Odebrecht seeks bankruptcy protection
Scandal-ridden Brazilian conglomerate Odebrecht filed for bankruptcy protection from a court in Sao Paulo state, a move it says will help it restructure its more than R51bn ($13bn) debt load.
The company said today its financial difficulties stem from the "reputational impact of mistakes made" and ensuing difficulty securing credit and new contracts.
Group companies will continue to operate normally as the firm focuses "on the common objective of ensuring financial stability and sustainable growth, thus preserving their social function of securing and generating jobs," the company said in a statement.
Staff levels at the company have fallen to around 48,000 from around 180,000 in 2014, the result of the scandal and resulting economic crisis from which Brazil is still struggling to exit.
Odebrecht was at the center of the historic Lava Jato (Car Wash) corruption probe that ensnared Brazil's business class and top politicians across Latin America, including former Brazilian presidents Luiz Inácio Lula da Silva and Michel Temer. Around 77 of the company's top executives turned state witnesses in the far-reaching probe that is still uncovering corruption after five years.
In 2016, Odebrecht admitted to paying around $788mn in bribes in 2001-16 for contracts in 12 countries, according to a $2.6bn plea deal with US, Brazilian and Swiss authorities
The decision to seek bankruptcy protection comes almost two weeks after the end of negotiations with Dutch company LyondellBasell for the sale of Odebrecht's 38pc stake in petrochemical giant Braskem.
Braksem is among the handful of subsidiaries excluded from the bankruptcy request. The company's oil and gas arm, Ocyan, formerly known as Odebrecht Oil and Gas, was also excluded from the request. Ocyan had been a major offshore platform contractor for state-controlled Petrobras before it and dozens of other companies were banned from bidding because of their involvement in a massive kickback scheme.
Ocyan's last major contract award from Petrobras was in 2014 for the 50,000 b/d FPSO Libra Pioneer, the early production system at the Santos basin's Mero pre-salt field. Mero, the first commercial discovery in the Libra project, currently produces around 40,000 b/d of 29°API crude.
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Abu Dhabi’s Adnoc puts crude capacity at 4.85mn b/d
Abu Dhabi’s Adnoc puts crude capacity at 4.85mn b/d
Dubai, 2 May (Argus) — Abu Dhabi's state-owned Adnoc has nudged up its self-reported crude production capacity to 4.85mn b/d, from 4.65mn b/d previously. The UAE state energy giant did not formally announce the increase but updated the figure on its website. It did something similar when its capacity reached 4.65mn b/d in late 2023, up from 4.5mn b/d in the middle of last year. This latest hike takes the company a step closer to its long-term 5mn b/d crude capacity target, which it aims to reach by 2027. Adnoc set the 5mn b/d target back in 2018 when its capacity was 3.5mn b/d. At that time, the company said it was aiming to deliver the increase by 2030, but in November 2022 it brought the timeframe forward by three years, citing the "UAE's robust hydrocarbon reserves". The change in timeline had been expected, with sources telling Argus earlier that year that discussions had been taking place in the upper echelons of Adnoc about significantly accelerating its capacity growth plans . Given the speed at which the company has been delivering capacity gains over the past few years, and how close it is to meeting its target already, it is not inconceivable that Adnoc will reach 5mn b/d ahead of schedule. Put your best foot forward The UAE's rising capacity comes as Opec+ producers engage with independent agencies to update their respective crude output capacities for use in production policy decisions from 2025. At their meeting in June last year, all Opec+ members committed to undergo an external assessment of their sustainable capacities in the first half of 2024 by three independent consultancies, IHS, Wood Mackenzie and Rystad. The updated capacity assessment will help address a key criticism of the Opec+ production restraint agreements in their current format, namely that many of the countries involved have been cutting output from a baseline level of production that they can no longer actually deliver, in most cases due to natural decline. The UAE has been one of a handful of countries in the group that has been raising its capacity over the past few years. This means it should, in theory, benefit from the latest assessment, as a higher accepted capacity will afford it a higher production baseline under any Opec+ agreements struck from 2025 onwards. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Battery storage stands out in Japan clean power auction
Battery storage stands out in Japan clean power auction
