Central Asian Countries Commit To Accelerate The Uptake Of Renewables

Countries of Central Asia and the International Renewable Energy Agency (IRENA) last week released a Communiqué on accelerating renewable energy deployment in the region.

The Communiqué was released in the framework of the Energy Ministerial, Meeting the Challenge of Sustainable Energy at the Astana EXPO-2017. The meeting identified six key areas to facilitate the up-take of renewables and help diversify the region’s energy mix, reflected in detail in a regional Action Plan.

“Covering over four million square kilometers, the countries of Central Asia are endowed with rich renewable energy sources that can drive sustainable economic development and growth,” said IRENA Director-General Adnan Z. Amin.

“With renewable energy targets in place for 2020 and beyond, the region can now seize this transformative opportunity for a sustainable energy future, and the new Action Plan will help boost efforts of renewable energy uptake".

During the Energy Ministerial at the Astana EXPO-2017, countries agreed that renewable energy plays a critical role in addressing the major regional challenges identified in IRENA’s analysis, including: rising electricity demand; ageing power infrastructure; limited energy access for remote areas; and the impact of climate change on the energy systems.

“The collaboration between Kazakhstan and IRENA continues to be fruitful, and together we have made significant strides in assessing the future development of renewable energy in the region.

We recognise that renewable energy can help the region with the imperative to modernise its energy system and to meet the goals of the Paris Agreement. Kazakhstan welcomes the efforts made today. I believe the EXPO, over the next couple of months, will provide the international community with a platform for valuable discussions on expertise, innovative solutions and promising projects in the renewable energy field,” said Bozumbayev Kanat Aldabergenovich, Kazakhstan’s Energy Minister at the Energy Ministerial.

Recently, the region has made strides in diversifying its energy mix, and installed 500 megawatts of new non-hydro renewable power capacity over the last two years. However, remote areas still lack reliable power and heat, issues which renewable energy and energy efficiency together can help address.

Speaking at the Ministerial, Mohamed El-Farnawany, Director of Strategic Management and Executive Direction at IRENA said, “The Action Plan reflects the commitment of the countries of Central Asia to further their economic development, through accelerating the uptake of renewable energy. It also enables them to reduce carbon emissions and fulfil their international objectives and national ambitions in this regard.”

Countries identified the following areas for IRENA collaboration to facilitate the deployment of renewable energy in the region: resource assessments, integration of variable renewable energy into power grids, policies and regulations for renewable energy deployment, renewable energy statistics and data collection, project facilitation, and awareness raising.

IRENA will work closely with countries of the region as well as partners and stakeholders to support ongoing work to advance renewable energy development in Central Asia.

Shell Shareholders Approve Merger With BG Group

 

More than 80 percent of shareholders in Royal Dutch Shell voted in favor of combining with British energy company BG Group, the Dutch supermajor said.

"I am delighted with the positive shareholder vote and the confidence that shareholders have shown in the strategic logic of the combination of Shell and BG," Shell CEO Ben van Beurden said in a statement.

Shell shareholders were asked to approve the acquisition of BG Group by the company. The Dutch supermajor said just over 83 percent of its shareholders voted in favor of the deal.

Shell said combining with BG Group would mark the start of a new chapter for the company. Costs will move lower by about $4 billion for 2016, but also result in widespread redundancies. About 10,000 staff and director contractor positions will be eliminated across both companies.

The $7 billion tie-up with BG Group will be one of the largest mergers of its kind since Exxon and Mobil joined in the 1990s. For the combined group, Shell in a prospectus last year said capital investments for 2016 would be around $33 billion, lower than previously forecast by $2 billion, or 5.7 percent.

Crude oil prices are trading at or near low levels not seen in a decade, leaving energy companies without capital needed for strong investments.

Shell through the deal takes on a larger footprint in the liquefied natural gas sector, a sector less dependent on the geopolitical constraints in the midstream, or transit, part of energy. Economic and political disputes between Russia and Ukraine, for example, pose threats to European energy security.

BG shareholders vote on the measure Thursday. If approved, the transaction would be finalized Feb. 15.

SOURCE: UPI.COM

Halliburton Reports $28m Revenue Loss

 

Steep declines in the North American market were in part behind the 9 percent decline in revenue, oil field services company Halliburton said.

