Page 13 - NorthAmOil Week 47 2020

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Chesapeake, Williams resolve

midstream contract dispute

US PIPELINE operator Williams said this week supply commitment for the Transco Regional
that it had reached a resolution with Chesa- Energy Access (REA) pipeline, which is cur-
peake Energy, which is currently in Chapter 11 rently under development.
bankruptcy protection. Chesapeake is one of “Williams has strategically invested in large-
Williams’ largest customers and the resolution scale and essential infrastructure necessary to
will allow Williams to continue treating and gather and treat the natural gas that Chesapeake
moving the bankrupt producer’s natural gas as and its joint interest owners produce in the
it restructures. Eagle Ford, Haynesville and Marcellus,” stated
Under the agreement, which requires Williams’ president and CEO, Alan Armstrong.
bankruptcy court approval, Chesapeake will “Our gathering systems are necessary to realise
be obliged to pay all pre-petition and past due the full potential of these high-value reserves,
receivables related to midstream expenses under and we are pleased to have been able to work
existing contracts. It has agreed not to attempt with Chesapeake toward a mutually beneficial
to reject Williams’ gathering agreements in the outcome that will put Chesapeake on a clear path
Eagle Ford play, Marcellus shale or Mid-Conti- to a bright future. Chesapeake is a valuable cus-
nent region. tomer, and this transaction will both strengthen
In the Haynesville shale, Williams has Chesapeake and allow Williams to enhance the
agreed to reduce its gathering fees in exchange value of our significant midstream infrastructure
for gaining ownership of a portion of Ches- by bringing adequate capitalisation to these low-
apeake’s South Mansfield producing assets, cost gas reserves.”
which consist of roughly 50,000 net mineral Earlier this month, also as part of its bank-
acres (202 square km). Meanwhile, Chesa- ruptcy proceedings, Chesapeake sold its Okla-
peake has agreed to enter into a long-term gas homa assets to Tapstone Energy for $130.5mn.™

INVESTMENT

Imperial to raise production,

spending in 2021

CANADA IMPERIAL Oil – one of Canada’s largest oil pro- productivity at its Kearl oil sands project, as well
ducers – has unveiled plans to cautiously raise as by adopting new technologies.
capital expenditure and production in 2021 as Imperial’s CEO, Brad Corson, noted that a
it bets on demand continuing to recover. This recovery in global energy demand was “highly
comes despite ongoing uncertainty and warn- uncertain” and dependent on the spread of the
ings over further market volatility, but nonethe- coronavirus (COVID-19). However, positive
less marks a turnaround from earlier this year, news emerging from several separate vaccine tri-
when major producers were slashing spending als recently appears to have boosted confidence
Imperial expects to and activity. that the pandemic can soon be brought under
improve productivity Imperial, which is majority-owned by Exx- control, at least to some degree.
at its Kearl oil sands onMobil, said during its virtual investor day And indeed, even as Imperial moves to
project. presentation last week that it was planning to gradually increase spending and production,
spend CAD1.2bn ($922mn) in 2021, up 33% it is clear that the pandemic and its impact on
from 2020. The company’s upstream produc- energy demand have taken a heavy toll this
tion is targeted to rise 5% to 415,000 barrels of year. This week, the company said it would lay
oil equivalent per day (boepd) next year. off around 200 people from its 6,000-strong
In addition, Imperial unveiled a new target workforce across Canada as part of a cost-cut-
to reduce its greenhouse gas (GHG) emissions ting initiative.
intensity by 10% compared with 2016 levels This comes as parent company ExxonMobil
by the end of 2023. This comes after the com- is in the process of cutting its global workforce by
pany has already cut its emissions intensity by around 15%, or around 14,000 jobs. The layoffs
more than 20% compared with 2013. It said it at Imperial are reported not to have been ordered
would achieve further reductions by improving by ExxonMobil.™

Week 47 26•November•2020 www. NEWSBASE .com P13