Page 15 - MEOG Week 22

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from South Korean shipbuilders Daewoo Ship- building & Marine Engineering, hyundai heavy Industries holdings and Samsung heavy Indus- tries. This marks the largest ever single LNG vessel order, covering more than 100 ships to be delivered by 2027.
Qatar’s push on both domestic and overseas LNG development comes as other planned liquefaction projects in North America and elsewhere appear to be increasingly in doubt. A handful of North American developers have already postponed final investment decisions (FIDs) from this year until 2021, but analysts are now warning that it could be even longer before any more liquefaction capacity is sanctioned.
A number of pre-FID projects in both the US and Canada would be greenfield developments, adding to their construction cost at a time when LNG prices remain low and securing financing is increasingly challenging. The convergence of LNG prices globally is also throwing the eco- nomics of shipping the fuel over long distances into question.
Current trends are compounding the worries of US LNG developers. Reuters reported on June 1 that the amount of pipeline gas flowing to US LNG export terminals was on track to fall to a nine-month low of 4.3 bcf (122 mcm) per day as cargo cancellations kick in. This is expected to hit Cheniere Energy, the US’ leading LNG exporter, particularly hard.
Ifyou’dliketoreadmoreaboutthekeyevents shaping the global LNG sector, then please click here for NewsBase’s GLNG Monitor.
Latin america faces sickness, sanctions
In two South American oil-producing states, the coronavirus pandemic and related topics con- tinue to dominate headlines.
The Colombian pipeline operator Cenit, a subsidiary of the national oil company (NOC) Ecopetrol, has said it will extend measures designed to ease the financial burden on produc- ers that have been hit hard by declining energy demand and low crude prices.
The company revealed last week that it intended to cut tariffs, to keep special financing arrangements in place for another six months and to be more flexible in negotiations with users of its pipelines.
In Brazil, more offshore operators are report- ing COVID-19 infections among their con- tractors and staff members. As of May 28, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) had made note of no less than 544 cases.
State-owned Petrobras reportedly accounted for hundreds of these cases, and several private firms – including Dommo Energia (Brazil), Enauta Participacoes (Brazil), Equinor (Nor- way), Perenco (UK/France) and Royal Dutch Shell (UK/Netherlands) – have also been hit. Venezuela also continues to draw criticism from the US for importing gasoline from Iran.
Officials in Washington have threatened to penalise any companies found to be involved
in the transaction and have also delivered dip- lomatic warnings to governments around the world. In related news, Libre Abordo, the obscure Mexican company that has been execut- ing an oil-for-water agreement with Venezuela, has declared bankruptcy. Venezuelan President Nicolas Maduro has blamed the US sanctions on his country for Libre Abordo’s woes.
Ifyou’dliketoreadmoreaboutthekeyevents shaping Latin America’s oil and gas sector, then please click here for NewsBase’s LatAmOil Monitor.
Cutting back, but looking to the future in north america
WTI prices have remained relatively stable above $30 per barrel in recent days, but this level is not high enough for many US producers. In one of the latest illustrations of the industry’s struggles, Occidental Petroleum announced on May 29 that it was cutting its dividend by 91%. This takes the company’s dividend to $0.01 per share – the lowest level since at least the 1970s.
Occidental is struggling more than many thanks to the debt it took on last year to acquire Anadarko Petroleum in what proved to be an ill- timed bet on shale and rising oil prices.
It is not just smaller companies that con- tinue to struggle, though. Super-major Chevron announced on May 27 that it would cut its global workforce by up to 15%. This equates to around 45,000 employees. No further details of the lay- offs have been provided as yet.
Rival ExxonMobil said it had no plans to cut staff, but would nonetheless reduce its operating expenses by 15%.
The two super-majors held their annual meetings last week, and shareholders of both rejected resolutions calling for the companies to set targets for greenhouse gas (GhG) emissions reductions, among other measures. While Exx- onMobil and Chevron have generally been more resistant to such measures than their European counterparts, this leads to questions over how the oil market downturn could affect the pace of the energy transition.
Despite the broader slowdown in North America’s oil and gas industry, a new exploration prospect that could be targeted in future years has been identified.
Applied Petroleum Technology (APT) said it had conducted a detailed evaluation of the Southern Grand Banks petroleum system off- shore Eastern Canada for multiple clients. It reported that it had identified previously unrec- ognised Lower Jurassic source rocks and a genet- ically related set of oil shows.
however, the findings come at a time when oil companies are unlikely to be rushing to explore the waters off Canada – or indeed other offshore areas. If more exploration ultimately takes place, it will be some time from now.
Ifyou’dliketoreadmoreaboutthekeyevents shaping the North American oil and gas sector, then please click here for NewsBase’s NorthAm- Oil Monitor.™
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