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Colombia needs to double oil reserves: Duque

  • Market: Crude oil, Natural gas
  • 15/11/18

Colombia must discover about 2bn bls of new crude reserves to remain self-sufficient, said Colombian President Ivan Duque, with unconventional resources providing the best opportunities.

Duque acknowledged that a "rigorous scientific debate" should be carried out before using hydraulic fracturing to tap such resources, but not an ideological one.

"We cannot accept demagogic discussions that demonize the economy of the country, and those which do not allow the development of the hydrocarbon sector," Duque said during the opening of the country's first comprehensive oil and gas summit held in Bogota.

Colombia's State Council, the highest administrative court, temporarily suspended norms governing hydraulic fracturing on 9 November, citing the production method's potential impact on the environment and human health.

The decision runs up against a campaign by Duque and oil industry groups to pursue unconventional oil drilling. They argue that Colombia needs to consider fracking as a way to sustain hydrocarbon production and government revenue in the form of taxes and royalties.

Colombia's oil self-sufficiency is expected to last until only 2023, a date the government has been able to postpone from the original forecast of 2009 thanks to the discovery of small oil fields. The country's proven crude reserves stood at 1.78bn at the end of the 2017, according to the oil chamber ACP.

Last week, the government appointed a commission to study and make recommendations for initial exploration in unconventional areas.

The State Council suspended Decree 3004 of 26 December 2013 and Resolution 90341 of 27 March 2014, which established norms governing unconventional exploration and production.

The debate should involve both the environmental and hydrocarbon sectors concurrently and ensure protection for water supply, Duque said.

Environmental groups, such as the umbrella group Colombia Free of Fracking, argue that the technique harms fresh water supplies. They say Colombia is among the countries most vulnerable to climate change, and should focus on cleaner energy.

The Ministry of Mines and Energy is readying an appeal at the State Council to seek a reversion of the initial ruling, Colombian oil chamber (ACP) president Francisco Lloreda said today.

Duque said Colombia must achieve the guarantees for fracking, like a stable legal framework, that have been achieved in other countries.

Duque meanwhile warned that the country needs more exploration, more efficiency among oil companies and more technological innovation.

Meanwhile, the president of Colombia's largest coal miner Drummond, Jose Miguel Linares, told Argus that the State Council decision will postpone plans to start production of coal-bed methane (CBM) gas under its Loma association and production contract.

Drummond had expected to produce as much as 14mn cf/d of gas by 2021-2022 at the Caporo project in the Caribbean province of Cesar, which will allow the miner to run the firm's coal operations that consume 13mn-14m cf/d , and become a self-producer of electricity.

Drummond has invested $43mn to explore CBM at La Loma, according to information from the company.

Caporo is expected to produce 6.3mn cf/d in the initial phase.


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19/09/24

LNG-burning vessels well positioned ahead of 2025

LNG-burning vessels well positioned ahead of 2025

New York, 19 September (Argus) — Vessels outfitted with dual-fuel LNG-burning engines are poised to have the lowest marine fuel expense heading into 2025 when the EU will tighten its marine EU emissions trading system (ETS) regulations and add a new regulation, " FuelEU", from 1 January 2025. Considering both regulations, at current price levels, fossil LNG (also known as grey LNG) will be priced the cheapest compared with conventional marine fuels and other commonly considered alternative fuels such as biodiesel and methanol. The EU's FuelEU maritime regulation will require ship operators traveling in, out and within EU territorial waters to gradually reduce their greenhouse gas (GHG) intensity on a lifecycle basis, starting with a 2pc reduction in 2025, 6pc in 2030 and so on until getting to an 80pc drop, compared with 2020 base year levels. The FuelEU GHG intensity maximum is set at 85.69 grams of CO2-equivalent per MJ (gCO2e/MJ) from 2030 to 2034, dropping to 77.94 gCO2e/MJ in 2035. Vessel pools exceeding the FuelEU's limits will be fined €2,400/t ($2,675/t) of very low-sulphur fuel oil (VLFSO) energy equivalent. GHG emissions from grey LNG vary depending on the type of marine engine used to burn the LNG, but ranges from about 76.3-92.3 gCO2e/MJ, according to non-governmental environmental lobby group Transport & Environment. This makes a number of LNG-burning, ocean-going vessels compliant with FuelEU regulation through 2034. The EU's ETS for marine shipping commenced this year and requires that ship operators pay for 40pc of their GHG generated on voyages within, in and out of the EU. Next year, the EU ETS emissions limit will increase to 70pc. Even with the added 70pc CO2 emissions cost, US Gulf coast grey LNG was assessed at $639/t VLSFOe, compared with the second cheapest VLSFO at $689/t, B30 biodiesel at $922/t and grey methanol at $931/t VLSFOe average from 1-18 September (see chart). "In 2025, we expect [US natural gas] prices to rise as [US] LNG exports increase while domestic consumption and production remain relatively flat for much of the year," says the US Energy Information Administration. "We forecast the Henry Hub price to average around $2.20/million British thermal units (mmBtu) in 2024 and $3.10/mmBtu in 2025." Provided that prices of biodiesel and methanol remain relatively flat, the projected EIA US 2025 LNG price gains would not affect LNG's price ranking, keeping it the cheapest alternative marine fuel option for ship owners traveling between the US Gulf coast and Europe. LNG for bunkering global consumption from vessels 5,000 gross tonnes and over reached 12.9mn t in 2023, according to the International Maritime Organization (IMO), up from 11mn t in 2022 and 12.6mn t in 2021. The maritime port authority of Singapore reported 111,000t of LNG bunker sales and the port authorities of Rotterdam and Antwerp reported 319,000t in 2023 from all size vessels. Among vessels 5,000 gross tonnes and over, LNG carriers accounted for 89pc of LNG bunker demand globally, followed by container ships at 3.6pc, according to the IMO. The large gap between LNG global and LNG Singapore, Rotterdam, and Antwerp bunker demand, is likely the result of most of the demand taking place at the biggest LNG export locations where LNG carriers call, such as the US Gulf coast, Qatar, Australia, Russia and Malaysia. By Stefka Wechsler USGC bunkers and bunker alternatives $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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19/09/24