Halliburton, which provides services to the drilling and production side of the energy sector, reported a $28 million loss for the fourth quarter, against a profit from the previous year's quarter of $901 million. Total revenue was down 9 percent.

"North America revenue declined 39 percent compared to 2014, as a result of unprecedented declines in activity, with the U.S. land rig count ending the year down 64 percent from the 2014 peak," Halliburton President Jeff Miller said in a statement.

Halliburton is the second-largest company of its kind behind Schlumberger, which last week reported a 9 percent decline in fourth quarter revenue. North American operations accounted for the bulk of the drop for Schlumberger, with land-based revenue falling off in the region by 45 percent.

Halliburton's international business saw fourth quarter revenue decline 5 percent. Year-end equipment sales for the company did not bring in the expected late surge in revenue either because some of Halliburton's customers are also facing budget constraints.

Outside of operating costs, the company recorded $79 million in costs related to the pending acquisition of rival services company Baker Hughes, compared to $62 million during the fourth quarter.

"We remain fully committed to closing the pending acquisition of Baker Hughes," Halliburton Chairman and CEO Dave Lesar said.

The planned merger between the services companies has faced anti-trust scrutiny. The European Commission found last week that only Halliburton, Baker Hughes and Schlumberger were able to provide necessary services to the industry, adding the merger of the former two would grossly inhibit competition from smaller potential market players.

Despite the industry headwinds, President Miller said the company was laying the groundwork for a strong recovery once the energy sector rebounds.

SOURCE: upi.com

ENI Boss Says OPEC Losing Clout

 

The Organization of Petroleum Exporting Countries is fading, though Middle East producers may reign supreme, the CEO of Italian energy company ENI said.

Claudio Descalzi, ENI's top executive, told delegates at a Middle East and North African energy conference in London current weakness in the crude oil market was driven by near-sighted focus on certain data sets that may not correlate with long-term fundamentals

"The lack of a regulator -- the role played before by OPEC -- which balanced oil prices and gave a long-term perspective, has resulted in the market being handed over to short-term positions," he said in his remarks.

OPEC members have pushed a robust production policy even as crude oil prices drift further away from mid-2014 peaks above $100 per barrel. OPEC, led tacitly by Saudi Arabia, said it needed to defend a market share against the increase in rival producers outside the 13-member group.

OPEC Secretary General Abdalla El-Badri said from London the crude oil market is going through a "significant readjustment" as free capital vanishes and supplies build in a weakened global economy.

"Given how this developed, it should be viewed as something OPEC and non-OPEC tackle together," he said. "Yes, OPEC provided some of the additional supply last year, but the majority of this has come from non-OPEC countries."

ENI's chief said that, despite the market influence, it will be member states Iraq and Saudi Arabia that are expected to lead in production growth moving forward.

Descalzi, meanwhile, said the short-term focus on data releases, like weekly figures on oil stockpiles in the United States from the U.S. Energy Information Administration is putting more negative pressure on crude oil prices that actual fundamentals warrant.

"Every time the U.S. Energy Information Administration publishes U.S. stock figures, there is an immediate and sensitive reaction on the Brent price," he said.

This tendency comes as lower crude oil prices are pressuring investments necessary to sustain robust production in key non-OPEC producers like the United States. Between 2013 and 2014, OPEC supply declined by 1 million barrels per day, while non-OPEC output grew by 3.7 million bpd.

Most analysts expect balance will return to the global energy market by late 2016 or early 2017 as U.S. production diminishes. Decreased spending, meanwhile, means about 1.5 million bpd will be deferred within five years.

SOURCE: upi.com

OPEC Pumped 32.28m Barrels Of Crude Oil Per Day In December

 

Oil production from the Organization of the Petroleum Exporting Countries (OPEC) fell by 130,000 barrels per day (b/d) in December on lower volumes from Iraq, Nigeria and Saudi Arabia, according to the latest Platts survey of OPEC and oil industry officials and analysts.

The latest survey -- which expands the estimate for Iraq to bring in volumes from the semi-autonomous Kurdistan region and also includes an estimate for Indonesia -- shows December output fell to 32.28 million b/d from 32.41 million b/d in November. For comparison purposes, the November table has been adjusted to include Kurdistan and Indonesia.

'Collapsing oil prices and oversupply used to be a recipe for, at the very least, an emergency OPEC meeting,' said Margaret McQuaile, senior correspondent for Platts, a leading global provider of energy and commodities information.

