Page 11 - Euroil Week 06 2020

EurOil
NEWS IN BRIEF
EurOil
European gas prices fall to
15-year low of under $100 per
1,000 cm
Gas prices in Europe have fallen to $101.70 per thousand cubic metres, Vedomosti reports. Gas prices in Zeebrugge reached $95.70 per kcm on February 7, which is a 15-year low.
“We note that spot gas prices in Europe have been below $100 per kcm in February, which is unusually low for the winter. The last time such price levels were observed was in September 2019. Given the spot price level in Europe, domestic deliveries are currently more valuable for Russian
gas producers than exports to Europe, we estimate,” VTB Capital (VTBC) said in a note.
“While both Gazprom and Novatek’s Yamal LNG export a sizable portion of
gas on long-term oil-linked contracts
(for Gazprom, the share of oil-linked and hybrid contracts stands at around 40%, we believe), the low level of spot European gas prices might present risks to our financial forecasts for Russian gas companies,” VTBC concluded.
Gas prices have been depressed by a combination of an unseasonably warm winter and the fact that both Gazprom and Ukraine’s national gas company, Naftogaz, built up significant reserves of stored gas in anticipation of a fresh gas war had the two companies failed to negotiate a new gas transit deal. A deal was reached in the last days of last year and both companies are now starting to unload their reserves of stored gas.
bne IntelliNews, February 10 2020
Poland says state-run
companies should merge as
much as possible
Poland needs “as many mergers of possible” of state-run companies in order to create entities able to operate on a global scale, deputy PM and the State Assets Minister Jacek Sasin told local media o February 10.
Poland’s ruling Law and Justice (PiS) party created the ministry of state assets after winning its second four-year term in the election held last October. Polish governments have long tinkered with state-run companies, planting loyalists in executive positions and trying to get the companies to carry out projects deemed
Week 06 13•February•2020
politically viable.
Sasin mentioned the planned merger of
oil companies PKN Orlen and Lotos as an example of a desirable merger. The minister also said he did not see why Poland needed four separate state-controlled energy companies. Those are PGE, Tauron, Enea, and Energa.
In December, PKN Orlen announced a tender to take over Energa, offering PLN7 (€1.64) per share.
“[State-controlled] companies must be profitable and must invest. The latter can happen via taking over other companies
or by increasing potential via mergers. There should be as many mergers [of state- controlled] companies as possible,” Sasin told newspaper Dziennik Gazeta Prawna.
“Many European countries have their own national companies, which, however, operate globally. Poland has virtually none. Neither public nor private. Our companies are large, but in Poland, not globally,” the minister added.
bne IntelliNews, February 11 2020
Aker BP strengthens its position in the Skarv area
Aker BP has entered into an agreement with PGNiG Upstream Norway AS to swap its 3.3% interest in the non-operated Gina Krog field and an 11.9175% interest in licence 127C, in exchange for a 5% interest and operatorship in licence 838 and a cash consideration.
Licence 838 contains the recent Shrek discovery near the Aker BP operated Skarv field. The transaction and the transfer of operatorship to Aker BP will enable an efficient development of this discovery as a tie-back to the Skarv FPSO. The licence also holds further exploration potential.
Licence 127C contains the Alve Nord discovery and the Alve NE prospect, which is also located in the Skarv area. Aker BP plans to drill an exploration well in the licence in 2020.
The transaction will provide Aker BP with a total cash consideration of up to $62mn, consisting of a firm payment of $51mn upon closing and an additional payment of $11mn contingent on a development of the Alve Nord discovery.
After this transaction, Aker BP will hold 35 % interest in licence 838 and 88.0825 % interest in licence 127C, while it will have fully divested its interest in the Gina Krog field. The effective date for the transaction is 1 January 2020.
The transaction is subject to approval by the Norwegian authorities.
Aker BP, February 11 2020
Increased production from the Fram field
A new gas module that was recently put
on stream on the Troll C platform will accelerate and boost production from Fram by substantial profitable volumes.
Fram is an oil and gas field tied in to the Troll C platform. In 2017 the Fram partners decided to invest about NOK 1 billion in a new gas module, boosting the gas processing capacity on Troll C by a total of 3.5 million standard cubic metres per day. The decision was made in agreement with the Troll partners.
“The gas module accelerates gas production and capacity in the Fram licence for existing and new wells, adding valuable short-term value. At the same time the gas module allows new future discoveries to be tied in,” says Gunnar Nakken, senior vice president, operations west.
The investment was essential to further developing Troll C as a hub for the area.
“This is an exciting area. On behalf of
the Fram license we made one of the largest discoveries on the Norwegian continental shelf in 2019 here, Echino South. In addition, several prospects are being considered for drilling”, says Nakken.
Gunnar Nakken (left) , senior vice president, operations west, and Geir Tungesvik, Equinor’s senior vice president for project development.
The slightly more than 400-tonne gas processing module featuring gas drying and cooling units was built by Aibel in Haugesund, whereas Aibel in Bergen was responsible
for the engineering work. Overall some 300 people have been involved in the project.
“The project had a very important employment effect in a period of few new contract awards, and it was delivered without serious incidents and on budget,” says Geir Tungesvik, Equinor’s senior vice president for project development.
The oil and gas industry recently launched an ambition to reduce carbon emissions from the NCS to near zero by 2050, and on behalf of the Troll partners Equinor awarded a front- end engineering and design contract (FEED) for modifications of Troll B and Troll C to enable power from shore.
The main purpose of the electrification project is to reduce the emissions of CO2 and NOx from the Troll B and Troll C platforms, which will also reduce the climate footprint from tied-in fields such as Fram.
Equinor, February 11 2020
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