Mexico crude exports up after Tula refinery outage
Mexican crude exports have bounced back in May after a power outage hit state-owned Pemex's 315,000 b/d Tula refinery last week, likely freeing more crude for the export market.
Crude exports rose to about 838,000 b/d so far in May, up by 18pc from full-month April but still 22pc lower compared with all of May 2023, according to trade analytics firm Kpler data.
The month-over-month hike was likely supported by a power outage at the Tula refinery on 13 May, which affected up to 20 processing plants, according to market sources.
It remains unclear if the refinery has resumed operations, but sources said the restart could take about two weeks.
The Tula refinery, which supplies refined products to Mexico City's metropolitan area, processed 246,500 b/d of crude in March, of which 182,000 b/d, or 74pc, was medium or light sour crude, according to the latest Pemex data.
Medium and light sour crude exports rose by 13pc to 336,000 b/d so far in May from the previous month, Kpler data show.
Additionally, fires at the Salina Cruz and Minatitlan refineries in late April could have also added to the uptick of crude exports.
Mexico this year trimmed crude exports to feed its domestic refineries as President Andres Manuel Lopez Obrador seeks to cut fuel imports in his final year in office, in line with his campaign promise to make Mexico more energy independent.
Pemex's six domestic refineries processed over 1mn b/d in March for the first time in almost eight years, driven by billion-dollar investments in maintenance since 2019 and the cut in crude exports.
The start-up of the new 340,000 b/d Olmeca refinery could further reduce crude exports, but the refinery still faces multiple delays.
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Q&A: Phillips 66 to balance fossil and renewable fuels
Q&A: Phillips 66 to balance fossil and renewable fuels
Houston, 14 June (Argus) — With Phillips 66's Rodeo, California, refinery expected to ramp up to over 50,000 b/d of renewable fuels production by the end of this quarter, all eyes are on the refiner for what is next. Zhanna Golodryga , executive vice president of emerging energy and sustainability for Phillips 66, talked to Argus at the refiner's Houston headquarters about how the company looks at investments, its focus on sustainable aviation fuel (SAF) production and why Texas might be the Silicon Valley of the energy transition. The conversation has been edited for clarity and length. When Rodeo reaches full capacity, it will represent about 3pc of your overall output. What will your fleet look like longer-term and what will be the renewables/petroleum split? Not all the refineries in our portfolio are created equal, and when we look at them what I call them is "lower-carbon energy hubs". Not low, lower, because it's going to be a combination of everything. We're looking at the assets we have in the portfolio and what we can do to help bring in lower carbon solutions and what can we build out. Our focus is going to continue to be SAF. We understand the limitations of feedstocks and we have a very strong commercial organization that is now working on providing feedstocks just for Rodeo. But we're also thinking about what we can do to bring in different feedstocks. Energy transition opportunities aren't going to replace our traditional fossil fuel refining. It's an "and", not an "or". You've highlighted a future focus on SAF. Does that mean a move away from renewable diesel (RD)? I think we have flexibility to do both and it will be market driven going forward. We have to look at demand but there is demand for SAF globally, not just in the US. Demand for gasoline is not as strong as demand for diesel and sustainable aviation fuel. That is what our focus is and then we want to diversify the feedstock. What is your outlook for RD? I think RD is here for quite some time. It's hard to predict what's going to happen by 2050 but I think we will have the demand. It's going to take a long time to electrify all future transportation. I think we have a much better opportunity for now to focus on what we're really good at. That's fuels, renewable fuels. You have faced activist investor pressure calling for Phillips 66 to focus on its core refining business. How do investors feel about the Rodeo conversion and your future plans? We have taken a pragmatic approach to the energy transition. We have criteria that we follow prior to taking any projects over the line, specifically the energy transition type projects. They must meet five key prerequisites: the right returns, the right technology that has been proven at scale, the right regulatory environment, preferably involve a partnership and be done at the right time. We have to prove with Rodeo that this is, as I call it, our license to continue to grow the business. This is our license to operate additional energy transition business. This one is going to be done extremely well. What are the policy tailwinds and headwinds to your renewables investments? When we look at our opportunities in our energy transition portfolio, we are building our economic model