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Meanwhile, Nigeria’s latest auction for mar- ginal elds, if successful, could provide oppor- tunities for the further deployment of modular re neries. Developers say these small-sized oil processing plants are the answer to Nigeria’s fuel dilemma, helping to reduce imports and replace illegal re neries in the Niger Delta.
Marginal elds are discoveries that have not been developed either due to their small size, lack of economic viability or a lack of infrastructure. But converting their crude into higher-value petroleum products could be the solution.
If you’d like to read more about the key events shaping the downstream sector of Africa and the Middle East, then please click here for NewsBase’s DMEA Monitor.
Europe embraces hydrogen
e EU is looking to embrace the hydrogen rev- olution and become a world-leader in advancing new hydrogen technologies, according to a new strategy unveiled by the European Commission (EC) last week.
e strategy has won from praise from the gas industry for accepting that in the short to medium term, some fossil fuel-based hydrogen production will be needed to lower emissions. But its priority is very much the large-scale deployment of carbon-free green hydrogen, produced from water using renewable power. e EC wants to use both demand- and sup- ply-side incentives to spur the development of a well-functioning hydrogen market.
Not everyone is happy with the strategy, though, with some gas producers calling for the strategy to create a more level-playing eld between the various hydrogen technologies, to ensure that the lowest-cost option succeeds. is means supporting fossil fuel-based hydrogen that is abated, using carbon capture, just as much as hydrogen derived from renewables.
Right now, green hydrogen is higher cost than gas-based blue hydrogen, but the EC’s hope is that it will become competitive against other technologies by the late 2020s.
In the North Sea, Equinor and Neptune Energy have both reported discoveries off
Norway. e Equinor gas and condensate nd is estimated at up to 63mn barrels of oil equivalent. Norwegian explorers are more fortunate than their UK counterparts, as Norway’s tax code allows them to deduct around 80% of explora- tion expenses from tax payments. is encour- ages operators to continue searching for new elds even when market conditions are poor, as
they are now.
Spirit Energy, a unit of Centrica, did not
enjoy the same success in the Barents Sea, suf- fering a dry well last week. Over the years, explo- ration in this frontier region has by and large disappointed.
If you’d like to read more about the key events shaping Europe’s oil and gas sector then please click here for NewsBase’s EurOil Monitor.
Russia goes local
Russia could start building its rst LNG carrier later this year, following the signing of a technol- ogy agreement between French specialist GTT and the Zvezda shipyard in the Far East earlier this month. Zvezda is set to play a key role in Rus- sia’s import substitution drive, primarily focused on the oil and gas industry and aimed at boosting domestic manufacturing and safeguarding stra- tegic sectors from potential sanctions.
Novatek wants to build a eet of dozens of LNGCs to carry gas from its LNG from the ra of export projects it is developing in the Russian Arctic. But because of the pace of its expansion work, the company says Zvezda lacks the capac- ity to build all the necessary vessels in time. It is therefore ordering some of them at foreign shipyards.
Meanwhile, BP is considering a return to Kazakhstan, a country which it le over a decade ago. Kazakhstan’s state-owned KazMunayGas (KMG) says it is in talks with the major on an exploration and production contract. But exactly what projects the pair are looking at has not been disclosed.
In any case, a nalised investment is unlikely to materialise anytime soon. Like other majors, BP’s priority now is cutting costs and
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w w w . N E W S B A S E . c o m Week 28 16•July•2020