US court asked for third Citgo auction extension

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Industry decarbonization talks mark progress: EDF


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19/09/24

Industry decarbonization talks mark progress: EDF

Houston, 19 September (Argus) — Growing decarbonization discussions in the oil and gas industry is a sign that momentum is building toward reducing emissions, according to Mark Brownstein, senior vice president of energy transition for the Environmental Defense Fund (EDF). Brownstein, speaking on the sidelines of the Gastech conference in Houston, Texas, noted a "robust conversation" was happening to address CO2 and methane emissions from natural gas use, which was "something you would not have seen five years ago." "Now, what would really make me happy, is to come back here next year, and see that it's not just talk," he said. "That there's real investment, that there's real action and that we're actually beginning to see emissions of methane and other pollutants going down." Brownstein noted that more than 70 companies in the oil and gas industry have committed to the COP 28 decarbonization charter to get to near-zero methane emissions by 2030. "That is a commitment that needs to be expanded to all players," he said. "A commitment that needs to be expanded by investment and real action. I believe the industry can do it. But of course you need to see it." Earlier this year the EDF helped launch MethaneSAT, a satellite that will allow for real-time monitoring of global methane emissions, aimed at bringing transparency to global emissions data. By David Haydon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Fed rate cuts 'no bearing' for CCUS: NET Power


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Small private Libyan firm exports oil through blockade


19/09/24
News
19/09/24

Small private Libyan firm exports oil through blockade

London, 19 September (Argus) — A small Libyan private firm appears to have been granted an exemption from an oil blockade, which has more than halved the country's exports. Arkenu Oil, which describes itself as a private oil and gas development and production firm, is scheduled to export 1mn bl of Sarir and Mesla crude from Marsa el-Hariga to Italy's Trieste on the Maran Poseidon, according to an official document seen by Argus . The tanker has been chartered by Turkish trader BGN and is currently loading its cargo. This is the first Arkenu shipment set to be exported since the country's eastern-based administration ordered a blockade on oil fields and terminals on 26 August in response to an attempt by its rival administration in the west to replace the central bank governor. It is also Arkenu's third known shipment since July. Arkenu exported a 1mn bl cargo on the Zeus on 10 July and another 1mn barrel cargo on the Yasa Polaris on 16 August, according to official documents and ship-tracking data. These were also Sarir and Mesla grade. Arkenu's exports are significant given that crude sales have historically been the preserve of NOC and a handful of international oil firms that hold stakes in the country's upstream such as Eni, TotalEnergies and OMV. Arkenu, which is based in the eastern city of Benghazi, is supposedly able to export its own crude based on an agreement with NOC which allocates it an unspecified share of production from its subsidiary Agoco's Sarir and Mesla fields in return for carrying out work to boost output at the sites. But there remain questions related to the legality of the deal, the nature of the work Arkenu is supposed to be carrying out and the company's technical capabilities. The three known Arkenu cargoes are worth around $240mn at prevailing market rates, Argus estimates. There has been no increase to Agoco's production capacity since the Arkenu deal was struck, one Libyan oil industry source said. Sarir and Mesla accounted for most of Agoco's roughly 280,000 b/d output in 2023. Arkenu and NOC have yet to reply to a request for comment. "The Haftar family is deliberately and selectively allowing crude exports that generate dollars outside the Libyan state, and they are doing so within the context of a blockade they imposed," said Jalel Harchaoui, a Libya specialist at the UK's Royal United Services Institute. "While the Libyan state struggles to figure out how to import food and medicine next month owing to the central bank crisis, the Haftars' strange oil blockade permits crude exports that profit a private Libyan entity," Harchaoui added. The leadership crisis at the central bank has degraded Libya's ability to carry out international financial transactions. "The only beneficiary from these Mesla and Sarir sales is an unknown private Libyan company with an account in Switzerland and the UAE, with zero dollars being deposited in the state," the oil industry source added. General Khalifa Haftar's Libyan National Army (LNA) controls the country's east and southwest and is the real force behind the blockade. Haftar is understood to be allowing some exports to continue as long as these revenues do not reach the central bank in Tripoli, which is controlled by the rival administration in the west. Libya's crude exports have averaged 410,000 b/d so far this month, according to Kpler. While this is well below pre-blockade levels of around 1mn b/d, it is well above levels seen in some past blockades. Rising exports in recent days suggests Libya's total crude production has picked up from an earlier Argus estimate of around 300,000 b/d to possibly around 500,000 b/d. Libya was producing 1mn b/d before the blockade. 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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