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Ecuador declares force majeure on crude exports

  • Market: Crude oil, Oil products
  • 10/04/20

Ecuador has declared force majeure on crude exports as a result of weather-related ruptures on its two main crude pipelines this week, but two loadings are still possible over the next 25 days, oil minister Rene Ortiz said today.

State-owned PetroEcuador's 360,000 b/d Sote pipeline will take two to three weeks to repair, while the private-sector 450,000 b/d OCP line will take three to four weeks, Ortiz said. He highlighted that the required spare parts are in stock to facilitate the repairs of the crude lines in addition to a products pipeline that was also knocked off line by torrential rains and mudslides.

Ecuador's crude production has fallen to close to 224,000 b/d, Ortiz said. He stressed that there would not be a "complete shutdown" of output at most fields. Ecuador produced around 521,000 b/d of crude in March, according to data from oil regulator Arch.

The reduced production will top off storage at the Pacific port of Balao to allow one tanker to load in the next few days, Ortiz said. Another tanker could load at the Colombian port of Tumaco in 20-25 days, if a 20,000 b/d cross-border link from the Sote line to neighboring Colombia's 85,000 b/d Transandino pipeline can be rehabilitated, Ortiz said.

There was no immediate comment from Colombia's mines and energy ministry, or Colombian state-owned Ecopetrol, regarding the pipeline spur.

Ecuador exports medium sour Oriente and Napo crude under oil-backed debt contracts with Asian clients, in addition to quarterly spot sales. PetroEcuador's last spot tender for Oriente went unawarded in late March.

A 'firm' deal

Ortiz, who served as Opec secretary-general from 1979-1981, expressed optimism that today's G20 meeting will add weight to yesterday's tentative Opec+ agreement. He said another 5mn b/d cut from "Opec++" countries could emerge from the G20 talks, on top of the 10mn b/d reduction agreed by the Opec+ countries.

"Today we hope (oil) markets perceive the firmness of the agreement," he said, alluding to the medium-term character of the Opec+ deal.

Ecuador withdrew from Opec in January as part of austerity measures implemented by the government of President Lenin Moreno.

Ortiz reiterated that Ecuador has ample supply of refined products in inventory to cover demand during the repair of a fluid catalytic cracking (FCC) unit at the 110,000 b/d Esmeraldas refinery, which also broke down this week following a power outage. He described the damage at a compressor in the FCC as very serious.


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25/07/24

Refining, LNG segments take Total’s profit lower in 2Q

Refining, LNG segments take Total’s profit lower in 2Q

London, 25 July (Argus) — TotalEnergies said today that a worsening performance at its downstream Refining & Chemicals business and its Integrated LNG segment led to a 7pc year-on-year decline in profit in the second quarter. Profit of $3.79bn was down from $5.72bn for the January-March quarter and from $4.09bn in the second quarter of 2023. When adjusted for inventory effects and special items, profit was $4.67bn — slightly lower than analysts had been expecting and 6pc down on the immediately preceding quarter. The biggest hit to profits was at the Refining & Chemicals segment, which reported an adjusted operating profit of $639mn for the April-June period, a 36pc fall on the year. Earlier in July, TotalEnergies had flagged lower refining margins in Europe and the Middle East, with its European Refining Margin Marker down by 37pc to $44.9/t compared with the first quarter. This margin decline was partially compensated for by an increase in its refineries' utilisation rate: to 84pc in April-June from 79pc in the first quarter. The company's Integrated LNG business saw a 13pc year on year decline in its adjusted operating profit, to $1.15bn. TotalEnergies cited lower LNG prices and sales, and said its gas trading operation "did not fully benefit in markets characterised by lower volatility than during the first half of 2023." A bright spot was the Exploration & Production business, where adjusted operating profit rose by 14pc on the year to $2.67bn. This was mainly driven by higher oil prices, which were partially offset by lower gas realisations and production. The company's second-quarter production averaged 2.44mn b/d of oil equivalent (boe/d), down by 1pc from 2.46mn boe/d reported for the January-March period and from the 2.47mn boe/d average in the second quarter of 2023. TotalEnergies attributed the quarter-on-quarter decline to a greater level of planned maintenance, particularly in the North Sea. But it said its underlying production — excluding the Canadian oil sands assets it sold last year — was up by 3pc on the year. This was largely thanks to the start up and ramp up of projects including Mero 2 offshore Brazil, Block 10 in Oman, Tommeliten Alpha and Eldfisk North in Norway, Akpo West in Nigeria and Absheron in Azerbaijan. TotalEnergies said production also benefited from its entry into the producing fields Ratawi, in Iraq, and Dorado in the US. The company expects production in a 2.4mn-2.45mn boe/d range in the third quarter, when its Anchor project in the US Gulf of Mexico is expected to start up. The company increased profit at its Integrated Power segment, which contains its renewables and gas-fired power operations. Adjusted operating profit rose by 12pc year-on-year to $502mn and net power production rose by 10pc to 9.1TWh. TotalEnergies' cash flow from operations, excluding working capital, was $7.78bn in April-June — an 8pc fall from a year earlier. The company has maintained its second interim dividend for 2024 at €0.79/share and plans to buy back up to $2bn of its shares in the third quarter, in line with its repurchases in previous quarters. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Mercado mexicano de turbosina evalúa cambios de Pemex


