Page 12 - FSUOGM Week 32

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mismanagement and corruption, and made of years of the UK’s CCS needs. Meanwhile
worse by fallout from the coronavirus (COVID- blue hydrogen, produced from natural gas but
19) pandemic. The explosion has stoked public with CO2 from the process being captured and
anger against authorities, with nationwide pro- stored, has the potential to decarbonise 30% of
tests leading the government to resign on August UK gas consumption within three decades.
10. The OGA has called for greater regulatory
Iraq has delivered some 720,000 litres of gas- co-ordination and support, in order to ensure
oil to the country as a form of humanitarian aid. that pioneering projects in these fields are a
Alongside fuel oil, gasoil serves as a vital fuel in success.
Lebanon’s power sectors. But supply shortages Meanwhile, the US is ramping up pressure on
have been chronic, resulting in frequent power Germany to shift its position on the Nord Stream
outages for decades. 2 pipeline, but Berlin shows no sign of dropping
Iraq is eager to supply Lebanon with gasoil its support for the Russian project. Several US Meanwhile, the
and fuel oil on a regular, commercial basis. For Senators wrote a letter to the operator of Germa-
its part, Lebanon has long wanted to diversify its ny’s Mukran port this week, threatening “crush- US is ramping
imports of these products once contracts with ing legal and economic sanctions” if it helps up pressure on
Algeria’s Sonatrach and Kuwait’s KPC expire at Russian vessels complete the pipeline. Mukran
the end of this year. has served as a logistic and service centre for ves- Germany to shift
In other news, Saudi Aramco has awarded a sels working on Nord Stream 2 over the years, as
$80mn contract to Spain’s Tecnicas Reunidas to well as a storage site for its pipes. its position on
build a new sour water stripper at its 550,000 bpd Both the German government and the Euro-
Ras Tanura oil refinery. The Saudi oil giant has pean Commission are considering steps to pro- the Nord Stream
scaled back spending significantly in response to tect EU businesses from potential US punitive 2 pipeline.
the oil price collapse, and so it is proceeding with action. This means any sanctions may prove inef-
only the most necessary and minor projects to fectual, serving only to sour US-European ties.
improve its downstream efficiency.
Aramco has notably axed a far costlier plan to If you’d like to read more about the key events shaping
build a synthetic rubber production in the east- Europe’s oil and gas sector then please click here for
ern Saudi port of Al Jubail, at least according to NewsBase’s EurOil Monitor .
its Russian partner Sibur.
FSU: Russian tax tweaks
If you’d like to read more about the key events shaping Russia trialled a new profit-based tax system at
the downstream sector of Africa and the Middle East, certain oilfields last year, in a bid to encourage
then please click here for NewsBase’s DMEA Monitor. investment in extra recovery. The pilot scheme is
part of efforts to reform the Russian oil industry’s
Europe: UK offshore decarbonisation complex and problematic tax regime, and advo-
The UK Continental Shelf (UKCS) can deliver cates want it to be applied nationwide within a
60% of the necessary emissions cuts for the decade.
country to meet its net-zero target, according The only problem is that Russia’s finance
to a new report by the Oil and Gas Authority ministry (MinFin) says this experiment has cost
(OGA). the budget some $2.9bn. The ministry has filed
Integrating oil and gas production with a bill seeking to make significant changes to the
renewable energy, carbon, capture and storage system, in order to claw back some of these lost
(CCS) and hydrogen could achieve 30% of the revenues.
emissions cuts required by 2050, while the use Unsurprisingly, the proposed changes are
of offshore wind, wave and tidal projects could strongly opposed by oil producers that have
contribute a further 30%, according to the OGA. benefitted from the profit-based system. If the
Among its key findings, the report estimates ministry gets its way, these companies would
that UKCS reservoirs could store up to 78 giga- take a significant hit to core earnings over the
tonnes of CO2, which sufficient for hundreds next few years.

P12 www. NEWSBASE .com Week 32 12•August•2020