Page 16 - FSUOGM Week 17

FSUOGM
NEWS IN BRIEF
FSUOGM
47.7% to 29.5mn tonnes, natural gas 0.8% to 644bn bcm, and associated gas 6.9% to 94.7 bcm.
EASTERN EUROPE
Ukraine won’t be able to cash in on oil storage
Ukraine won’t be able to take advantage of the global shortage in oil storage capacity as its infrastructure is configured for oil transportation rather than storage, Interfax Ukraine reported on April 22.
“All tech equipment of the country’s pipeline system, including pipelines, reservoir parks and oil transfer pumping stations was designed and built based on its main purpose of establishing reliable and uninterrupted transportation of
oil,” Ukrtransnafta, the national pipeline operator, told Interfax Ukraine.
According to Ukrtransnafta, the company has no tech capacity for offering oil storage services to foreign oil producers.
In addition, Ukraine’s legislation does not stipulate storage of oil owned by foreign companies on Ukrainian territory, Ukrtransnafta said, stressing that the current legislation only stipulates two regimes for foreign oil on Ukrainian territory, namely import and transit.
Earlier, Naftogaz executive director Yuri Vitrenko said that Ukraine should take advantage of the global oil capacity shortage and a sharp decline in oil prices and offer its pipeline infrastructure for oil storage.
Ukrtransnafta is fully owned by Ukraine’s state-run oil and gas company Naftogaz and runs a pipeline system across 19 regions with a total length of 4,767 km..
CENTRAL ASIA & SOUTH CAUCASUS
Caspian pipeline
consortium looks to divert
Kazakh oil flows to Russia’s
Transneft in May
Kazakh oil producers that export crude via the Caspian Pipeline Consortium (CPC) are looking into diverting flows to Russia’s Transneft starting from May in order to minimise losses as CPC Blend margins and demand fall, Reuters reported, citing five anonymous market sources.
The producers include Chevron’s Tengizchevroil, Karachaganak Petroleum Operating (KPO) and state-owned KazMunaiGaz (KMG). The firms plan to redirect 4.5mn barrels to transit via Russia’s Novorossiisk and Ust-Luga ports, allowing them to mix their barrels and to export Urals oil instead, according to the sources. Ural oil trades $5-6 a barrel above the CPC Blend.
Oil blended for the CPC route is known as CPC Blend, whereas Kazakh barrels are mixed with Russian grades for Transneft destinations and sold as Urals Blend. Demand and prices for CPC Blend have been hit by Arab oil inflows and weak European fuel demand, the traders told Reuters.
CPC runs the largest privately-operated route connecting Kazakh and Russian oil fields with the Black Sea. The consortium’s shareholders include Chevron, ExxonMobil, Italy’s Eni and Russia’s Rosneft and Lukoil.
CPC had planned to raise CPC Blend oil exports in 2020 to 1.4mn barrels per day thanks to rising output at Kazakhstan’s oilfields and Russia’s Lukoil oilfields in
the Caspian Sea, but the plans have been
hit by the ongoing global downturn, the coronavirus (COVID-19) pandemic and collapsing world oil prices.
Tengizchevroil says production operations “continue as normal” after fresh coronavirus case at partner company
Kazakhstan’s biggest oil producer, Tengizchevroil (TCO), said on April 20 that its production operations were “continuing as normal” after a fresh coronavirus (COVID-19) case was confirmed among workers of one of its partner companies, leading to further tests of the worker’s contacts and disinfections at the company’s facilities.
TCO said on April 14 that it had
reduced some work on its $45bn expansion project in the west of the country due
to the coronavirus outbreak. A Chevron spokeswoman said critical work on the expansion project, including construction of equipment in South Korea and the building of pipelines in Kazakhstan, was continuing as normal.
Around 500 people employed by TCO’s contractors briefly refused to go to work on April 20 for fear of getting infected, the Atyrau local government said. The workers then agreed to return to work by April 22 after authorities said they would test all of them for the disease.
Chevron owns a 50% stake in TCO, with the rest of the company split between Exxon Mobil, Russia’s LUKOIL and Kazakh state- run oil and gas firm KazMunayGaz.
To date, Kazakhstan has confirmed over 1,500 coronavirus infections.
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Week 17 29•April•2020