TotalEnergies mulls Nigerian onshore oil fields exit
TotalEnergies may sell its stake in Nigerian onshore oil licences because of community disruptions, the firm's chief executive Patrick Pouyanne said.
TotalEnergies holds 10pc in a joint venture operated by Shell's Nigerian subsidiary SPDC. With Shell having said last year it is planning to exit the onshore business in the west African country, Pouyanne said his firm will also put up for sale its interest.
"Disruptions by local communities were a source of great concern," Pouyanne said, causing a 25,000 b/d of oil equivalent (boe/d) decline in SPDC's production. "We will keep, however, the onshore gas licences of SPDC as they are critical to feed an LNG expansion," he said.
TotalEnergies also plans to divest "some non-strategic oil, particularly production that is high carbon intensity," to further rebalance its energy mix, Pouyanne said. The firm has plans to increase its oil and gas production by about 3pc/yr by 2026, driven by LNG, but has said its oil output will peak this decade, before declining, in line with its assumption that oil demand will peak by 2030.
SPDC has already divested around 50pc of its onshore Nigerian portfolio in the past decade as it grapples with long-running and persistent challenges of crude theft and pipeline sabotage, which it blames for oil spills.
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TMX is a fossil fuel subsidy of at least C$8.7bn: IISD
TMX is a fossil fuel subsidy of at least C$8.7bn: IISD
Calgary, 18 September (Argus) — Canada's newest crude pipeline to the country's west coast amounts to a fossil fuel subsidy of at least C$8.7bn ($6.4bn), a research and policy think-tank said. The federal government is unlikely to recover its C$34bn investment to construct the 590,000 b/d Trans Mountain Expansion (TMX) connecting oil producers in Alberta to the Pacific coast, qualifying the project as a major subsidy for the fossil fuel industry, according to the International Institute for Sustainable Development (IISD) on Wednesday. This runs contrary to the government's policy to eliminate direct support for the oil and gas sector , a goal Justin Trudeau's Liberals said was achieved in 2023. The government was the first G20 country to hit this milestone, following a 2009 commitment by the group to reach the goal by 2025. The subsidy as it relates to TMX could be as high as C$18.7bn, the Canadian non-profit said, but noted the entire amount could still be recovered by increasing tolls and/or implementing a levy. This levy could be against either all producers, or all shippers, of crude in the Western Canadian Sedimentary Basin (WCSB), whether they use TMX or not, the IISD suggested. About 90pc of Canada's crude production comes from western Canada, with much of that derived from Alberta's oil sands region. "A levy in the range of C$1-2/bl . . . over a 10-year period would be sufficient to recover the entire cost of the subsidy and the loss to the Canadian taxpayer," according to the IISD. Alternatively, fixed tolls on TMX would need to be more than doubled to C$24.53/bl from C$11.37/bl to recover all capital costs for the line that went into service on 1 May this year, according to IISD's figures. Variable tolls would be added to this. The terms in the original contracts signed between shippers and then-owner Kinder Morgan were no longer appropriate as they did not reflect the rising risks of the project, said the IISD. Kinder Morgan suspended the project in 2018, which led to the Canadian government buying both the expansion project and the original 300,000 b/d Trans Mountain line from US midstream company that same year. The federal government has maintained its plan to sell the pipeline once operational, but the final tolls are yet to be determined. Whether the operator or shippers will bear the brunt of the massive cost overruns is also still unknown. Tolls, representing cash flows for any prospective buyer, will help dictate the price that the expanded Trans Mountain system will fetch. The IISD suggests a sale price is likely to be between C$17.6bn-26.6bn, resulting in a net loss to the government of between C$8.9bn-18bn assuming its cost of investment climbs to nearly C$36bn before a sale is reached. But despite warnings by opponents it would go underused, TMX has been as advertised, opening a new frontier for oil sands operators and disrupting trade flows throughout the Pacific Rim. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hoekstra to face 'tough' EU parliamentary hearings
Hoekstra to face 'tough' EU parliamentary hearings
Brussels, 18 September (Argus) — EU climate commissioner Wopke Hoekstra, who has been nominated again for the role, is expected to face "tough" hearings in the European Parliament, according to a senior European official. The official told Argus that Hoekstra might have a "slight" advantage, as he underwent parliamentary hearings in 2023 when he took over fellow Dutchman Frans Timmermans' climate portfolio. At the time, Hoekstra was questioned extensively about past work with Shell and on climate issues. European Commission president Ursula von der Leyen put forward new commissioner candidates on 17 September, assigning Hoekstra the climate, net-zero, and clean growth portfolio. All candidates will undergo hearings before the EU parliament votes on the new commission line-up. Hoekstra has said he is "honoured and humbled", but formal appointment depends on how he performs during the hearings before the European Parliament's energy, environment and other committees. Hoekstra's mandate would include drafting legislation to enshrine a 90pc cut in greenhouse gas (GHG) emissions by 2040, from 1990 