Australia’s Santos joins OGCI zero methane initiative

  • Market: Emissions, Natural gas
  • 21/02/24

Australian independent Santos has signed the Aiming for Zero Methane Emissions initiative, which seeks "near-zero" methane emissions by 2030 from signatories' operated oil and gas assets.

The project, which now has 23 signatories, was launched in March 2022 by the Oil and Gas Climate Initiative (OGCI) — a group of 12 major oil and gas companies.

Santos has operations in Australia, Papua New Guinea, Timor-Leste and the US. The company produced 92.2mn bl of oil equivalent in 2023 and has set a target of net zero emissions across scopes 1 and 2 by 2040 for its equity share.

The company is also looking to develop three carbon capture and storage (CCS) hubs offshore Australia, which could have a total future storage capacity of up to 35mn t/yr of CO2 — though Santos did not provide a timeframe. Its Moomba CCS project is 80pc complete and the first CO2 injection is expected in the middle of this year.

Santos today also formally endorsed a World Bank initiative to eliminate routing flaring from oil operations by 2030. Santos will "will develop and implement plans to achieve its commitment under this initiative", it said. It will also report "flaring and improvement progress" to the World Bank on an annual basis, from 2025.

The recent UN Cop 28 climate summit, in November-December 2023, placed scrutiny on oil and gas producers' emissions reduction plans. Companies representing over 40pc of global oil production pledged to cut emissions — including methane to "near zero" by 2030. The summit saw renewed focus on methane emissions, although the frameworks are voluntary.


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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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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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Central Petroleum signs Australian NT gas supply deal


12/04/24
News
12/04/24

Central Petroleum signs Australian NT gas supply deal

Sydney, 12 April (Argus) — Australian independent Central Petroleum has announced a gas supply agreement with Northern Territory (NT) government-owned utility Power and Water Corporation (PWC) to the end of 2024. The Mereenie gas project will supply 8.6PJ (230mn m³) to PWC, which is struggling for supplies from Italian energy firm Eni's Blacktip field offshore the NT that supplies the NT's gas-fired power generation and to private-sector customers, Central said on 12 April. The lack of oversupply in the NT, Australia's smallest jurisdiction by population, means insufficient flows exist to operate the Jemena-operated 90 TJ/d (2.4mn m³/d) Northern gas pipeline linking the NT and Queensland state. Mereenie has effectively curtailed production by 10-15 TJ/d, Central said, but it expects tail gas from Australian independent Santos' offshore Bayu-Undan field to fall in the coming months, enabling Mereenie to increase supplies. Bayu-Undan exported its final cargo through the 3.7mn t/yr Darwin LNG (DLNG) late last year , ahead of preparatory works for backfill through Santos' delayed Barossa project that is currently 70pc complete. DLNG was supplying about 25-35 TJ/d to domestic customers in the NT last month from the depleting Bayu-Undan. A unit of Australia's Macquarie Bank owns 50pc of Mereenie in the NT's onshore Amadeus basin, with operator Central holding 25pc, while 17.5pc is controlled by upstream firm New Zealand Oil and Gas and the remaining 7.5pc by domestic independent Cue Energy. Blacktip started production in 2009 and has an agreement with PWC for an initial 23 PJ/yr, increasing to 37 PJ/yr or nearly 750PJ across its production life of 25 years, which means it should produce up until 2034. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Australia's Woodside pulls oil, gas stakes from sale


12/04/24
News
12/04/24

Australia's Woodside pulls oil, gas stakes from sale

Sydney, 12 April (Argus) — Australian independent Woodside Energy has decided against selling stakes in its offshore Macedon domestic gas venture and Pyrenees oil project, following a sales process that began in mid-2023. Woodside said following completion of the sale process it has decided to retain its current ownership in both Carnarvon basin assets, adding that Macedon continues to be a critical supply source of gas to the Western Australian domestic market. Singapore-listed oil and gas firm Jadestone Energy revealed in February it was a participant in the sale being managed by investment bank Morgan Stanley. The fields were acquired as part of Woodside's takeover of BHP's petroleum division in 2022, producing about 28,000 b/d of oil equivalent during July-December 2023. Woodside holds a 64.86pc interest in Pyrenees and a 71.4pc stake in Macedon. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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