Oct 2016

GE and Baker Hughes to create fullstream digital industrial service company (31 October 2016): GE and Baker Hughes have entered into an agreement to combine GE’s oil and gas business (GE Oil & Gas) and Baker Hughes to create a world-leading oil and gas technology provider with a unique mix of service and equipment capabilities. The “New” Baker Hughes will be a leading equipment, technology and services provider in the oil and gas industry with $32 B of combined revenue and operations in more than 120 countries. By drawing from GE technology expertise and Baker Hughes capabilities in oilfield services, the new company will provide physical and digital technology solutions for customer productivity.

OPEC Head Says Oil Producers On Course to Clinch Supply Deal (31 October 2016)- Bloomberg: OPEC’s most senior official said the organization and other major oil producers are “on course” to deliver a deal next month that will temper the global oversupply. All of OPEC’s 14 members as well as erstwhile rivals such as Russia are committed to finalizing the agreement, to be completed when the group meets Nov. 30, Secretary-General Mohammed Barkindo said Monday in a Bloomberg Television interview. Even Iraq, which has demanded an exemption from supply caps and vowed to increase production, is willing to play its part, he said.

Oil bulls won’t be able to push prices higher for long: Oil prices hit its highest level in fifteen months in mid-October on hopes of a deal to freeze output (30 October 2016): After the Organisation of Petroleum Exporting Countries (Opec) failed to reach an immediate agreement on output cuts in Vienna over the weekend, analysts expect oil prices may head southward. On Friday, Brent crude fell 1.51 per cent to be at $49.71 per barrel, registering its biggest weekly loss in six weeks. West Texas Intermediate closed 2.05 per cent lower at $48.70 per barrel.

How solar energy can (finally) create value (McKinsey & Company By David Frankel, Aaron Perrine, and Dickon Pinner): Last year, China and the United States installed a record 15 and 7.5 gigawatts (GW) of solar, respectively. This year, the world could install as much as 66 GW. 1.“Led by China, the United States, and Japan, global solar installations to reach approximately 66.7 GW, reports Mercom Capital Group,” Mercom Capital Group, April 2016, mercomcapital.com. In 2015, investors poured $161 billion of capital into solar, the largest amount for any single power source. 2.Global trends in renewable energy investment 2016, Frankfurt School–United Nations Environment Programme (UNEP) Collaborating Centre for Climate & Sustainable Energy Finance, March 2016, fs-unep-centre.org. In China, 43 GW of capacity have been installed, more than in any other nation; India aspires to build 100 GW of solar capacity by 2017. Across the sun-drenched Middle East, investment rose from $160 million in 2010 to about $3.5 billion in 2015.

Exxon Mobil profit slides as oil-market slump threatens reserves: By Joe Carroll (28 October 2016): IRVING, Texas (Bloomberg) -- Exxon Mobil profit sank as the world’s largest publicly traded oil company posted its lowest production in seven years and warned the prolonged slump in energy markets may force a write off of 19% of its reserves. The Irving, Texas-based driller extended its longest streak of profit declines in almost three decades. Third-quarter net income was $2.65 billion, or 63 cents a share, compared with $4.24 billion, or $1.01, a year earlier, Exxon said in a statement on Friday. The per-share results exceeded the 59-cent average of 20 estimates in a Bloomberg survey, though the company pumped less crude and natural gas than analysts expected.

OPEC can’t succeed alone as cuts would barely drain oil surplus (27 October 2016): By GRANT SMITH, LONDON (Bloomberg) -- Even if OPEC defies a skeptical market by implementing output cuts in full, it still won’t drain the ocean of surplus oil already pumped from the ground. The Organization of Petroleum Exporting Countries aims to shrink the world’s bloated oil inventories with its first production cut in eight years, according to Secretary-General Mohammed Barkindo. Yet the bloc’s own data show that even the maximum reduction under consideration would barely dent record stockpiles next year. That makes securing help from competitors—chiefly Russia—critical to ending the glut.

