Page 8 - FSUOGM Week 22

FSUOGM
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by 2021. Mele Kyari, NNPC’s group managing director, noted that costs were running as high as $35.97 per barrel at some fields.
If you’d like to read more about the key events shaping Africa’s oil and gas sector then please click here for NewsBase’s AfrOil Monitor.
Spot prices spiral in Asia
The global oversupply of LNG and the destruc- tion of Asian demand amid the coronavirus (COVID-19) pandemic have sent spot prices spiralling for a second week.
Spot cargoes for July delivery into to East Asia fell to $1.85 per mmBtu ($52.39 per 1,000 cubic metres), Reuters reported on June 1. The newswire pointed to the number of cargoes on the market this week, coupled with depressed industrial demand for gas around the world, as behind the $0.07 per mmBtu ($1.98 per 1,000 cubic metre) decline.
Malaysia’s state-owned Petronas has it is “optimising” its production of LNG in response to weaker prices and demand.
The company told Reuters this week that challenges relating to the ongoing COVID- 19 pandemic meant that it needed to optimise production volume in line with the market slowdown.
Malaysia’s exports of LNG are expected to drop to 1.5-1.64mn tonnes in May, the newswire quoted unnamed industry sources as saying last week. This would represent a nearly two-year low in terms monthly export volumes, down from the 1.92mn tonnes the country exported in April.
The news comes after Petronas announced last month that it would cut its 2020 capital expenditure budget by 21% and its operating expenditure 12%.
With the international gas market tanking, the region’s largest gas exporter – Australia – has begun turning its attention to ways it can prop up domestic producers.
Australian Energy Minister Angus Taylor
said last week that it was essential for the country to lean on gas-fired power generation as it transi- tions to a greener economy.
Taylor’s comments came following an update to the Australian Energy Statistics, which showed that renewable energy sources accounted for 21% of the country’s power generation in 2019. Gas-fired power generation represented 20.5% of the national total.
Taylor said: “Gas is flexible and provides the dispatchable capacity we increasingly need to balance intermittent renewables and deliver a secure, reliable and affordable electricity system to power our homes, businesses and industries.”
He added: “This has never been more impor- tant – particularly as we begin our recovery from the impact of the COVID-19 pandemic. This is why the Australian government believes a gas- fired recovery will drive jobs and economic growth.”
If you’d like to read more about the key events shaping Asia’s oil and gas sector then please click here for NewsBase’s AsianOil Monitor.
South African fuel rationing
Many markets are reeling in excess fuel supply as a result of COVID-19 travel restrictions. But South Africa has had to ration diesel following a fast recovery in demand as the country’s lock- down is eased.
Only two of South Africa’s six refineries are operating normally, with most refining capacity having been shut down in response to a collapse in demand. Opposition politicians blame the government for failing to ensure a sufficient stockpile of fuel.
Meanwhile, Egypt has unveiled a new strat- egy that aims to realise $19bn in new petro- chemical projects by 2035. The country is set for a rapid growth in demand for petrochemical products as its population boom continues. The government is eager to see domestic resources used to meet this demand, rather than imports.
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w w w . N E W S B A S E . c o m Week 22 03•June•2020