US shale in 'dire' state on supply chain woes: Oxy
The US shale sector is in a "dire" position and will find it hard to raise production enough to address global demand growth, in part because of supply chain headaches prompted by Covid-19, according to Occidental Petroleum.
"We are in a dire situation," chief executive Vicki Hollub told CERAWeek by S&P Global conference today in Houston, Texas. "We have never seen a scenario where we need to grow production when supply chains in every industry are being impacted by the pandemic."
Russia's invasion of Ukraine on 24 February has sparked concerns over an already tight crude market and sent prices up to 14-year highs this week. New supply opportunities have opened as buyers and governments turn away from Russian exports amid the invasion, while Opec+ earlier this month decided against raising production beyond 400,000 b/d monthly production increases already in place.
But the pandemic has left the US shale sector in no position to add supply of its own as companies struggle to access people and equipment needed to drive growth, Hollub said.
"Everybody came into this year just wanting to keep production pretty much flat and nobody really prepared in advance for significant growth coming over this year as a part of the recovery," Hollub said.
"And if you did not plan for growth, you are not going to be able to achieve growth today."
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Dangote seeks 2mn bl/month WTI crude for 12 months
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London, 16 May (Argus) — Nigeria's 650,000 b/d capacity Dangote refinery has issued a tender for the supply of 2mn bl of US WTI crude each month, for 12 months starting in July, according to a tender document seen by Argus . Dangote will accept offers on a delivered cif basis to Lekki, Nigeria, and on a fob basis from Houston and Corpus Christi, Tx. It was not stated whether the fob offers would be against WTI or Brent. The tender closes on 21 May. Dangote came online at the end of 2023 and its throughout capacity is planned to reach around 350,000 b/d a its first phase of operations. The refinery received its first crude cargo on 6 December and since then deliveries have averaged 179,000 b/d, according to data from Vortexa. Light sweet WTI accounted for 42,000 b/d, or 23pc of the total. By Lina Bulyk and Kuganiga Kuganeswaran Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Eni cuts scope 1, 2 upstream emissions by 40pc in 2023
Eni cuts scope 1, 2 upstream emissions by 40pc in 2023
Edinburgh, 15 May (Argus) — Italy's Eni said today that it has cut its net scope 1 and 2 emissions in the upstream sector by 40pc in 2023, compared with a 2018 baseline. Eni has also cut scope 1 and 2 emissions by 30pc for the whole business during the same period, it said. Scope 1 refers to emissions directly stemming from an organisation's activity, while scope 2 refers to indirect emissions from purchased energy. The firm has a target to be net zero upstream for scope 1 and 2 emissions by 2030, and by 2035 for the whole company. It also has a goal of being net zero across all its businesses, including scope 3 emissions that are generated by use of its products, by 2050. Eni said it agrees with the UN Cop 28 deal struck by almost 200 countries in Dubai last year, and for "the need for the energy transition to take place in a fair, orderly, just and pragmatic manner". But it added that this includes expanding its gas portfolio, as well as investing to reduce emissions from oil and gas output. It said investing in gas is "a bridging vector in the energy transition pathway", citing the acquisition of Neptune Energy and the start of LNG production in Congo (Brazzaville). Eni completed the purchase of assets of gas-focused UK-based independent Neptune Energy in January. The Cop 28 agreement acknowledges the need to transition away from fossil fuels in energy systems "so as to achieve net zero by 2050 in keeping with the science", but it also "recognises that transitional fuels can play a role in facilitating the energy transition while ensuring energy security". Some climate non-governmental organisations and countries particularly vulnerable to the effect of climate change have warned that this could create loopholes benefiting the development of fossil fuel resources, including natural gas. Eni in March said that it has cut its spending plans by around 20pc through to 2027 as it looks to focus on the quality of upstream projects and streamlined development to grow its oil and gas production by an annual 3-4pc. "Natural gas will continue expanding its share of production," Eni chief executive Claudio Descalzi said. The firm is also looking to raise its renewable energy capacity to 4GW this year from 3GW at the end of last year, and then double this to more than 8GW by 2027. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US inflation slows broadly in April
