Page 5 - NorthAmOil Week 47 2020

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production costs to $10 per barrel or less. December-January.
He explained his call for cost-cutting by point- The resurgence in the number of COVID-
ing out that market conditions would not support 19 also threatens to bring an end to the recent
upstream projects that carried high production recovery in the country’ refinery runs, which hit
costs. Currently, he said, expenses related to a 13-week high in the seven days to November
direct handling, human resources and logistics 14. S&P Global Platts cited data published by the
account for 70% of NNPC’s production costs, PAJ on November 18 as showing that run rates
while the remaining 30% covers expenses related had climbed 4.7% to 2.48mn bpd.
to administration, direct lifting, production The pandemic is exacerbating a long-term
maintenance, security and service management. downward trend in Japanese fossil fuel con-
sumption, which has been driven by rising
If you’d like to read more about the key events shaping energy efficiency and an ageing population.
Africa’s oil and gas sector then please click here for The Ministry of Energy, Trade and Indus-
NewsBase’s AfrOil Monitor . try (METI) revealed last week that final energy
consumption in fiscal year 2019-2020 had con-
Asia: Japan expects OPEC+ to delay pro- tracted by 2% y/y to 335mn kilolitres of oil equiv-
duction ramp up alent. The ministry noted that fossil fuel supplies
The Japanese oil industry expects OPEC+ to had declined for a sixth year in a row, accounting
delay plans to ramp up production from the for 85% of primary energy supply, while renewa-
start of 2021 owing to coronavirus’ (COVID-19) bles and nuclear power had both expanded their
downward pressure on global oil demand. share. Fossil fuels saw their share of the energy
The cartel is likely to stick to its existing mix drop to its lowest level since fiscal 2011-12.
7.7mn barrel per day (bpd) production cut, the
Petroleum Association of Japan’s (PAJ) presi- If you’d like to read more about the key events shaping
dent, Tsutomu Sugimori, told a December 20 Asia’s oil and gas sector then please click here for
press conference. NewsBase’s AsianOil Monitor .
“Given the weaker oil demand amid the
resurgence of COVID-19 infections, OPEC+ is DMEA: Iraq invites bids for refinery
likely to keep the current curbs ... after January,” Iraq is eager to build out its refining sector to
Reuters quoted the executive, who is also chair- wean itself off fuel imports, but the OPEC pro-
man of leading Japanese refiner Eneos, as saying. ducer’s dire fiscal straits mean it needs interna-
His comments were made after Bloomberg tional investment to take projects forward.
quoted unnamed OPEC+ delegates on Novem- Oil Minister Ihsan Ismaael announced on
ber 11 as saying that member countries were November 18 that the government intended to
inclined to delay production increases, but had invite international firms to bid for the construc-
not been swayed by some calls to deepen cuts. tion of a 300,000 barrel per day (bpd) refinery in
The decision to refrain from upping production its south. The new refinery will be erected in the
limits comes amid lockdowns in Europe and port of al-Faw in the Basra governorate, under a
record case numbers in the US that have driven build operate transfer (BOT) or build own oper-
California to introduce curfews. ate transfer (BOOT) investment model, Ismaael
The Japanese Ministry of Health, meanwhile, said. Petrochemicals production would be added
revealed that the East Asian country’s cases had to the facility at a later stage.
climbed by 2,508 on November 22 – the fourth Iraq signed a contract for the project with
consecutive day of record-breaking numbers. Chinese companies PowerChina and Norinco
Speaking at the start of the spike in cases, International in 2018, but that deal fell through.
Sugimori warned that rising infection num- The Iraqi government aims to boost national
bers could depress national gasoline demand in throughput capacity to around 910,000 bpd by
December and January. Consumption is already early 2022, thanks to two key projects.
projected to slip 2% year on year this month, but In September Ismaael ordered the capac-
Sugimori said could it plunge as much as 9% in ity of the Sumood refinery in Baiji to be raised

Week 47 26•November•2020 www. NEWSBASE .com P5