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US turns screws on Venezuela as Florida beckons

  • Market: Crude oil, Natural gas, Oil products
  • 29/10/20

The election-minded US government is tightening its screws on Venezuela in a controversial strategy that appeals to hawkish Latino voters in Florida but divides their compatriots inside the impoverished country.

From diesel supply to an environmentally sensitive crude transshipment, President Donald Trump's administration is seeking to seal off Venezuelan president Nicolas Maduro's access to the oil market. The moves are expedient pre-election optics but will not spark regime change in Caracas, Venezuela watchers in Washington tell Argus.

As of this week, the US has effectively ended a sanctions exemption for diesel supplied by non-US companies under transactions that had been permitted on humanitarian grounds since the US imposed oil sanctions on Venezuela in early 2019.

India's Reliance Industries was a key diesel supplier in swap transactions for Venezuelan crude, while Spain's Repsol and Italy's Eni were lifting crude as payment from Venezuela's state-owned PdV for their natural gas production and historical debts, with diesel shipped back to balance their books.

"We are trying to stop the export of crude by the Maduro regime in Venezuela, and one of the ways we are trying to stop it is to prevent people from swapping various products for it, not just paying cash for it. So swapping debt, swapping diesel," US special envoy to Iran and Venezuela Elliott Abrams told reporters today.

Because the imported low-sulfur diesel is used for power generation, municipal water supply, agricultural activity, some food distribution and public transport, human rights groups — including UN High Commissioner for Human Rights Michelle Bachelet — had been urging the White House for months to maintain the exception.

That position was recently echoed by Miguel Pizarro, the Venezuelan opposition's UN envoy. Local Venezuelan farmers and businessmen, already hit by a severe gasoline shortage, have warned of dire consequences.

But other senior figures in the US-supported interim government led by Juan Guaido — including influential former political prisoner Leopoldo Lopez, now in self-imposed exile in Spain — support tougher measures to oust Maduro, whom they blame for the once-prosperous country's grave humanitarian crisis.

Aside from the loss of the imported diesel itself, detractors say the situation will open more avenues for opaque oil transactions. Crude exports are already tumbling and storage tanks full. And Repsol and Eni will have no sanctions-permitted mechanism to secure payment for their Venezuelan gas production. With only sporadic high-sulfur diesel production from PdV's crippled refineries, little onshore gas flow and only a partially functional network to distribute the gas, western Venezuela in particular will be pummeled by more blackouts and a loss of domestic gas supply.

Risky business

On the other side of Venezuela, the US is similarly resisting international calls to transfer 1.3mn bl of Venezuelan crude from the impaired Nabarima floating storage unit, which is at risk of causing a catastrophic oil spill in the Gulf of Paria.

Eni, which is PdV's minority partner in the Corocoro offshore field where the vessel has been moored for a decade, wants formal US assurances that the company and its contractors would not trigger sanctions by offloading the oil. Talks with the US State Department have been underway for weeks. Without a swift agreement, Eni's proposal will become obsolete, because PdV is already transferring the oil in a risky barge-based process guarded by the Venezuelan military.

The State Department's Bureau of Western Hemisphere Affairs said today that "Eni is under no sanctions risk to begin immediate emergency repairs to the vessel. We hope a resolution can be found soon."

No mention was made of authorizing an oil transfer.

Eni has said it is ready to carry out the safe transfer once it has approval from the US as well as PdV as the operator of the PetroSucre joint venture.


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18/07/24

Australia’s Santos delays FID on Dorado oil field

Australia’s Santos delays FID on Dorado oil field

Sydney, 18 July (Argus) — Australian independent Santos will now target a 2025 final investment decision (FID) on its 80pc-owned Dorado oil project in Western Australia (WA), after deferring it in 2022 and last year indicating a 2024 decision. Dorado's 10pc stakeholder Australian independent Carnarvon Energy said the joint venture (JV) will evaluate a lower capital expenditure (capex) option by reducing capacity below the previously guided 75,000-100,000 b/d and phasing development wells, targeting front-end engineering and design re-entry later in 2024 "once the JV secures the best option vessel or hull". Carnarvon said overall capex prior to the first oil from the offshore field will now be below its previous guidance of $2bn. Dorado JV's other shareholder is Taiwan's state-owned CPC with 10pc. Santos reported higher April-June oil and gas output than the previous quarter on 18 July, with production from the 7.8mn t/yr Gladstone LNG (GLNG) in Queensland state up on a year earlier. It produced 22.2mn bl of oil equivalent (boe), up by 2pc from 21.8mn boe during January-March because of the return of WA's Devil Creek gas plant following a maintenance shutdown, as well as higher liquids production following cyclone-related disconnections during January-March. But output was 3pc below the year-earlier figure of 22.8mn boe. GLNG is on track to swap 18PJ (480mn m³) of gas into the domestic market over April-September 2024, Santos said, with the project maintaining its guidance of around 6mn t of LNG shipped for the year to 31 December. Production at the 6.9mn t/yr ExxonMobil-operated PNG LNG in Papua New Guinea (PNG) was down on January-March with natural decline at the Hides field, partially offset by high compression reliability from the Santos-operated Gobe and Kutubu fields. Finalisation of drilling and completion of operations activities at PNG LNG's Angore C1 and C2 wells has been achieved with both wells perforated for production. Angore project teams are now starting tie-in execution with production of 350mn ft³/d (10mn m³/d) expected during October-December. The $4.6bn Barossa backfill project in the Timor Sea is 77pc complete, Santos said, with pipeline testing completed in June and on track for its first gas in July-September 2025 within its cost guidance. Santos' 1.7mn t/yr Moomba carbon capture and storage project in South Australia is mechanically complete and on track to raise injection of Cooper basin gas plant carbon dioxide during July-December. Santos maintained its 2024 production guidance of 84mn-90mn boe and will release its half-year results on 21 August. By Tom Major Santos results Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 y-o-y % ± q-o-q % ± Volumes ('000 t) GLNG (100pc) 1,338 1,649 1,263 6 -19 Darwin LNG (100pc) 0 0 134 100 0 PNG LNG (100pc) 2,001 2,009 2,065 -3 0 Santos' equity share of LNG sales 1,264 1,352 1,333 -5 -7 Financial LNG sales revenue ($mn) 762 901 838 -9 -15 Total sales revenue ($mn) 1,313 1,398 1,336 -2 -6 LNG average realised price ($/mn Btu) 11 13 12 -4 -10 Oil price ($/bl) 89 89 83 7 0 Source: Santos Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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TotalEnergies agrees to sell stake in Nigeria SPDC JV


