Feb 2018

Algeria's Sonatrach to invest $56B from 2018 to 2022 (28 February 2018): HASSI RMEL, Algeria, (Reuters) - Algerian state energy firm Sonatrach will invest $56 billion from 2018 to 2022, its chief executive said. “We will give more details very soon,” Abdelmoumen Ould Kaddour told reporters during a visit to the Hassi Rmel gas field. He spoke after launching a new gas pipeline pumping from southwestern fields including Reggane North, Touat and Timimoun with capacity of 8.8 billion cubic metres a year. (Source: Gas Processing)

LNG market needs $200B investment to meet demand - Shell (27 February 2018): LONDON, (Reuters) - More than $200 billion of investment in liquefied natural gas is needed to meet a boom in demand by 2030, Royal Dutch Shell, the world's top LNG trader said. The LNG market is set to continue its rapid expansion into 2020 as facilities approved for construction in the first half of the decade come online, in a development expected easily to meet sharp growth in consumption of the super-chilled fuel. (Source: Gas Processing)

Oil Jumps On Libya Export Outage, Saudi Comments (26 February 2018): By Irina Slav - Crude oil started the week with gains thanks to comments from Saudi Arabia’s Energy Minister Khalid al-Falih and reports of a slowdown in exports from Libya’s Mellitah oil terminal. WTI was trading at US$63.63 a barrel at the time of writing and Brent crude was changing hands at US$66.98, after on Saturday Al-Falih said that Saudi Arabia’s oil production over the first three months of 2018 would be much lower than the amount allowed under the 2016 production cut agreement. Al-Falih added that exports were estimated to average 7 million bpd in the three-month period. (Source: Oil Price)

Saudi Arabia sees oil cuts reduction next year (25 February 2018): Bloomberg - Opec and its allies including Russia may next year ease the crude-output curbs that have helped prices recover from the worst crash in a generation, according to Saudi Arabia’s Oil Minister. With the market moving toward equilibrium and bloated inventories shrinking, the next step for global producers will be to phase out the reductions, Khalid Al Falih told reporters in New Delhi on Saturday. The nations taking part in the supply curbs are currently studying what a crude re-balancing will entail, and will announce their next steps once that is analysed, he said.

EIA U.S. Reserve Estimates (24 February 2018): By Ron Patterson - The data is provided directly by the E&Ps with some adjustments made by EIA for missing numbers. The data show reserves for the end of a given year, plus the reasons for change over the year: basically discoveries, production, revisions and sales. Until 2015 EIA had different categories for discovery (essentially a new reservoir, although there may be new pockets in existing reservoir) and extension (an increase in the area of an existing field). Recently most of this category has been extensions to LTO fields (i.e. an increase in the expected economic drainage area of a play). This year the reporting has changed so all discoveries and extensions are reported as a single figure and I’ve shown only this sum for previous years too. I have summed revision gains and losses plus adjustments to give a net number, and similarly for sales and acquisitions. (Source: Oil Price)

U.S. oil boom tempts Saudis to consider American crude sale (22 February 2018): By SERENE CHEONG, SINGAPORE (Bloomberg) - The kingdom’s state oil firm considered the possibility of sending American crude to Asia in February via a U.S. unit before determining it wasn’t economically viable, according to a person with knowledge of the matter. It also asked potential buyers in Asia if they would be interested in U.S. supply, according to officials at two regional refiners. The people asked not to be identified because the information is confidential. (Source: World Oil)

A new supply shock is oil’s $10 trillion question (21 February 2018): Andy Critchlow - A new oil supply shock could be just around the corner unless the industry starts investing fast. This was the stark warning delivered by the UAE's Energy Minister and current Opec president Suhail Al Mazrouei at the International Petroleum Week event in London on Monday. Despite the rise of US shale and the slow draining of global inventories, his prediction can’t be ignored. According to Mr Al Mazrouei’s calculations, the world needs to invest $10 trillion – equivalent to China’s entire GDP – in order to replace natural field declines through to the end of 2040. What's more, this eye-watering figure will only be enough to maintain output at current levels. Even more capital investment will be required if global producers are expected to keep up with forecast increases in demand. (Source: The National (UAE))

