Libya NOC lifts force majeure from ‘safe’ fields, ports
Libya's state-owned NOC said it has lifted force majeure measures from "safe" fields and oil terminals but will retain these restrictions for assets still allegedly infiltrated by foreign mercenaries and Russian paramilitary group Wagner.
NOC chairman Mustafa Sanalla said the company's priority is now to resume production and exports, while accounting for worker and operational safety, and preventing attempts to "politicize the national oil sector."
The company is conducting a technical evaluation to prepare for the restart of oil activities. It did not name the assets it would be targeting to return on line. But a Libyan shipping source said the Marsa el-Hariga and Zueitina terminals would likely be among the first ones restarted because of the lower mercenary presence.
Since January, all onshore Libyan crude oil fields and terminals have been intermittently blockaded by forces allied with Khalifa Haftar's Libyan National Army (LNA) — comprising the Petroleum Facilities Guard (PFG) units that previously guarded these assets, the Wagner group, Sudanese Janjaweed mercenaries and Libyan tribes. Foreign mercenaries remain posted at the Ras Lanuf and Es Sider ports, as of this week.
On 18 September, the LNA announced it reached an agreement to restart oil production and exports immediately with the rival UN-backed Government of National Accord (GNA), which Haftar's forces have battled for nationwide control since April of last year. On the GNA side, the accord was brokered and represented by deputy prime minister Ahmed Maiteeq, who represents the north western city of Misrata — leaving it unclear if further deal endorsement was required from other GNA parties. The deal duration was also not immediately apparent.
The Russian Foreign Ministry — which has backed Haftar in the civil conflict held Libya-linked talks with GNA ally Turkey in recent days — on 19 September said it welcomed the agreement. Last week, the US Embassy to Libya had foreshadowed the deal, announcing that Haftar had agreed to reopen the oil sector by the end of 12 September — a few days earlier than the LNA was able to achieve.
Argus estimates Libyan production has consequently stayed in the 80-100,000 b/d monthly average range since February, sporadically boosted by fleeting and failed attempts to restart production at various points during the summer. Most recently, the LNA opposed mid-July efforts to resume oil activity, citing concerns over the potential mismanagement of oil and gas revenues by Libya's central bank.
The LNA-GNA 18 September agreement tellingly mandates the creation of a joint technical committee with members of both factions, which will oversee the distribution of oil revenues. The make-up of this committee has yet to be disclosed but could lead to further friction if the two parties and the provinces they control conclude they are not fairly represented.
NOC on 19 September reaffirmed that the management of "Libyan financial affairs and the budgeting process" are outside its jurisdiction. The company had historically sought to maintain political neutral in the dispute.
Libyan exports volumes are likely to become available to the market immediately. NOC has said that it retains "hundreds of thousands of tonnes of hydrocarbons" in storage. In mid-August, the LNA allowed a restart of shipments of stored supplies from eastern ports, in an effort to free up stocks that will allow NOC to continue gas production and alleviate intensifying national power outages. The Marsa el-Brega port conducted exports of stored crude and condensate at the start of September.
Field production may lag, with NOC previously warning that the extended duration of the blockades had damaged pipelines and other infrastructure, which would slow down eventual output recoveries.
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Canadian rail workers vote to launch strike: Correction
Canadian rail workers vote to launch strike: Correction
Corrects movement of grain loadings from a year earlier in final paragraph. Washington, 2 May (Argus) — Workers at the two major Canadian railroads could go on strike as soon as 22 May now that members of the Teamsters Canada Rail Conference (TCRC) have authorized a strike, potentially causing widespread disruption to shipments of commodities such as crude, coal and grain. A strike could disrupt rail traffic not only in Canada but also in the US and Mexico because trains would not be able to leave, nor could shipments enter into Canada. This labor action could be far more impactful than recent strikes because it would affect Canadian National (CN) and Canadian Pacific Kansas City (CPKC) at the same time. Union members at Canadian railroads have gone on strike individually in the past, which has left one of the two carriers to continue operating and handle some of their competitor's freight. But TCRC members completed a vote yesterday about whether to initiate a strike action at each carrier. The union represents about 9,300 workers employed at the two railroads. Roughly 98pc of union members that participated voted in favor of a strike beginning as early as 22 May, the union said. The union said talks are at an impasse. "After six months of negotiations with both companies, we are no closer to reaching a settlement than when we first began, TCRC president Paul Boucher said. Boucher warned that "a simultaneous work stoppage at both CN and CPKC would disrupt supply chains on a scale Canada has likely never experienced." He added that the union does not want to provoke a rail crisis and wants to avoid a work stoppage. The union has argued that the railroads' proposals would harm safety practices. It has also sought an improved work-life balance. But CN and CPKC said the union continues to reject their proposals. CPKC "is committed to negotiating in good faith and responding to our employees' desire for higher pay and