24/07/24
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24/07/24

Mercado mexicano de turbosina evalúa cambios de Pemex

Mexico City, 24 July (Argus) — La cadena de valor del mercado de turbosina en México podría sufrir cambios drásticos, luego de que la empresa estatal mexicana Pemex eliminara su programa de descuentos por volumen para las ventas de turbosina. Los precios de turbosina a partir del 1 de julio se determinan bajo el esquema de "precio único" anunciado por Pemex mediante un aviso oficial el 28 de junio, según una nota de Aeropuertos y Servicios Auxiliares (ASA), el mayor cliente de turbosina de Pemex y el principal proveedor de combustible de aviación en México. Pemex afirmó en su aviso del 28 de junio que el cambio tiene como objetivo mejorar su oferta para el consumidor final y proporcionar "un precio competitivo" para todos sus clientes. La empresa no ha respondido a una solicitud de comentarios de Argus desde el 12 de julio. El programa de descuentos por volumen, activo hasta junio, permitía a los grandes participantes del mercado reducir los costes de la turbosina a través de grandes volúmenes de compra. Este cambio, junto con un peso mexicano más fuerte frente al dólar estadounidense, probablemente provocó una disminución considerable de los precios de turbosina en los principales aeropuertos de México, a pesar de la subida de los precios internacionales. El precio promedio de la turbosina en los cinco principales aeropuertos de México cayó en 5pc a Ps13.23/l ($2.75/USG) durante la semana del 2 al 8 de julio, desde Ps13.87/l la semana anterior, según cálculos de Argus basados en las tarifas de ASA. Sin embargo, el 1 de julio, los precios de la turbosina entregada en la costa este de México desde la costa del Golfo de EE. UU. habían aumentado en 6pc. Los precios cayeron aún más en esos aeropuertos durante la semana del 16 al 21 de julio, alcanzando su punto más bajo en cinco semanas, con un promedio de Ps12.96/l. Los precios al mayoreo de Pemex no incluyen costes logísticos ni impuestos. Los principales aeropuertos de México por número de pasajeros son Ciudad de México, Cancún, Guadalajara, Monterrey y Tijuana. Los principales distribuidores de turbosina en los aeropuertos, incluyendo a ASA y algunas empresas del sector privado, ya no mantendrán su ventaja competitiva como grandes compradores bajo el nuevo régimen de precio único, lo que podría abrir de forma abrupta el mercado mexicano de turbosina a una mayor competencia. El nuevo régimen de precios podría favorecer a la empresa militar Gafsacomm, que comenzó a vender combustible para aviones en algunos aeropuertos menores este año. Los volúmenes de ventas de Gafsacomm no cumplían los requisitos para recibir descuentos, lo que colocó a la compañía en desventaja frente a los competidores más grandes. Gafsacomm se creó en abril de 2022 y está a cargo de la secretaría de defensa (Sedena). La empresa también opera una docena de aeropuertos y la aerolínea comercial Mexicana de Aviación, que comenzó operaciones a finales de diciembre. La creciente implicación de Sedena y la marina en el sector de aviación bajo el presidente Andrés Manuel López Obrador ha puesto en desventaja a otras empresas, incluidas las aerolíneas comerciales, según Cofece, el vigilante de la competencia de México. Gafsacomm comenzó a vender turbosina en el nuevo aeropuerto de Tulum este año y en el aeropuerto internacional Felipe Ángeles (AIFA) en mayo. Por el contrario, el refinador estadounidense Valero, la única empresa del sector privado que tiene un permiso válido de importación de turbosina en México, podría ampliar su negocio, ya que el nuevo esquema de precios de Pemex podría abrirle oportunidades en algunos aeropuertos. Mientras tanto, la eliminación del régimen de descuentos podría obstaculizar a las tres principales aerolíneas comerciales de México, que ya no recibirán descuentos por volumen y perderán competitividad frente a las aerolíneas regionales más pequeñas, además de las aerolíneas extranjeras. Pero el impacto en las aerolíneas podría no ser significativo, ya que algunas tienen contratos de suministro directo con Pemex, según fuentes del mercado. El gobierno tiene un monopolio sobre el mercado de turbosina de México, con Pemex suministrando gran parte del mercado. La turbosina fue el último de los productos petrolíferos en abrirse a una mayor competencia en México después de los cambios constitucionales en 2014, pero el progreso de la reforma se detuvo bajo la administración de López Obrador, que ha impulsado una política de soberanía energética. Por Antonio Gozain Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Indian budget lifts spending for refining, crude SPR