Osaka, 2 May (Argus) — Japan's first auction for long-term zero emissions power capacity has attracted strong bidding interest with a plan to install battery storage, as investment in the power storage system is gaining momentum in line with expanded use of fluctuating renewable energy sources. Japan launched the clean power auction system from the April 2023-March 2024 fiscal year, aiming to spur investment in clean power sources by securing funding for fixed costs in advance to drive the country's decarbonisation by 2050. The first auction, which was held in January, has awarded 1.1GW capacity for battery storage, or 27pc of total contract capacity for clean power sources, excluding gas-fired generation that has been temporally included in the auction system to help ensure stable power supplies, nationwide transmission system operator Organisation for Cross-regional Co-ordination of Transmission Operator (Occto), which manages the auction, said on 26 April. Bidding capacity for battery storage totalled around 4.6GW, the highest volume among any other clean power sources. This means the contract ratio for storage batteries was 24pc compared with the 100pc ratio for ammonia co-firing, hydrogen co-firing , biomass dedicated and nuclear capacity, along with gas-fired capacity . Awarded capacity for battery storage as well as pumping-up electric power facilities reached 1.67GW, exceeding the 1GW sought by the auction. Japan has secured a total of 9.77GW of net zero capacity through the 2023-24 auction. Contract volumes covered 1.3GW of nuclear, 199MW biomass, 577MW of pumping-up electric power, 770MW for ammonia co-firing and 55.3MW hydrogen co-firing, as well as 1.1GW of battery storage. This also included 5.76GW of gas-fired projects. All winners under the auction can generally receive the money for 20 years through Occto, which collect money from the country's power retailers, although they need to refund 90pc of other revenue. The first auction saw total funding of ¥233.6bn/yr ($1.51bn) for decarbonisation power sources and ¥176.6bn/yr for gas-fired capacity. Japan's battery requirements are expected to continue rising, with uncertainty over future nuclear availability likely to spur Tokyo to accelerate the roll-out of renewable energy to meet a 46pc greenhouse gas emissions reduction by 2030-31 against 2013-14 levels — a target still far above the 23pc recorded in 2022-23. Japan will need to install 38-41GW of renewable capacity, nearly triple actual output of 14GW in 2019. Japan is looking to establish lithium-ion battery production capacity of 150GWh/yr domestically and 600GWh/yr globally by 2030. The trade and industry ministry projects the latter target will require 380,000 t/yr of lithium, 310,000 t/yr of nickel, 600,000 t/yr of graphite, 60,000 t/yr of cobalt and 50,000 t/yr of manganese. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Shell's 1Q profit supported by LNG and refining
Shell's 1Q profit supported by LNG and refining
London, 2 May (Argus) — Shell delivered a better-than-expected profit for the first quarter of 2024, helped by a strong performance from its LNG and oil product businesses. The company reported profit of $7.4bn for January-March, up sharply from an impairment-hit $474mn in the previous three months but down from $8.7bn in the first quarter of 2023. Adjusted for inventory valuation effects and one-off items, Shell's profit came in at $7.7bn, 6pc ahead of the preceding three months and above analysts' estimates of $6.3bn-$6.5bn, although it was 20pc lower than the first quarter of 2023 when gas prices were higher. Shell's oil and gas production increased by 3pc on the quarter in January-March and was broadly flat compared with a year earlier at 2.91mn b/d of oil equivalent (boe/d). For the current quarter, Shell expects production in a range of 2.55mn-2.81mn boe/d, reflecting the effect of scheduled maintenance across its portfolio. The company's Integrated Gas segment delivered a profit of $2.76bn in the first quarter, up from $1.73bn in the previous three months and $2.41bn a year earlier. The segment benefited from increased LNG volumes — 7.58mn t compared to 7.06mn t in the previous quarter and 7.19mn t a year earlier — as well as favourable deferred tax movements and lower operating expenses. For the current quarter, Shell expects to produce 6.8mn-7.4mn t of LNG. In the downstream, the company's Chemicals and Products segment swung to a profit of $1.16bn during the quarter from an impairment-driven loss of $1.83bn in the previous three months, supported by a strong contribution from oil trading operations and higher refining margins driven by greater utilisation of its refineries and global supply disruptions. Shell's refinery throughput increased to 1.43mn b/d in the first quarter from 1.32mn b/d in fourth quarter of last year and 1.41mn b/d in January-March 2023. Shell has maintained its quarterly dividend at $0.344/share. It also said it has completed the $3.5bn programme of share repurchases that it announced at its previous set of results and plans to buy back another $3.5bn of its shares before the company's next quarterly results announcement. The company said it expects its capital spending for the year to be within a $22bn-$25bn range. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia issues offshore wind feasibility licences