BP Energy Outlook 2018 - gas demand increase through switching (20 February 2018): Natural gas grows strongly, supported by broad-based demand, strong increases in low-cost supplies, and continuing expansion of supplies of liquefied natural gas (LNG) increasing the availability of gas globally. Global LNG supplies more than double over the Outlook, with around 40% of that expansion occurring over the next five years. The sustained growth in global LNG supplies greatly increases the availability of gas around the world, with LNG volumes overtaking inter-regional pipeline shipments in the early 2020s. (Source: Gas Processing)

The End Of The LNG Glut (19 February 2018): By Alan Mammoser - Many reputable forecasters, who've anticipated an LNG supply glut for years, now expect a brief period of surplus at most, and gradual market tightening after 2020. But global demand, which has surprised market watchers to the upside and kept physical markets tight during the past four years, could cut this looming mini-glut short. Numerous factors are at play but a few key indicators will shed light on likely supply and demand conditions through the mid-2020s. (Source: Oil Price)

Is This The Future For OPEC? (16 February 2018): By Nick Cunningham - OPEC and Russia, along with other countries participating in the oil production cuts aimed at balancing the market, are looking to create a “super group of oil producing countries,” according to a report from The National. The move would institutionalize the framework that has been in place since late 2016, when OPEC, plus a group of non-OPEC oil-producing countries led by Russia, cut output by a combined 1.8 million barrels per day (mb/d). The trick has been keeping everyone on board with the limits for an extended period of time, with multiple extensions, while also trying to figure out what to do when the oil market reaches the long-sought after “balance.”

Saipem details contract let for Oman’s grassroots Duqm refinery (15 February 2018): By Robert Brelsford, OGJ Downstream Technology Editor - Saipem SPA of Italy has confirmed the value of its portion of a previously awarded contract by Duqm Refinery & Petrochemical Industries Co. LLC (DRPIC), Muscat—a joint venture of state-owned Oman Oil Co. and Kuwait Petroleum Corp. subsidiary Kuwait Petroleum International Ltd.—for the final main contract package covering engineering, procurement, and construction (EPC) of DRPIC’s long-planned 230,000-b/d refinery and petrochemical complex to be built in the Duqm Special Economic Zone in Duqm, Al Wusta Governate, on Oman’s northeastern coast.

Iraq could save $5.2bn in four years from flared gas reduction, says Siemens (14 February 2018): Jennifer Gnana - Iraq could save about US$5.2 billion over the next four years by reducing gas flared from its fields in addition to other power generation efficiency efforts, as the world's third-biggest oil exporter looks to end flaring by 2021, Siemens said. Siemens presented a plan to Iraqi Prime Minister Haider Al Abadi to help with reconstruction efforts including a blueprint to "ensure uninterrupted power supply of up to 16 gigawatts by 2025 to major Iraqi cities and beyond". The proposal comes amid Baghdad's increasing efforts to tap foreign aid and move ahead with reconstruction following the defeat of ISIL. (Source: The National (UAE))

IEA Warns Of New Oil Glut (13 February 2017): By Irina Slav - The global oil market could slip into deeper oversupply on the back of non-OPEC production growth led by the United States, the International Energy Agency said in its latest Oil Market Report. “The main factor,” the IEA said, “is US oil production. In just three months to November, crude output increased by a colossal 846 kb/d, and will soon overtake that of Saudi Arabia. By the end of this year, it might also overtake Russia to become the global leader.” Commenting on the recent reversal in oil prices, the authority attributed it to profit-taking and a market correction spanning all industries, adding that oil’s fundamentals supported a decline in prices. (Source: Oil Price)

