Page 11 - LatAmOil Week 49

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It shows that some appetite for long-term offtake NorthAmOil: Chevron cuts capex
agreements remains and comes as a boost to Chevron followed rival super-major ExxonMo-
other producers that are still trying to take FIDs.. bil in announcing a cut to its capital expendi-
ture budget last week. This comes as both large
If you’d like to read more about the key events shaping and small producers are looking to 2021 – and
the global LNG sector then please click here for beyond – and independents can be expected to
NewsBase’s GLNG Monitor. follow the super-majors’ leads in announcing
scaled-back spending plans over the coming
MEOG: OPEC+ agreement weeks.
The oil market sighed with relief this week when Chevron said on December 3 – three days
it was announced that OPEC and its partners after ExxonMobil’s capex plans were unveiled
had agreed a deal to maintain 7.2mn bpd of cuts – that its 2021 capital and exploratory spending
until at least the end of January, with monthly programme would total $14bn. It added that
meetings to decide increases going forward. its longer-term capex guidance over 2022-25
However, the friction between key OPEC was $14-16bn. This is down from a previous
members Saudi Arabia and the UAE that caused projection of $19-22bn, with Chevron unveil-
the group to delay their meeting with non-OPEC ing 2020 capex guidance of $20bn this time last
partners has not gone unnoticed. Riyadh had year before subsequently scaling back its plans OPEC and
been keen to maintain the previous 7.7mn bpd after the oil and gas industry entered its latest
cuts for a further three months in order to max- downturn. its partners
imise market stability and prop up prices, but the The super-major said it would continue to
UAE said it would only support a continuation of prioritise investments that are “expected to grow have agreed
reductions if non-compliers were forced to toe long-term value and deliver higher returns and
the line. While a compromise has been reached, lower carbon”. It added that this would include to maintain
it is likely to have fallen short of the levels the over $300mn worth of investments aimed at 7.2mn bpd of oil
UAE would have hoped for with ramping up advancing the energy transition in 2021.
production, an important element in its efforts Chevron said it expected to increase invest- production cuts
to make its Murban crude grade a benchmark ment in various “advantaged assets” over the
for the commodity. coming years, including the Permian Basin, until at least the
Iraq will play a particularly important role other unconventional plays and the Gulf of
in the success of the latest deal, with the coun- Mexico. end of January
try the most flagrant offender when it comes to Some parallels can be drawn between Chev-
non-compliance. Meanwhile, Total is reported to ron and ExxonMobil here, with the latter also
have taken steps to sell off a non-core asset in the saying it would prioritise spending on a handful
Kurdish north of the country, with the Sarsang of assets, including its operations in the Permian.
block apparently being marketed by Jefferies. But Chevron appears to have more of a focus on
OPEC+ member Oman has concerted efforts its entire US portfolio, which now includes the
to reinvigorate the sultanate’s oil and gas indus- assets it acquired through its merger with Noble
try through the creation of Energy Development Energy earlier this year.
Oman (EDO), a new company that will seek to Other announcements of capex cuts, albeit
tap international debt markets backed by the on a smaller scale, are set to follow across the US
country’s largest oil concession, Block 6. oil and gas industry..

If you’d like to read more about the key events shaping If you’d like to read more about the key events shaping
the Middle East’s oil and gas sector then please click the North American oil and gas sector then please click
here for NewsBase’s MEOG Monitor . here for NewsBase’s NorthAmOil Monitor.™

Week 49 10•December•2020 www. NEWSBASE .com P11