Page 8 - LatAmOil Week 32

LatAmOil NRG LatAmOil

Iraq is eager to supply Lebanon with gasoil and The OGA has called for greater regulatory
fuel oil on a regular, commercial basis. For its co-ordination and support to ensure that pio-
part, Lebanon has long wanted to diversify its neering projects in these fields are a success.
imports of these products once contracts with At the same time, the US is ramping up pres-
Algeria’s Sonatrach and Kuwait’s KPC expire at sure on Germany to shift its position on the Nord
the end of this year. Stream 2 pipeline, but Berlin shows no sign of
In other news, Saudi Aramco has awarded a dropping its support for the Russian project. Sev-
$80mn contract to Spain’s Tecnicas Reunidas to eral US Senators wrote a letter to the operator
build a new sour water stripper at its 550,000 bpd of Germany’s Mukran port this week, threaten-
Ras Tanura oil refinery. The Saudi oil giant has ing “crushing legal and economic sanctions” if
scaled back spending significantly in response to it helps Russian vessels complete the pipeline.
the oil price collapse, and so it is proceeding with Mukran has served as a logistic and service cen-
only the most necessary and minor projects to tre for vessels working on Nord Stream 2 over the
improve its downstream efficiency. years, as well as a storage site for its pipes.
Aramco has notably axed a far costlier plan to Both the German government and the Euro-
build a synthetic rubber production in the east- pean Commission are considering steps to pro-
ern Saudi port of Al Jubail, at least according to tect EU businesses from potential US punitive
its Russian partner Sibur. action. This means any sanctions may prove inef- Russia’s Finance
fectual, serving only to sour US-European ties. Ministry has filed
If you’d like to read more about the key events shaping
the downstream sector of Africa and the Middle East, If you’d like to read more about the key events shaping a bill seeking to
then please click here for NewsBase’s DMEA Monitor. Europe’s oil and gas sector then please click here for
NewsBase’s EurOil Monitor. make significant
Europe: UK offshore decarbonisation
The UK Continental Shelf (UKCS) can deliver FSU: Russian tax tweaks changes to the
60% of the necessary emissions cuts for the Russia trialled a new profit-based tax system at tax system
country to meet its net-zero target, according certain oilfields last year, in a bid to encourage
to a new report by the Oil and Gas Authority investment in extra recovery.
(OGA). The pilot scheme is part of efforts to reform
Integrating oil and gas production with the Russian oil industry’s complex and prob-
renewable energy, carbon, capture and storage lematic tax regime, and advocates want it to be
(CCS) and hydrogen could achieve 30% of the applied nationwide within a decade. The only
emissions cuts required by 2050, while the use problem is that Russia’s finance ministry (Min-
of offshore wind, wave and tidal projects could Fin) says this experiment has cost the budget
contribute a further 30%, according to the OGA. some $2.9bn.
Among its key findings, the report estimates The ministry has filed a bill seeking to make
that UKCS reservoirs could store up to 78 giga- significant changes to the system, in order to
tonnes of CO2, which sufficient for hundreds of claw back some of these lost revenues. Unsur-
years of the UK’s CCS needs. prisingly, the proposed changes are strongly
Meanwhile, blue hydrogen, produced from opposed by oil producers that have benefitted
natural gas but with CO2 from the process being from the profit-based system.
captured and stored, has the potential to decar- If the ministry gets its way, these companies
bonise 30% of UK gas consumption within three would take a significant hit to core earnings over
decades. the next few years.

P8 www. NEWSBASE .com Week 32 13•August•2020