Page 14 - MEOG Week 24

MEOG nr G MEOG

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

P14 www. NEWSBASE .com Week 24 17•June•2020