Page 14 - AsianOil Week 21

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The GNA has started to made progress in its military campaign against the LNA, but it will probably have a hard time restarting production at major oilfields such as El-Feel and Sharara.
If you’d like to read more about the key events shaping Africa’s oil and gas sector then please click here for NewsBase’s AfrOil Monitor.
Downstream cost-cutting and fuel quality
Qatar Petroleum (QP), the world’s biggest LNG producer, says it is cutting costs by 30% in response to the market slump. But it is still moving “full steam ahead” and has a $50bn plan to expand its liquefaction capac- ity by two thirds by 2027. QP has also ruled out cutting production in response to prices, on the grounds that its low costs make such a step unnecessary.
Meanwhile, a new report suggests that the petroleum products imported legally into Nige- ria are more polluting and of worse quality than supplies produced at illegal refineries in the Niger Delta. A study by the Stakeholder Democ- racy Network (SDN) concluded that official samples of gasoline and diesel contained more sulphur than unofficial volumes.
Fuel quality is difficult to control in Nigeria, and SDN’s research suggests that the practice of blaming illegal fuel for air pollution is merely a convenient way to defer responsibility.
In North Africa, Morocco is looking to take advantage of the drop in fuel prices to stock on supplies, using its closed refinery as a storage facility.
Meanwhile, Bahrain has reached the halfway point in a $6bn refining upgrade programme, and the embattled Turkish refiner Tupras has swung to a $353mn loss.
If you’d like to read more about the key events shaping the downstream sector of Africa and the Middle East, then please click here for NewsBase’s DMEA Monitor.
European asset sales at risk
North Sea producers are struggling to close deals since oil prices tanked.
France’s Total is working to save its $635mn deal to sell its non-core UK assets after one of its prospective buyers, Oman’s Petrogas, dropped out. The entire portfolio is now expected to go to Norwegian private equity fund HitecVision, which will secure vendor financing from Total to pay for the acquisition.
London-listed Energean Oil & Gas has been less fortunate. It reported on May 19 that the sale of $280mn worth of North Sea assets to regional pro- ducer Neptune Energy had collapsed. This could crush Energean’s hopes of completing its $750mn takeover of Italy’s Edison E&P, since the assets due to be sold to Neptune were part of that deal.
UK’s Premier Oil, meanwhile, seems to be having second thoughts about acquiring $871mn of offshore UK field interests from BP and South Korea’s Dana Petroleum. The com- pany announced those deals in January, when the market outlook was far rosier.
Low prices are also creating opportunities, though, as Poland is looking to boost the role of gas in its energy mix now that it is much cheaper.
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w w w . N E W S B A S E . c o m Week 21 28•May•2020