24/07/24
News
24/07/24

Indian budget lifts spending for refining, crude SPR

Mumbai, 24 July (Argus) — India allocated 1.19 trillion rupees ($14.2bn) to the oil ministry in its budget for the 2024-25 fiscal year ending 31 March, up from Rs1.12 trillion in the 2023-24 revised budget. The budget presented by finance minister Nirmala Sitharaman on 23 July was the first since the BJP-led administration was re-elected in June . Indian state-controlled refiner IOC was allocated Rs273bn for 2024-25, up from Rs270bn in the revised budget for 2023-24. Bharat Petroleum (BPCL) received an increased allocation of Rs110bn, up from 95bn, while Hindustan Petroleum (HPCL) was allotted Rs107bn that was up from Rs102bn previously. No capital support was allocated to the oil marketing companies in the budget given IOC, BPCL and HPCL all reported record profits in 2023-24. India's crude import dependency rose to 88.3pc in April-June from 88.8pc the previous year, oil ministry data show. India's crude imports during January-June were up by around 1pc on a year earlier at 4.65mn b/d, according to Vortexa data. ONGC's allocation rose to Rs308bn for 2024-25, while fellow state-controlled upstream firm Oil India's increased to Rs68bn from Rs305bn and Rs56bn rupees respectively in the revised budget for 2023-24. India has been trying to reduce its dependence on imports and will offer 25 oil and gas blocks in the tenth bidding round in August or September under the Hydrocarbon Exploration and Licensing Policy's Open Acreage Licensing Programme (OALP). It offered 136,596.45km² in 28 upstream oil and gas blocks in the ninth bidding round. ONGC in January secured seven of the 10 areas of exploration blocks offered under India's eighth OALP round. A private-sector consortium of Reliance Industries and BP, Oil India and private-sector Sun Petrochemicals received one block each. Allocation for the Indian Strategic Petroleum Reserve (SPR) received a push to Rs4.08bn for the construction of caverns under its second phase against Rs400mn in the previous budget. The first phase of India's SPR built 1.33mn t (9.75mn bl) of crude storage at Vishakhapatnam, 1.5mn t at Mangalore and 2.5mn t at Padur. A provision of Rs119.25bn was made for LPG subsidies in 2024-25 compared with spending of Rs122.4bn in 2023-24. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Repsol 2Q profit doubles but cash flow turns negative


