Page 9 - LatAmOil Week 19 2020

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More US shale producers are announcing plans to further scale back their activity as earnings season continues
While LNG producers do not tend to comment publicly on decisions taken by their customers, suppliers are increasingly expected to come under pressure to curtail some of their output. Warnings about these looming curtailments have been stepped up – again – over the past week.
Meanwhile, Malaysian shipping firm MISC has said it expects growth of the global LNG fleet to slow as FIDs on new liquefaction capacity are pushed back.
Some projects continue to move forward, however, both on the liquefaction and the regas- ification side. On May 8, BNamericas reported that Generacion e Interconexion Ele had filed preliminary documents for a gas-to-power hub with Colombian regulators. The project would include an offshore LNG import terminal and an associated power generation complex that would comprise multiple combined-cycle power plants.
If you’d like to read more about the key events shaping the global LNG sector then please click here for NewsBase’s GLNG Monitor.
Middle Eastern dance
The inevitable ripples of the recent oil price crash feature strongly in this week’s MEOG – and will for the foreseeable future. After the heady days of the collapse of the OPEC+ agreement and the resulting free for all, the oil market has come up for air and the aftermath is being played out amid the same grim economic news. In the past few weeks MEOG has covered the global story; it has continued to cover country-specific issues and these come to the fore in this week’s edition.
Saudi Arabia showed fast footwork in cut- ting oil prices in April to capture a larger slice of the oil market. This was mainly at the expense of Iraq, whose share fell by a similar amount. A ray of good news came in the appointment of a new Iraqi prime minister – at last – whose in-tray is full of major challenges. The situation in Iraq has the potential for change and upheaval and, in line with recent editions of MEOG, it will
continue to be followed very closely.
Specific sector downturns in Saudi Arabia
and Kurdistan throw light on the extent of the current crisis and Israel’s Delek has been forced to offload its fuel storage and distribution arm after auditors expressed a “going concern” qualification. No doubt further such sell-offs or financial “adjustments” will follow in future weeks and months. News from Iranian internal energy developments and Syrian fuel subsidies also feature.
Although most of the news features oil, the effect on gas is highlighted in the postponement of drilling in the eastern Mediterranean and an update on gas transfer capacity in Iran.
If you’d like to read more about the key events shap- ing the Middle East’s oil and gas sector then please click here for NewsBase’s MEOG Monitor.
North American production cuts
More and more US shale producers are announcing plans to further scale back their activity as earnings season continues. Pro- lific Bakken player Continental Resources announced this week that it had cut 70% of its May oil output, more than double the amount it had planned earlier. The company now expects to spend 3-5% less than its revised 2020 capital expenditure budget of $1.2bn. Continental also withdrew its outlook for the whole of 2020 and said it was suspending further guidance as a result of the current market conditions.
Marathon Oil, meanwhile, has said it is paus- ing “virtually all” completion activity during the second quarter of 2020. The company, which has operations in the Eagle Ford and Bakken plays, among other shale regions, also said it was with- drawing its previous guidance, and now expects its US oil output to decline roughly 8% this year, when adjusted for asset sales.
EOG Resources, for its part, said it now expected to produce around 390,000 bpd of oil in 2020, marking a drop of 15% y/y. The com- pany has reduced the number of rigs it operates to eight from 36 over the past six weeks.
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