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Europe: Peak oil demand plans for a major petrochemicals hub in the Rus-
BP has warned that oil demand will peak sian Far East, Russian media have reported, and
within a few years, reflecting the growing belief has requested government support for the plan.
that the coronavirus (COVID-19) pandemic has The company is asking for benefits for the Far
brought forward the decline of fossil fuels. East Petroleum Co. (FEPCO) venture, including
The oil and gas major published its Energy negative excise duties – effectively subsidies – for
Outlook 2020 on September 14, outlining three the naphtha and crude oil feedstock that the pro-
scenarios for global energy demand. Under the ject will consume.
business-as-usual case, oil consumption will Rosneft had been trying to advance the
peak in the early 2020s. According to the other project for a decade before quietly shelving it
two scenarios, which assume more aggressive last year. The company failed to find invest-
action is taken to curb emissions, the peak is ment partners and had difficulty working out a
already past, as demand will never fully recover means of supplying the complex with raw mate-
to the level seen before the pandemic. rials. Under its first stage, priced at RUB700bn Rosneft is rushing
The outlook for gas is markedly better, how- ($9.3bn), FEPCO is slated to process up 12mn
ever, supported “by broad-based demand and tonnes per year (240,000 bpd) of crude oil and ahead with a
the increasingly availability of global supplies,” produce 8mn tpy of gasoline, diesel and other
according to BP. The major expects demand to refined fuels, along with 3.4mn tpy of petro- hard-to-recover
surge by a third over the next three decades in chemicals. Its output would double under a oil project in the
the business-as-usual case, but it could slump as second stage, which would bring overall costs to
much as a third under BP’s net-zero scenario. RUB1.5 trillion. Volga-Urals basin
With new CEO Bernard Looney at the helm, Meanwhile, Rosneft is also pushing ahead
BP has embraced the energy transition. But a with a hard-to-recover oil project in the Vol-
number of other European firms have made ga-Urals Basin – its first without any partner. The
commitments to bring their emissions to zero company said on September 10 it had started
over the next three decades. drilling a first well to test the Domanik formation
Polish oil refinery PKN Orlen became the lat- in the Orenburg region.
est to make a pledge to become emissions-neu- Rosneft’s close partner and shareholder BP
tral by 2050, mirroring similar commitments had wanted to take part in the project, but pulled
made by other European oil and gas companies out after the 2014 oil price crash. Western sanc-
over the last year. It unveiled plans on Septem- tions were also imposed on Russia’s oil sector
ber 9 to invest some PLN25bn ($6.6bn) in clean that year, but they have only prevented firms
energy projects by in the next 30 years to reach from assisting at shale reservoirs rather than
this goal. PKN is in the processing of acquir- limestone formations such as Domanik.
ing its smaller refining rival Lotos and has also Rosneft has been assessing the potential for
signed a preliminary deal to acquire state gas commercial production at Domanik sites in the
company PGNiG. Earlier it also took over Polish Samara region as well, through a joint venture
power utility Energa. with Norway’s Equinor. The company typi-
cally partners with international oil companies
If you’d like to read more about the key events shaping (IOCs) at technically challenging or significantly
Europe’s oil and gas sector then please click here for costly projects.
NewsBase’s EurOil Monitor.
If you’d like to read more about the key events shaping
FSU: Rosneft projects take shape the former Soviet Union’s oil and gas sector then
Russia’s state-owned oil giant Rosneft has revived please click here for NewsBase’s FSU Monitor .

Week 37 16•September•2020 www. NEWSBASE .com P9