Page 8 - LatAmOil Week 21 2020

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In North Africa, Morocco is looking to take advantage of the drop in fuel prices to stock on supplies, using its closed refinery as a stor- age facility. Meanwhile, Bahrain has reached the halfway point in a $6bn refining upgrade programme, and the embattled Turkish refiner Tupras has swung to a $353mn loss.
If you’d like to read more about the key events shaping the downstream sector of Africa and the Middle East, then please click here for NewsBase’s DMEA Monitor.
European asset sales at risk
North Sea producers are struggling to close deals since oil prices tanked.
France’s Total is working to save its $635mn deal to sell its non-core UK assets after one of its prospective buyers, Oman’s Petrogas, dropped out. The entire portfolio is now expected to go to Norwegian private equity fund HitecVision, which will secure vendor financing from Total to pay for the acquisition.
London-listed Energean Oil & Gas has been less fortunate. It reported on May 19 that the sale of $280mn worth of North Sea assets to regional producer Neptune Energy had collapsed. This could crush Energean’s hopes of completing its $750mn takeover of Italy’s Edison E&P, since the assets due to be sold to Neptune were part of that deal.
UK’s Premier Oil, meanwhile, seems to be having second thoughts about acquiring $871mn of offshore UK field interests from BP and South Korea’s Dana Petroleum. The com- pany announced those deals in January, when the market outlook was far rosier.
Low prices are also creating opportunities, though, as Poland is looking to boost the role of gas in its energy mix now that it is much cheaper. This is quite a change of heart for a country that secures 80% of its electricity from coal-burning thermal power plants (TPPs).
Bulgaria is once again coming down hard on fuel retailers over suspected collusion, with reg- ulators closing down the offices of the Bulgarian Oil and Gas Association, pending investigation. The move comes weeks after the government proposed bolstering tax controls over the sector, prompting Russia’s Lukoil to threaten to shut down its fuel operations in the country.
If you’d like to read more about the key events shaping Europe’s oil and gas sector, then please click here for NewsBase’s EurOil Monitor.
FSU leadership and petrochemical plans
Igor Sechin, the long-serving CEO of Russia’s largest oil company Rosneft, has secured another five-year term at the helm of the state-run com- pany. Sechin is rumoured to have pushed aggres- sively for Russia to cut ties with OPEC+ in early March, in a move that triggered the collapse in oil prices.
Now his company faces considerable hard- ship as a result of the downturn, having posted its first quarterly net loss in the January-March period since 2012.
Now that Russia and its OPEC+ partners have forged a new agreement on cuts, all eyes are on Russian producers to see whether they will comply. Russia repeatedly exceeded its OPEC+ quotas last year under the previous deal.
Meanwhile, Kazakhstan’s efforts to build up its petrochemical industry has suffered a set- back, with Austria’s Borealis pulling out of a plan to build a 1.25mn tonne per year (tpy) polyethyl- ene (PE) plant. The plant was to use gas-derived ethane, which is produced cheaply and in abun- dance in Kazakhstan, as feedstock.
Like other Central Asian states, Kazakhstan wants to use its gas to turn out value-added products, rather than selling raw gas cheaply to neighbouring China and Russia. But keeping such projects afloat has proved a challenge.
All eyes are on Russian producers to see whether they will comply with OPEC+ cuts
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w w w . N E W S B A S E . c o m Week 21 28•May•2020