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Europe: T ough quarter for majors for gas, despite prices falling to unprecedented
Europe’s largest oil and gas producers were lows this year in the wake of the pandemic.
spared in the third quarter from the pain they Speaking to investors on October 29, Novatek
endured in the previous three months, when the CFO Mark Gyetvay said the LNG exporter
coronavirus (COVID-19) crisis was at its height. “remains absolutely committed to its portfolio
But their numbers were still dramatically lower strategy to deliver up to 70mn tonnes of LNG”
than in the same period last year, and the market per year (tpy) by 2030. Novatek expects global
outlook remains bearish. LNG consumption to reach 365mn tonnes in
Demand and prices for oil and fuels has 2020, up 2% year on year, and sees it doubling to
recovered in recent months following the eas- over 700mn tonnes by 2040. This growth will be
ing of COVID-19 lockdowns over the summer driven by gains in the Asia-Pacific region, where
and continued supply cuts by OPEC+. Gas economies are expanding fast and governments
prices have taken longer to bottom out and then hope to improve air quality by phasing out coal.
rebound, however, partly because of oil indexa- In the shorter term, the CFO said that while
tion in some contracts. But an end to the market gas prices were still lower than the pre-corona-
turmoil is still not in sight. virus level, the recovery is underway. A rise in
The world is now in the grip of a second wave forward curve prices for the upcoming winter Certain Asian
of COVID-19, with Europe, the US and many reflects expectations of colder weather ahead,
other nations again seeing record daily infection Gyetvay said. LNG projects
rates. Some major oil consumers such as Italy, Over in Kazakhstan, the government has put
Germany and France are again going into lock- up for auction 10 oil and gas blocks in the Atyrau have suffered
down mode. It is telling that OPEC+, which is region, marking the country’s first ever online
among the most bullish forecasters, reportedly contest for acreage. Authorities are looking to setbacks over
now sees a risk of an oil supply surplus re-emerg- attract interest from foreign investors despite the past week
ing in 2021. restrictions put in place in response to the coro-
After months of low prices, though, Europe’s navirus (COVID-19) pandemic, as well as weak
majors have largely exhausted their financial market conditions.
defences, having already made drastic cuts to The government expects that the Zaburunye
operational and capital spending. This gives and Sarayshky blocks to attract the strongest
them little room to manoeuvre if there is another interest, and their market value has been esti-
full-blown slump in fuel demand, and puts them mated at $63mn and $57mn respectively.
at the mercy of OPEC+ decision-makers.
At the same time, Europe’s oil leaders are also If you’d like to read more about the key events shaping
pursuing aggressive strategies to move away the former Soviet Union’s oil and gas sector then
from fossil fuels and expand in cleaner energies. please click here for NewsBase’s FSU Monitor .
But implementing these plans will not be cheap.
GLNG: Asia’s ups and downs
If you’d like to read more about the key events shaping Certain Asian LNG projects have suffered set-
Europe’s oil and gas sector then please click here for backs over the past week, while good news has
NewsBase’s EurOil Monitor. been reported elsewhere. In late October, it was
reported that ExxonMobil had decided not to
FSU: Novatek bullish on LNG proceed with plans to participate in an LNG
Russia’s biggest independent gas producer import terminal in Pakistan, and had exited the
Novatek remains bullish on long-term prospects Energas Terminal consortium.

P8 www. NEWSBASE .com Week 44 04•November•2020