Page 8 - AsianOil Week 17 2022

AsianOil ASIA-PACIFIC AsianOil

Asian refiners reap record profits

on high demand, tight supply

PERFORMANCE ASIAN refiners were reported as seeing their tightening supply as demand rises elsewhere.
highest ever profits this week. This has been Other trends weighing on supply include annual
attributed to a combination of factors, including maintenance at some refineries.
higher demand during holiday seasons, rebounds According to Reuters, export-oriented refin-
from the coronavirus (COVID-19) pandemic ers including South Korea’s SK Energy and S-Oil,
and increased exports to Europe. And the as well as Taiwan’s Formosa Petrochemical, stand
demand strength across the region came despite to benefit in particular from higher margins.
consumption falling at its fastest rate in around However, the news service also cited traders
two years in China amid ongoing lockdowns. as warning that refiners – outside China – are
As this was playing out, profit margins for already operating at full capacity and have little
refineries in Singapore – seen as the bellwether ability to produce more fuel.
for the broader Asian refining industry – rose Meanwhile, Europe’s scramble to reduce its
above $20 per barrel on April 27. Reuters dependence on Russian energy continues to
reported that gasoline, diesel and jet fuel crack have a ripple effect across other regions, includ-
spreads all hit record highs of $22.28 per barrel, ing Asia. Europe’s diesel imports from Asia, the
$47.53 per barrel and $37.38 per barrel respec- Middle East and the US are anticipated to hit
tively on April 28. The news highs came thanks their highest levels in almost three years in April.
to a boom in transport as more countries in the Russia is the world’s leading exporter
region eased their COVID-19 restrictions, even of petroleum products, as well as the sec-
as China maintained lockdowns. ond-largest exporter of crude, and Western
Indeed, lower exports of petroleum products sanctions are hitting the supply of diesel and
from China are reported to be contributing to refining feedstocks.™

GLOBAL

CNOOC confirms end to Flemish

Pass Basin exploration in Canada

PROJECTS & CHINA National Offshore Oil Corp. (CNOOC) though the company still has oil sands opera-
COMPANIES has confirmed to Canadian media that it is exit- tions in Alberta. It owns these Canadian, US
ing offshore Flemish Pass Basin offshore New- and UK assets thanks to its $15bn acquisition of
foundland and Labrador. Nexen in 2013.
The Chinese company’s exit follows an Pelles had been widely considered a well
unsuccessful drilling campaign in the basin. It worth watching thanks to its proximity to
drilled the highly anticipated Pelles well last year, Equinor’s Bay du Nord discovery, also in the
but subsequently said in mid-2021 that the well Flemish Pass Basin, which was recently approved
The Stena Forth would be plugged and abandoned, without pro- for development by the Canadian government.
drillship, which viding further details. Indeed, CNOOC’s failure with Pelles does not
was used at Pelles, CBC News cited CNOOC as confirming this appear to have deterred other companies from
will also be used week that the well had come up dry and that it carrying out further exploration in the basin.
to drill ExxonMobil would be abandoning exploration offshore New- At the end of 2021, QatarEnergy farmed into
and QatarEnergy’s foundland and Labrador. licence 1165A, which is held by ExxonMobil.
Hampden prospect. “We made the difficult decision to relinquish The two companies have contracted the Stena
our exploration licences in the Flemish Pass,” a Forth drillship, which was used at Pelles, to drill
CNOOC International spokesperson told the the Hampden prospect in their licence in the sec-
news service. ond half of 2022.
The move also comes after reports emerged Meanwhile, Equinor is preparing to drill
earlier this month that CNOOC was planning two additional exploration wells at the Sitka
to exit its US, UK and Canadian operations and Cambriol East this year as it seeks to bol-
amid concerns over potential Western sanc- ster reserves in the Bay du Nord area. Upstream
tions, as well as operational challenges in those reported last week that the Norwegian company
countries (See AsianOil Week 15). The exit from could be days away from re-starting exploration
Newfoundland and Labrador aligns with this, drilling in the region.™

P8 www. NEWSBASE .com Week 17 29•April•2022