Page 10 - FSUOGM Week 25

FSUOGM POLICY FSUOGM
All eyes on Moscow as to prolong output cuts
OPEC+ prepares
output. e extraction and exports of his com- pany was also badly hit in May by disruptions of supplies via the Druzhba oil pipeline to Poland and Germany.
e government, on the other hand, seems to be speaking strongly in favour of extending the deal, as Russia’s Minister of Energy Alexan- der Novak echoed Siluanov and warned that oil price could decline to $30 per barrel should the output caps be li ed.
Analysts surveyed by Vedomosti daily on June 10 also believe that Russia’s gains from ele- vated oil prices far exceed the losses from lower output, while a decline in prices to below $40 per barrel would shock the domestic oil industry.
“ e transition of the parties, especially of Saudi Arabia, to the policy of uncontrolled oil extraction could potentially lead to sharp price decline, especially in the conditions of global economic uncertainty and trade wars,” Dmitry Marinchenko of Fitch Ratings told the daily.™
RUSSIA
SHOULD the parties participating in Opec+ deal fail to prolong coordinated global oil out- put cut, the price of oil could drop below $40 per barrel, Russian Finance Minister Anton Siluanov warned at the meeting of Highest Eurasian Eco- nomic Council in Kazakhstan, as cited by Reu- ters on June 10.
Currently Brent oil trades at about $63, but the oil price dynamics depend on another exten- sion of the Opec+ deal on June 25.
All eyes are on Russia as it is the last coun- try to decide its position on prolonging the deal, Saudi Arabia’s Minister of Energy told Tass on June 10. “Obviously, in Russia internal discus- sions are being held on how much oil should be extracted in the second half of the year,” he said.
In the meantime Igor Sechin, the head of Rus- sia’s largest crude oil producer Rosne , recently exed his muscles by repeatedly slamming the deal’s e ects and threatening the government with demands for compensations over declined
PROJECTS & COMPANIES
Kazakhstan lends rig to Azerbaijan
CASPIAN
KAZAKHSTAN has completed the transfer of a drilling rig to Azerbaijan that will be deployed at the o shore Shallow-Water Absheron Peninsula (SWAP) block.
A ceremony was held in Baku on June 19 to herald the arrival of the Satti jack-up rig, owned by Kazakhstan’s national oil company KazMu- nayGas (KMG). Under a deed of trust signed earlier this year, the platform will be trans- ferred temporarily to KMG’s Azeri counterpart SOCAR.
Satti was built in the Aktau shipyard in 2016 by Singapore-based Keppel and is capable of working in water depths of up to 80 metres. e platform will be modernised to drill wells up to 6,000 metres in depth, KMG said in a statement, before being dispatched to the SWAP area for a drilling campaign later this year.
SOCAR and its partner BP plan to drill three exploration wells at the SWAP block targeting potential reservoirs at depths of between 3,000 and 5,000 metres under the sea bed. e pair entered into a production-sharing agreement (PSA) to work at the site in 2014, and have since collected 1,300 square km of 3D seismic data in preparation for drilling.
According to SOCAR, the Satti rig will be
upgraded at its Caspian Drilling (CDC) shipyard in Baku. A er wrapping up work at the SWAP site, it may also be used at Umid-Babek, another block nearby that is operated by SOCAR and UK-based Nobel Upstream under a risk-service contract (RSC).
Shortages of platforms and other drilling equipment are a perennial problem in the land- locked Caspian Sea and can o en lead to project delays. At the ceremony, KMG Chairman Alik Aydarbayev described the delivery of the Satti platform to SOCAR as “a symbol of friendship and constructive co-operation between the two companies.” e two signed a memorandum of understanding (MoU) on working together in the oil and gas industry earlier this year.™
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Week 25 26•June•2019