Woodside investors approve merger with BHP upstream arm
Shareholders in Australian independent Woodside Petroleum have approved a merger with the petroleum arm of Australian resources firm BHP to create Australia's largest oil and gas producer.
The A$41bn ($28.7bn) all-share transaction is expected to be completed on 1 June. More than 98pc of the proxy and direct votes were in favour of Woodside merging with BHP's oil and gas operations to create a producer with an output of around 550,000 b/d of oil equivalent (boe/d).
BHP shareholders will receive Woodside shares rather than cash and existing Woodside shareholders will own 52pc of the enlarged company. BHP shareholders will own the remaining 48pc. BHP will focus on mining activities in iron ore, coking coal, copper, nickel and potash once the merger is complete.
Woodside earlier this week received its last outstanding regulatory condition for the merger when the National Offshore Petroleum Titles Administrator (Nopta) approved the merger. Nopta is Australia's regulator responsible for issuing exploration and upstream development permits for offshore areas overseen by the federal government.
When the merger was first unveiled in August, Woodside said the combined production of the merged company will be 46pc LNG, 29pc oil and condensate and 25pc domestic gas and liquids.
Production assets will combine interests in three LNG projects offshore Western Australia (WA), domestic gas in eastern Australia and oil projects in the US Gulf of Mexico, and Trinidad and Tobago. More than 59pc of the combined proven and probable reserves will be natural gas and 41pc liquids.
Woodside and BHP are also partners in the 16.3mn t/yr North West Shelf (NWS) LNG venture offshore WA, the country's biggest LNG plant, where they each own a 16.6pc stake. They are also partners in the 13 trillion ft³ (368bn m³) greater Scarborough fields in the Carnarvon basin offshore WA, which will provide feedstock gas for a second 5mn t/yr train at the 4.3mn t/yr Pluto LNG venture offshore and backfill for the NWS LNG project.
One of the first decisions of the enlarged group is a final investment decision on Mexico's deepwater Trion oil field from mid-2022, aiming to first complete studies under the current front-end engineering and design planning stage.
Woodside shareholders also voted on several other issues at the firm's annual meeting, with 48.97pc of shareholders voting against Woodside's climate plan.
"We acknowledge that the energy transition is a complex and ongoing process," Woodside chairman Richard Goyder said. "Our shareholders' views are important to us and will continue to inform our approach as it evolves."
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Iraq sets plan to compensate for excess Opec oil output
Iraq sets plan to compensate for excess Opec oil output
Dubai, 3 May (Argus) — Iraq, Opec's second-largest oil producer, has submitted a plan to the Opec secretariat outlining how it will compensate for producing above quota in the first quarter of 2024. The plan indicates that Baghdad will make compensatory cuts from May through to the end of this year, although its breakdown could be tweaked if its April production is again above quota, based on average production estimates issued by the seven Opec secondary sources, including Argus . Opec+'s Joint Ministerial Monitoring Committee (JMMC) said in its 3 April meeting that members that have produced above their quotas so far this year would need to submit plans to compensate for the excess. Iraq and Kazakhstan, which Opec said has also submitted its own compensation plan, have produced the most excess excess volumes in the Opec+ group since the beginning of the year. The JMMC oversees compliance to the coalition's crude production cuts and studies market dynamics. Iraq produced 194,000 b/d above target in January, and overshot by 217,000 b/d and 193,000 b/d in February and March, respectively. To compensate for this, Baghdad plans to produce 50,000 b/d below its quota between May and September, 100,000 b/d below quota for October and November, and 152,000 b/d below its quota for December. Iraq has been working to a quota of 4mn b/d since the start of the year, including two rounds of voluntary cuts it made in April and November last year. Baghdad will submit its crude production figure for April later this week, it said. Any extra volumes produced will also be factored into the country's compensation plan. To meet obligations, Baghdad says it will cap its crude burn at 75,000 b/d and maintain refining