Page 8 - NorthAmOil Week 28

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Meanwhile, o cials from Argentina’s state natural gas regulator Enargas have met with representatives of gas distribution companies to discuss plans for expanding the country’s pipe- line network. e parties reportedly focused on options for restarting work on a number of pro- jects, in line with the government’s wider e orts to keep production up at the levels prevailing before the pandemic struck.
If you’d like to read more about the key events shaping the Latin American oil and gas sector then please click here for NewsBase’s LatAmOil Monitor.
Quiet in the Gulf despite further Houthi at- tacks
e Middle Eastern oil and gas market was quiet this week despite renewed efforts by Yemen’s Houthis to disrupt Saudi Arabian infrastructure.
e Houthis said that they had attacked and hit an oil facility in the southern Saudi Arabian city of Jazan. Meanwhile, the Saudi Arabian-led coalition said that it intercepted and destroyed four missiles and six explosive drones that had been launched by Houthi forces, without say- ing whether any of the projectiles had hit their target.
Jazan, which is around 60 km from the Yemen border, is home to a 400,000-barrel per day re n- ery owned by Saudi Aramco, which is expected to reach capacity within the next few months.
e move the latest in a string of attacks, the most striking of which came in September last year, when drones struck oil processing facili- ties at Abqaiq and Khurais, causing signi cant damage and taking 5.7mn bpd of oil out of circulation.
The Houthis took responsibility for this attack, though there are few who think the rebel group could have carried out such an advanced assault without the help of Iran.
Tehran this week awarded a development contract for the Yaran oilfield as the Islamic Republic looks to ramp up oil production, citing that sanctions would come to an end. ere is little reason to think that this will happen in the short-term, though it does appear that further contract awards will be forthcoming.
If you’d like to read more about the key events shaping the Middle East’s oil and gas sector then please click here for NewsBase’s MEOG Monitor.
Shut-in output comes back amid pipeline jitters
Producers in both the US and Canada are bring- ing some of the output they shut in over recent months in response to low demand and prices back online. However, there are considerable worries about the implications of recent pipeline setbacks. (See: Pipeline jitters overshadow return of curtailed output , page 9) Other obstacles to the North American oil industry’s recovery could also prove signi cant.
Canadian oil producers are reported to be in the process of restoring thousands of barrels per day (bpd) of curtailed output, largely from the oil sands. As of last week, Cenovus Energy and Husky Energy had restored 70,000 bpd out of the combined 140,000 bpd that the two com- panies had shut in. At the same time, though, Cenovus’ CEO, Alex Pourbaix, voiced concerns about the July 6 court ruling temporarily shut- ting down the Dakota Access pipeline, pointing to the implications that other already operational pipelines could also be at risk.
Exports of Canadian oil go almost entirely to the US.
Nonetheless, executives of a number of companies that produce oil sands crude have expressed con dence that the worst of the recent oil price downturn is over.
South of the border, shale producers are also restoring output as West Texas Intermediate (WTI) prices remain stable at around $40 per bar- rel. And the industry will hope that a slowdown in the rate at which the US oil rig count is dropping is good news. In the week up to July 10, the oil rig count fell by 4. By contrast, over the month of April, 62 oil rigs on average were taken o ine each week as producers scrambled to respond to the collapse in crude prices and demand.
Much of the curtailed production that needs to be brought back online is located in the Per- mian Basin. However, the looming shutdown of Dakota Access will present another obstacle to operators in North Dakota’s Bakken play that are seeking to return their output to the market.™
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w w w . N E W S B A S E . c o m Week 28 16•July•2020