24/07/24
News
24/07/24

Repsol 2Q profit doubles but cash flow turns negative

Madrid, 24 July (Argus) — Spanish integrated Repsol's profit more than doubled on the year in the second quarter, as lower one-time losses and better results in the upstream and customer divisions more than offset a weaker refining performance. But its cash flow turned negative as it completed the buyout of its UK joint venture with China's state-controlled Sinopec, raised investments and experienced weaker refining margins. Net debt was sharply higher, largely reflecting share buy-backs. Repsol has said it will acquire and cancel a further 20mn of its own shares before the end of the year, which will probably further increase its debt. It completed a 40mn buy-back in the first half of the year. Repsol's profit climbed to €657mn ($714mn) in April-June from €308mn a year earlier, when earnings were hit by a large provision against an arbitration ruling that obliged it to acquire Sinopec's stake in their UK joint venture. Excluding this and other special items, such as a near threefold reduction in the negative inventory effect to €85mn, Repsol's adjusted profit increased by 4pc on the year to €859mn. Repsol confirmed the fall in refining margins and upstream production reported earlier in July . Liquids output increased by 3pc on the year to 214,000 b/d, and gas production fell by 4pc to 2.1bn ft³/d. Adjusted upstream profit increased by 4pc on the year to €427mn. The higher crude production and a 13pc rise in realised prices to $78.6/bl more than offset lower gas production and prices, which fell by 6pc to $3.1/'000 ft³ over the same period. Adjusted profit at Repsol's industrial division — which includes 1mn b/d of Spanish and Peruvian refining capacity, an olefins-focused petrochemicals division, and a gas and oil product trading business — was down by 16pc on the year at €288mn. Profit fell at the 117,000 b/d Pampilla refinery in Peru after a turnaround and weak refining margins, and there was lower income from gas trading. Spanish refining profit rose on a higher utilisation rate and gains in oil product trading. Repsol's customer-focused division reported adjusted profit of €158mn in April-June, 7pc higher on the year thanks to higher retail electricity margins, a jump in sales from an expanded customer base, higher margins in aviation fuels and higher sales volumes in lubricants. Repsol swung to a negative free cash flow, before shareholder remuneration and buy-backs, of €574mn in the second quarter, from a positive €392mn a year earlier. After shareholder remuneration, including the share buy-backs and dividends, Repsol had a negative cash position of €1.12bn compared with a positive €133mn a year earlier. Repsol's net debt more than doubled to €4.595bn at the end of June from €2.096bn on 31 December 2023, reflecting the share buy-backs and new leases of equipment. By Jonathan Gleave Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Equinor 2Q profit supported by higher European output


24/07/24
News
24/07/24

Equinor 2Q profit supported by higher European output

London, 24 July (Argus) — Norway's state-controlled Equinor posted a small rise in profit on the year in the April-June period, as a lift in its European production offset lower gas prices. Equinor reported a profit of $1.87bn in the second quarter, up by 2.2pc on the year but down by 30pc from the first three months of 2024. The company paid two Norwegian corporation tax instalments, totalling $6.98bn, in the second quarter, compared with one in the first quarter. Equinor paid $7.85bn in tax in April-June in total. Its average liquids price in the second quarter was $77.6/bl, up by 10pc from the second quarter of 2023. But average gas prices for Equinor's Norwegian and US production fell in the same period by 17pc and 6pc, respectively. The company noted "strong operational performance and lower impact from turnarounds" on the Norwegian offshore, including new output from the Breidablikk field . Equinor's entitlement production was 1.92mn b/d of oil equivalent (boe/d) in April-June, up by 3pc on the year. The company cited "high production" from Norway's Troll and Oseberg fields in the second quarter, as well as new output from the UK's Buzzard field. But US output slid, owing to offshore turnarounds and "planned curtailments onshore to capture higher value when demand is higher", the company said. It estimates oil and gas production across 2024 will be "stable" compared with last year, while its renewable power generation is expected to increase by around 70pc across the same timespan. Equinor's share of power generation rose by 14pc on the year to 1.1TWh in April-June. Of this, 655GWh was renewables — almost doubling on the year — driven by new onshore wind capacity in Brazil and Poland. "Construction is progressing" on the UK's 1.2GW Dogger Bank A offshore windfarm , Equinor said. It is aiming for full commercial operations in the first half of 2025 at Dogger Bank A — a joint venture with UK utility SSE. Equinor was granted three new licences in June to develop CO2 storage in Norway and Denmark. The Norwegian licences — Albondigas and Kinno — together have CO2 storage potential of 10mn t/yr. The Danish onshore licence, for which Equinor was awarded a 60pc stake, has potential capacity of 12mn t/yr. Equinor has a goal of 30mn-50mn t/yr of CO2 transport and storage capacity by 2035. The company's scope 1 and 2 greenhouse gas (GHG) emissions amounted to 5.6mn t/CO2 equivalent (CO2e) in the first half of the year, edging lower from 5.8mn t/CO2e in January-June 2023. It also incrementally cut its upstream CO2 intensity, from 6.7 kg/boe across 2023, to 6.3 kg/boe in the first half of this year. Equinor has kept its ordinary cash dividend steady , at $0.35/share, and will continue the extraordinary cash dividend of $0.35/share for the second quarter. It will launch a third $1.6bn tranche of its share buyback programme on 25 July. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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