Adnoc awards Indian firm Dh1.25bn contract to develop onshore field (12 February 2018): Jennifer Gnana - Abu Dhabi National Oil Company (Adnoc) awarded Indian firm Larsen & Toubro (L&T) a contract worth more than Dh1.25bn to develop a small onshore field as the emirate boosts its energy ties with India. L&T will undertake engineering works in the Haliba asset, which is operated by Adnoc subsidiary Al Dhafra Petroleum and will start production at 20,000 barrels per day (bpd) by mid-2019. Production capacity of the field located along the south-east border of Abu Dhabi will be increased to 40,000 bpd by 2020. (Source: The National (UAE))

The Oil Bubble Has Burst. What Now? (9 February 2018): By Irina Slav - Those analysts who warned that oil prices can’t go on rising forever now have the chance to tell everyone else “I told you so.” Brent and WTI have fallen by 9 percent since the highs they hit in late January, with the international benchmark slumping to US$64.42 today in midday Asian trade, and West Texas Intermediate falling to US$60.61 a barrel. The problem with bubbles is that they are so irresistibly shiny while they expand, but sooner or later every bubble pops. Sometimes the bang can be deafening, which is what happened four years ago. This time it was quite loud, too. (Source: Oil Price)

India To Boost Oil Refining Capacity By 77% (8 February 2018): By Irina Slav - India plans to increase its crude oil refining capacity by 77 percent to 438.65 million tons, or more than 8 million bpd, a government report has revealed. The increase would happen gradually over the next 12 years as Asia’s new powerhouse seeks to satisfy its growing demand for fuel. The report said that the bulk of the capacity boost will come from facilities owned and operated by Reliance Industries, the local heavyweight, and Essar Oil, which Russia’s Rosneft acquired last year. (Source: Oil Price)

Adnoc to invest $3.1bn in Ruwais refinery to expand crude processing options (7 February 2017): Dania Saadi - Abu Dhabi National Oil Company will invest $3.1 billion on upgrading its Ruwais refinery that will provide flexibility to process crudes other than Murban, and free more of it up for export, while helping generate greater value from each barrel of oil pumped in the emirate. “Enabling the Ruwais Refinery-West to process Upper Zakum, or similar, medium sour crude, in place of Murban light sweet crude, will allow us to extract greater value from our crude resources,” said Abdulaziz Alhajri, director of Adnoc's downstream directorate. “It will mean we can maximise the benefit of price differentials to enhance refinery margins, improve the middle distillate products and release valuable Murban crude into the market.” (Source: The National (UAE))

BP Has Its Most Successful Year This Decade (6 February 2018): By Tsvetana Paraskova - Higher oil prices and increased upstream production from newly started fields helped BP (NYSE:BP) to more than double its 2017 earnings and beat expectations for Q4 profit. BP reported on Tuesday an underlying replacement cost (RC) profit—its preferred metric for net income—of $6.2 billion for 2017, compared with $2.6 billion for 2016, in what CEO Bob Dudley described “was one of the strongest years in BP’s recent history.” For the fourth quarter, BP booked underlying RC profit of $2.1 billion, up from $400 million for the same period of 2016, and ahead of the analyst expectations of $1.9 billion. (Source: Oil Price)

Chevron posts strongest year of crude discoveries since 2011 (2 February 2018): By KEVIN CROWLEY, HOUSTON (Bloomberg) - Chevron Corp. had its best year of oil and natural gas discoveries in more than half a decade as rebounding energy prices lifted drillers out of the worst slump in a generation. Chevron found enough untapped fields to replace 155% of the crude and gas it pumped last year, the highest reserves replacement since 2011. The biggest additions were in the U.S. Permian basin and Australia, the company said in a statement on Friday.

Goldman: Oil To Top $80 Within Six Months (1 February 2018): By Tsvetana Paraskova - Goldman Sachs has held one of the most optimistic views on the rebalancing of the oil market and oil prices in the near term, and the investment bank is now growing even more bullish, predicting that the oil market has likely balanced, and that Brent Crude will reach $82.50 a barrel within six months. Goldman sees the price of Brent reaching $75 per barrel within three months, lifting its short-term oil price projection from the previous $62 forecast. (Source: Oil Pricing)