intake to between 400,000 b/d and 500,000 b/d through to the end of this year, according to Iraq's Opec national representative Mohammed Adnan Ibrahim Al-Najjar. But Iraq has yet to decide whether it will extend a 3.3mn b/d cap on exports, in place since April , beyond the second half, as it will depend on "Opec+ agreements [in the June meeting] and [the needs of] Iraq's economy over the coming months," the oil ministry told Argus last week. When needs must With the summer season around the corner in the Mideast Gulf region, Iraq has pushed the majority of its compensation into the last three months of the year. Iraq in summer often experiences extreme heatwaves resulting in a major spike in electricity demand. Power shortages during the summer season have fuelled political unrest in Iraq in recent years. To strike a balance between its Opec+ commitments and avoid similar scenarios this year, Iraq says it will import higher levels of gas from neighbouring Iran, with Baghdad also beginning to benefit from electricity supply from Jordan through a newly-established power line which became operational at the beginning of April. Iran and Iraq finalised a five-year supply agreement at the end of March, which will see Tehran send "up to 50mn m³/d" of gas to Iraq, Iraq's electricity minister Ziad Ali Fadel said. But Iraq's persistent overproduction, which has drawn scrutiny within Opec+, might be difficult to address, especially as Iraq blames it on its inability to oversee production in the semi-autonomous Kurdistan region in the north of the country. Most Iraqi Kurdish crude output is directed to local refineries or sold on the black market following the closure of the export pipeline that links oil fields in northern Iraq to the Turkish port of Ceyhan just over a year ago. Iraq's federal oil ministry says its Kurdish counterpart has stopped providing production data, but on 3 May said it estimates Kurdistan Regional Government (KRG) crude production to be between 40,000 b/d and 50,000 b/d. Meanwhile, Iraq's oil minister Hayyan Abdulghani on 2 May announced that two joint Baghdad-Erbil committees have been formed to resolve the issue of contracts between Erbil and the international oil companies operating in the Kurdistan region. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Austrian regulator consults on gas tariff changes
Austrian regulator consults on gas tariff changes
London, 3 May (Argus) — Austrian energy regulator E-Control has revised up its planned increase in gas tariffs from the start of 2025 but adjusted its commodity charge lower. E-Control on Friday published draft amendments to its gas system charges ordinance that would codify planned changes to how it calculates tariffs. It largely retains its revised methodology from April, but has modified its planned outright tariffs and commodity charge. The regulator had in February proposed a shift to a capacity-weighted distance (CWD) model for its reference price methodology, along with a change to a 50:50 entry-exit revenue split from roughly 20:80 at present. The proposed changes would have tripled entry costs from Germany and quadrupled them from Italy from 2025, as well as other significant changes for the distribution system and storages. Austria's system operators supported the changes , but almost all other respondents to the consultation were highly critical , warning that the changes could threaten diversification, lower utilisation and increase tariffs further and harm liquidity. E-Control last month walked back on several of the proposed changes . Most significantly, it revised the entry-exit split to 25:75, limited the increase in exit tariffs to the distribution zone, introduced a 50pc discount on exit fees to storage facilities, and equalised entry tariffs at all points. The switch to a CWD model was retained, however. The most notable modification from the changes proposed in April is a roughly 7pc increase in capacity-based tariffs, as the new amendments use final prices as opposed to indicative prices previously (see table) . The difference "results from the findings over the course of the cost approval procedure during the past few months", E-Control told Argus . In contrast, the commodity charge on gas entering and exiting the Austrian grid has decreased as a result of "lower expected fuel energy costs", E-Control told Argus . It now plans to charge around €0.04/MWh on entry flows and €0.13/MWh on exit flows, compared with €0.12/MWh and €0.13/MWh, respectively, in the original proposal. There is no commodity