Shell exits Iraqi petchem project

  • Market: Condensate, Crude oil, Natural gas, Petrochemicals
  • 20/02/24

Shell has withdrawn from plans to build a petrochemical plant in Iraq's southern Basra region after nearly 10 years, in a blow to Baghdad's aim of driving foreign investment in its energy sector. The major has pulled out following an "in-depth evaluation on the feasibility" of the Nebras complex. Shell will continue to support the project through its Basrah Gas (BGC) joint venture with the Iraqi government and Japan's Mitsubishi. Shell signed an initial agreement in 2015 to develop the project using BGC's associated gas, but it has stalled. Shell has a 49pc stake in the venture estimated at $8bn. BGC will provide ethane feedstock for the complex from its gas processing facilities, with the associated gas coming from the Rumaila, West Qurna 1 and Zubair oil fields.


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14/04/24

G7 leaders to meet over Iran's attack on Israel

G7 leaders to meet over Iran's attack on Israel

Dubai, 14 April (Argus) — Leaders of the G7 will meet today, 14 April, to co-ordinate a diplomatic response to Iran's overnight air attack on Israel, which ushered a new phase in a six-month conflict that is threatening regional escalation. G7 presidency Italy "has organized a conference at leaders' level for the afternoon of today," Italian prime minister Giorgia Meloni said on X, formerly Twitter. US President Joe Biden has pledged a co-ordinated G7 diplomatic response and condemned the Iranian assault. Iran fired hundreds of drones and missiles against Israel on the evening of 13 April, according to the country's state-owned news agency Irna. Almost all were intercepted before they reached Israeli airspace and there were no fatalities reported by Israel. One civilian was injured and an air force base in southern Israel was lightly damaged, according to the Israel Defence Forces (IDF). The Iranian attack came in response to a suspected Israeli air strike on the vicinity of Iran's embassy compound in Damascus, Syria, on 1 April. Tehran's foreign minster Hossein Amir-Abdollahian said Iran considers this to be the end of its operation. But energy markets, which have been supported in recent weeks by a geopolitical risk premium, will face a week of uncertainty about whether Israel will retaliate. The front-month June Ice Brent contract was trading at $90.45/bl before markets closed for the weekend, and hit a more-than five month high of $92.18/bl on Friday, 12 April. Israeli officials said the attack was "a severe and dangerous escalation" from Tehran. Israel's war cabinet is meeting today to discuss a response. "We will build a regional coalition and exact the price from Iran in the fashion and timing that is right for us," said cabinet minister Benny Gantz. The US is urging Israel to claim victory for its defence, in an apparent effort to discourage Israeli prime minister Benjamin Netanyahu's government from feeling compelled to retaliate. While noting that Israel ultimately will make the decision as to how to respond, White House national security communications co-ordinator John Kirby, in a televised interview today, hailed what he called Israel's "incredible military achievement" in defending itself against the attack. Very little managed to penetrate the defensive shield, "and the damage was extraordinarily light," he said. The US military played a role in helping to defend against the attack, bringing down "several dozens of drones and missiles," Kirby said. UK prime minister Rishi Sunak said the Royal Air Force shot down "a number of Iranian attack drones". Israel's western allies are urging it to show restraint as they try to prevent a wider conflict in the Middle East, which could directly affect oil producers and send energy prices soaring. President Biden is especially keen to avoid such a scenario in an election year. By Bachar Halabi and David Ivanovich Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Iran launches air attacks on Israel


13/04/24
News
13/04/24

Iran launches air attacks on Israel

Washington, 13 April (Argus) — Iran has launched an airborne attack on Israel today, marking a dramatic escalation of the Middle East conflict that for the past six months has been mostly confined to Gaza. The Iranian attack by what the Israeli military described as long-range drones comes after Tehran vowed to retaliate for a 1 April suspected Israeli strike on an Iranian diplomatic mission in Damascus, Syria. Iran's state-owned Irna news agency said the Islamic Revolutionary Guard Corps has launched missiles and drones against Israel. "This attack is likely to unfold over a number of hours," the White House said. "President [Joe] Biden has been clear: Our support for Israel's security is ironclad. The US will stand with the people of Israel and support their defense against these threats from Iran." The US has already pre-positioned forces in the Middle East to deal with the expected Iranian counter-strike. The initial reaction from the White House does not explicitly threaten a retaliatory attack against Iranian targets. But Israel has vowed to retaliate against any strikes from Iran and its proxies. Today marks the first direct military attack by a foreign state against Israel since the 1991 Gulf war. Separately, Iranian naval vessels earlier today seized the Portuguese flagged, British-owned MSC Aries container ship transiting through the Gulf of Oman. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Opec+ crude output above target again


