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FSUOGM NRG FSUOGM

Rather than a simple sale and purchase trans- the Netherlands, or its 110,000-bpd plant in
action, ADNOC will lease out its ownership Ingolstadt, Germany.
interest in the assets for 20 years in exchange for Other refiners may consider similar options,
a volume-based tariff. This marks the latest in and for the long-term health of European refin-
a series of divestment deals by the national oil ing, reduced capacity may not be such a bad
producer, which needs funding to diversify its thing.
business and shore up its cash reserves during Meanwhile, Mediterranean-focused Ener-
the downturn. Last year, it also shed a 40% stake gean has secured a significant price cut in its deal
in its oil pipeline network to US investors Black- to acquire the upstream arm of Italy’s Edison.
rock and KKR for $4bn. It will pay only $284mn, instead of an original
In Mozambique, France’s Total and its part- price of $750mn. This is largely because Edison’s
ners at the 13mn tonne per year (tpy) Mozam- Algerian and Norwegian assets have been omit-
bique LNG export plant are inching towards ted from the transaction, although weaker mar- For the long-
closing a financing deal that will pave the way ket conditions also helped drive down the price.
for a final investment decision (FID). Around BP, meanwhile, has agreed to sell its $5bn term health of
20 commercial banks are expected to take part. petrochemicals business to UK chemicals group Europe’s refining
Meanwhile, fuel prices have spiked in Zim- Ineos to help meet its $15bn divestment target
babwe, following the government’s removal of early and reshape its business for the energy sector, reduced
a fixed exchange rate in place since March. US transition. By divesting its petrochemicals, BP is
dollar scarcity has exacerbated fuel shortages in also separating itself from its peers such as Royal capacity may not
Zimbabwe, which lacks any refining capacity of Dutch Shell and ExxonMobil, both of which are
its own and therefore imports all of its gasoline, expanding their petrochemicals businesses. be such a bad
diesel and other petroleum products. thing
If you’d like to read more about the key events shaping
If you’d like to read more about the key events shaping Europe’s oil and gas sector then please click here for
the downstream sector of Africa and the Middle East, NewsBase’s EurOil Monitor .
then please click here for NewsBase’s DMEA Monitor.
FSU: Gazprom’s bold claim
European asset sales at risk The long-serving head of Russia’s state gas sup-
The European refining sector has not had an easy plier Gazprom made a bold claim last week that
time over the years, amidst structural problems the company would one day send up to 130bn
with overcapacity and ever more efficient fuel cubic metres (bcm) per year of gas to China.
consumption. Gazprom projects it will only send 5 bcm of
The coronavirus (COVID-19) crisis and the gas to Russia’s eastern neighbour this year via the
resulting collapse in fuel demand may prove to Power of Siberia pipeline, brought on stream in
be the final straw for Swiss-based Gunvor, which December. That network is not expected to reach
is considering the closure of its 107,500 barrel its full 38 bcm per year capacity until 2025.
per day (bpd) plant in the Belgian port of Ant- Nevertheless, Gazprom CEO Alexei Miller
werp. Gunvor says it will take time for the supply says the 130 bcm per year target can be reached
glut created by the pandemic to be soaked up, by expanding Power of Siberia’s flow capacity by
and in the meantime, its plant will continue to a further 6 bcm, building a second pipeline with
generate negative cash flow. The company has a capacity of 50 bcm per year through Mongo-
stressed that the decision would not affect oper- lia and delivering additional supplies via the Far
ations at its 88,000-bpd refinery in Rotterdam, East.

Week 26 01•July•2020 www. NEWSBASE .com P7