Page 10 - FSUOGM Week 21

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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 storage 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.
Major LNG projects advance
Some major LNG projects are still moving for- ward, despite the oversupply that has led some developers to delay plans for adding new lique- faction capacity. In some cases, though, the pro- gress is coming at the regulatory level. As a result, there are no guarantees that a given project will ultimately reach the final investment decision (FID) stage.
This is the case with Alaska LNG, which received authorisation from the US Federal Energy Regulatory Commission (FERC) on May 21. The approval marks the conclusion of an environmental review process that has taken over three years. While the approval has been welcomed, the project remains mired in uncer- tainty, owing to the high cost of development. Its price tag was previously estimated at $43bn but was recently reviewed; an updated figure has not yet been disclosed, though.
It has previously been reported that state- owned Alaska Gasline Development Corp. (AGDC), the project’s backer, may sell off the venture’s assets if it does not find another party to develop Alaska LNG. Obtaining authorisation from FERC could help de-risk the project sig- nificantly in the eyes of potential investors and developers.
Elsewhere in the world, Qatar has reiterated its commitment to increasing its LNG produc- tion significantly in the coming years despite the current oversupply in the market.
Indeed, Qatari Minister of Energy Saad al-Kaabi, who is also the CEO of Qatar Petro- leum (QP), said that if there is capacity for the country to grow its LNG output beyond the planned 126mn tonnes per year (tpy), it may commit to this in the coming years.
Meanwhile, few developments illustrate the short-term impact of recent developments on demand more clearly than the growing number of cancellations for cargoes that were scheduled
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 20 20•May•2020