'That is no longer the case, however, and Saudi Arabia and its Gulf allies appear to be as committed to their laissez-faire production policy as they ever were. Without the support of these countries for an emergency meeting, it seems unlikely that one will take place - in the very short term, at any rate.'

Volumes from kingpin producer Saudi Arabia dipped last month by 50,000 b/d to 10.1 million b/d. The kingdom is facing an unprecedented budget crunch amid the steep drop in oil prices since mid-2014.

Despite sliding oil prices, however, it has given no indication that it is ready to abandon the market share strategy that it persuaded OPEC to adopt in November 2014. Indeed, although the December volume was down from that of November, Saudi output remains above the 10 million b/d it has consistently exceeded since March last year.

SOURCE: www.oilvoice.com

Schlumberger Buys Into Ophir Energy In Equatorial Guinea

 

Ophir has signed a non-binding Heads of Terms Agreement with Schlumberger whereby Schlumberger will, subject to due diligence, definitive documentation and Government approval, receive a 40% economic interest in the Fortuna FLNG project, offshore Equatorial Guinea.

Ophir and Schlumberger will now work towards signing a definitive agreement, which is expected to be signed in 2Q 2016, ahead of Final Investment Decision.

Under the definitive agreement Schlumberger will reimburse 50% of Ophir's past costs in the form of a development carried interest. This is expected to cover Ophir's share of capital expenditures up until first sales of LNG.

As previously indicated, Ophir is also presently shortlisting the gas off-take offers and expects to complete this process within the coming weeks. All workstreams are progressing in line with expectations and the project remains on track to achieve FID in mid-2016.

Mercedes Eworo Milam, Director General of Hydrocarbons in the Equatorial Guinea Ministry of Mines, Industry and Energy ('MMIE'), commented: 'MMIE continues to lend full support to Ophir, GEPetrol and Sonagas as it progresses the Fortuna FLNG project towards FID.'

On the 22nd January 2016 an agreement was signed between Golar and Schlumberger to jointly develop gas reserves through FLNG technology. Subject to a successful FID and implementation of the partnership in the Fortuna project both Schlumberger and Golar have expressed interest to extend this partnership to include other existing or potential new Ophir assets

Ophir's 2015 operating cash flow from producing assets and capex remain broadly in line with previous guidance. Production for 2015 averaged 13,000 boepd on a full year proforma basis. This exceeded guidance with both the Bualuang and Sinphuhorm fields producing ahead of budget.

Capital expenditure in 2015 was approximately $250 million on a full year proforma basis. Group cash at year end was approximately $620 million with a net cash position of approximately $360 million. Group gearing at year end was in the region of 12%.

Ophir's 2016 production guidance is 10,500 boepd to 11,500 boepd, with the Kerendan gas field expected to start contributing to these volumes in the second half of the year.

Ophir's 2016 capital expenditure is expected to be between $175 million and $225 million. Group operating cashflow from producing assets in 2016 is forecast to be between $75 million and $100 million.

This, along with a planned 2016 refinancing of the Group debt facilities, is expected to lead to a 2016 year end cash position of between $550 million and $600 million, a net cash position of between $225 million and $275 million, and an estimated gearing of 17%.

Ophir has a low cost production base that is cash generative materially below current commodity prices. The Bualuang oil field has a 2016 post-tax operating cashflow break-even of approximately $17 per barrel before capex (approximately $25 per barrel after capex).

Ophir's total production base has a post-tax operating cashflow breakeven price of approximately $15 per boe.

SOURCE: www.oilvoice.com

 

Shell Not Sure When Recovery Will Emerge

 

There's a durable sense of weakness in the oil economy and, while recovery is expected, it's uncertain when, Royal Dutch Shell said Wednesday.

Shell said it expects fourth quarter profits to come in at around 50 percent lower year-on-year as the industry continues to suffer from the dramatic declines in crude oil prices. The price for Brent crude oil tumbled 2.8 percent in early Wednesday trading in a sign of protracted weakness in the energy markets.

A spokesperson for Shell said the company was positioning itself for a sustained downturn by cutting capital investments. The company is planning to merge with British counterpart BG Group and, combined, spending of $33 billion for the year marks a 45 percent reduction from its peak.

Shell said an oversupplied market is the fundamental reason behind the sector decline. Once production falters from maturing fields and investments in future output falls off, supply pressures should ease and markets will start to recover.

