Feb 2017

BP targets $40 break-even price in four years to reassure investors (28 February 2017): By RAKTEEM KATAKEY - LONDON (Bloomberg) -- BP Plc said it will need an oil price of about $40/bbl in 2021 to be able to cover spending and dividends, lowering the so-called cash-balance point from $60 this year. The break-even level will fall as BP keeps capital spending at no more than $17 billion a year, the London-based company said Tuesday in a statement.

Saudi Aramco to invest $7 B in Petronas' RAPID oil refinery (27 February 2017): KUALA LUMPUR (Reuters) -- Malaysia's Prime Minister Najib Razak announced on Monday that Saudi Arabia's state oil company Saudi Aramco will invest $7 billion into an oil refinery and petrochemical project in Malaysia's southern state of Johor.

MARKET WATCH: NYMEX crude oil price for April hovers around $54/bbl (27 February 2017): By Paula Dittrick, OGJ Upstream Technology Editor - Light, sweet crude oil prices for April dropped modestly Feb. 24 but still settled at about $54/bbl on Feb. 24 on the New York market despite a climbing US rig count. The US oil futures benchmark has traded at $50-55/bbl for weeks.

LG Chem lets contract for Daesan ethylene expansion (24 February 2017): By Robert Brelsford, OGJ Downstream Technology Editor - LG Chem Ltd., Seoul, has let a contract to KBR Inc. to provide technology licensing and basic engineering design (LBED) services for a previously announced 3-year program to modernize and expand ethylene capacity at the Daesan petrochemical complex in Chungcheong Province, South Korea.

Is The Trump Administration About To Rescue The Russian Economy? (23 February 2017) As oil prices continue their slow uphill climb and the global energy community reenters exploration mode, the Russian economy has much to gain from new American leadership that seems lenient on oil sector sanctions. On Tuesday, Representative Charlie Dent from Pennsylvania became the fourth Republican lawmaker to back a bill limiting newly inaugurated President Donald Trump’s ability to pull back sanctions against Russia.

Moody’s: Oversupply to keep LNG prices low beyond 2020 (22 February 2017): By OGJ editors - Moody’s expects global LNG prices to remain low beyond 2020 as a wave of fresh supply comes online while demand from the world’s largest importers is weakening. Global oversupply will peak at about 55 million tonnes/year in 2019, according to the rating agency’s report, “Global Liquefied Natural Gas Industry: Market Imbalance Will Continue Beyond 2020, Keeping a Lid On Prices.”

Oil To $70? Or Down To $30? (22 February 2017): Will oil prices rise to $70 per barrel this year or fall to $30? Depends on who you ask. Oil price forecasts are always all over the map, but the exceptional disparity between some projections for 2017 is pretty stunning. On the one hand, you have Citibank, which sees oil shooting up to $70 this year as supply continues to tighten even as demand rises.

Saudi renewable energy projects advance (22 February 2017): By OGJ editors - The Saudi government has opened bidder qualification in its push for renewable energy in electric power generation. The Renewable Energy Project Development Office of the Saudi Ministry of Energy, Industry, and Mineral Resources has requested qualifications for two projects: a 300-Mw photovoltaic facility at Sakaka in Al Jouf Province and a 400-Mw wind farm at Midyan in Tabuk Province.

Oil Prices Fall As Gasoline Glut Takes Its Toll (22 February 2017): 

Photo Courtesy of CNPC.
Photo Courtesy of CNPC

Algeria attracts 49 initial international offers for new refineries (21 February 2017): ALGIERS (Reuters) -- Algeria has attracted 49 offers from international energy companies to build four refineries worth a total $6 billion, a state energy firm Sonatrach source told Reuters on Monday. Algeria is also considering a petrochemicals partnership with the Saudi Arabia's SABIC, details of which are expected to be unveiled shortly, the source told Reuters.

Crude Oil Could Plunge to as Low as $30 a Barrel (21 February 2017): by Christopher Sell and Alaric Nightingale - Crude prices could plunge toward $30 a barrel -- a rout of about 40 percent from current levels -- unless OPEC extends production cuts that are propping up the market, ABN Amro Bank NV said.

Fire hits Torrance refinery in California (20 February 2017): by Robert Brelsford, OGJ Downstream Technology Editor - South Coast Air Quality Management District and Torrance Refining Co. LLC (TORC), a subsidiary of PBF Energy Inc., Parsippany, NJ, are investigating the cause of a weekend fire at TORC’s 155,000-b/d refinery in Torrance, Calif.

Woodfibre Lng Project Small
Photo Courtesy of Woodfibre LNG

Fluor awarded contract for Woodfibre LNG project in Canada (20 February 2017): IRVING, Texas – Fluor Corporation announced that it has signed an agreement with JGC America, Inc. to provide construction-related support to the front-end engineering and design services for the Woodfibre LNG project in the District of Squamish near Vancouver, British Columbia, Canada. Fluor booked the undisclosed contract value in the fourth quarter of 2016.

