Page 13 - AsianOil Week 32

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Europe: UK offshore decarbonisation well as a storage site for its pipes.
The UK Continental Shelf (UKCS) can deliver Both the German government and the Euro-
60% of the necessary emissions cuts for the pean Commission are considering steps to pro-
country to meet its net-zero target, according tect EU businesses from potential US punitive
to a new report by the Oil and Gas Authority action. This means any sanctions may prove inef-
(OGA). fectual, serving only to sour US-European ties.
Integrating oil and gas production with
renewable energy, carbon, capture and storage If you’d like to read more about the key events shaping Meanwhile, the
(CCS) and hydrogen could achieve 30% of the Europe’s oil and gas sector then please click here for
emissions cuts required by 2050, while the use NewsBase’s EurOil Monitor. US is ramping
of offshore wind, wave and tidal projects could up pressure on
contribute a further 30%, according to the OGA. FSU: Russian tax tweaks
Among its key findings, the report estimates Russia trialled a new profit-based tax system at cer- Germany to shift
that UKCS reservoirs could store up to 78 giga- tain oilfields last year, in a bid to encourage invest-
tonnes of CO2, which sufficient for hundreds ment in extra recovery. The pilot scheme is part of its position on
of years of the UK’s CCS needs. Meanwhile efforts to reform the Russian oil industry’s complex
blue hydrogen, produced from natural gas but and problematic tax regime, and advocates want it the Nord Stream
with CO2 from the process being captured and to be applied nationwide within a decade. 2 pipeline.
stored, has the potential to decarbonise 30% of The only problem is that Russia’s finance
UK gas consumption within three decades. ministry (MinFin) says this experiment has cost
The OGA has called for greater regulatory the budget some $2.9bn. The ministry has filed
co-ordination and support, in order to ensure a bill seeking to make significant changes to the
that pioneering projects in these fields are a system, in order to claw back some of these lost
success. revenues.
Meanwhile, the US is ramping up pressure on Unsurprisingly, the proposed changes are
Germany to shift its position on the Nord Stream strongly opposed by oil producers that have
2 pipeline, but Berlin shows no sign of dropping benefitted from the profit-based system. If the
its support for the Russian project. Several US ministry gets its way, these companies would
Senators wrote a letter to the operator of Germa- take a significant hit to core earnings over the
ny’s Mukran port this week, threatening “crush- next few years.
ing legal and economic sanctions” if it helps The ministry is unlikely to get everything it
Russian vessels complete the pipeline. Mukran is asking for, given the pilot scheme’s popularity
has served as a logistic and service centre for ves- among Russia’s powerful oil lobby. On the other
sels working on Nord Stream 2 over the years, as hand, some tweaks will have to be made given

Week 32 13•August•2020 www. NEWSBASE .com P13