Page 6 - GLNGl Week 24

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expatriates for roles in its oil sector, as the for two fields and pipelines off Norway.
government looks to reduce the number of for- The majors are scrambling to raise cash to
eigners in the Gulf state and protect the local settle debts, pay their dividends and continue
workforce. The employment of foreign workers spending on core projects. But they will fetch far
has been a contentious issue in Kuwait for some less for their assets now than they would have
time, and the government is aiming to address done six months ago. These divestments are ones
it at a time when the country grapples with an of necessity.
economic slowdown.
If you’d like to read more about the key events shaping
If you’d like to read more about the key events shaping Europe’s oil and gas sector then please click here for
the downstream sector of Africa and the Middle East, NewsBase’s EurOil Monitor .
then please click here for NewsBase’s DMEA Monitor .
Russian permafrost worries
Germany’s hydrogen aspirations An enormous fuel spill in northern Siberia has
Germany is aspiring to become a world leader in highlighted the threat that climate change poses
hydrogen energy, after adopting a new strategy to oil and gas infrastructure in Russia’s Arctic
that will set aside €7bn ($7.8bn) for its devel- zone.
opment. Its goal is to establish 5 GW of hydro- Permafrost covers around 65% of Russia and
gen energy capacity by 2030 and to double this much of the older infrastructure in these areas
amount by 2040. is not build to withstand this layer thawing.
Not everyone is happy with the plan, how- But this is exactly what is happening. Approx-
ever. The gas industry has criticised the strategy imately 45% of the producing oil and gas fields
for only favouring green hydrogen produced are located in the highest hazard zone, accord-
using renewables, and omitting blue hydrogen, ing to the IPCC.
derived from natural gas. Germany will need a While the latest oil and gas developments in
strategy that is inclusive of a wide array of tech- Russia’s permafrost zone have been designed
nologies in order to produce the large quantities with climate change in mind, this is not the case
of hydrogen it will need in the future and at the with older projects, where structures could sink,
best price, the industry argues. requiring costly repairs. Russian producers are
Norwegian operators Aker BP and Equinor counting on Arctic fields to deliver extra pro-
have announced new investments on Norway’s duction that can offset declines at older deposits
Continental Shelf (NCS), after the government further south. But the permafrost issue is likely
granted tax relief aimed at encouraging more to drive up costs in the already high-cost region.
projects to go ahead, despite the downturn. In other news, Gazprom Neft is preparing
Equinor is preparing to connect its installa- to launch development of the Bazhenov tight
tions at the Gina Krog and Sleipner fields to the oil formation in Western Siberia. The company
onshore grid, in order to reduce their emissions. said this month it had sunk its first exploration
Aker BP, meanwhile, is pushing ahead with and appraisal well into the formation. At current
the Hod redevelopment scheme – a project it prices, targeting unconventional oil in Russia
shelved back in April because of spending cuts. is unfeasible. But Gazprom Neft hopes that the
Norway’s offshore sector managed surprisingly market will have recovered sufficiently by 2025,
well after the 2014 oil price crash, and looks set when it aims to start commercial production at
to persevere once more thanks to government Bazhenov.
support.
Undeterred by current market uncer- If you’d like to read more about the key events shaping
tainty, the oil majors are continuing with the former Soviet Union’s oil and gas sector then please
North Sea divestments. ExxonMobil has click here for NewsBase’s FSU OGM Monitor .
revived plans to sell its UK North Sea busi-
ness, which comprises stakes in 40 fields, Hopes remain for new LNG import potential
while Royal Dutch Shell is seeking a buyer There is increasing pessimism over the appetite

P6 www. NEWSBASE .com Week 24 19•June•2020