Page 13 - AfrOil Week 46

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In Mexico, President Andres Manuel Lopez North America: Asset sale and bankruptcy
Obrador has said his government is ready to The shale industry has been prominent in North
issue the last permit needed for Sempra Energy American oil and gas developments in recent
to make a final investment decision (FID) on days, with notable news including a reported
the Energía Costa Azul (ECA) project. He also asset sale and a bankruptcy.
stated, though, that the company would have to On November 13, Reuters reported that Den-
commit to helping Mexico City dispose of excess ver-based Ovintiv was seeking to sell its assets in
gas supplies to receive the permit. the Eagle Ford shale, citing several people famil-
iar with the matter.
If you’d like to read more about the key events shaping The company – which was previously based
the Latin American oil and gas sector then please click in Calgary and known as Encana – bought its
here for NewsBase’s LatAmOil Monitor . Eagle Ford assets in 2014 from Freeport-Mc-
MoRan for $3.1bn. According to one of Reuters’
Mideast: Attacks and contracts sources, the assets could fetch around $600- The US shale
ADNOC, the UAE’s national oil company 700mn. The plan to sell the assets is reported to
(NOC), announced progress on several initia- be at an early stage. industry has
tives last week and also struck deals on new pro- The difference in the assets’ original prices
jects, using the platform of the annual ADIPEC and what they could fetch now illustrates how seen a reported
event to spread the word of its successes. much more challenging the operating envi-
The state-run oil firm continues to supple- ronment is now – when even before this year’s asset sale and
ment its core upstream businessas it increases downturn, shale drillers were already struggling. a bankruptcy in
activities throughout the value chain, and this Some are now seeking to boost their perfor-
strategy was exemplified by progress in the mance and pay down debt, including through recent days
upstream, midstream and services sectors. asset sales. Indeed, Ovintiv is estimated to have
Meanwhile, the company is ramping up efforts to debt of $7.1bn that a sale of the Eagle Ford assets
improve its environmental stewardship through could help pay down.
carbon capture, utilisation and storage (CCUS). Other shale drillers, meanwhile, have found
In Saudi Arabia, oil facilities at Jazan, which is themselves forced into bankruptcy protection.
located near the border with Yemen, came under This has also played out in recent days once again
attack from Houthis. While the attack was ulti- in recent days, with Gulfport Energy announc-
mately foiled, it resulted in a fire, although there ing that it had filed for Chapter 11 bankruptcy
were no casualties. Jazan has been an area of protection.
concern for Saudi Aramco over the past year or The company said on November 14 that it
so, having come under attack previously, while had entered into a restructuring support agree-
issues with the refinery and terminal have also ment, with over 95% of its revolving credit facil-
posed their own problems. ity lenders and certain noteholders. The plan is
The news wasn’t all bad in Saudi Arabia aimed at strengthening Gulfport’s balance sheet,
though, as Aramco is reported to be preparing “significantly” reducing its funded debt and low-
to kick off work to expand production capacity at ering operating costs, it stated.
the super-giant offshore Safaniyah field. Tender The company said that after it completes the
documents have been issued to the company’s restructuring process, it will have eliminated
pool of contractors that are signatories of long- roughly $1.25bn in funded debt. Gulfport Ener-
term agreement (LTA) contracts with Aramco, gy’s debts came to about $2.5bn as of September
ahead of an anticipated award in the first quarter 30, according to a filing with the US Bankruptcy
of 2021. Court for the Southern District of Texas.

If you’d like to read more about the key events shaping If you’d like to read more about the key events shaping
the Middle East’s oil and gas sector then please click the North American oil and gas sector then please click
here for NewsBase’s MEOG Monitor . here for NewsBase’s NorthAmOil Monitor.™

Week 46 18•November•2020 www. NEWSBASE .com P13