Page 18 - FSUOGM Week 02 2021

FSUOGM PROJECTS & COMPANIES FSUOGM

Block expects first West Rustavi

gas in weeks

GEORGIA GEORGIA-FOCUSED Block Energy expects to “The commencement of gas sales will be a
launch gas sales from its West Rustavi field near significant event for Block and is testament to
The producer is waiting Tbilisi within the next month, the London-listed the capability of our team, who have continued
on its customer to finish junior said on January 11. to prioritise this project, despite some significant
the necessary steps to Block said it had taken all necessary steps operational and travel challenges associated with
launch gas flows. within its control for gas supplies to commence, [coronavirus] COVID-19,” Block CEO Paul
which it expects to see in either late January or Haywood said. “As well as the commencement
early February. These steps include completing of gas sales, we are pleased to be recommencing
and commissioning an early production facility production and sales of crude oil at West Rustavi
and a gas gathering line. with the Brent oil price now over $50 per barrel.”
The producer is now waiting on Georgian Block was forced to curtail production after
gas supplier Bago to complete a compressor sta- the onset of the coronavirus pandemic and the
tion and hook it up to the state’s main gas line. resulting collapse in oil prices. West Rustavi, the
It clinched a deal to sell gas to Bago in October company’s main focus, has yielded 50mn barrels
2019, at $185 per 1,000 cubic metres. Bago has of crude to date, with 0.9mn barrels in 2P oil
already built and pressure-tested an 8-km pipe- reserves. But Block believes the main potential
line to receive the gas. lies in its 608bn cubic feet (17.2bn cubic metres)
Block plans to mobilise teams to the WR-16aZ of 2C contingent gas resources.
and WR-38Z wells at West Rustavi in the coming Block also produces oil from the Norio and
days to resume oil and gas production. It is also Satskhenisi fields in Georgia. It also closed a deal
finalising preparations for its 2021 drilling and in November to acquire licences for two blocks
workover programme, which it expects to pres- from US services firm Schlumberger, giving it
ent to shareholders in the coming weeks. additional exploration opportunities. ™

NEWS IN BRIEF

RUSSIA OPEC+ increase for February in addition on January 6, as cited by Interfax Ukraine.
to the 500k bpd increase implemented as of The reduction in gas volumes means
Latest OPEC+ decision seen January 1, 2020, but more price-sensitive that Gazprom has sent less gas than it is
contractually obliged to send, but under the
members of the organisation baulked.
as win-win for Russian oil reached – Russia was allowed to increase terms of a deal signed at the last minute in
"In the end, a remarkable agreement was
December 2019 Gazprom will pay transit
companies output by 65kbpd (about half of what it was fees on the whole amount stated in the
effectively asking for), while Saudi Arabia
contract.
The latest OPEC+ consortium decision to agreed to cut output by 1mn bpd," BCS GM The contract provides for the transit of
allow Russia to raise production in February analysts noted. at least 65bn cubic metres of Russian gas in
and March 2020 by 65,000 barrels per day They stressed that oil prices are now back 2020, which equates 178mn cubic metres
(bpd) each month, together with Saudi to the levels of last February, before the per day.
Arabia announcing cutting production by onset of the coronavirus (COVID-19) crisis Gazprom was sending about 180 mcm
1mn bpd on its own, is seen as positive for but after the brief oil price war between per day through Ukraine’s pipes at the end
Russian oil producers. Russia and Saudi Arabia. . of December, but as soon as the contract
bne IntelliNews reported that 2021 kicked expired on January 1 this year the volumes
off with oil prices rallying on the OPEC+ news fell off dramatically to about 130 mcm per
to over $56 per barrel of Brent crude oil. day early January, Interfax reports.
"The unexpected result of last week’s EASTERN EUROPE Under the terms of the transit deal
OPEC+ meeting was a win-win for Russian signed in December 2019 Russia is obliged
oil producers, allowing them to increase Russian gas transit via to send 40 bcm every year in 2021-2024.
production somewhat even as the oil price Payment for the contracted volumes is
rose," BCS Global Markets commented on Ukraine down third in 2020 guaranteed even if the smaller amount of
January 11. gas is pumped through the Ukrainian gas
BCS GM also highlights that key Russia's state-owned gas giant Gazprom transport system (GTS).
members Saudi Arabia and Russia sent its European customers nearly a third The amount of gas Gazprom is sending
have begun going their separate ways less gas via Ukraine’s pipeline network in is radically reduced from earlier transit
on production policy, but within the 2020 than it did a year earlier, the head of volumes and well below the capacity of
framework of the organisation. the Gas Transmission System Operator of Ukraine’s GTS, which is able to carry some
Russia suggested a further 0.5mn bpd Ukraine (GTSOU), Serhiy Makogon, said 140 bcm a year. Russia has already started

P18 www. NEWSBASE .com Week 02 13•January•2021