Page 6 - AsiaElec Week 15

EurOil COMMENTARY EurOil
state’s energy regulator. The Republican politi- cian urged the US on April 8 to cut at least 4mn bpd of supply within the next three months to avoid storage running out.
Texas accounts for more than 40% of US national oil production. While antitrust laws prevent US producers from co-ordinating sup- ply, the state could in theory legislate to cap out- put. Even so, this would leave authorities at risk of being sued by operators claiming losses as a result of the restrictions.
The US would also have to impose a cut unilaterally rather than through an explicit agreement with other producers, to ward off accusations of collusion. Such anti-competi- tive activity is banned by the Organisation for Economic Co-operation and Development (OECD), of which the US is a member.
Norway, another OECD member, has in a similar vein said it would consider a unilateral cut to production if OPEC+’s deal comes into force. The country, which lifted 1.75mn bpd of crude in February, was among seven to attend
the group’s talks last week as an observer. The others were Argentina, Colombia, Ecuador, Egypt, Indonesia and Trinidad & Tobago.
What next?
Unilateral cuts would, of course, help tighten the market. But as non-OPEC+ countries will not be party to a formal agreement committing them to quotas, they will be able to ramp production back up when it suits them. This is likely to sow distrust among OPEC+ members, especially those pledging the biggest reductions: Saudi Arabia and Russia.
A chief cause behind the collapse of OPEC+’s previous production pact in early March was growing frustration among the group that other producers were profiting from their actions by raising their own supply. Those same anxieties could re-emerge and derail the pact, plunging the industry once more into chaos. Either the deal could fall through, or OPEC+ members could simply flout their commitments. ™
COMMENTARY
Europa awaits Wressle launch, continues farm-in search
Europa says it is well placed to withstand prolonged oil price volatility
IRELAND
WHAT:
Europa is preparing to launch the Wressle oilfield this year in the UK.
WHY:
It ended a dispute with local authorities in January, clearing the path for the project’s start-up.
WHAT NEXT:
Europa is still hopeful it can find farm-in partners to progress key assets off Ireland and Morocco.
LONDON-LISTED Europa Oil & Gas is eagerly awaiting the start-up of the onshore Wressle oilfield in the UK – a project it says will “transform” the company’s revenue portfolio. It is also still hopeful of cutting farm-in deals at its key assets off Ireland and Morocco, despite the catastrophic collapse in oil prices.
The producer said in a report for the six months ending January 31 that it stood ready to take on the challenging market outlook.
“Together with measures we have taken to reduce our already low cost base, and following the repositioning of our portfolio towards gas, we believe Europa will be well placed to with- stand a sustained period of oil price volatility and weakness,” Europa’s interim CEO, Simon Oddie, said.
Europa currently produces only 90 barrels per day (bpd) from three UK onshore fields, with all its acreage in Morocco and off Ireland still at the exploration phase. It expects to ramp up to 200 bpd following Wressle’s launch later this year, however.
Wressle’s development was held back by a three-year court battle with the North
Lincolnshire Council, which had denied the project’s planning permission to drill at the site. Europa and its partners finally won the dispute in January, which Oddie described as a “stand- out” event along with the company’s award of the Inezgane permit offshore Morocco.
A new assessment at Wressle confirms the field as “robust” in the current price environ- ment, Europa said, boasting a breakeven price of
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w w w . N E W S B A S E . c o m Week 15 16•April•2020