Page 8 - AfrOil Week 32

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Meanwhile, blue hydrogen, produced from nat- opposed by oil producers that have benefitted
ural gas but with CO2 from the process being from the profit-based system. If the ministry gets
captured and stored, has the potential to decar- its way, these companies would take a significant
bonise 30% of UK gas consumption within three hit to core earnings over the next few years.
decades. The ministry is unlikely to get everything it
The OGA has called for greater regulatory is asking for, given the pilot scheme’s popularity
co-ordination and support to ensure that pio- among Russia’s powerful oil lobby. On the other
neering projects in these fields are a success. hand, some tweaks will have to be made given
At the same time, the US is ramping up pres- the huge budgetary shortfall that the country is
sure on Germany to shift its position on the Nord facing. The Kremlin will likely have to wade into
Stream 2 pipeline, but Berlin shows no sign of the dispute and thrash out a compromise.
dropping its support for the Russian project. Sev- In other news, Lukoil has reported a sharp
eral US Senators wrote a letter to the operator decline in oil and gas production in the first half
of Germany’s Mukran port this week, threaten- of the year. This is not only due to OPEC+ cuts
ing “crushing legal and economic sanctions” if that came into force in April, but also a steep
it helps Russian vessels complete the pipeline. drop in its Uzbek gas sales to China.
Mukran has served as a logistic and service cen- Chinese gas demand has continued to grow
tre for vessels working on Nord Stream 2 over the this year, in spite of COVID-19 lockdown Russia’s Finance
years, as well as a storage site for its pipes. measures, but at a much slower pace. Chinese Ministry has filed
Both the German government and the Euro- companies have prioritised purchases while
pean Commission are considering steps to pro- cutting imports, including from Uzbekistan, a bill seeking to
tect EU businesses from potential US punitive where Lukoil operates the Southwest Gissar and
action. This means any sanctions may prove inef- Kandym projects. make significant
fectual, serving only to sour US-European ties. Turkmen state media have reported progress
at several refining projects being undertaken by changes to the
If you’d like to read more about the key events shaping the country’s favoured contractor, US-registered tax system
Europe’s oil and gas sector then please click here for Westport Trading Europe. But Turkmenistan’s
NewsBase’s EurOil Monitor. strict control over information flow makes it dif-
ficult to determine just how much work is taking
FSU: Russian tax tweaks place on the ground. After all, despite numerous
Russia trialled a new profit-based tax system at reports of progress over the years, the country’s
certain oilfields last year, in a bid to encourage throughput capacity does not appear to have
investment in extra recovery. changed in five years.
The pilot scheme is part of efforts to reform
the Russian oil industry’s complex and prob- If you’d like to read more about the key events shaping
lematic tax regime, and advocates want it to be the former Soviet Union’s oil and gas sector then
applied nationwide within a decade. The only please click here for NewsBase’s FSU Monitor .
problem is that Russia’s finance ministry (Min-
Fin) says this experiment has cost the budget More grief for Gorgon LNG
some $2.9bn. Chevron and its partners in the Gorgon LNG
The ministry has filed a bill seeking to make project have been ordered by the government
significant changes to the system, in order to of Western Australia to inspect the propane heat
claw back some of these lost revenues. Unsur- exchangers at Trains 1 and 3 at the 15.6mn tonne
prisingly, the proposed changes are strongly per year (tpy) liquefaction terminal.

P8 www. NEWSBASE .com Week 32 12•August•2020