Australia issues offshore wind feasibility licences
Sydney, 2 May (Argus) — The Australian federal government has issued the first feasibility licences for offshore wind projects in the country following a competitive process, for up to 12GW of capacity off the coast of Gippsland in the southern state of Victoria and a potential further 13GW in the next stage. Six projects have received approval to explore the feasibility of offshore wind farms in the Bass Strait off Gippsland's coast, which was the first offshore wind zone declared in Australia at the end of 2022. Successful applicants include Danish investment firm Copenhagen Infrastructure Partners (CIP), Danish utility Orsted, Australian utility AGL Energy, European utilities EDP Renewables and Engie and Japanese utility Jera. The government also intends to grant another six licences, subject to consultation with First Nations groups. The 12 projects could have a potential combined capacity of around 25GW, the government said ( see table ). Projects that prove feasible will be able to apply for commercial licences and move to the construction phase if they secure financing, with the most advanced wind farms expected to start generating power in the early 2030s. CIP secured site exclusivity to develop two projects with a combined 4.4GW through a newly launched platform company Southerly Ten. The projects comprise the 2.2GW Star of the South, which claims to be the most advanced offshore wind project in Australia , along with the early stage 2.2GW Kut-Wut Brataualung. Southerly Ten is also developing the Destiny Wind project in Australia's second declared offshore wind zone off the Hunter region in New South Wales. Orsted was given one licence for a 2.8GW project and might receive another one for a 2GW wind farm. It said it will proceed with site investigations, environmental assessments and supply chain development, with a view to bid in future auctions planned by the Victorian government, which are expected to start in late 2025. Victoria is targeting 2GW of offshore wind capacity by 2032 and 9GW by 2040. "Subject to the above steps and a final investment decision, the projects are expected to be completed in phases from the early 2030s, with the aim to maximise dual site synergies through shared resources and economies of scale," Orsted said. The 2.5GW Gippsland Skies offshore wind project, belongs to a consortium made of Irish renewables firm Mainstream Renewable Power with 35pc, UK-based firm Reventus Power 35pc, AGL Energy 20pc and Australian developer Direct Infrastructure 10pc. The first phase of the project is expected to be operational in 2032, according to the consortium. The list of six projects already granted feasibility licences also include High Sea Wind, a proposed 1.28GW wind farm developed by EDP Renewables' and Engie's 50:50 joint venture Ocean Winds, along with Blue Mackerel North, a 1GW development by Japanese utility Jera Nex's subsidiary Parkwind. Parkwind is also developing another offshore wind project in Australia, with Australian utility Alinta Energy, the 1GW Spinifex in the Southern Ocean off Victoria, which was declared Australia's third wind zone in March. The other projects that might receive licences are being developed by companies such as Spanish utility Iberdrola, Spanish developer Bluefloat Energy, Australian firm Macquarie's wind developer Corio Generation, German utility RWE and a joint venture between Australia's Origin Energy and UK-based developer RES Group. By Juan Weik Australian offshore wind projects with feasibility licences Developer Capacity Licence Orsted Offshore Australia 1 Orsted 2.8 Granted Gippsland Skies Consortium* 2.5 Granted Star of the South Southerly Ten 2.2 Offered Kut-Wut Brataualung Southerly Ten 2.2 Granted High Sea Wind Ocean Winds 1.3 Granted Blue Mackerel North Parkwind 1.0 Granted Aurora Green Iberdrola 3.0 Under consultation Great Eastern Offshore Wind Corio Generation 2.5 Under consultation Gippsland Dawn Bluefloat Energy 2.1 Under consultation Orsted Offshore Australia 2 Orsted 2.0 Under consultation Navigator North Origin Energy, RES 1.5 Under consultation Kent Offshore Wind RWE N/A Under consultation Source: federal government, companies *Mainstream Renewable Power, Reventus Power, AGL, Direct Infrastructure Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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