CNPC buys Abu Dhabi oil field stake (20 February 2017): Written by  Audrey Raj - Abu Dhabi National Oil Co. (ADNOC) on Sunday (19 February) awarded China National Petroleum Corp. (CNPC) 8% interest in Abu Dhabi’s onshore oil concession. CNPC contributed a sign-up bonus of AED 6.5 billion to enter the concession, operated by the Abu Dhabi Co. for Onshore Petroleum Operations (ADCO). Joining ADCO, BP (10%), Total (10%), Inpex (5%) and GS Energy (3%) are the minority partners in the joint venture.

Energy Companies Face Crude Reality: Better to Leave It in the Ground - High costs, low prices and tough new environmental rules forcing companies to cancel plans to produce oil: By SARAH KENTBRADLEY OLSON and GEORGI KANTCHEV - A new era of low crude prices and stricter regulations on climate change is pushing energy companies and resource-rich governments to confront the possibility that some fossil-fuel resources will remain in the ground indefinitely. In a signal that the prospect is growing more likely, Exxon Mobil Corp. has said that as many as 3.6 billion barrels of oil that it planned to produce in Canada in the next few decades is no longer profitable to extract. A disclosure is expected in the coming week.

Why 100% Renewable Energy Is Just A Dream The “Wind and Solar Will Save Us” story is based on a long list of misunderstandings and apples to oranges comparisons. Somehow, people seem to believe that our economy of 7.5 billion people can get along with a very short list of energy supplies. This short list will not include fossil fuels. Some would exclude nuclear, as well. Without these energy types, we find ourselves with a short list of types of energy — what BP calls Hydroelectric, Geobiomass (geothermal, wood, wood waste, and other miscellaneous types; also liquid fuels from plants), Wind, and Solar.

Asia shares ease after run of gains; oil lifted by OPEC cut extension hopes (17 February 2017): Asian stock markets took a breather on Friday from their recent surge as investors booked profits, while the dollar inched up after Thursday's slide and optimism over possible renewed supply cuts by OPEC lifted oil prices. Financial spread better CMC Markets expects Britain's FTSE 100 to start the day flat, Germany's DAX .GDAXI to be slightly higher and France's CAC 40 .FCHI to be marginally lower, with markets failing to recover Thursday's losses.

OPEC Ready To Cut Deeper (16 February 2017): OPEC is finding itself backed into a corner: the group, it appears, is prepared to extend the oil production cut agreement that is set to expire at the end of June and also increase the cuts, if inventories fail to drop to a specified level, sources from the group told Reuters. The agreement, which also involves 11 non-OPEC producers, including Russia, Mexico, Kazakhstan, Azerbaijan, and several smaller producers, envisaged taking off around 1.8 million barrels from the global daily supply. This means, according to the sources, that global stockpiles should shrink with 300 million barrels in the six-month period, to reach the five-year average. This, however, requires a compliance rate of 100 percent from all participants.

Trump’s First Law Removes Transparency Rule For Big Oil (15 February 2017): 

Photo Courtesy of Reuters.
Photo Courtesy of Reuters

Rosneft faces $100-MM bill to boost safety at Bashneft refineries (14 February 2017): MOSCOW (Reuters) -- Russia's top oil producer Rosneft will have to spend up to $100 million to improve standards at ageing refineries it bought last year, industry sources have told Reuters. Rosneft took control of the sites in October when it bought a 50 percent stake in Bashneft for $5.7 billion as part of Russian privatization efforts.

Oil Producers Promised Output Cuts. Here’s the Reality (14 February 2017) By Brian Wingfield, Samuel Dodge, Hayley Warren - For more than two years, a worldwide oil glut has depressed prices, bedeviled producers and roiled the economies of some nations dependent on crude sales. On Nov. 30, OPEC sought to stop the volatility by agreeing to trim output by a collective 1.2 million barrels a day for at least the first half of the year. Eleven non-OPEC nations led by Russia and Mexico pledged to cut production by an additional 558,000 barrels a day. January output numbers provide a first look at how far the two groups have to go to reach their goal.

Missing worker believed dead in Phillips 66 pipeline blast (13 February 2017): HOUSTON (Reuters) -- A worker missing since a Thursday night explosion at a Phillips 66 natural gas liquids pipeline station in Louisiana is believed dead, the company said on Saturday. The on-going fire at the onshore Paradis, Louisiana, pipeline station has forced a gas pipeline and two production facilities to curtail or shut production in the Gulf of Mexico.

GE proposes investment in Nigerian refineries (13 February 2017): By Robert Brelsford, OGJ Downstream Technology Editor - Nigerian National Petroleum Corp. and US-based General Electric International Inc. are discussing a proposed investment by GE in NNPC’s program to modernize and expand Nigeria’s three state-owned refineries run by subsidiaries Port Harcourt Refining Co Ltd. (PHRC), Warri Refining & Petrochemical Co. Ltd. (WRPC), and Kaduna Refining & Petrochemical Co. Ltd. (KRPC) 

Oil Prices Head Lower In Spite Of Bullish OPEC Data (13 February 2017): B

The Global Impact Of Trump’s Climate Policies (10 February 2017): 

US Shale Gas Reuters Small
Photo Courtesy of Reuters.

