Azerbaijan claims new pipeline attack thwarted
Azerbaijan claims to have thwarted an Armenian attack on the Baku-Novorossiysk crude export pipeline.
The country's general prosecutor's office says that Azeri air defence forces "neutralised" Armenian rockets fired in the direction of the Khizi region to the north of Baku. "Some parts of the missiles fell at a distance of 250m from the strategic Baku-Novorossiysk oil pipeline passing through the village Sitalchay," it said.
This information could not be verified. Azerbaijan says it was an attempt "to deliberately destroy a large number of infrastructure facilities, creating a dangerous environment for crude oil and export condensate pipelines, the destruction of which could cause significant material damage".
Armenia has denied targeting pipelines during the renewed conflict over the Nagorno-Karabakh region, which began on 27 September.
The 160,000 b/d Baku-Novorossiysk pipeline carries crude produced by Azerbaijan's state-owned Socar to the Russian Black Sea port of Novorossiysk. Shipments are scheduled at around 18,000 b/d in the fourth quarter.
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Cost remains key challenge to transition: ExxonMobil
Cost remains key challenge to transition: ExxonMobil
Houston, 18 March (Argus) — Society may want to see emissions reduced, but the challenge is that no one wants to pay for the energy transition, according to the chief executive officer of ExxonMobil. "And so if you don't pay for it, you can't engage the markets, you can't provide the incentives for what are very large capital investments," Darren Woods said today at the CERAWeek by S&P Global conference in Houston, Texas. Although government incentives -- such as those pushed by the Inflation Reduction Act in the US -- are helping, at some stage market forces need to be in a position to take over. "As a company, I am not real keen on building businesses based on government subsidies," Woods said. "That's not a sustainable business model." The challenge for hydrogen in particular is there is not a "huge incentive" to drive forward low-carbon projects over existing sources. Woods also defended a lawsuit the company is pursuing against two activist investors who had pressed for ExxonMobil to set more ambitious emissions targets, even though they have since pulled the proposal. Investment company Arjuna Capital and Dutch activist group Follow This had been seeking a a shareholder vote on a motion urging ExxonMobil to target more ambitious Scope 3 emissions, "These are not legitimate investors -- they are activists," Woods said. "These activists have no interest in the economic wellbeing of our company." The shareholder proxy process that involves the US Securities and Exchange Commission has been "hijacked to the detriment of our shareholders," he added. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Aramco chief decries 'fantasy' of phasing out oil
Aramco chief decries 'fantasy' of phasing out oil
Washington, 18 March (Argus) — Oil and gas will remain the backbone of the global energy system for decades to come, state-controlled Saudi Aramco's chief executive Amin Nasser told CERAWeek by S&P Global conference. Just a year ago, Nasser's UAE counterpart, Adnoc chief executive Sultan al-Jaber exhorted the oil industry leaders at CERAWeek to step up efforts to decarbonize their operations and the global energy system. But Nasser's message appears to have been received more warmly in Houston. "We should abandon the fantasy of phasing out oil and gas and instead invest in them, adequately reflecting realistic demand assumptions," Nasser said, drawing a round of applause. Conversations on energy transition are led by the advanced economies, ignoring the needs of emerging economies that have accounted for most of the growth in oil and gas demand, Nasser said. The so-called "global south" accounts for the majority of the world's population and energy demand growth, but draws just a fraction of global investments in renewable capacity, Nasser said. "These nations cannot afford expensive energy solutions." Despite the development of renewable alternatives, focusing on reducing emissions from hydrocarbons produces better results in cutting back greenhouse gas, Nasser said. Aramco itself plans an ambitious gas production growth, in part to reduce the use of oil in domestic power generation. "The future of energy transition in Indonesia is gas," Indonesia's energy ministry director general Tutuka Ariadji told a different CERAWeek panel today. Aramco is still keen to pursue hydrogen production agreements with partners in South Korea and Japan, but high costs are an issue, Nasser said. Aramco estimates the cost of producing hydrogen produced from natural gas with carbon capture at oil-equivalent $200/bl, while renewable hydrogen production costs are oil-equivalent $400/bl, Nasser said. "Our partners, our customers, especially in Japan and Korea, are waiting for government incentives" before moving forward on those projects, he said. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iran awards key oil projects due to deliver 400,000 b/d
Iran awards key oil projects due to deliver 400,000 b/d