levels, into European law. The commission's 2040 target, revealed in February, referred to a "net GHG emissions reduction of 90pc". Hoekstra last year made a "personal" commitment to defend a "minimum target of at least 90pc" net GHG cuts. Von der Leyen has tasked Hoekstra with designing climate policies for the post-2030 period and developing an Industrial Decarbonisation Accelerator Act. Other key objectives include channelling investment toward net-zero infrastructure and ensuring revenues from the EU's emissions trading system (ETS) are used "effectively" to drive decarbonisation. Hoekstra's responsibilities extend to advancing a single market for CO2, boosting carbon removals for hard-to-abate sectors, and phasing out fossil fuel subsidies. Hoekstra would work closely with former Danish climate minister Dan Jorgensen, who is nominated for the energy and housing portfolio, if both are appointed. Jorgensen will be responsible for advancing the Electrification Action Plan for industrial transition and overseeing a roadmap to phase out Russian energy imports. He is tasked with ensuring the "full use" of joint procurement mechanisms, with a mandate to extend the current aggregated demand system from gas to include hydrogen and potentially other commodities. Supervising both Hoekstra and Jorgensen, in addition to von der Leyen, will be Teresa Ribera, Spain's former climate minister. Ribera has been nominated as executive vice-president for a clean, just and competitive transition. European Parliament officials expect to receive financial declarations and other procedural documents in the coming days. That will allow parliamentary committees to send written questions to Hoekstra and other nominated commissioners, officially kicking off the hearing process. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indian windfall tax on domestic crude output at zero
Indian windfall tax on domestic crude output at zero
Mumbai, 18 September (Argus) — India has reduced the windfall tax on domestic crude production to zero from a previous 1,850 rupees/t ($3/bl), in line with a fall in global oil prices. The new rate is effective from 18 September. The rate was last revised on 31 August when it was cut by 12pc . The rate is revised every two weeks. Global crude prices fell nearly 9pc during 1-18 September. The windfall tax was cut to zero during 4-19 April and 16 May-15 July 2023. The Indian government first imposed the windfall tax in July 2022 because of a sharp increase in crude prices that led to domestic crude producers making windfall gains. Indian producers sell crude to domestic refineries at international parity prices. India's crude production in August fell by 4pc from a year earlier to 520,000 b/d, oil ministry data show. Crude imports in August fell by 8pc from July and by nearly 1pc against a year earlier to 4.22m b/d in August, Vortexa data show. India has again extended a deadline to 21 September for submitting bids for the ninth bidding round under the Hydrocarbon Exploration and Licensing Policy's Open Acreage Licensing Programme, as it attempts to boost investment to lift domestic upstream output. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia issues regulation to build energy reserves
Indonesia issues regulation to build energy reserves
A strategic energy reserve comprising stocks of LPG, oil and gasoline could be ready by 2035 under a presidential decree, writes Prethika Nair Singapore, 17 September (Argus) — Indonesia's government has issued a presidential decree outlining plans to build strategic energy reserves, including LPG, by 2035. The decree sets out the goal of establishing stockpiles amounting to 9.64mn bl of gasoline, 10.17mn bl of oil and 525,800t of LPG within the next 11 years. "The government is aware of the importance of having sufficient energy reserves to handle risks such as global oil price fluctuations, natural disasters, or supply disruptions," Indonesian agency the National Energy Council's (NEC) secretary general, Djoko Siswanto, said on 6 September. "The provision of the [reserves] will be carried out in stages until 2035, according to the country's financial capabilities." Funds for establishing the reserves will come from the state budget and other legitimate resources, he said. The NEC will oversee the regulations while the energy ministry and companies with permits in the energy sector will manage the reserves, according to Djoko. Management includes procurement of supplies from domestic production or imports, as well as investment in infrastructure and maintenance, and the use and recovery of the reserves. The location of the reserves will be based on local geology, ease of distribution, spatial planning, supporting infrastructure and the potential for crises or emergencies, and where infrastructure is not sufficient, new facilities will be built, Djoko said. Indonesia aims to reach 1mn b/d of oil production and 12bn ft³/d (124bn m³/yr) of gas production by 2030. But its oil output fell to 606,000 b/d in 2023 from 612,000 b/d in 2022, energy ministry data show. The country's LPG imports amounted to about 6mn t in 2023, energy minister Bahlil Lahadalia says. This contrasts with imports of just over 7mn t, relatively unchanged from a year earlier, Kpler data show. The country imported around 369,000 b/d of gasoline and 29,000 b/d of crude. The energy ministry in August announced plans to boost oil and gas output by reactivating up to 1,500 idle wells, drilling more than 1,000 new wells a year and increasing recovery rates at existing wells to 50pc from 30pc. Indonesia gas production Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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