Page 17 - Euroil Week 18 2020

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NEWS IN BRIEF
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Po Valley awaits Italian approvals
Australia’s Po Valley Energy (PVE) expects approvals from the Italian government for its Selva and Teodorico gas field developments, it said on April 30.
CEO Michael Masterman said that PVE had advanced its gas field developments
in Italy while keeping its people safe amid the COVID-19 pandemic and streamlining costs.
The Italian government has confirmed technical environmental approval for the Selva gas field, east of Bologna. As a result, development and preliminary work has now started, ahead of the planned launch of production in 2021. Final approval is anticipated in the second quarter of 2020.
The first phase of development involves building a fully automated gas plant and installing a 1-km pipeline to connect the well with the nearby gas grid, with peak production capacity of up to 150,000 cubic metres.
The Teodorico gas field is in 30 metres
of water in the northern Adriatic Sea and close to offshore gas production facilities. PVE, its sole owner, expects the regulatory approval process to finish in the second half of 2020.Teodorico has the largest gas-in- place of all of PVE’s gas fields and is at an advanced stage of assessment, ready for development.
PKN Orlen completes takeover of Energa
Poland’s state-controlled refiner and
oil and gas producer PKN Orlen has completed the takeover process of another state-controlled company, the utility Energa, PKN Orlen said on April 30.
The deal is in line with the Law and Justice (PiS) government pushing for the companies it controls to merge so as to become larger entities, supposedly better equipped to compete on international markets.
Orlen paid PLN8.35 (€1.82) per Energa share having eventually taken control of 80% of Energa’s stock, the refiner said in a stock exchange filing.
“We need to create large, strong entities which, after combining their investment budgets, will be able to carry out bold and ambitious projects, successfully develop their business and compete on the European and later also on the global market,” said Jacek Sasin, Deputy Prime Minister and Minister of State Assets, who oversees
Poland’s state-controlled companies. “Establishing multi-utility businesses
is in line with megatrends and efforts pursued by other international oil companies, as diversified revenue streams make a company more resilient to market fluctuations and macroeconomic volatility, creating added value for both customers and shareholders,” PKN Orlen said in a statement.
The company also hinted at taking over Poland’s other state-controlled refiner, Lotos, as the next step in building a multi- utility company similar to Italy’s Eni. Discussions about the potential merger have been underway in Poland for months.
PKN Orlen’s stock rose 1.53% to PLN62.36 at the end of last week’s trading on the Wrsaw Stock Exchange.
Tupras to halt production
at Izmir refinery on weak
pandemic-hit demand
Tupras, Turkey’s largest refiner, is to suspend production at its Izmir facility between May 5 and July 1.
“We are halting production at the facility due to a decline in demand driven by stammering commercial activity in domestic and international markets,”
the company said in a filing with Borsa Istanbul.
The refinery has a capacity of 12mn tonnes/yr.
Tupras, owned by Turkey’s largest industrial group Koc Holding, in April revised downwards its financial projections for 2020 taking into account the adverse impacts on demand of the coronavirus (COVID-19) pandemic. The company lowered its production expectation from 28mn tonnes to 24mn tonnes and slashed its sales estimate from 29mn tonnes to 25mn tonnes due to decline in demand.
Tupras has four refineries in all. They meet around 55% of Turkey’s petroleum product needs. The petroleum product storage capacity of Tupras accounts for 57% of the country’s total storage capacity.
Aker BP books Q1 loss on impairments
Norway’s Aker BP swung to a net
loss in the first quarter, as a result of impairments linked to the sharp decline in oil and gas prices. The result came despite the company achieving record production in the period.
Aker BP’s net production averaged 208,100 barrels of oil equivalent per day in the three months, up from 158,700 boepd a year earlier.
The all-time high was mainly thanks
to the continued ramp-up in production
at the Johan Sverdrup field off Norway, launched in October. Aker BP’s revenues were down 20%, however, due to lower prices. The company partly sheltered itself from the weak market conditions thanks to its oil price hedging programme.
Impairments amounted to $654mn, causing a loss before tax of $414mn.
Aker BP benefitted from $80mn in tax credit, versus $312mn in tax losses a year earlier. The low effective tax rate for the first quarter mainly reflects the limited deductibility towards the special petroleum tax for financial items and impairments, as well as the currency-driven revaluation of the company’s tax balances.
Overall, the company reported a net loss of $335mn, compared to a net profit of $10mn a year before.
Given the weak oil market and the high uncertainty in the global economy, the board has decided to retract the current dividend plan in order to retain financial flexibility and position the company
for future value accretive organic and inorganic growth opportunities.
The board has decided to pay $70.8mn in dividends in May 2020, representing one-third of the previously guided amount.
It is the board’s ambition to maintain this level for the remaining quarters of 2020, implying total dividend payments of $425mn for the full year, Aker BP said.
Each quarterly dividend decision will, however, be subject to a holistic assessment of all relevant factors, including oil prices, the COVID-19 situation and the company’s financial position.
Deepsea Yantai rig to drill in North Sea for Neptune
Norwegian offshore safety body, the Petroleum Safety Authority (PSA), has given its consent to Neptune Energy for exploration drilling in the North Sea using the Deepsea Yantai semi-submersible drilling rig.
The PSA said on May 6 that the consent was for two exploration wells, designated 34/4-15 S and 34/4-15 A, at block 3/4.
The prospect named Dugong is located in production licence 882 in a water depth of 331 metres
Neptune is the operator of the licence with a 40% interest. Its partners are Idemitsu, Concedo, and Petrolia NOCO with a 20% stake each.
Week 18 07•May•2020
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