South Korea's KOGAS says interested in US shale gas projects (10 February 2017): SEOUL (Reuters) -- Korea Gas Corp (KOGAS), the world's No.2 buyer of liquefied natural gas (LNG), would be "interested" in participating in US shale gas projects, with such investment curbing any potential trade pressure on South Korea from the US government. US President Donald Trump, who has dropped out of the 12-nation Trans-Pacific Partnership pushed by his predecessor Barack Obama, has repeatedly criticized the trade policies of South Korea's neighbors, Japan and China.

Oil Prices Rise As OPEC Compliance To Cuts Hits 90% (10 February 2017) Oil prices were up more than 1 percent early Friday morning after the International Energy Agency (IEA) said that OPEC’s supply-cut deal achieved a record initial compliance rate of 90 percent. As of 7:23AM (EST), WTI Crude was up 1.19 percent at US$53.63, while Brent Crude was trading up 1.29 percent at US$56.35.

Wall street’s love affair with energy heats up as rigs soar (9 February 2017): By DAVID WETHE - HOUSTON (Bloomberg) -- Wall Street is throwing the most money at U.S. energy companies since at least 2000 amid growing confidence that the industry is emerging from the worst downturn in a generation. Energy firms raised $6.64 billion in 13 equity offerings in January, drawn in by a rich combination of oil prices consistently above $50/bbl and a rush to drill that’s doubled the rigs in use in the U.S. and Canada since May. The biggest change from last year: oilfield service companies that provide the rigs, fracking equipment and sand used by producers.

EIA: Global oil market to rebalance during 2017-18 (8 February 2017): By OGJ editors - Beginning with the February Short-Term Energy Outlook, the US Energy Information Administration incorporated significant upward revisions to historical liquid fuel consumption from 2013-14, with the largest changes occurring in China and other nonmembers of the Organization for Economic Cooperation and Development. These revisions create a higher baseline from which 2015–16 STEO consumption is estimated.

BP and Shell profits slump after OPEC output cuts end oil-trading boom (7 February 2017): By JAVIER BLAS AND ANDY HOFFMAN - LONDON (Bloomberg) -- The oil-trading boom that cushioned the profits of Royal Dutch Shell and BP through the price slump of 2015 and early 2016 is over. BP said on Tuesday it made a "small" loss trading oil in the fourth quarter, while Shell last week said trading profits "flattened" in late 2016. The fall-off in trading contributed to worse-than-expected fourth-quarter profits at Europe’s largest oil and gas producers.

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Image: dimitrisvetsikas1969/pixabay

China hits record-breaking amount of West African oil bought in February (7 February 2017): China's crude oil buying will push its February loadings of West African crude to their highest in at least 13 years, a Reuters survey a showed on 3 February. Buying for China, led by state-run Unipec and Sinochem, hit a total of 40 cargoes for February loading. At a level of 1.36mn bpd. This is the highest since the Reuters survey of traders and shipping data began tracking the shipments in 2004.

Putin’s Tough Choice: China Or The West 

Kuwait Projects 2017: Access exclusive projects market forecasts for 2016 / 2017
Kuwait has also made important changes to legislation governing public-private partnerships (PPP) in the past two years. The Kuwait Authority for Partnership Projects (KAPP), is set to become one of the most important clients in Kuwait over the next five years with a significant pipeline of projects to tender and award.

Trump trades barbs with Iran as new round of sanctions looms (3 February 2017): By LADANE NASSERI AND DANA KHRAICHE - DUBAI (Bloomberg) -- Tensions between the U.S. and Iran escalated as President Donald Trump prepared new sanctions and told Tehran it’s “playing with fire,” prompting Iran to respond that it won’t be bullied. The deterioration in relations came as the U.S. prepared to punish Iran for testing a ballistic missile on Sunday. As many as 17 entities connected with Iran’s missile work and up to eight linked to terrorism will be named under penalties as early as Friday, according to two people familiar with U.S. strategy.

Photo Courtesy of Reuters.
Photo Courtesy of Reuters

SK Innovation buys Dow Chemical's ethylene acrylic acid unit for $370 MM (2 February 2017): SEOUL (Reuters) -- South Korea's SK Innovation said on Thursday it would acquire Dow Chemical Co's ethylene acrylic acid (EAA) business for $370 million, a move that will expand its range of high value-added chemical products. Dow said the sale was part of the ongoing regulatory process for its $130 billion merger with DuPont and that the divestiture would be "conditioned" on the two companies closing their deal.

Research Warns Cheap Solar Will Dampen Oil, Coal Demand (2 February 2017): A new research from Imperial College London and think tank Carbon Tracking Initiative has warned that the falling costs of solar power and electric vehicles is likely to weigh on the demand for oil and coal from 2020 onwards. The research studied the cost trends in electric cars and solar power, and reviewed government policies targeting renewable energy and their effect on the power industry and road transport, which combined account for 50 percent of the global consumption of fossil fuels.

CB&I breaks ground on new combined-cycle gas turbine power station (1 February 2017): THE WOODLANDS, Texas -- CB&I announced the groundbreaking of the St. Charles Power Station, a new natural gas-fired combined-cycle power plant for Entergy Corporation subsidiary Entergy Louisiana, LLC in Montz, La.