US inflation slows broadly in April
Houston, 15 May (Argus) — US consumer price gains eased in April, with core inflation posting the smallest gain in three years, signs the economy is slowing in the face of high borrowing costs. The consumer price index (CPI) rose by an annual 3.4pc in April, easing from 3.5pc over the prior 12-month period, the Labor Department reported on Wednesday. Core CPI, which strips out volatile food and energy, rose by 3.6pc, slowing from 3.8pc the prior month. The easing inflation comes as the Federal Reserve has pushed back the expected start of interest rate cuts after holding its target rate at a 23-year high since July 2023 as the US economy has continued to grow and generate jobs at greater than expected rates. Job growth however slowed to 175,000 in April, the lowest since October 2023, and job openings and wage gains have also slowed while a measure of manufacturing has contracted. The CME FedWatch tool boosted the probability of Fed rate cuts in September to about 72pc today from about 65pc on Tuesday. The energy index rose by 2.6pc over the 12 months ended in April, accelerating from 2.1pc. The gasoline index slowed to an annual 1.2pc in April from 1.3pc The food index rose by an annual 2.2pc, matching the prior month. Shelter slowed to 5.5pc from 5.7pc. Services less energy services slowed to 5.3pc from 5.4pc. Transportation services accelerated to an annual 11.2pc, led by insurance costs, from 10.7pc in the 12 months through March. On a monthly basis, CPI inflation slowed to 0.3pc in April from 0.4pc the prior two months. Core inflation slowed to 0.3pc from 0.4pc the prior three months. Energy held flat at a monthly 1.1pc. Services less energy services slowed to a monthly 0.4pc gain from 0.5pc. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Chinese importers seek five LNG cargoes for Jun-Sep
Chinese importers seek five LNG cargoes for Jun-Sep
Shanghai, 15 May (Argus) — Five Chinese importers, mostly second-tier buyers, are each seeking one LNG cargo for June-September delivery, according to an official notice published by China's national pipeline operator PipeChina on 15 May. The five importers are PipeChina, Chinese independent ENN, Hong Kong-listed city gas firm China Resources Gas, Hong Kong-based Towngas and state-owned China Gas. PipeChina and ENN have indicated a target price of at most $9.50/mn Btu for their intended cargoes, both for delivery to PipeChina's 6mn t/yr Tianjin terminal. China Gas has indicated a target price of at most $9.30/mn Btu for delivery to PipeChina's 6mn t/yr Beihai termial. China Resources Gas and Towngas have both indicated a target price of at most $9/mn Btu for delivery to PipeChina's 2mn t/yr Yuedong and Tianjin terminals, respectively. This consolidated requirement came about because of a need for PipeChina to better leverage on its infrastructure advantages and, at the same time, meet the varying needs of gas importers and consumers in the country. But this requirement comes at a time when spot LNG prices are still somewhat higher than the importers' targeted prices. But the importers can choose not to buy if offers are not within their expectations. The front-half month of the ANEA, the Argus assessment for spot LNG deliveries to northeast Asia, was last assessed at $10.485/mn Btu on 15 May. Chinese importers mostly perceive spot prices below $9-9.50/mn Btu for June-September deliveries to be unattainable for now because there is strong buying interest from south and southeast Asia in particular. Indian state-controlled refiner IOC most recently bought LNG for delivery between 22 May and 15 June at around $10.60/mn Btu, through a tender that closed on 14 May. Thailand's state-controlled PTT most recently bought three deliveries for 9-10 July, 16-17 July and 22-23 July through a tender that closed on 13 May , at just slightly above $10.50/mn Btu. The most recent spot transaction was Japanese utility Tohoku Electric's purchase of a 10-30 June delivery at around $10.55/mn Btu through a tender that closed on 14 May . This is at least $1/mn Btu higher than Chinese importers' indications. Summer requirements have so far been muted but concerns among buyers about potential supply disruptions remain. Malaysia's 30mn t/yr Bintulu LNG export terminal suffered a power loss on 10 May, but this issue may have been resolved as of early on 15 May, according to offtakers. Some unspecified upstream issues may still be affecting production at the Bintulu facility, resulting in Malaysia's state-owned Petronas having to ask some of its buyers for cargo deferments, according to offtakers. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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