Page 12 - AsianOil Week 28 2022

AsianOil OCEANIA AsianOil

Shell announces extension of

disruption to Prelude FLNG cargoes

PROJECTS & SHELL told customers on July 11 that it would be are also demanding job security protections that
COMPANIES unable to supply cargoes from its Prelude float- would prevent Shell from contracting out full-
ing LNG (FLNG) facility offshore Australia until time jobs. Prelude workers have also accused the
at least July 21. This came as industrial action company of constantly changing their conditions
over a pay dispute was extended after union of employment without consultation.
members rejected Shell’s latest offer. Data from commodity data provider Kpler
Once the offer was rejected, it was reported show that Shell loaded one LNG cargo at Prel-
that Shell would have to completely shut down ude on June 28 and another on July 7. Further
Prelude within days, as a result of workers ban- loadings remain disrupted.
ning mooring tankers alongside the vessel as The ongoing outage is contributing to the
part of their protected action. This effectively tight global market for LNG supplies, with an
prevents Shell from unloading LNG and liq- outage at Freeport LNG in the US also exacer-
uefied petroleum gas (LPG) from its storage bating the situation. Prelude, with a capacity
tanks, and leads to the tanks rapidly reaching of 3.6mn tonnes per year contributes roughly
full capacity. one LNG cargo per week to the market, while
The super-major had previously warned that the 15mn tpy Freeport terminal accounts for
shipments from Prelude would be disrupted around four cargos per week when it is operat-
until at least mid-July. (See AsianOil Week 26) ing normally.
As of press time this week, though, there was no LNG from Prelude is delivered to custom-
sign that the dispute could be resolved anytime ers in Asia, and observers will now be watch-
soon, and thus the outage at the vessel could be ing to see whether these customers turn to the
extended further still. increasingly expensive spot market amid the
While pay is a key issue in the dispute, unions ongoing disruption.™

NEWS IN BRIEF

SOUTHEAST ASIA gas discovery, it could add significant value to take advantage of prevailing oil prices
to the expected oil discoveries anticipated at to reach this juncture. Obviously, oil prices
Indonesia Energy discovers Kruh 28. IEC is continuing to drill the well are subject to volatility, but if the current
towards the expected oil zone at 2,836 to 2,964
high prices for oil are sustained as we move
potential natural gas feet (subsea TVD depth) and expects to report forward, we believe we will have the potential
final results when the well is anticipated to be
to grow our cash flow as new wells from our
reservoir during current completed in the coming weeks. Kruh Block drilling programme begin to
produce. Additionally, we are moving forward
Separately, IEC announced that with the
drilling of Kruh-28 oil current rate of production from its existing to aggressively set the stage to develop our
five production wells at Kruh Block and with
potential billion-barrel equivalent natural gas
production well the current realised price of oil, it is now Citarum Block, where the previous operator
drilled a few gas discoveries,” concluded Mr.
operating at positive cash flow operations.
Indonesia Energy Corp. (IEC), an oil and Mr. Frank Ingriselli, IEC’s President, Ingriselli.
gas exploration and production company commented “We are certainly very excited INDONESIA ENERGY CORP., July 12, 2022
focused on Indonesia, today announced that about encountering this gas zone in the
while drilling the Kruh 28 well on IEC’s Kruh Kruh 28 well which, if fully confirmed, could
block, IEC unexpectedly found evidence provide significant upside to our plans to EAST ASIA
of a potential natural gas bearing reservoir develop the Kruh Block, where our new wells
between 976 and 1,006 feet interval with at the current price of oil are expected to have AIP issued for large LCO2
25 feet net thickness. This initial evidence net revenues in their first 12 months that is
was supported by both wireline logging and more than 150% of the cost to drill such well. carrier with LNG fuel
geologic logging data. This potential gas discovery reinforces our
This gas zone was not encountered in belief that the Kruh Block is a world class In a way of tackling global climate change, the
previous oil wells where IEC announced only asset.” ‘CO2 Capture, Transport, and Burial’ method
oil discoveries. As previously announced, IEC “Moreover, achieving cash flow positive has attracted attention as an intermediate step
commenced drilling for oil at Kruh 28 on June operations has been an important goal for to achieving carbon neutrality. This has led to
22, 2022. If this zone turns out to be a natural our company, and we are pleased to be able increased demand for technology for LCO2

P12 www. NEWSBASE .com Week 28 15•July•2022