Page 6 - LatAmOil Week 27

LatAmOil COMMENTARY LatAmOil

NRG: Bracing for the second wave

Oil prices have risen further, but the recovery could be checked by a surge in coronavirus infections

COMMENTARY WELCOME to the latest edition of NewsBase’s South African divestments, developments
Roundup Global (NRG), in which our team of South African companies have had a busy week.
international editors provide you with a snap- Sasol, the country’s largest corporate tax-
shot of some of the key issues affecting their payer, is looking to shed some of its foreign
regional beats. Get the NRG Oil & Gas Editor’s assets. On July 6, the company confirmed that
Picks to your inbox every week for free. Just sign it intended to give up its exploration licences for
up here. Blocks 16 and 19, two adjacent sites lying off-
Crude prices regained ground last week and the shore Mozambique.
trend continued into this week, with front-month This decision appears to have been driven, at
contracts for WTI and Brent closing at $40.63 and least in part, by the results of an environmental
$43.10 per barrel respectively on July 6. impact assessment (EIA) report.
The recovery has been driven by economies It closely followed Sasol’s announcement of
reopening and fuel consumption recovering to plans to divest its indirect stake in the Escravos
normal levels, supported by OPEC+’s sacrificial gas-to-liquids (GTL) plant in Nigeria within
cuts. Most of the oil cartel’s members are keeping the framework of a broader divestment pro-
to their agreed quotas, and they have maintained gramme. The firm is set to sell the asset to the
their resolve. US major Chevron, its partner in the project. It
However, a second wave of coronavirus hopes the sale will help strengthen its financial
(COVID-19) infections is now sweeping across position during the downturn resulting from the
much of the world, with daily new confirmed COVID-19 pandemic.
cases surging beyond 200,000 per day. Oil mar- Meanwhile, Astron Energy is recovering
kets are starting to brace for another steep fall in oil from a fire that broke out at the 100,000 barrel
demand, and OPEC+ seems unlikely to counter per day (bpd) Milnerton refinery in Cape Town
this by extending its record deep cuts beyond July. on July 2.

P6 www. NEWSBASE .com Week 27 09•July•2020