Page 8 - NorthAmOil Week 17 2022

NorthAmOil POLICY NorthAmOil

US DoE unveils contracts awarded

under second emergency SPR sale

US THE US Department of Energy (DoE) has 3.6mn barrels. Other companies winning con-
awarded 12 contracts for 30mn barrels from tracts include Atlantic Trading & Marketing,
the Strategic Petroleum Reserve (SPR) as part Chevron, Equinor, Glencore, Marathon Petro-
of an emergency release previously announced leum, Mercuria, Phillips 66, Shell and Unipec.
at the start of April. The sale is also being con- The DOE will offer an additional 40mn bar-
ducted as part of co-ordinated action by the US rels on May 24 for delivery in June and July.
and other countries to stabilise crude prices that Added to already-scheduled releases, the new
have hit multi-year highs since Russia’s invasion contracts mean that the SPR will now deliver
of Ukraine in February. 50mn barrels in May and June. The US has com-
Valero, Motiva Enterprises and ExxonMobil mitted to releasing 1mn barrels per day (bpd)
were awarded the largest shares of the latest sale, from the SPR for a period of six months. Also as
comprising almost half of the volumes on offer. part of this commitment, another 90mn barrels
The oil is scheduled for delivery between May 15 will be offered for delivery between August and
and June 30 and includes 9.6mn barrels of sour October under separate notices of sale, which
crude from West Hackberry in Louisiana, 8.7mn analysts expect to be fully subscribed.
barrels of sour crude from Big Hill in Texas, 8mn The 180mn barrel drawdown by the US will
barrels of sour crude from Bryan Mound, also deplete the SPR by roughly one-third, reduc-
in Texas, and 3.7mn barrels of sweet crude from ing the volumes in the reserve to their lowest
Bayou Choctaw in Louisiana. level since 1984. As of April 15, the SPR held
A total of 16 companies made 126 bids for the 556mn barrels, with sour crude accounting
30mn barrels. Valero has been awarded 6.85mn for about 55% and sweet crude making up the
barrels, Motiva 4.05mn barrels and ExxonMobil remaining 45%.™

PROJECTS & COMPANIES

CNOOC confirms end to Flemish

Pass Basin exploration

NEWFOUNDLAND CHINA National Offshore Oil Corp. (CNOOC) the company still has oil sands operations in
AND LABRADOR has confirmed to Canadian media that it is exit- Alberta. It owns these Canadian, US and UK
ing offshore Flemish Pass Basin offshore New- assets thanks to its $15bn acquisition of Nexen
foundland and Labrador. in 2013.
The Chinese company’s exit follows an Pelles had been widely considered a well
unsuccessful drilling campaign in the basin. It worth watching thanks to its proximity to
drilled the highly anticipated Pelles well last year, Equinor’s Bay du Nord discovery, also in the
but subsequently said in mid-2021 that the well Flemish Pass Basin, which was recently approved
The Stena Forth would be plugged and abandoned, without pro- for development by the Canadian government.
drillship, which viding further details. Indeed, CNOOC’s failure with Pelles does not
was used at Pelles, CBC News cited CNOOC as confirming this appear to have deterred other companies from
will also be used week that the well had come up dry and that it carrying out further exploration in the basin.
to drill ExxonMobil would be abandoning exploration offshore New- At the end of 2021, QatarEnergy farmed into
and QatarEnergy’s foundland and Labrador. licence 1165A, which is held by ExxonMobil.
Hampden prospect. “We made the difficult decision to relinquish The two companies have contracted the Stena
our exploration licences in the Flemish Pass,” a Forth drillship, which was used at Pelles, to drill
CNOOC International spokesperson told the the Hampden prospect in their licence in the sec-
news service. ond half of 2022.
The move also comes after reports emerged Meanwhile, Equinor is preparing to drill
earlier this month that CNOOC was planning two additional exploration wells at the Sitka
to exit its US, UK and Canadian operations amid and Cambriol East this year as it seeks to bol-
concerns over potential Western sanctions, as ster reserves in the Bay du Nord area. Upstream
well as operational challenges in those countries reported last week that the Norwegian company
(See NorthAmOil Week 16). The exit from New- could be days away from re-starting exploration
foundland and Labrador aligns with this, though drilling in the region.™

P8 www. NEWSBASE .com Week 17 28•April•2022