17/07/24
News
17/07/24

TotalEnergies agrees to sell stake in Nigeria SPDC JV

London, 17 July (Argus) — TotalEnergies has agreed to sell its 10pc stake in Nigeria's SPDC onshore oil and gas joint venture to Africa-focused independent Chappal Energies for $860mn. Other partners in the SPDC joint venture comprise operator Shell with a 30pc interest, state-owned NNPC with 55pc and Italy's Eni with 5pc. Shell agreed to sell its stake in the joint venture to a consortium of five companies for up to $2.4bn in January. That deal remains subject to a due diligence process by regulators. The joint venture's assets include around 50 producing oil and gas fields across 18 licences. TotalEnergies will transfer its 10pc interest and all its rights and obligations in 15 of the licences to Chappal. These licences mainly produce oil and netted TotalEnergies around 14,000 b/d of oil equivalent last year. The other three licences — OML 23, OML 28 and OML 77 — mainly produce gas and account for 40pc of supply to the Nigeria LNG (NLNG) joint venture, in which TotalEnergies has a 15pc stake. TotalEnergies will also transfer its 10pc stake in these licences to Chappal but it will retain "full economic interest" in them, it said. The divestment "allows us to focus our onshore Nigeria presence solely on the integrated gas value chain and is designed to ensure the continuity of feed gas supply to Nigeria LNG in the future", said TotalEnergies' exploration and production president Nicolas Terraz. Chappal specialises in taking over and operating mature fields. It agreed a deal in November last year to acquire Norwegian firm Equinor's stake in Nigeria's OML 128 block, a transaction that was finally approved earlier this month . The company said last month that it is contemplating issuing a bond to raise up to $450mn to help it finance acquisitions. 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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China’s CNOOC gets record gas results from Bohai well


17/07/24
News
17/07/24

China’s CNOOC gets record gas results from Bohai well

Singapore, 17 July (Argus) — Chinese state-controlled oil firm CNOOC has achieved what it described as record gas production results from a test well at its Longkou 7-1 (LK7-1) oil and gas field in the eastern region of China's Bohai Sea. The LK7-1-1 exploration well could produce almost 1mn m³/d of natural gas and about 210m³/d (1,320 b/d) of crude oil, the company said on 15 July. The former set a record for natural gas tested productivity in the Bohai Sea, according to CNOOC. China produced 123.6bn m³ of natural gas in January-June, up by 6pc from a year earlier, according to the National Bureau of Statistics of China (NBS). The country produced 4.15mn b/d of crude in 2023, NBS data showed. The potential output adds to CNOOC's reserves and production in the Bohai Sea, which stood at 1.97mn b/d of oil equivalent (boe/d) and 599,847 boe/d as of the end of 2023, according to CNOOC. The region represents 29pc of the company's total reserves and approximately 32pc of its production. CNOOC, along with other state-controlled firms like PetroChina and Sinopec, dominates China's domestic oil and gas production. CNOOC has also separately started production at an oilfield offshore China. The Wushi 23-5 oilfield development project — located in the Beibu Gulf of the South China Sea — is expected to produce light crude, and achieve peak production of 18,100 boe/d in 2026. "The project will realise full-process recovery and utilisation of the associated gas through integrated natural gas treatment," the company said on 1 July. CNOOC in November 2023 started production at its Bozhong 19-6 condensate gas field in the Bohai bay. The gas field is currently producing an estimated 37,500 boe/d, exceeding an initial expectation of peak production of about 37,000 boe/d, the company said on 11 July. CNOOC in March 2023 discovered the Bozhong 26-6 field with over 100mn t of oil equivalent reserves, also in the Bohai Sea. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Aumentan importaciones de combustible en México


