Page 14 - FSUOGM Week 32

FSUOGM NRG FSUOGM

In other news, Russia and Argentina are mov-
ing forward with plans for joint production of
steel pipes for oil and gas projects. Ricardo Lago-
rio, Argentina’s ambassador to Moscow, told
Sputnik earlier this week that Tenaris, an inter-
national company founded in Argentina, and
Russia’s Severstal were working together to build
a new welded pipe plant in Western Siberia. The
facility is due to begin production next year and
will reach full capacity in 2024, Lagorio said.
Elsewhere in Latin America, Mexico’s
national electricity provider CFE is under fire
for burning residual fuel oil at a plant near the
capital that contravened regulations pertaining
to maximum sulphur content. Shortly after a
Reuters report brought the utility’s violations to
light, a Mexican Nobel Prize winner called for
a ban on the use of heavy fuel oil in power gen-
eration. Residual fuel oil is plentiful in Mexico,
as the country produces large amounts of heavy
crude oil.

If you’d like to read more about the key events shaping acquire Painted Pony Energy for CAD461mn
the Latin American oil and gas sector then please click ($347mn) including debt. Indeed, the assump-
here for NewsBase’s LatAmOil Monitor. tion of Painted Pony’s debt makes up the
majority of the transaction at CAD350mn
Middle East: Aramco update highlights a ($264mn), while CNRL will pay CAD111mn
quiet week ($84mn) in cash for the company.
It has been a quiet week, with companies CNRL is one of Canada’s largest produc-
throughout the region returning to work fol- ers, and the deal illustrates its desire to keep
lowing the Eid al-Adha break. The big news growing its footprint in the liquids-rich Mont-
was Saudi Aramco’s Q2 earnings update, which ney shale gas play in northeastern British
showed that the company’s net income had Columbia.
dropped by a full 50% during the first half of the News of the deal comes within days of
year, with Q2 $10bn lower than Q1. Aramco put CNRL reporting a better-than-expected loss
a characteristically brave face on the results, her- for the second quarter of 2020. The company’s A number of
alding the firm’s resilience, though much of the adjusted loss came in at CAD772mn ($581mn)
financial hurt experienced by the company and or CAD0.65 ($0.49) per share, while Refinitiv shale producers,
its majority sovereign stakeholder was self-im- data showed that analysts had expected it to
posed, given the Ministry of Energy’s direction post an adjusted loss of CAD0.85 ($0.64) per including
to Aramco to produce a single-day record in share.
early April. Other second-quarter losses also contin- Pioneer Natural
For the energy sector, Aramco’s earnings ued to pile up over the past week, extending Resources and
update took some of the spotlight off the tragic a trend that quickly became clear after the
explosion in the port of Beirut that has brought first North American producers reported Devon Energy,
an already crippled economy to a near-complete their earnings. Among those reporting a loss
halt, with the government set to resign en masse. in recent days in the US was leading shale have also
Countries around the world have jumped for- producer EOG resources, which performed
ward with humanitarian aid, though the wounds worse than analysts’ expectations. The com- unveiled plans
are not just skin-deep. pany posted a net loss of $909.4mn, or $1.57 for a variable
Meanwhile, Baghdad announced last week per share, for the second quarter of 2020, from
that it would increase voluntary additional oil a profit of $847.8mn, or $1.46 per share, a year dividend.
production cuts to 400,000 bpd below its 3.8mn ago.
bpd ceiling in August to make up for previous A number of shale producers, including
non-compliance with OPEC+ cuts. Pioneer Natural Resources and Devon Energy,
have also unveiled plans for a variable divi-
If you’d like to read more about the key events shaping dend in an effort to keep rewarding sharehold-
the Middle East’s oil and gas sector then please click ers as they struggle to deliver returns. Other
here for NewsBase’s MEOG Monitor. shale players have also said they may consider
such a move. Pioneer’s CEO, Scott Sheffield,
Quarterly losses mount in North America has suggested this could be a new model for a
Larger North American companies appear to volatile industry that had fallen out of favour
be gaining the confidence to make acquisitions with investors in recent years.
despite the continued uncertainty over the near-
term oil and gas outlook. If you’d like to read more about the key events shaping
This week, Canadian Natural Resources the North American oil and gas sector then please click
Ltd (CNRL) announced that it had agreed to here for NewsBase’s NorthAmOil Monitor .™

P14 www. NEWSBASE .com Week 32 12•August•2020