12/04/24
News
12/04/24

Opec+ crude output above target again

The alliance overshot its output target in March, with serial overproducers Iraq and Kazakhstan again exceeding their pledges, writes Aydin Calik London, 12 April (Argus) — Opec+ crude output was once again above target in March, as serial overproducers Iraq and Kazakhstan continued to exceed their pledges. Kuwait and Gabon were last month's other notable overproducers. March production from members subject to targets rose by 70,000 b/d to 34.59mn b/d, according to Argus estimates, leaving the alliance 270,000 b/d above its goal (see table). The gap would have been wider were it not for a war-related decline in output from non-Opec members Sudan and South Sudan. Opec+ has been cutting production since November 2022 in a self-described attempt to support and balance the oil market. A new round of "voluntary" reductions by several members came into force in January this year and is due to run until the end of June. The group is not relaxing its stance on production discipline, despite front-month Ice Brent crude futures moving above $90/bl for the first time in around six months in early April. Earlier this month, Opec's Joint Ministerial Monitoring Committee, which oversees compliance with the coalition's crude production cuts and studies market dynamics, said members that overshot targets in the first quarter of this year will submit plans to compensate. "Participating countries with outstanding overproduced volumes for the months of January, February and March will submit their detailed compensation plans to the Opec secretariat by 30 April 2024," the secretariat said. The nine Opec members bound by targets were 400,000 b/d above their combined production pledge in March, while the nine non-Opec members of the alliance were 130,000 b/d below. Iraq reduced output by 50,000 b/d in March after burning less crude for power generation, but it was still 180,000 b/d over its 4mn b/d target. To allay concerns, Baghdad last month pledged to drive its crude exports down to 3.3mn b/d, although state-owned marketer Somo reported exports of 3.42mn b/d for March. Like Iraq, Kazakhstan has vowed to comply with its pledges and compensate for overproduction in January and February, but it made no progress last month — output was unchanged at 1.59mn b/d, which was 120,000 b/d above target. Wide of the mark Others that overshot the mark last month include Kuwait, where production rose by 40,000 b/d to 2.51mn b/d, leaving the country 100,000 b/d above its pledge. Kuwait overproduced by around 70,000 b/d on average in the first quarter. Fellow Opec member Gabon exceed its March quota by 80,000 b/d. Saudi Arabia and the UAE, which have shouldered much of the burden of the group's collective cuts over the past 16 months, were slightly above target last month too, after increasing output by a respective 30,000 b/d and 20,000 b/d. Russian crude production rose by 30,000 b/d to 9.44mn b/d, just 10,000 b/d shy of its target. Drone attacks and refinery maintenance resulted in as much as 1.1mn b/d of crude processing capacity being off line for repairs last month, freeing up more crude for export — shipments hit an 11-month high in March. Energy minister Nikolai Shulginov said on 3 April that all recently damaged refineries would be fully repaired by June or earlier — implying that there could be excess crude for export this month and in May. Fellow non-Opec producers Sudan and South Sudan were both 40,000 b/d below their quotas last month as the impact of Sudan's ongoing civil war began to be felt. South Sudan, which is entirely reliant on its northern neighbour to get its oil to international markets, saw its production nearly halve to around 80,000 b/d because of a blocked pipeline. Opec+ crude production mn b/d Mar Feb* Mar target† ± target Opec 9 21.62 21.49 21.22 0.40 Non-Opec 9 12.97 13.03 13.10 -0.13 Total Opec 18 34.59 34.52 34.32 0.27 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Mar Feb* Mar target† ± target Saudi Arabia 9.00 8.97 8.98 0.02 Iraq 4.18 4.23 4.00 0.18 Kuwait 2.51 2.47 2.41 0.10 UAE 2.95 2.93 2.91 0.04 Algeria 0.92 0.91 0.91 0.01 Nigeria 1.50 1.47 1.50 0.00 Congo (Brazzaville) 0.25 0.23 0.28 -0.03 Gabon 0.25 0.23 0.17 0.08 Equatorial Guinea 0.06 0.05 0.07 -0.01 Opec 9 21.62 21.49 21.22 0.40 Iran 3.28 3.27 na na Libya 1.18 1.16 na na Venezuela 0.85 0.88 na na Total Opec 12^ 26.93 26.80 na na *revised †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Mar Feb* Mar target† ± target Russia 9.44 9.41 9.45 -0.01 Oman 0.76 0.76 0.76 0.00 Azerbaijan 0.49 0.48 0.55 -0.06 Kazakhstan 1.59 1.59 1.47 0.12 Malaysia 0.36 0.36 0.40 -0.04 Bahrain 0.15 0.15 0.20 -0.05 Brunei 0.08 0.08 0.08 0.00 Sudan 0.02 0.05 0.06 -0.04 South Sudan 0.08 0.15 0.12 -0.04 Total non-Opec 12.97 13.03 13.10 -0.13 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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EBRD has no plan to fully ban gas investment soon


