Page 19 - AsianOil Week 42

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There has been long-held scepticism in the worst-case scenario, Reuters reported citing a
industry about the ability of fractured reservoirs confidential document. They had ruled this out
like those found at Lancaster to produce at a as a possibility in their September meeting.
stable level, owing to their complex and unpre- The committee’s base-case scenario still
dictable nature. They were largely ignored until anticipates a supply deficit emerging in 2021 of
Hurrciane came on the scene in 2004, with its around 1.9mn barrels per day, although this was
exploration work to date having yielded four less than the 2.7mn bpd deficit forecast a month
fractured basement discoveries. earlier. But their worst-case scenario foresees a In other news,
Lancaster entered production last year but swing to a 200,000 bpd surplus. This could mean
has not lived up to expectations, meaning devel- that oil storage levels remain above the five-year France’s finance
opments at other sites are likely to be rethought. average next year, rather falling under it after ministry is
In other news, France’s finance ministry is the first quarter, as OPEC+’s base-case scenario
looking to rein in state export guarantees for predicts. looking to rein
fossil fuel production projects, according to its Unprecedented cuts by the alliance of oil pro-
proposal to Parliament last week. ducers have been critical in rebalancing global in state export
Guarantees, which reduce risks for French supply with demand since the coronavirus pan-
companies and commercial banks in export demic struck. They had hoped to taper the cuts guarantees
transactions, will no longer be provided for the by 2mn bpd at the start of 2021, but a looming for fossil fuel
dirtiest forms of oil, including heavy oil, shale oil surplus could threaten these plans.
and bitumen oil sands, starting next year. France Meanwhile, BP has confirmed that the production
stopped issuing guarantees for projects that use Trans-Adriatic Pipeline (TAP) is still on track to
hydraulic fracturing or flaring this year, and ear- deliver the first gas from Azerbaijan to Europe by projects.
lier called time on coal as well. the end of this year, as the UK oil major looks to
Gas projects will be safe for now, with guar- quell concerns of a delay amid continued fight-
antees continuing to be offered until 2035. The ing in the Nagorno-Karabakh region.
ministry justified this delay by saying the fuel In a statement on October 13, BP said the
would help coal-reliant economies scale down commissioning of TAP and an interconnecting
their emissions. But it said it might bring forward pipeline would be completed in November. This
the end-date in the future. “will allow the Shah Deniz consortium to finalise
the final steps required to start the 25-year-long
If you’d like to read more about the key events shaping supplies of natural gas from Azerbaijan to cus-
Europe’s oil and gas sector then please click here for tomers in Italy, Greece and Bulgaria as planned
NewsBase’s EurOil Monitor. by the end of 2020.”
FSU: OPEC+ warns of oil surplus in 2021 If you’d like to read more about the key events shaping
Russia, Saudi Arabia and other members of the the former Soviet Union’s oil and gas sector then please
OPEC+ oil alliance have warned that a sustained click here for NewsBase’s FSU Monitor.
second wave of the coronavirus (COVID-19)
pandemic and a surge in Libyan output could GLNG: IEA highlights LNG’s role
push the oil market back into surplus next year. The International Energy Agency (IEA) last
The oil cartel’s Joint Technical Committee week highlighted the role of LNG in adjusting to
held a virtual monthly meeting on October a drop in global gas demand in the wake of the
15. They considered this renewed surplus as a coronavirus (COVID-19) pandemic. The agency

Week 42 22•October•2020 www. NEWSBASE .com P19