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Middle East: OPEC+ compliance Facing obstacles in North America
In the Middle East, there were signs that state- Several North American entities have reported
owned producers are starting to feel more setbacks and disappointments over the last week.
confident. Saudi Arabia and Kuwait resumed ExxonMobil is set to post two consecutive
production from their shared Al-Khafji oilfield quarterly losses for the first time in its history,
in the Partitioned Neutral Zone (PNZ). The asset thanks to the coronavirus pandemic and the
was shut in on June 1 under the banner of efforts Russian-Saudi oil price war. According to a
to adhere to OPEC+ quotas; however, the recent regulatory filing submitted last week, the US Noia has called
history of the PNZ has been somewhat colourful. super-major’s upstream oil and gas unit sus-
At capacity, Al-Khafji and the onshore Wafra tained a loss of $3.1bn in the second quarter of on Canada’s
oilfield can produce around 550,000 bpd; how- 2020, while its downstream refining unit lost
ever, the fields were shut in because of disagree- nearly $1bn. The company is due to release a full government to
ments between the two governments in 2014 and report on its quarterly results at the end of this
then in 2015. month. provide more
Output resumed at both fields in December Dominion Energy and Duke Energy have support for
2019, increasing to 260,000 bpd by April, with decided against going forward with the con-
production of 130,000 bpd from each asset. struction of the Atlantic Coast natural gas offshore oil and
Wafra has remained in production since Decem- pipeline. Even though the partners scored an
ber. Plans are in place to raise output capacity important victory in the US Supreme Court last gas operators
at the PNZ to 575,000 bpd, with an increase month, they have concluded that the risk of fur-
coming in the form of a 25,000 bpd ramp-up at ther litigation is too high to ensure the project’s
al-Khafji, currently capable of 300,000 bpd. viability.
Meanwhile in Oman, signs of a rebound in Also on the legal front, a US district court
exploration came by way of Sweden’s firm Tethys has ordered Energy Transfer to shut down and
Oil signing an exploration and production-shar- empty its 570,000 bpd Dakota Access oil pipe-
ing agreement (EPSA) for the Sultanate’s onshore line (DAPL) within 30 days. Under this ruling,
Block 58. The company has a growing presence the company must suspend operations pending
in Oman and has taken advantage of the down- the completion of a new environmental impact
turn to increase its asset base. But its example is report, which is likely to take more than a year
unlikely to be followed in the region, with only to complete.
Israel holding an active 2020 bidding round. Meanwhile in Canada, the Newfoundland
In the UAE, though, Abu Dhabi National Oil & Labrador Oil & Gas Industries Association
Co. (ADNOC) has taken advantage of the dip (NOIA) has urged Seamus O’Regan, the coun-
in demand to take the giant Bab oilfield offline try’s natural resources minister, to uphold his
for scheduled maintenance, with production to recent pledges to assist offshore oil and gas
remain shut-in until late July. Prior to the shut- operators.
down, production from Bab was running above “We need immediate action to get people
370,000 bpd of light, sour Murban crude, which back to work, to remain globally competitive
has an API gravity of 40.5°. Bab has a capacity of and to retain the investment we have previously
420,000 bpd. The move also aligns well with the attracted to our industry,” said Karen Winsor, the
UAE’s OPEC+ commitments, with July the chairperson of NOIA’s board. “We need a show
final month before the reductions are eased. of faith in our future and we need it immediately.”

If you’d like to read more about the key events shaping If you’d like to read more about the key events shaping
the Middle East’s oil and gas sector then please click the North American oil and gas sector then please click
here for NewsBase’s MEOG Monitor. here for NewsBase’s NorthAmOil Monitor .™

P10 www. NEWSBASE .com Week 27 09•July•2020