Page 8 - NorthAmOil Week 49

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national oil company (NOC), over the terms of OPEC+ member Oman has concerted efforts
a 20-year ethane supply deal. Mexican President to reinvigorate the sultanate’s oil and gas indus-
Andres Manuel Lopez Obrador has come down try through the creation of Energy Development
on the side of the state-owned companies, and Oman (EDO), a new company that will seek to
some industry observers believe that the gov- tap international debt markets backed by the
ernment sees recent developments as a means of country’s largest oil concession, Block 6.
forcing Braskem Idesa to sign new contracts that
are more favourable to both Cenagas and Pemex. If you’d like to read more about the key events
In related news, Mexico’s government is on shaping the Middle East’s oil and gas sector then
track to collect about $2.5bn this year as a result please click here for NewsBase’s MEOG Monitor .
of its annual oil price hedging deal. The 2020
hedge, which expired on November 30, locked NorthAmOil: Chevron cuts capex
oil prices in at $49 per barrel. This was a fortu- Chevron followed rival super-major ExxonMo-
nate move, given the depths to which world bil in announcing a cut to its capital expenditure
crude prices sank earlier this year. Prices for budget last week. (See: Chevron follows ExxonMobil
Maya crude, Mexico’s main export grade, sunk in capex cut, page 14) This comes as both large and
briefly below zero in April and even now are only small producers are looking to 2021 – and beyond
at around $40 per barrel. – and independents can be expected to follow the
super-majors’ leads in announcing scaled-back
If you’d like to read more about the key events shaping spending plans over the coming weeks.
the Latin American oil and gas sector then please click Chevron said on December 3 – three days
here for NewsBase’s LatAmOil Monitor . after ExxonMobil’s capex plans were unveiled
– that its 2021 capital and exploratory spend-
MEOG: OPEC+ agreement ing programme would total $14bn. It added
The oil market sighed with relief this week when that its longer-term capex guidance over 2022-
it was announced that OPEC and its partners 25 was $14-16bn. This is down from a previous
had agreed a deal to maintain 7.2mn bpd of cuts projection of $19-22bn, with Chevron unveil-
until at least the end of January, with monthly ing 2020 capex guidance of $20bn this time
meetings to decide increases going forward. last year before subsequently scaling back its
However, the friction between key OPEC plans after the oil and gas industry entered its
members Saudi Arabia and the UAE that caused latest downturn.
the group to delay their meeting with non-OPEC The super-major said it would continue to
partners has not gone unnoticed. Riyadh had prioritise investments that are “expected to grow
been keen to maintain the previous 7.7mn bpd long-term value and deliver higher returns and
cuts for a further three months in order to max- lower carbon”. It added that this would include
imise market stability and prop up prices, but the over $300mn worth of investments aimed at
UAE said it would only support a continuation of advancing the energy transition in 2021.
reductions if non-compliers were forced to toe Chevron said it expected to increase invest-
the line. While a compromise has been reached, ment in various “advantaged assets” over the
it is likely to have fallen short of the levels the coming years, including the Permian Basin,
UAE would have hoped for with ramping up other unconventional plays and the Gulf of Mex-
production, an important element in its efforts ico. Some parallels can be drawn between Chev-
to make its Murban crude grade a benchmark ron and ExxonMobil here, with the latter also
for the commodity. saying it would prioritise spending on a handful
Iraq will play a particularly important role of assets, including its operations in the Permian.
in the success of the latest deal, with the coun- But Chevron appears to have more of a focus on
try the most flagrant offender when it comes to its entire US portfolio, which now includes the
non-compliance. Meanwhile, Total is reported assets it acquired through its merger with Noble
to have taken steps to sell off a non-core asset Energy earlier this year.
in the Kurdish north of the country, with the Other announcements of capex cuts, albeit
Sarsang block apparently being marketed by on a smaller scale, are set to follow across the US
Jefferies. oil and gas industry.™

P8 www. NEWSBASE .com Week 49 10•December•2020