Page 8 - Euroil Week 21 2020

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In North Africa, Morocco is looking to take advantage of the drop in fuel prices to stock on supplies, using its closed refinery as a storage facility.
Meanwhile, Bahrain has reached the halfway point in a $6bn refining upgrade programme, and the embattled Turkish refiner Tupras has swung to a $353mn loss.
If you’d like to read more about the key events shaping the downstream sector of Africa and the Middle East, then please click here for NewsBase’s DMEA Monitor.
FSU leadership and petrochemical plans
Igor Sechin, the long-serving CEO of Russia’s largest oil company Rosneft, has secured another five-year term at the helm of the state-run com- pany. Sechin is rumoured to have pushed aggres- sively for Russia to cut ties with OPEC+ in early March, in a move that triggered the collapse in oil prices. Now his company faces considerable hardship as a result of the downturn, having posted its first quarterly net loss in the Janu- ary-March period since 2012.
Now that Russia and its OPEC+ partners have forged a new agreement on cuts, all eyes are on Russian producers to see whether they will comply. Russia repeatedly exceeded its OPEC+ quotas last year under the previous deal.
Meanwhile, Kazakhstan’s efforts to build up its petrochemical industry has suffered a set- back, with Austria’s Borealis pulling out of a plan to build a 1.25mn tonne per year (tpy) polyethyl- ene (PE) plant. The plant was to use gas-derived ethane, which is produced cheaply and in abun- dance in Kazakhstan, as feedstock.
Like other Central Asian states, Kazakhstan wants to use its gas to turn out value-added products, rather than selling raw gas cheaply to neighbouring China and Russia. But keeping such projects afloat has proved a challenge.
Meanwhile in Azerbaijan, ExxonMobil has resumed efforts to sell its 6.8% stake at the giant BP-operated Azeri-Chirag-Gunashli (ACG) oil project. The US giant reportedly began looking for a buyer for its share last year, but fetching a suitable price will be difficult now. ACG’s share- holders are not only earning far less for each barrel following the price collapse but are also
having to cut production over the next two years to meet Azerbaijan’s OPEC+ obligations.
If you’d like to read more about the key events shaping the former Soviet Union’s oil and gas sector then please click here for NewsBase’s FSU Monitor.
Major LNG projects advance
Some major LNG projects are still moving for- ward, despite the oversupply that has led some developers to delay plans for adding new lique- faction capacity. In some cases, though, the pro- gress is coming at the regulatory level. As a result, there are no guarantees that a given project will ultimately reach the final investment decision (FID) stage.
This is the case with Alaska LNG, which received authorisation from the US Federal Energy Regulatory Commission (FERC) on May 21. The approval marks the conclusion of an environmental review process that has taken over three years. While the approval has been welcomed, the project remains mired in uncer- tainty, owing to the high cost of development. Its price tag was previously estimated at $43bn but was recently reviewed; an updated figure has not yet been disclosed, though.
It has previously been reported that state- owned Alaska Gasline Development Corp. (AGDC), the project’s backer, may sell off the venture’s assets if it does not find another party to develop Alaska LNG. Obtaining authorisation from FERC could help de-risk the project sig- nificantly in the eyes of potential investors and developers.
Elsewhere in the world, Qatar has reiterated its commitment to increasing its LNG produc- tion significantly in the coming years despite the current oversupply in the market.
Indeed, Qatari Minister of Energy Saad al-Kaabi, who is also the CEO of Qatar Petro- leum (QP), said that if there is capacity for the country to grow its LNG output beyond the planned 126mn tonnes per year (tpy), it may commit to this in the coming years.
Meanwhile, few developments illustrate the short-term impact of recent developments on demand more clearly than the growing number of cancellations for cargoes that were scheduled
All eyes are on Russian producers to see whether they will comply with OPEC+ cuts
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w w w . N E W S B A S E . c o m Week 21 28•May•2020