16/07/24
News
16/07/24

Aumentan importaciones de combustible en México

Mexico City, 16 July (Argus) — Las importaciones de combustible en México aumentaron en julio de cara a la temporada de viajes de verano e impulsadas por una disminución de la producción nacional en las refinerías de la estatal Pemex. Las importaciones marítimas a México de gasolina, diésel y turbosina, incluidas las importaciones de Pemex y privados, aumentaron un 18pc a aproximadamente 780,000 b/d del 1 al 10 de julio, frente a 663,000 b/d en el mismo periodo de 2023, según datos de Vortexa. Esto se debió principalmente a un aumento del 66pc en los cargamentos de diésel hasta alcanzar 268,000 b/d, ya que la disponibilidad de este combustible en el mercado ilegal probablemente disminuyó, según fuentes del mercado. Los cargamentos de turbosina se cuadriplicaron hasta los 43,000 b/d en el mismo periodo, ya que Pemex reabastece sus inventarios antes de la temporada de viajes aéreos de verano. Las importaciones de combustible a México habían disminuido a principios de este año, después de que la campaña del gobierno para aumentar la producción de refinerías y reducir su dependencia de las importaciones de EE. UU. comenzara a dar sus frutos, aumentando la producción de gasolina y diésel de Pemex en un 32pc y reduciendo sus importaciones hasta un 25pc en marzo. Pero en abril y mayo, el sistema de refinación de Pemex enfrentó varios problemas, desde un incendio en la refinería de Minatitlán hasta un corte de energía importante en la refinería de Tula, lo que llevó los niveles de procesamiento de crudo de Pemex a un mínimo de cinco meses en mayo. Las tasas de operación de las refinerías en junio se publicarán el 26 de julio. Es probable que el procesamiento de crudo haya caído durante el mes pasado debido a operaciones de mantenimiento en dos refinerías, dijo una fuente familiarizada con las operaciones de refinación de Pemex. El mercado tiene sus dudas sobre la posibilidad una fuerte caída en las importaciones de combustible a México, y algunos refinadores de la costa del Golfo de EE. UU. esperan una fuerte y creciente demanda. Además, incluso si la refinería Olmeca de 340,000 b/d iniciara operaciones comerciales este año, es probable que las otras seis refinerías reduzcan sus tasas de utilización, según fuentes del mercado. Recientemente, Pemex comenzó a vender diésel desde la terminal de distribución de la refinería de Olmeca, pero la cantidad es limitada y el combustible se produjo utilizando materia prima destilada en otra planta. La tendencia a la baja en las operaciones de refinado de México podría continuar en julio a pesar de los esfuerzos del gobierno saliente para aumentar la producción nacional. México ha exportado alrededor de 1 millón de b/d de crudo hasta la fecha en julio, un aumento del 20pc frente a los 847,500 b/d en todo junio, según los datos de Vortexa. Esto indica que es probable que las refinerías de Pemex estén operando a tasas más bajas. Las importaciones de combustible de México podrían continuar su tendencia al alza en los próximos meses, pues los gasolineros esperan una mayor demanda de gasolina durante las vacaciones de verano. Los inventarios de gasolina y diésel de Pemex descendieron un 24pc en junio a 6.2 millones de bl, frente a 8.1 millones de bl en junio de 2023, según una respuesta de transparencia de Pemex a una solicitud de Argus . La empresa deberá aumentar sus importaciones si las refinerías no siguen el ritmo de la demanda. Además, las importaciones suelen aumentar en la segunda mitad del año, impulsadas por la demanda de diciembre y la mezcla de gasolina de invierno de menor precio. México importó más gasolina en el segundo semestre del año en 11 de los últimos 12 años y más diésel en ocho de esos mismos años. Juego de unos pocos El mercado de importación de combustible de México se ha limitado a Pemex y a algunas empresas del sector privado durante los últimos tres años del mandato del presidente Andrés Manuel López Obrador, y no hay señales de cambio después de las elecciones presidenciales de junio. Se espera que la presidenta electa Claudia Sheinbaum, que tomará el cargo el 1 de octubre, continúe con las políticas nacionalistas de energía de López Obrador, y tendrá aún menos contrapeso que su predecesor tras la contundente victoria de su partido Morena en las elecciones legislativas. Las importaciones de combustible a México se abrieron a empresas del sector privado después de la reforma energética de 2014, pero la secretaría de energía canceló decenas de permisos de importación de combustible en los últimos años. 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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Tanker owner denies Houthi attack in Med


16/07/24
News
16/07/24

Tanker owner denies Houthi attack in Med

London, 16 July (Argus) — The owner of a tanker reported attacked today in the Mediterranean Sea has said there was no such incident. Petronav Ship Management said its tanker, Olvia , was not targeted as claimed by Yemen's Houthi militants. An attack in the Mediterranean would be a big step outside the Houthi's region of operations, which is limited to the area in and around the Bab el-Mandeb strait at the southern end of the Red Sea. The Houthis claimed two other attacks today in the Red Sea, on crude tanker Chios Lion and oil product tanker Bentley I . By Ben Winkley and Bob Wigin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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