Page 10 - FSUOGM Week 42

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expansion plans will weigh down on invest- exploration work to date having yielded four
ment approvals on other liquefaction for years fractured basement discoveries.
to come. Lancaster entered production last year but
Meanwhile, a report by the Arab Petroleum has not lived up to expectations, meaning devel-
Investment Corp. (APICORP) said that there opments at other sites are likely to be rethought.
were some $95bn petrochemicals projects In other news, France’s finance ministry is
planned in the Middle East and North Africa in looking to rein in state export guarantees for
2020-2024, up $4bn from its last five-year out- fossil fuel production projects, according to its
look a year ago. proposal to Parliament last week.
Egypt, Iran and Saudi Arabia account for Guarantees, which reduce risks for French
the bulk of these ventures. Developers will have companies and commercial banks in export
difficulty delivering on these investments, how- transactions, will no longer be provided for the
ever, given weak market conditions and a lack of dirtiest forms of oil, including heavy oil, shale oil In other news,
established petrochemical infrastructure in the and bitumen oil sands, starting next year. France
region. stopped issuing guarantees for projects that use France’s finance
hydraulic fracturing or flaring this year, and ear- ministry is
If you’d like to read more about the key events shaping lier called time on coal as well.
the downstream sector of Africa and the Middle East, Gas projects will be safe for now, with guar- looking to rein
then please click here for NewsBase’s DMEA Monitor. antees continuing to be offered until 2035. The
ministry justified this delay by saying the fuel in state export
Europe: UK prospects grow bleaker would help coal-reliant economies scale down
Hydrocarbon production on the UK Conti- their emissions. But it said it might bring forward guarantees
nental Shelf (UKCS) is unlikely to exceed 2mn the end-date in the future. for fossil fuel
barrels of oil equivalent per day (boepd) again,
Oslo-based Rystad Energy said in research pub- If you’d like to read more about the key events shaping production
lished on October 15, after lowering its forecasts Europe’s oil and gas sector then please click here for
to factor in a downgrade at Hurricane Energy’s NewsBase’s EurOil Monitor . projects.
Lancaster field.
Rystad had expected national output to FSU: OPEC+ warns of oil surplus in 2021
rebound to 2.1mn boepd by 2035, up from Russia, Saudi Arabia and other members of the
1.65mn boepd last year. But setbacks at Lancas- OPEC+ oil alliance have warned that a sustained
ter, the first fractured basement field to reach second wave of the coronavirus (COVID-19)
production, have prompted the consultancy to pandemic and a surge in Libyan output could
rethink its assumptions. push the oil market back into surplus next year.
Hurricane slashed its estimate last month for The oil cartel’s Joint Technical Committee
how much oil could be recovered from Lancaster held a virtual monthly meeting on October 15.
to 16mn barrels, from 37.3mn barrels previously, They considered this renewed surplus as a worst-
after discovering that the field was more com- case scenario, Reuters reported citing a confi-
plex than earlier thought. Fractured basement dential document. They had ruled this out as a
resources were expected to account for almost possibility in their September meeting.
one fifth of future national output, according to The committee’s base-case scenario still
Rystad. anticipates a supply deficit emerging in 2021 of
The consultancy now predicts UK produc- around 1.9mn barrels per day, although this was
tion to max out at only 1.7mn boepd in 2035 and less than the 2.7mn bpd deficit forecast a month
wind down to next to nothing by mid-century. earlier. But their worst-case scenario foresees a
There has been long-held scepticism in the swing to a 200,000 bpd surplus. This could mean
industry about the ability of fractured reservoirs that oil storage levels remain above the five-year
like those found at Lancaster to produce at a average next year, rather falling under it after
stable level, owing to their complex and unpre- the first quarter, as OPEC+’s base-case scenario
dictable nature. They were largely ignored until predicts.
Hurrciane came on the scene in 2004, with its Unprecedented cuts by the alliance of oil

P10 www. NEWSBASE .com Week 42 21•October•2020