to Buy Wind Turbine Supplier

file Image: an offshore wind farm (CREDIT Seimens)

A.P. Moller Holding, which controls Danish shipping giant A.P. Moller-Maersk will acquire Danish wind turbine supplier KK Group, it said on Wednesday, in a first step into the renewable energy industry.The acquisition marks a new direction for the family-owned company, which has built its business on the shipping and oil industry.The parties declined to disclose the price of the deal. A.P. Moller Holding will buy KK Group, whose main activities are through KK Wind Solutions, from Swedish private equity Solix Group."Denmark is the leading hub for the wind industry worldwide with significant global growth potential.

Venezuela Sells Oil to Tiny Turkish Firm

© Anatoly Menzhiliy / Adobe Stock

With U.S. sanctions blocking Venezuela from selling oil to the United States, state-owned energy firm PDVSA has turned to several little-known buyers that include a tiny Turkish company with no refineries but ties to President Nicolas Maduro's government, according to internal documents and a PDVSA source.Until recently, some of the world's largest petroleum and refining firms, including U.S. companies Chevron and Valero Energy, lined up to take Venezuelan oil cargoes and PDVSA had a rigorous vetting process to ensure potential buyers had the capacity to pay.But U.S.

Does the Answer to Our Energy Problems Lie in Tiny Microbes?

© Dmitry Knorre / Adobe Stock

Such are the dire predictions about climate change these days that there seem to be only two courses open for human society: either we fail to act and the planet keeps heating up, or we restrict ourselves, leave our cars at home, give up hamburgers and stop flying on vacation.Either way, it would seem, the future is dead set on making our children’s lives worse than ours.But there is a third way and it lies in new forms of energy. One of the most promising involves the use of microorganisms to generate electricity.The…

Okea's IPO Falls Short

Gjoea platform (File photo: Equinor)

Norwegian oil firm Okea has raised 315 million crowns ($36 million) in an initial public offering, the company said on Monday, less than half of what it had initially planned due to a fall in the oil price.Europe's oil and gas sector has built up a crowded pipeline for stock market flotations but investors are cautious given a bumpy recovery following the 2014 downturn and uncertainty over long-term oil demand as the world transitions to cleaner energy.Okea had to extend its bookbuilding period for a week and lower its IPO price to 21 crowns per share…

Norway Wealth Fund to Drop ConocoPhillips, Hess

(Photo: ConocoPhillips)

Norway's wealth fund will have to divest its holdings in ConocoPhillips and Hess after both U.S. oil companies were added to a list which effectively excludes them from the Nordic country's portfolio.As part of Norway's efforts to shift its $1 trillion "rainy day" fund away from oil, the country's parliament on Wednesday adopted a plan to drop all dedicated oil and gas explorers and producers, as defined by stock market indices provider FTSE Russell, from the fund's benchmark index.ConocoPhillips and Hess were both added to the list of those classified as "exploration and production" this month…

MWV Expects Druzhba Shipments Within Days

© nokturnal / Adobe Stock

German oil industry lobby group MWV expects German refineries to receive shipments of clean Russian oil through the Druzhba pipeline via Belarus and Poland within the next several days, a spokesman said on Tuesday.The spokesman for the Berlin-based association (Mineraloelwirtschaftsverband), that represents 14 companies, 17 refinery sites and 10 oil pipelines, said the two most severely affected refineries, PCK Schwedt and Leuna would be receiving pipeline oil again.An influx of contaminated oil into Druzhba in April forced Russia to halt west-bound flows to customers…

U.S. Shale: World’s 2nd Cheapest Source of Supply in Oil

Graph: Rystad Energy

North American tight oil is emerging as the second cheapest source of new oil volumes globally, just shy of the Middle East onshore market, Rystad Energy said.The U.S. shale oil was the world’s second most expensive oil resource just four years ago, the energy research and business intelligence company pointed out.“As the majors are struggling to replace conventional liquids, a wealthy source of additional resources is tight oil,” says Espen Erlingsen, Head of Upstream Research at Rystad Energy.Tight oil – such as onshore shale oil in the US – has witnessed an impressive turnaround over the last few years.

Oil Prices Fall After Trump's Tariff Threat Against China

© Jim / Adobe Stock

Oil prices fell on Monday after U.S. President Donald Trump said he would sharply raise tariffs on Chinese goods this week, risking the derailment of trade talks between the world's two biggest economies.U.S. West Texas Intermediate (WTI) crude futures were at $61.68 per barrel at 1338 GMT, down 26 cents. WTI hit $60.04 earlier in the session, its lowest since March 29.Brent crude futures were broadly steady at $70.88 per barrel, having earlier hit its lowest since April 2 at $68.79.Trump said on Twitter on Sunday that he would hike U.S.

Warren Buffett Backs Oxy's Anadarko Bid

(Photo: Anadarko)

Warren Buffett's Berkshire Hathaway Inc committed $10 billion on Tuesday to Occidental Petroleum Corp's $38 billion cash-and-stock bid for Anadarko Petroleum Corp, boosting its chances of snatching a deal from Chevron Corp.Occidental and Chevron are locked in the biggest oil-industry takeover battle in years as they eye Anadarko's prized assets in West Texas' huge Permian shale oil field.Anadarko on Monday agreed to start negotiations with Occidental, saying its bid could potentially be superior to Chevron's existing…

Anadarko to Resume Talks with Occidental

(Photo: Anadarko)

Anadarko Petroleum Corp said on Monday it planned to resume talks with Occidental Petroleum Corp over its $38 billion bid, putting pressure on Chevron Corp to raise its $33 billion offer for the oil and gas producer.Anadarko said its board had unanimously decided that Occidental's offer could result in a "superior proposal", but added that it continued to recommend Chevron's offer at this point.Anadarko asked Chevron on Sunday if it wanted to raise its bid and Chevron declined, people familiar with the matter told Reuters on Monday.Chevron is reluctant to pay more for Anadarko and does not want to be drawn into a bidding war…