Oil falls as U.S. supply seen rising while Russia resists cuts (26 October 2016): By BEN SHARPLES, ANGELINA RASCOUET, NEW YORK (Bloomberg) -- Oil dropped for a third day after industry data showed U.S. crude stockpiles expanded as Russia reiterated it would prefer freezing output at current levels rather than cutting. Futures declined as much as 1.6% in New York after closing below $50/bbl Tuesday for the first time in more than a week. U.S. crude inventories increased by 4.75 MMbbl last week, the American Petroleum Institute was said to report. Energy Information Administration data Wednesday is forecast to show supplies rose. Output cuts are not an option for Russia, the nation’s envoy to OPEC said, according to Interfax.

Libya's Waha oil field resumes production (25 October 2016): Production has been resumed at Libya's Waha oil field, bringing overall production from the site to 580,000 barrels per day, according to a senior Libyan oil official. Libya's oil production has been severely restricted for several years by an on-and-off blockade of its major export terminals. The Waha field, which is operated by the Waha Oil Company, is one of the main contributors of export grade oil from the Es Sider port. Reuters reported that it is the first of the Es Sider fields to resume production.

ITER: will the world’s biggest fusion project change the future of energy? (20 October 2016) Heidi Vella - International nuclear fusion collaboration ITER is moving forward with its project to build the world’s largest tokamak after newly appointing MOMENTUM to manage its assembly. Work will commence in August and will include the assembly of more than one million components. What are the challenges of the project and how pivotal is its success to the future commercialisation of carbon-free fusion energy?

Iraq Balks at Joining OPEC Cuts, Making Oil Output Deal Harder (23 October 2016): OPEC’s second-largest producer threw an obstacle in the group’s path toward a final deal to stabilize oil markets when Iraq balked at joining efforts to trim output to prop up crude prices. Iraq should be exempted from cutting production because it’s embroiled in a war with Islamic militants, Oil Minister Jabber Al-Luaibi said Sunday at a news conference in Baghdad. The country currently produces more than 4.7 million barrels a day it pumped in September, and Iraq’s output could rise higher still as the government urges international companies to boost production at its fields, he said. The minister disputed Organization of Petroleum Exporting Countries figures that peg Iraqi output at less than 4.2 million barrels daily.

OPEC deal unlikely to lift oil prices for long, World Bank says (21 October 2016): By Andrew Mayeda - WASHINGTON, D.C. (Bloomberg) -- OPEC’s power to help lift oil prices by curbing output will be tested by the ability of shale-oil producers and other unconventional suppliers to ramp up production, the World Bank said. Crude prices have surged more than 7% since Sept. 28, when the Organization of Petroleum Exporting Countries agreed to limit production for the first time in eight years. The group includes 14 major oil producers, from Saudi Arabia to Iran and Nigeria. A global supply glut has caused oil prices to slump over the past two years.

“Several” injured in Saudi Aramco fire near Riyadh (20 October 2016): By OGJ editors - Saudi Aramco said “several” people were injured Oct. 19 in a fire near a tank at a crude oil processing facility near Riyadh. According to Arab News, 17 were hospitalized, including three in intensive care. Saudi Aramco said operations were not impacted. On Oct. 19, the company said emergency response teams had controlled the fire, and that it would provide additional information “as it becomes available.” Eight people were injured in September in a fire at Saudi Aramco’s Ras Tanura oil terminal.

The World’s Biggest Oil Kingdom Reverses Course (20 October 2016): Next year will be a test of strength for Saudi Arabia, the world’s largest oil exporter, as it tries to regain control of the market and lift prices. After two years of pumping at full blast, and helping drive prices to 12-year lows in January, the Saudis now appear willing to pull back. In September, at a meeting in Algiers, the Organization of the Petroleum Exporting Countries agreed to the outlines of a plan to lower the group’s production by as much as 750,000 barrels a day. Although the details won’t be final until the cartel’s Nov. 30 meeting in Vienna, the Saudis are expected to make most of those supply cuts.