for them to produce the right returns without any incentives. That is our starting point. On the other hand, the IRA [US Inflation Reduction Act] has been a bipartisan initiative and we think it's going to stand for the greater good of the planet. We have to think globally, as we have the Humber refinery in the UK. It's interesting for us to see what's possible in the US with the IRA incentives, versus more of a stick in Europe. But the challenge for us is permitting and timing. We probably could have brought Rodeo online sooner if we didn't have to wait for some permits. Our headquarters are in Texas and Texas is the "energy transition Silicon Valley". I'm repeating someone's words and those are the words of Bill Gates. But I believe that. We're perfectly positioned on the Gulf coast to go to the next phase and build something here. You've mentioned Phillips 66's 265,000 b/d Sweeny refinery in Old Ocean, Texas, as a low carbon energy hub. Does that mean it is a candidate for renewable fuel conversion or co-processing? It could be an option, maybe not at Sweeny, but in the Gulf coast, maybe Lake Charles. It's driven by our hardware, just like what we've done at Rodeo. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
S Africa's ANC, DA agree to form government
S Africa's ANC, DA agree to form government
Cape Town, 14 June (Argus) — South Africa's African National Congress (ANC) and Democratic Alliance (DA) political parties today agreed to form a government while the first sitting of the new parliament was underway. The agreement, which includes the Inkatha Freedom Party (IFP), paves the way for ANC leader Cyril Ramaphosa to be re-elected president. The parties will assume various positions in government broadly in proportion to their share of seats. The government of national unity (GNU) agreement is the result of two weeks of intense negotiations after the ANC lost its long-held majority in the national election on 29 May. It secured 40.2pc of the vote, and the centre-right, pro-market DA retained its position as the official opposition with 21.8pc. The deal scuppers the possibility of an alliance between the ANC and the two largest left-wing parties, MK (uMkhonto weSizwe) and the Economic Freedom Fighters (EFF), which credit ratings agency Fitch warned could pose risks to macroeconomic stability . MK party unseated the EFF in the election to come third, winning 14.6pc of the vote. The EFF secured 9.5pc, and the IFP came a distant fifth with 3.85pc. The MK and EFF are populist parties that campaigned on agendas including wide-scale land expropriation without compensation, nationalisation of economic assets — including mines, the central bank and large banks and insurers — halting fiscal consolidation and aggressively increasing social grants. The GNU parties agreed the new administration should focus on rapid economic growth, job creation, infrastructure development and fiscal sustainability. Other priorities include building a professional, merit-based and non-partisan public service, as well as strengthening law enforcement agencies to address crime and corruption. Through a national dialogue that will include civil society, labour and business, parties will seek to develop a national social compact to enable South Africa to meet its developmental goals, they said. The GNU will take decisions in accordance with the established practice of consensus, but where no consensus is possible a principle of sufficient consensus will apply. By Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK political parties repeat existing stances on energy
UK political parties repeat existing stances on energy
London, 13 June (Argus) — The two main UK political parties have set out their plans, including on energy and climate change, with just three weeks until the general election. Energy security and the cost to consumers is a recurring theme for both, but the manifestos present some marked differences in approach to the energy transition. Both the incumbent Conservative and opposition Labour parties doubled down on existing positions in their respective manifestos. The Conservative party said that it remains committed to the UK's 2050 net zero emissions target, but promises a "pragmatic and proportionate" route. The party's manifesto guarantees "no new green levies or charges while accelerating the rollout of renewables". The UK's net zero goal is legally-binding, and was passed with significant cross-party support under a Conservative government in 2019. The Conservatives have been in power since 2010, and fielded five prime ministers in that time. Recent polling data show a substantial lead for Labour, which performed well at local elections in May. Labour placed strong focus on the opportunity the transition offers, saying that it would place the UK at the "forefront of climate action by creating the green jobs of the future at home and driving forward the energy transition on the global stage". The party has committed to zero-carbon power by 2030, although it would "maintain a strategic reserve of gas power stations to guarantee security of supply", it said. The Conservative