Page 15 - NorthAmOil Week 29

NorthAmOil POLICY NorthAmOil

US, India discuss oil reserve co-operation

US-INDIA OFFICIALS representing the US and India have after oil prices collapsed and the coronavirus
signed a memorandum of understanding (MoU) (COVID-19) pandemic began to hit demand.
on co-operation relating to emergency crude However, US Congress failed to agree on
reserves. The two sides are discussing sharing funding this initiative. Instead, some SPR
knowhow on the establishment of strategic capacity is now being leased to several oil
petroleum reserves (SPRs), and also the possi- companies, but additional spare capacity is
bility of India storing oil in the US’ SPR. thought to remain.
US Secretary of Energy Dan Brouillette told The discussions between India and the US
reporters during a teleconference that the two have taken place after the latter finalised an SPR
countries’ officials would discuss details of the lease agreement with Australia in early June. This
The discussions emergency reserves in the coming months. agreement, which was described by US officials
between India and Indian Minister of Petroleum and Natural Gas as “historic”, allows Australia to lease space in the
the US have taken Dharmendra Pradhan also participated in the SPR to store Australian-owned oil and access
place after the latter teleconference. this oil during an emergency. Australia agreed to
finalised an SPR The MoU comes as India seeks to overcome spend around $59mn on the initiative, needing
lease agreement with its domestic SPR capacity constraints and benefit to increase its stockpile to meet International
Australia in June. from the current low oil price while storing the Energy Agency (IEA) fuel security rules when
crude until a later date. The Asian country has its own storage tanks were full and also seeking
the capacity to store 39mn barrels in its strate- to take advantage of low crude prices.
gic reserve, while the US SPR has a capacity of This was the first time the US had agreed to
714mn barrels. Pradhan said in May that India lease SPR capacity to another country. Brouillette
had resorted to using floating storage, having said last week that co-operation on the issue with
filled its strategic capacity. India could follow the same path as Australia, but
In March, US President Donald Trump that there was “no predetermined outcome” for
ordered Brouillette to fill the SPR to capacity talks with the Asian country.™

PROJECTS & COMPANIES

Hibernia production shut

down after fluid spill

NEWFOUNDLAND OUTPUT at the Hibernia oil platform offshore No impact on wildlife has been detected, nor
AND LABRADOR Newfoundland and Labrador in Eastern Canada have any workers been injured during the inci-
was temporarily shut down following a spill of dent. All wells at the project are in a “safe state”,
drilling and production fluids on July 19. according to the C-NLOPB.
The Hibernia Management and Develop- A gravity-based structure (GBS) is used to
ment Co. (HMDC) reported the incident to reg- produce oil at Hibernia, which has been in oper-
ulators on July 20, after finding an “exceedance of ation since 1997 and has a capacity of 220,000
produced water discharge” during well flowback barrels per day (bpd). However, production at
operations. The findings led to an immediate the field has declined as it has matured, and was
shutdown of production at Hibernia, which is averaging just under 112,000 bpd over 2018-
located roughly 315 km east of St. John’s, and to 19, according to the C-NLOPB. Last year, the
the discharge being isolated. HMDC was reported to be considering more
The Canada-Newfoundland and Labra- subsea drilling work at the field in order to fur-
dor Offshore Petroleum Board (C-NLOPB) ther extend its life. However, it is not yet known
noted that a sheen was detected by a satel- how these plans have been affected by the 2020
lite 2.5 km from the platform and confirmed oil price downturn.
by vessel observation. A remotely operated ExxonMobil is the largest shareholder in the
vehicle (ROV) was deployed and confirmed HMDC with a 33.125% interest. Chevron holds
that there was no continuous release, the a 26.875%, Suncor Energy owns 20%, Canada
board added. The HMDC has also deployed Hibernia Holding has a 8.5% stake, Murphy Oil
a tracker buoy to continue surveillance of owns 6.5% and Equinor has the remaining 5%
the area. The volume of the discharge and its interest.
composition were still in the process of being On July 22, the HMDC said production at the
determined as of July 21. platform was gradually resuming.™

Week 29 23•July•2020 www. NEWSBASE .com P15