"Overall production capacity is estimated to be falling by about 4 million barrels a day, so the world needs an additional five million barrels a day just to stand still in terms of meeting demand," a Shell spokesperson said in response to email questions. "These fundamentals point to the oil price recovering, but when and to what level is a matter of speculation."

Provided the deal with BG Group is completed, the company said the combined footprint will be positioned well to take advantage of resilient sectors like liquefied natural gas and deep-water exploration, which will combine to act as a springboard for the combined entity.

Shell Chief Executive Officer Ben van Buerden said teaming up with BG Group would mark the start of a new chapter for the Dutch supermajor. Costs will move lower by about $4 billion for 2016, but also result in widespread redundancies.

"These actions will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies, as streamlining and integration of the two companies continue," he said in a statement.

Shares in Royal Dutch Shell (NYSE:RDS) held steady, while those for BG Group (LON:BG) were off 2.4 percent in early Wednesday trading.

SOURCE: UPI.COM

 

CNOOC Trims Global Production Target

 

China National Offshore Oil Corp., the country's largest producer, said its 2016 production forecast is lower than last year by about 3.5 percent.

CNOOC set a production target for the year in the range of 470 million to 485 million barrels of oil equivalent.

"The net production targets set for 2017 and 2018 are around 484 and 502 million boe respectively," the company said. "The estimated net production for 2015 was approximately 495 million boe."

The decline comes as the slowing in the Chinese economy is putting downward pressure on crude oil prices. The Chinese National Bureau of Statistics reported the economy in 2015 grew 6.9 percent year-on-year for its slowest rate in a quarter of a century.

Wang Baoan, the head of the NBS, was quoted by China's official Xinhua News Agency as saying the country has the "daunting task" of enacting deep reforms to slow the pace of economic decline.

CNOOC said that, in light of the economic pressures, it would put cost control and efficiency at the forefront of its agenda for 2016.

"In response to the continued challenge posed by low oil prices, we will maintain prudent financial policy and further strengthen cost-control measures in order to make steady progress in the overall business, including exploration, development and production," Chief Financial Officer Zhong Hua said in a statement.

CNOOC said spending for 2016 would be "no more than $9.1 billion." That's down nearly 11 percent from last year.

SOURCE: UPI.COM

Weak Oil Economy Leaves Energy Companies With Less Capital To Invest

 

Nearly 3 million barrels of oil developments may see production delays given the capital pressure from lower crude oil prices,Wood Mackenzie finds.

"The impact of lower oil prices on company plans has been brutal," Angus Rodger, Wood Mackenzie's principle researcher in exploration and production, said in a statement.

The price for Brent crude oil, the global benchmark, is down roughly 70 percent from the most recent high in June 2014 and off 16 percent from the start of 2016. That leaves energy companies with less capital to invest in exploration and production, or the upstream part of the energy sector.

U.S. supermajor Chevron in its latest budget forecast said it plans to spend about $26.6 billion this year, about a quarter less than total expected investments for 2015. The overall budget for ConocoPhillips of $7.7 billion is a 25 percent reduction in expected full-year capital spending for 2015

Wood Mackenzie found about $170 billion in spending through 2020 has been delayed from 68 projects pulled off the table. By 2021, that means a deferred volume of around 1.5 million barrels per day and 2.9 million bpd by 2025. Those delays mean companies aren't expected to produce new oil from new projects until at least the middle of the next decade.

"But against a backdrop of overwhelming corporate pressure to free-up capital and reduce future spend -- to the detriment of production growth -- there is considerable scope for this wall of output to get pushed back further if prices do not recover and/or costs do not fall enough," he said.

Crude oil prices are lower in part because robust production levels are pushing markets toward the supply side as the global economy struggles to show growth. A balance between supply and demand should develop by the end of this year, though a recent report from the U.S. Energy Information Administration said Brent will only reach $50 per barrel by 2017.

"Tumbling prices and reduced budgets have forced companies to review and delay final investment decisions on planned projects, to re-consider the most cost-effective path to commerciality and free-up the capital just to survive at low prices," Rodgers said.

Subscribe to this RSS feed

26°C

Kampala

Mostly Cloudy

Humidity: 74%

Wind: 22.53 km/h

  • 24 Mar 2016 28°C 22°C
  • 25 Mar 2016 28°C 21°C