improved work-life balance, while respecting the best interests of all our railroaders, their families, our customers, and the North American economy." CN said it wants a contract that addresses the work life balance and productivity, benefiting the company and employees. But even when CN "proposed a solution that would not touch duty-rest rules, the union has rejected it," the railroad said. Canadian commodity volume has fallen this year with only rail shipments of chemicals, petroleum and petroleum products, and non-metallic minerals rising, Association of American Railroads (AAR) data show. Volume data includes cars loaded in the US by Canadian carriers. Coal traffic dropped by 11pc during the 17 weeks ended on 27 April compared with a year earlier, AAR data show. Loadings of motor vehicles and parts have fallen by 5.2pc. CN and CPKC grain loadings fell by 4.3pc from a year earlier, while shipment of farm products and food fell by 9.3pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
FTC clears Exxon-Pioneer deal but bars Sheffield
FTC clears Exxon-Pioneer deal but bars Sheffield
New York, 2 May (Argus) — US antitrust regulators signaled they will clear ExxonMobil's proposed $59.5bn takeover of Pioneer Natural Resources but banned the shale giant's former chief executive officer from gaining a seat on the board. A proposed consent order from the Federal Trade Commission seeks to stop Scott Sheffield, Pioneer's former chief executive, from taking part in "collusive activity" that would potentially raise crude prices and cause US consumers to pay more at the pump. The order paves the way for ExxonMobil to close its blockbuster deal for Pioneer, which will make it the leading producer in the prolific Permian shale basin of west Texas and southeastern New Mexico. It is also the top US oil producer's biggest transaction since Exxon's 1999 merger with Mobil. ExxonMobil's Permian output will more than double to 1.3mn b/d of oil equivalent (boe/d) when the acquisition closes, before increasing to about 2mn boe/d in 2027. The FTC, which has taken a tougher line on mergers under the administration of President Joe Biden, has paid close attention to oil deals announced during the latest phase of shale consolidation. Only this week, Diamondback Energy said it had received a second request for information from the regulator over its $26bn proposed takeover of Endeavor Energy Resources. And Chevron's planned $53bn acquisition of US independent Hess has also been held up. The FTC alleged in a complaint that Sheffield exchanged hundreds of text messages with Opec officials discussing crude pricing and output, and that he sought to align production across the Permian with the cartel. His past conduct "makes it crystal clear that he should be nowhere near Exxon's boardroom," said Kyle Mach, deputy director of the FTC's Bureau of Competition. ExxonMobil said it learnt about the allegations against Sheffield from the FTC. "They are entirely inconsistent with how we do business," the company said. While Pioneer said it disagreed with the FTC's complaint, which reflects a "fundamental misunderstanding" of US and global oil markets and "misreads the nature and intent" of Sheffield's actions, the company said it would not be taking any steps to stop the merger from closing. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Abu Dhabi’s Adnoc puts crude capacity at 4.85mn b/d
Abu Dhabi’s Adnoc puts crude capacity at 4.85mn b/d
Dubai, 2 May (Argus) — Abu Dhabi's state-owned Adnoc has nudged up its self-reported crude production capacity to 4.85mn b/d, from 4.65mn b/d previously. The UAE state energy giant did not formally announce the increase but updated the figure on its website. It did something similar when its capacity reached 4.65mn b/d in late 2023, up from 4.5mn b/d in the middle of last year. This latest hike takes the company a step closer to its long-term 5mn b/d crude capacity target, which it aims to reach by 2027. Adnoc set the 5mn b/d target back in 2018 when its capacity was 3.5mn b/d. At that time, the company said it was aiming to deliver the increase by 2030, but in November 2022 it brought the timeframe forward by three years, citing the "UAE's robust hydrocarbon reserves". The change in timeline had been expected, with sources telling Argus earlier that year that discussions had been taking place in the upper echelons of Adnoc about significantly accelerating its capacity growth plans . Given the speed at which the company has been delivering capacity gains over the past few years, and how close it is to meeting its target already, it is not inconceivable that Adnoc will reach 5mn b/d ahead of schedule. Put your best foot forward The UAE's rising capacity comes as Opec+ producers engage with independent agencies to update their respective crude output capacities for use in production policy decisions from 2025. At their meeting in June last year, all Opec+ members committed to undergo an external assessment of their sustainable capacities in the first half of 2024 by three independent consultancies, IHS, Wood Mackenzie and Rystad. The updated capacity assessment will help address a key criticism of the Opec+ production restraint agreements in their current format, namely that many of the countries involved have been cutting output from a baseline level of production that they can no longer actually deliver, in most cases due to natural decline. The UAE has been one of a handful of countries in the group that has been raising its capacity over the past few years. This means it should, in theory, benefit from the latest assessment, as a higher accepted capacity will afford it a higher production baseline under any Opec+ agreements struck from 2025 onwards. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Shell's 1Q profit supported by LNG and refining
Shell's 1Q profit supported by LNG and refining
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