charge in place for this year. The final change is an update of the multipliers for capacity bookings depending on their duration. The regulator now proposes multipliers of 1.25 for quarterly products, 1.5 for monthly, two for daily, and three for within-day. Interested parties may submit comments to the regulator by 16 May. Final tariffs will then be published in June, and will be applicable from 1 January 2025. By Brendan A'Hearn Austria 2025-28 estimated tariffs €/kWh/h/a Entry/Exit Capacity type* 2025 (final) 2026 (preliminary) 2027 (preliminary) Baumgarten Entry FZK 1.30 1.37 1.48 Oberkappel Entry FZK 1.30 1.37 1.48 Uberackern Entry FZK 1.30 1.37 1.48 Uberackern Entry DZK 1.17 1.23 1.33 Uberackern Exit FZK 4.25 4.59 4.98 Uberackern Exit DZK 3.82 4.13 4.48 Arnoldstein Entry FZK 1.30 1.37 1.48 Arnoldstein Entry DZK 1.17 1.23 1.33 Arnoldstein Exit FZK 5.96 6.62 7.39 Murfeld Exit FZK 3.73 4.19 4.71 Mosonmagyarovar Exit FZK 2.15 2.49 2.80 Distribution area Exit FZK 1.26 1.45 1.67 Storage Penta West Exit FZK 2.12 2.29 2.49 Storage MAB Exit FZK 1.07 1.19 1.34 *FZK = Firm, freely allocable capacity; DZK = dynamically allocable capacity — E-Control Austria 2025 final tariff vs current €/kWh/h/a Entry/Exit Capacity type* 2025 Current ±% Baumgarten Entry FZK 1.30 0.85 53 Oberkappel Entry FZK 1.30 0.97 34 Uberackern Entry FZK 1.30 0.97 34 Uberackern Entry DZK 1.17 0.88 33 Uberackern Exit FZK 4.25 3.26 30 Uberackern Exit DZK 3.82 2.93 31 Arnoldstein Entry FZK 1.30 0.97 33 Arnoldstein Entry DZK 1.17 0.68 72 Arnoldstein Exit FZK 5.96 4.35 37 Murfeld Exit FZK 3.73 1.90 97 Mosonmagyarovar Exit FZK 2.15 1.23 75 Distribution area Exit FZK 1.26 0.42 200 Storage Penta West Exit FZK 2.12 0.44 383 Storage MAB Exit FZK 1.07 0.44 144 *FZK = firm, freely allocable capacity; DZK = dynamically allocable capacity — E-Control Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US job growth nearly halved in April
US job growth nearly halved in April
Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth fell, signs of gradually weakening labor market conditions. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia’s Tangguh LNG facility offers Jun-Jul cargoes
Indonesia’s Tangguh LNG facility offers Jun-Jul cargoes
Singapore, 3 May (Argus) — Indonesia's 7.6mn t/yr BP-operated Tangguh LNG facility is offering four LNG cargoes for June-July loading, through a tender that closes on 6 May. The Tangguh LNG project in Indonesia's west Papua province is offering four cargoes on a fob basis for loading on 17, 22, 27 June, and on 2 July, or two cargoes on a des basis. But the delivery windows are unclear. The firm was last in the market in March , when it offered four cargoes on a fob basis for loading during 28-29 April, 1-2 May, 3-4 May and 17-19 May, or three cargoes on a des basis for delivery over 6-8 May, 8-10 May and 12-14 May. But it is unclear if these cargoes were sold eventually. This offer adds to a growing pool of availability for June and July cargoes, as summer restocking demand among traditional major importing region northeast Asia is poised to be lower this year. This is mainly owing to higher inventories after the winter season and more than sufficient contracted term deliveries, buyers in the region said. This is despite Japan and South Korea forecasting higher summer temperatures this year as compared to the previous year, according to the Japan Meteorological Agency and Korea Meteorological Administration on 23 April. Spot prices have remained relatively rangebound at around high-$9s to low-$10s/mn Btu since the end of March despite weak demand. Spot prices have been tracking some strength in Dutch TTF contract prices, which has reduced importers' incentive to step up spot purchases since imported spot has no obvious price advantage. The front half-month of the ANEA — the Argus assessment for spot LNG deliveries to northeast Asia — was last assessed on 3 May at $9.955/mn Btu, lower by about 11¢/mn Btu from a week earlier, but about 71¢/mn Btu higher from a month earlier. Spot demand has been mostly confined to south and southeast Asian importers. Most of southeast Asia is currently experiencing a heatwave, which is likely to continue driving spot LNG demand from firms like Thailand's state-controlled PTT. The firm has issued another tender seeking three deliveries over 1-2, 7-8 and 10-11 July that closed on 3 May. It may have awarded the tender, but further details are unclear, traders said. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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