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Insurgents with suspected links to Islamic State in the harsher winter months in order to secure
have been battling government forces in gas-rich rigs, rather than working in the more favourable
northern Mozambique, where several major summer months.
LNG export projects are under development. This is set to be a long-term if not permanent
The attacks have grown in frequency over the shift in market dynamics, Bassoe says. If opera-
past year. In July, eight employees of a private tors cannot find a way to progress with plans in
construction firm working on Mozambique the coming year, it could lead to more units being
LNG were killed in an ambush. retired or cold-stacked, making rig scarcity even
Mozambique LNG is due tocome on stream worse.
in 2024 and will produce 13.1mn tonnes per year Neptune Energy, the Netherlands’ biggest
(tpy) of super-cooled gas at its peak. The Golf- oil and gas producer, saw its core earnings more
inho and Atum gas fields in the Offshore Area 1 than halve in the second quarter. But the com-
concession serve as its resource base. pany fared better than others thanks to hedging
Total and its partners secured almost $15bn a good deal of its production. But the mainly
in senior debt financing for the project in early gas-focused producer warns that the recovery in
August. They will be hoping that the security sit- gas and LNG prices will be slow.
uation can be contained. Neptune’s fortunes were lifted in August
In other news, Iraq’s oil-for-projects deal when it made the Dugong oil discovery off
with China is reportedly on hold because of the Norway – the country’s largest find of the year
former’s unfolding economic crisis and pressure containing up to 120mn barrels of oil equivalent
from the US. The agreement reached last year is (boe). It now says there is scope for additional
expected to see China support a $10bn joint fund potential at the site, but has not divulged details.
to develop reconstruction projects, including a
number of refineries. In return, Iraq has pledged If you’d like to read more about the key events shaping
to supply China with 100,000 barrels per day Europe’s oil and gas sector then please click here for
(bpd) of oil. NewsBase’s EurOil Monitor.
However, local media report that the agree-
ment has been put on ice. Washington is pressing FSU: Gazprom’s disappointing quarter
the government to cancel it, they claim. Russia’s Gazprom has reported its worst set of
quarterly results since the 2000s, as the corona-
If you’d like to read more about the key events shaping virus (COVID-19) pandemic took its toll on the
the downstream sector of Africa and the Middle East, company’s European sales.
then please click here for NewsBase’s DMEA Monitor. Gazprom’s EBITDA was $1.3bn, versus
$7.4bn a year ago, marking its worst earnings in
Europe: Turn of tide for UK rig market The at least a dozen years. The company was also free
market for semi-submersible rigs in UK cash flow (FCF) negative, and its net debt crept
waters has been oversupplied for years, weighing up 9% to around $53bn.
down on day rates. But “the tide is beginning to The Russian giant’s European gas business
turn,” according to a new report by Oslo-based performed particularly poorly, with prices down
brokerage Bassoe Offshore. 38% and sales volumes down 16.7%. COVID-19
Rig owners are responding to the testing new and its impact on demand was the main factor
market conditions by retiring more vessels, and here, but high levels of gas in storage, a warm
this could mean that operators struggle to find winter and a pre-pandemic glut in global LNG
semi-submersibles for the work they plan in supply did not help matters. Its sales in Russia
2021, according to Bassoe. Some will have to drill offered comparative stability.

P8 www. NEWSBASE .com Week 35 03•September•2020