12/04/24
News
12/04/24

EBRD has no plan to fully ban gas investment soon

London, 12 April (Argus) — The European Bank for Reconstruction and Development (EBRD) has no plan to completely ban gas investments in the near future, its chief economist, Beata Javorcik, told Argus . "We do not finance upstream gas, in rare and exceptional cases we will finance selective downstream and midstream natural gas projects," Javorcik said on the sidelines of the Financial Times Global Commodities Summit in Lausanne. For projects to receive support from the bank it is necessary to demonstrate "strong ambition to accelerate the low-carbon transition" in the economies where EBRD operates, particularly in those that rely heavily on fossil fuels and coal for electricity and heating, Javorcik said. Certain gas projects can help to bring about a faster decline in Europe's CO2 emissions and ensure energy security while accelerating the deployment of renewables, Javorcik said. In many countries where the EBRD operates "the usage of energy per capita in residential heating and residential appliances is lower than in advanced Europe", but CO2 emissions per capita are roughly equal to or higher than in western Europe, according to the bank. "So, in other words, energy sources in our countries of operations are more intensive in emissions which makes their decarbonisation more challenging and it is why in some cases selective gas projects can support acceleration of the energy transition," Javorcik said. Europe is "well positioned in terms of gas supply" for the next year thanks to the historically high storage inventories at the end of gas winter as well as the prolonged decline of gas use, Javorcik said. "The good news is that prices of LNG in Europe are back to the average level of 2017-21. The bad news is that prices of natural gas in Europe are about four times as high as natural gas in the US," Javorcik said, stressing that it reduces "European competitiveness". Industrial exports from western Europe, in particular Germany, may also remain relatively low in the coming year, which will influence gas demand in the region. "In turn, less positive growth in western Europe translates into lower demand for imports from emerging Europe." "There is also a risk if Donald Trump becomes the new president, the US will impose a 10pc tariff on European exports as has been promised by Trump," Javorcik said. UK bank Barclays has decided not to provide project or other direct finance for existing clients' upstream oil and gas expansions. The bank also said that it would no longer finance new energy clients if more than 10pc of their planned oil and gas capital expenditure is in expansion. Other banks, including HSBC, BNP Paribas and Societe Generale, have promised to stop or limit new oil and gas financing. By Alexandra Vladimirova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Gunvor set for buying spree after windfall: CEO


12/04/24
News
12/04/24

Gunvor set for buying spree after windfall: CEO

London, 12 April (Argus) — Trading firm Gunvor plans to use part of a massive earnings windfall over the past two years to build out its asset base, its chief executive Torbjörn Törnqvist told Argus . "Today, we are under-invested in assets so we will change that," Törnqvist said, adding that investments would be broad based and to some extent opportunistic. "We will employ quite a lot of capital in investments." Independent commodity trading companies are sitting on unprecedented piles of cash after two years of bumper earnings arising from supply chain disruptions and market volatility. While Geneva-based Gunvor is smaller than its peers Vitol, Trafigura and Mercuria, it is still a huge company by most metrics. It reported revenues of $127bn in 2023 and a profit of $1.25bn, following a record $2.36bn in 2022. It has kept most of its earnings in house and had an equity position of almost $6.16bn by the end of 2023 — its highest ever. Törnqvist is eyeing further growth. "We will definitely be a much bigger company, that I can say," he replied when asked where he saw Gunvor in 10 years' time. "I think we will grow in tune with the [energy] transition." Trading firms are looking for ways to keep their competitive advantage, particularly given the uncertainties associated with the energy transition. One emerging trend is an appetite for infrastructure. Vitol is in the process of buying a controlling stake in Italian refiner Saras, which operates the 300,000 b/d Sarroch refinery in Sardinia. Trafigura said this week that it is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast. Part of the rationale behind these moves is to increase optionality and take advantage of the loss of Russian products to the European market, as well the closure of large chunks of local refining capacity. Gunvor owns the landlocked 100,000 b/d Ingolstadt refinery in Germany and a 75,000 b/d refinery in Rotterdam, where it plans to shift away from fossil fuel use. "Many oil refineries have been up for sale and still are," Törnqvist said. Asked if Gunvor was looking for something similar, he said the company is interested in the "right opportunity" whether in upstream, downstream, midstream or shipping. "It all feeds into what we are doing and all supports our underlying trading," he said. But Törnqvist suspects a lot of Gunvor's growth will come from gas and power — areas where trading companies are already seeing rising profits. The company made its first investment in a power generation asset late in 2023, when it agreed to buy BP's 75pc stake in the 785MW Bahia de Bizkaia combined-cycle gas turbine plant in Bilbao, Spain. It has signed a slew of LNG offtake agreements in the past year and continues to grow its LNG tanker fleet . "We're building logistical capabilities in LNG," Törnqvist said. "Oil is here to stay" Törnqvist said Gunvor is well placed to navigate the energy transition, and is stepping up investments in renewables and biofuels and expanding into carbon and metals trading. "There will be disruptions, there will be different paths to the transition in different parts of the world which go at different paces and have different priorities and ways to deal with it," he said. "This will create opportunities." But Törnqvist is clear that oil and gas will remain an integral part of Gunvor's business. "We feel that oil is here to stay," he said. "And it will grow for several years." By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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