manifesto reiterates the party's plans to build new gas-fired power plants. The party had previously committed to a decarbonised power grid by 2035, in line with a G7 pledge, although that is not mentioned in its manifesto. The two main parties clearly diverge on their approaches to North Sea oil and gas production. The Conservatives aim to keep the windfall tax — which effectively results in a 75pc rate — on oil and gas producers in place "until 2028-29, unless prices fall back to normal sooner". Labour confirmed plans to lift the rate to 78pc and run the tax until the end of the next parliament, which is likely to be mid-2029. Labour is also clear that it "will not revoke existing licences" in the North Sea, but it will not issue any new licences — for oil, gas or coal. The Conservatives restated the party's aim to legislate for annual North Sea licensing rounds . Both parties back nuclear energy, including small modular reactors — though those are unlikely to be operational until after 2030. And both pledge to cut planning bureaucracy and tackle grid connections. Labour's plans to "double onshore wind, triple solar power, and quadruple offshore wind by 2030" would result in installed capacity of 31GW, 48GW and 59GW, respectively, from a baseline of end-2023. The Conservatives' target to triple offshore wind by the end of the next parliament would put installed capacity at 44GW in 2029 — below the 50GW target for 2030 set in 2022 — while it said it supports solar and onshore wind in some circumstances. Finance in focus Both parties are keen to pull in private-sector investment, while Labour took up an original Conservative pledge to "make the UK the green finance capital of the world". And both pledge to address the cost of energy for consumers — Labour through local power generation projects and home insulation upgrades, and the Conservatives by ruling out any further "green levies". The latter plans to reverse London's expansion of the ultra-low emissions zone — originally planned by Conservative then-mayor and later prime minister Boris Johnson. Labour said that it would restore a phase-out date of 2030 for new internal combustion engine cars — which prime minister Rishi Sunak in September pushed back to 2035 . On an international level, both parties mention climate leadership at summits such as UN Cops. The Conservatives pledged to "ring-fence" the UK's climate finance commitments, while Labour committed to restore development spending to 0.7pc of gross national income "as soon as fiscal circumstances allow". By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Opec reopens rift with IEA on peak demand
Opec reopens rift with IEA on peak demand
London, 13 June (Argus) — Opec today reopened a rift with the IEA about the future need for oil, calling the Paris-based agency's forecast for peak demand this decade a "continuation of [its] anti-oil narrative." Opec secretary-general Haitham Al Ghais said the IEA's projection , made earlier this week, is a "dangerous narrative" that "will only lead to energy volatility on a potentially unprecedented scale." He made his case in a commentary for consultancy Energy Aspects that Opec made publicly available. This is not the first time the two organisations have clashed over the future trajectory for oil demand growth. When IEA executive director Fatih Birol first floated the idea of a peak demand this decade in 2023, Al Ghais said this was "extremely risky and impractical". Birol and the IEA have been keen to stress that there will be no sharp demand fall beyond its predicted peak year of 2029, and have repeatedly said there will be a gradual decline perhaps over as long as 20 years. Al Ghais said Opec does not see peak oil demand by the end of the decade — he said in January that the scenario "is not showing up in any reliable and robust short- and medium-term forecasts" — and took issue with the IEA's forecasts for demand growth to 2030. The watchdog projects a sharp drop off in growth in 2026 to almost nothing in 2029 and a small contraction in 2030. Al Ghais called this unrealistic. The two bodies' demand estimates have been moving further apart in recent months, with Opec's forecast for growth this year now 1.3mn b/d more than that of the IEA. Birol this week acknowledged this is a "big gap", but was diplomatic when pressed for reasons. "We respect all institutions' forecasts," he said. "We will see at the end of the year what the numbers will be." Criticism of the IEA from the upstream industry has magnified since 2021, when the agency said that 2050 climate goals exclude the need for any new oil and gas fields. Saudi oil minister Prince Abdulaziz bin Salman described this as "la la land" analysis. This year the IEA has come under fire from Republicans in the US Congress who have said the agency is veering into climate advocacy. US industry body API chief executive Mike Sommers said earlier this year the IEA "has become, unfortunately, so politicized that it's just not a reliable source of data any more." By Ben Winkley Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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