Page 9 - LatAmOil Week 48 2020

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FSU: Ukraine’s Black Sea ops If you’d like to read more about the key events shaping
Ukraine’s government has granted state-owned the former Soviet Union’s oil and gas sector then please
gas supplier Naftogaz a 30-year licence to explore click here for NewsBase’s FSU Monitor.
and develop a section of the Black Sea, without
a tender. The country’s Cabinet of Ministers GLNG: Looking at resource-sharing
approved a resolution clearing Naftogaz for the The oversupply in the LNG market, which has
project on November 25, with Natural Resources been exacerbated by the coronavirus (COVID-
Minister Roman Abramovsky suggesting that 19) pandemic, is prompting developers to con-
the firm partner with international investors. sider options including resource-sharing. This
Naftogaz has been lobbying for access to the is now playing out in Mozambique, where Total
Black Sea shelf to help it expand production and and ExxonMobil are reported to be in talks over
reduce Ukraine’s need for imported gas, but a potential resource-sharing deal.
authorities previously wanted to find offshore Last week, three sources familiar with the
developers through an auction. matter told Reuters that the two companies
Ukraine’s subsoil service held a contest were in negotiations, with each reportedly seek-
for rights to 9,500 square km of the Black Sea, ing to extract more gas from a shared field that
known as the Dolphin contract area, last year. straddles their two developments and cut costs.
A London-based company called Trident Total is already developing its Mozambique
Resources with no past experience of oil and gas LNG export terminal, which will use feedstock
exploration was selected as the winner. But the gas from Offshore Area 1. ExxonMobil, mean- Naftogaz has
government cancelled the award the following while, is still weighing whether to go ahead with been lobbying
month, saying it wanted an investor with experi- Rovuma LNG, which would use feedstock gas
ence and technical capability. from neighbouring Offshore Area 4. Separately, for access to the
The auction had been due to be restaged, with ExxonMobil is also involved in the Eni-led Coral
investors given more time to submit their bids, South floating LNG (FLNG) project, under Black Sea shelf
but this plan was put on hold in light of the coro- development currently and using gas from Off-
navirus (COVID-19) pandemic. shore Area 4. to help it expand
Naftogaz has said it will invest $40mn in its The field that straddles ExxonMobil and production and
first year of work on the Ukrainian Black Sea Total’s project areas contains cheap and abun-
shelf, which it estimates to hold 1-2 trillion cubic dant gas resources. The volume each project reduce Ukraine’s
metres of gas. It will, however, first need to drill could extract from the shared area was set out
to find out how much gas is really out there and in a 2015 unitisation – or resource-sharing – need for imported
how much can be recovered commercially. agreement, but according to the sources, both
Over in Russia, both Gazprom and Tatneft ExxonMobil and Total are now renegotiating natural gas
reported their third-quarter results on Novem- that contract with each other.
ber 30. While Gazprom swung to a net loss of The companies are reportedly seeking to
RUB251bn ($3.3bn), Tatneft stayed in the black, cut costs wherever they can, in response to the
delivering a net income of $0.49bn. impact of COVID-19 and the worsening secu-
Gazprom blamed its reversal on a rity situation in northern Mozambique. The
RUB464.3bn foreign exchange loss relating to negotiations are reported to be particularly sig-
the revaluation of its foreign currency-denom- nificant for ExxonMobil, as it has yet to make a
inated debts. Tatneft’s board, meanwhile, dis- final investment decision (FID) on the Rovuma
appointed investors by failing to announce a project, which is estimated to cost $30bn.
decision on a dividend for the third quarter of This comes as developers elsewhere in the
2020, implying that one is not likely to be paid. world are backing away from resource-sharing.

Week 48 03•December•2020 www. NEWSBASE .com P9