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US wades into German affairs; North Sea 9.7mn barrel per day (bpd) of supply offline until
developments the end of July and then ease the cuts. OPEC+’s
The US is considering additional sanctions in a decisiveness, together with recovering demand,
last-ditch attempt to prevent Russia from com- should help stabilise the market, with analysts
pleting its Nord Stream 2 pipeline. But with a forecasting that oil could rise back up to $50 per
mere 6% of the pipeline left to lay, further puni- barrel as a result.
tive action is unlikely to thwart the project and Those OPEC+ members that have failed
could backfire by further straining Washington’s to keep their commitments so far, namely
relations with Berlin. (See: US lawmakers back Iraq and Nigeria, will have to compensate
more sanctions on Nord Stream 2, page 13) for this with greater reductions during the
Russia is expected to use two of its own pipe- rest of the year. Low prices have not checked
laying vessels to finish Nord Stream 2, which the Arctic ambitions of Russia’s oil and gas
would likely continue work even if the sanctions companies.
are applied. Gazprom also appears to have trans- State oil firm Rosneft has reportedly asked
ferred one of the vessels to another company, the government to auction off licences for
shielding itself from potential punitive measures. three gas fields in Russia’s far north. It appears
In the North Sea, Premier Oil has managed to that the company’s plan is to establish its own
renegotiate a lower price for a group of BP assets, LNG production in the region. It has long
while also making peace with its main creditor coveted rival Novatek’s success in the LNG
which opposed the deal. If completed, the trans- sphere, but has failed to advance any projects
action will be a boon for North Sea M&A activ- of its own.
ity, which has slumped since the March oil price The company wants to develop the three gas
collapse. deposits as part of its Vostok Oil project. Few
North Sea juniors Egdon Resources and Cluff details have been revealed about Vostok Oil,
Natural Resources are pushing ahead with devel- which Rosneft CEO Igor Sechin has claims could
opment plans, despite the current market condi- one day flow up to 2mn barrels per day (bpd)
tions. Egdon has secured licence extensions for of oil. But despite Rosneft’s secrecy, the $160bn
the Resolution and Endeavour gas discoveries, scheme is expected to secure large tax breaks and
bringing it one step closer to completing a farm- financing from the government.
out to Royal Dutch Shell. Cluff, meanwhile, says Meanwhile, Gazprom has ordered a special-
it is still committed to drilling at the Pensacola ised platform for what is expected to be the first
and Selene finds, even though one of the wells gas field on Russia’s Arctic shelf to start produc-
will be delayed by a year. It too is partnered with tion. Kamennomysskoye-more is thought to
the Anglo-Dutch major. contain 550bn cubic metres of gas and will flow
14.5 bcm per year at full capacity.
If you’d like to read more about the key events shaping These projects likely have a breakeven point
Europe’s oil and gas sector, then please click here for considerably higher than current prices, how-
NewsBase’s EurOil Monitor. ever, raising questions about how quickly they
will see first production.
Russia commits to longer guts
Russia and its OPEC+ allies agreed a one-month If you’d like to read more about the key events
extension to record output cuts in a meeting on shaping the former Soviet Union’s oil and gas sector,
June 6. then please click here for NewsBase’s FSU Oil & Gas
The alliance of oil producers will now keep Monitor.

P6 www. NEWSBASE .com Week 23 11•June•2020