Dubai, 18 March (Argus) — Iran's state oil company NIOC awarded contracts worth a combined $13.4bn to domestic oil and gas contractors to lift the country's crude production capacity at six fields close to Iran's border with Iraq by 350,000-400,000 b/d. "We are [today] implementing some of the projects defined in the seventh national development plan [2023-28], which will help us achieve our 8pc economic growth target," NIOC managing director Mohsen Khojasteh-Mehr said. The biggest of the deals, valued at $11.5bn, was signed with a consortium of nine domestic exploration and production companies and banks known as Dasht Azadegan Arvand to develop the giant Azadegan oil field, one of several oil fields that make up the key West Karun cluster. The Azadegan field shares a reservoir with the Majnoon field across the border in Iraq. NIOC did not specified to what level the consortium had committed to lift production, saying only that the contract obliged the group "to extract 2.6bn bl" over its 20-year lifespan. But the preliminary agreement NIOC signed with Dasht Azadegan Arvand in 2022, on which this latest deal has been built, called on the group to lift production to 550,000 b/d, from 205,000 b/d. Azadegan's output has risen since to stand at around 270,000 b/d, according to Argus estimates, implying that an increase of around 280,000 b/d in capacity remains for the consortium to deliver. The second most significant deal, worth $1.36bn, was signed with Sarvak Azar Engineering and Development for the second phase development of the Azar oil field, also on Iran's border with Iraq, and part of the West Karun cluster. Azar shares a reservoir with the Badra field in Iraq, operated by Russia's Gazpromneft. Iran's state-owned OIEC delivered first production from the field in March 2017 at a rate of 15,000 b/d, and doubled production by September of that year. By the middle of 2021, output reached its phase one plateau target of 65,000 b/d . NIOC said that Sarvak Azar was obliged to extract 177mn bl over the 20-year life of the contract. Iran's former oil minister Bijan Namdar Zanganeh in 2021 said a second phase development of Azar would see production rising to "at least 100,000 b/d." The third agreement was with Iran's Gostar Sina Energy, for the $260mn second phase development of the 6.2bn bl Masjed Soleiman field in Iran's western Khuzestan province. Production from Iran's oldest field has declined significantly from its peak of above 100,000 b/d, with production now below 10,000 b/d. This 14-year agreement builds on an earlier preliminary agreement signed in 2022 to boost production by 9,000 b/d. The final two contracts, worth a combined $245mn, were signed with a consortium comprising two companies, Well Services Iran and PetroIranian Arvand, to produce a cumulative 40.4mn bl from three oil fields in Kermanshah province ꟷ Sumar, Saman and Delevaran ꟷ over 20 years. This agreement builds on an earlier preliminary deal, signed late last year, envisaging a 9,000 b/d increase in production. Light oil from these three fields is typically directed to the 150,000 b/d Anahita refinery as feedstock. Onwards and upwards Iran brought several upstream projects online in February taking its crude capacity above 3.9mn b/d, from 3.8mn b/d in late 2023. But output remains well below that at around 3.27mn b/d as the country continues to contend with US sanctions. This next batch of projects could lift crude capacity further to as high as 4.2mn-4.3mn b/d, a level Iran has not produced at sustainably for several decades. Iran has very ambitious plans to boost its crude capacity to 5.7mn b/d by 2028, but it will struggle to deliver anything close to that unless sanctions are lifted, allowing foreign companies and investment back to the country. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iraq, Turkey agree security deal signalling better ties
Iraq, Turkey agree security deal signalling better ties
Dubai, 15 March (Argus) — Turkey and Iraq say they have reached a landmark deal to tackle the security threat posed by the Kurdistan Workers' Party (PKK), a Kurdish separatist group cached on Iraq's northern border. The agreement, made at a security summit in Baghdad on 14 March, signals an improvement in ties and may increase the likelihood of a resolution to a dispute that is preventing crude flows resuming through the Iraq-Turkey pipeline. "The two sides stressed that the PKK organisation represents a security threat to both Turkey and Iraq," according to a joint statement issued late Thursday. The countries discussed measures against the group and decided to establish a permanent joint committee on combating terrorism, as well as dealing with trade, agriculture, energy, water, health and transportation issues. Turkey welcomed a decision by Iraq to label the PKK a "banned organisation", the statement said, although Baghdad stopped short of using the term "terrorist organisation". The PKK wants to establish an autonomous region in Turkey's largely Kurdish southeast. Turkey, the US and the EU view the group as a terrorist organisation, and Turkey has long sought to prevent the PKK from using mountainous areas in northern Iraq as a springboard for attacks. Turkey's defence minister said this week that Ankara and Baghdad are in talks to jointly crack down on the PKK's hideouts. Turkey is also aiming to create a security corridor up to 40km deep along its border with Iraq. Turkish president Recep Tayyep Erdogan is due to visit Iraq before the end of April. Erdogan and Iraqi prime minister Mohammed Shia al-Sudani have aspirations for a $17bn trade route stretching from Iraq's southern Basrah province to Turkey and on to Europe, and they are considering trying to convince Mideast Gulf countries to help finance it. Erdogan and al-Sudani see the corridor as an alternative to the India–Middle East–Europe Economic Corridor (IMEC) project, which was announced at the G20 summit in New Delhi last September. The multinational rail and shipping corridor will connect south Asia to the Middle East and Europe and reshape Eurasian connectivity. Iraq and Turkey fear being left out. The security deal and Erdogan's upcoming visit to Baghdad could pave the way for a resolution to a dispute that is preventing the restart of about 470,000 b/d of crude exports from Iraq's semi-autonomous Kurdistan region via the Turkish port of Ceyhan. Turkey ordered the pipeline that links oil fields in northern Iraq with Ceyhan to be closed a year ago after an international arbitration ruling said it had breached a bilateral agreement by allowing Iraqi Kurdistan crude to be exported without Baghdad's consent. Turkey is holding out on paying $1.47bn that the Paris-based International Chamber of Commerce said it owes Baghdad in compensation for breaching the pipeline deal. It is also seeking clarity about Iraq's position on a second arbitration case. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.