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17 December 2018

Weekly news roundup (10-14 December)

International

US producers ConocoPhillips and Hess will focus most of their 2019 capital and exploratory budgets on their home market, with both prioritising oil over gas as they look to increase production next year.

Shell has shelved an asset swap with Gazprom first proposed in 2015, and separately set a deadline of end-Q1 to strike a deal with the Sakhalin-1 consortium over gas supply to underpin a third-train expansion of the Sakhalin LNG plant.

Oil production cuts agreed last Friday by the OPEC+ group appear to provide a USD 60/barrel floor price for Brent crude, the IEA said in its latest monthly market report.

A war of words has erupted between DNO and takeover target Faroe Petroleum, with the Norwegian firm criticising Faroe’s recent asset swap with Equinor, claiming the move “jettisoned a crown jewel”.

Africa

Mozambique – Qatar Petroleum has made its first foray into Mozambique after taking a 10% stake in three offshore blocks operated by long-term partner ExxonMobil, in line with the Qatari company’s strategy to expand its international upstream footprint.

Asia Pacific

Japan – Japanese shipping giant NYK has signed a long-term charter agreement with Mitsubishi Corp subsidiary Diamond Gas International for three new-build LNG carriers for use at the Cameron LNG project.

Philippines – Shell is willing to conduct further exploration near the country’s sole producing gas field, but the company needs clarity on the fiscal regime, Pilipinas Shell CEO Cesar Romero was quoted as saying, questioning the need for proposed LNG imports.

South Korea – Daewoo Shipbuilding & Marine Engineering has reportedly bagged more orders for LNG carriers in separate transactions with Greek shipping company Maran Gas Maritime and the BW Group.

Thailand – Bangkok has wrestled control of Thailand’s strategically significant Bongkot and Erawan gas fields from international majors Total and Chevron, in what appears to be the latest case of resource nationalism in south-east Asia.

Australasia

Australia – ExxonMobil and BHP are set to add fresh gas supplies to south-east Australia, helping stave off a potential gas supply shortfall in the region, after the pair took a final investment decision (FID) to develop the West Barracouta offshore field.

Western Australia could host its sixth LNG export facility after Western Gas added a liquefaction element to its Equus project, which until now was proposed for domestic supply only – unless the developer opts to use shared LNG infrastructure planned for the region.

Total has reduced its stake in the Ichthys LNG plant by selling a 4% stake to the plant’s operator Inpex for USD 1.6 billion.

Woodside Energy has concluded a long-term gas sales and purchase agreement with Alcoa, with the deal to start in 2020.

Central & South America

Brazil – Total has been dealt a major blow in its quest to drill the prospective Foz do Amazonas basin after national environment regulator Ibama rejected a request for a drilling permit, with reports suggesting the latest denial to the French major – the fifth – could be the last.

French Guyana – Total has said it is ready to begin exploring the Guyane Maritime licence and has invited NGOs to visit its installations.

Europe

Netherlands – The International Association of Ports and Harbors has put its new LNG bunkering audit tool into practice at the Port of Rotterdam that aims to support port authorities’ decision-making in granting permits to LNG bunker facility operators.

Sweden – Swedegas has carried out its first LNG and liquefied biogas bunkering at the Port of Gothenburg’s new bunkering facility, the first in the country that can handle both fuels.

UK – Shell is ending offshore processing at its Shearwater platform in the central North Sea by diverting wet gas to the St Fergus processing plant in Aberdeenshire in an apparent cost cutting move, while at the same time boosting pipeline competition in the maturing basin.

Middle East

Iran – China’s CNPC has reportedly halted investment in the South Pars 11 gas mega-field in Iran to assuage Washington during US-China trade talks, in a move that could hit Iran’s domestic supply-demand balance and even squeeze gas exports to neighbouring countries.

North America

Canada – FortisBC will increase gas prices for British Columbia residential customers despite limiting supply to homes following last month’s Enbridge pipeline rupture that reduced regional supply to 40% and prompted the utility to urge customers to ration consumption.

Mexico – Prospects for Mexico’s energy sector changed radically in 2018 with the election win of left-wing president Andres Manuel Lopez Obrador, who has moved to halt oil and gas auctions for the next three years, while the government waits for production under existing contracts to pick up.

US – Cheniere shipped the first LNG from the state of Texas last week after a commissioning cargo departed from the Corpus Christi LNG plant.

The former owners of Rice Energy, brothers Toby and Derek Rice, have called for a shake-up of the board of EQT – the firm which acquired Rice Energy last year – claiming that management has underperformed.

Russia & CIS

Russia – The government of Russia has passed a decree to liberalise domestic consumer prices of Russian-produced LNG in a bid to spur development of small-scale LNG projects to supply remote areas and use the fuel for transportation.

Gazprom and Japanese trading house Itochu have signed a memorandum of understanding on the proposed Baltic LNG project.

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