IMF Sees Saudi Break-Even Oil Price Drop Less Than Forecast (19 October 2016) - Bloomberg: The average oil price that Saudi Arabia needs to balance its budget will fall this year by only half as much as forecast six months ago, according to the International Monetary Fund. The country’s fiscal break-even price will drop to $79.70 a barrel this year from $92.90 in 2015, the IMF said in a report released on Wednesday, a fall of 14 percent. In April, the IMF projected that the Saudi break-even price would decrease by 30 percent this year, to $66.70 a barrel from $94.80.

South Korean shipbuilders eyed for LNG carriers deal worth $3.8 B (12 October 2016): (Reuters) A little-known investment company said it intends to order up to 20 LNG carriers, probably from South Korean shipbuilders. The contracts would be worth as much as $3.8 B, two people with direct knowledge of the matter told Reuters. CBI Energy and Chemical, which is controlled by Australian and Canadian investors and has offices in Hong Kong, also said in a statement to Reuters that it would be seeking to buy floating LNGproduction and import facilities as part of an ambitious plan for Africa and Asia.

First fully commercial CCSU plant launches capturing CO2 at $30/ton (11 October 2016): Carbon Clean Solutions Ltd. (CCSL) has launched a new project that will see more than 60 MMt of CO₂ captured from the 10 megawatt coal-fired power station based near Chennai, India. Post-start up, the power station is set to become a zero-emission plant. The ground-breaking project, believed to be the first of its kind, is privately financed and will capture CO₂ at just $30/ton, much lower than the $60/ton – 90/ton capture costs typically observed in the global power sector.

Populist resistance to trade damping growth projections (7 October 2016): ByBob Tippee - Surging populism and the related perils for trade are damping expectations for global economic growth. The International Monetary Fund lists “political discord and inward-looking policies” among threats to assumptions underlying its latest forecast of world output. In this month’s edition of its twice-yearly World Economic Outlook, IMF projects global growth of 3.1% this year and 3.4% in 2017, compared with 3.2% in 2015. In April, IMF projected growth of 3.2% this year and 3.5% in 2017.

Eni and BP to sell Mozambique LNG (7 October 2016): Eni and its partners in Area 4, offshore Mozambique, sign with BP a binding agreement for the sale of LNG produced in Coral South. Eni, through Eni East Africa S.p.A, and its partners in the Area 4 Block in Mozambique, Galp, Kogas and ENH, signed today a binding LNG sale agreement with BP Poseidon Ltd, a company entirely controlled by BP PLC, for the sale of the Liquefied Natural Gas (LNG) produced by the Coral South Floating LNG facility, to be installed offshore Mozambique.

Federal carbon price announced in Canada (5 October 2016): By OGJ editors - Provincial governments in Canada are resisting the federal government’s plan to impose a carbon price higher than most of them have in place. Prime Minister Justin Trudeau announced a nationwide floor price on emissions of greenhouse gases while inaugurating debate in the House of Commons over ratification of the Paris agreement on climate change. The price would start at $10/tonne of carbon dioxide and rise to $50/tonne in 2022.

Oil rises to three-month high as investors assess OPEC agreement (3 October 2016): NEW YORK (Bloomberg) -- Oil climbed to the highest level in three months in New York as traders continued to assess last week’s change in OPEC policy. U.S. crude futures rose as much as 1.3% after advancing 8.5% last week. While OPEC outlined an accord to reduce production by as much as 750,000 bopd, its third-largest member Iran wants to increase exports to 2.35 MMbopd in the coming months, state news agency IRNA reported. The OPEC member is currently shipping 2.2 MMbopd. Rigs targeting crude in the U.S. rose a fifth consecutive week to the highest level since February, Baker Hughes said on its website Friday.

Amec Foster Wheeler to consult on Ichthys LNG Project, Australia (3 October 2016): Amec Foster Wheeler has been awarded a consultancy contract by INPEX for the Ichthys LNG Project in Australia. Ichthys is the largest discovery of hydrocarbon liquids in Australia in the last 40 years. The scope of work involves Amec Foster Wheeler providing a team of production and maintenance assessors to carry out competency assessments for the Ichthys operations and maintenance teams across all project assets. This includes the central processing facility, floating production storage and offtake vessel and the Bladin Point LNG onshore processing plant. The assessments will be aligned to Australian national competency standards for the process industry.