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Guyana extends deadline for first oil block bids

  • Spanish Market: Crude oil, Natural gas
  • 12/04/23

Growing oil producer Guyana has extended the deadline for bids in its first competitive auction for offshore blocks by three months to 15 July, the natural resources ministry said today.

The ministry launched the auction on 9 December 2022 and had set 14 April deadline for bids for 11 shallow-water and three deepwater blocks, saying contracts would be awarded by 31 May.

It did not indicate a revised date for awarding contracts.

"Industry feedback and the advanced pace of modernizing the oil and gas regulatory framework underscore the extended bidding period for the nation's first competitive offshore oil and gas licensing round," the ministry said today.

Current and future bid rounds "must be governed by a modern regulatory framework and the government has been thoroughly moving towards the finalization of the model production share agreement," the ministry said. The government had said in March that the auction could be delayed by only one month.

The government's draft of new production sharing terms will see winning bidders paying a 10pc royalty, against 2pc being paid by US major ExxonMobil under its 2016 production sharing agreement.

The current 75pc cost-recovery ceiling is being lowered to 65pc, while profit sharing after cost recovery remains evenly split between the contractor and the government.

"These new terms will double Guyana's share from 14.5pc to 27.5pc, plus the newly introduced 10pc corporate tax," the government said.

The government recently concluded agreements with technology data providers PGS Exploration of the UK and CGG of France to reprocess additional data about the blocks being offered, it said.

"Existing and prospective participants of the licensing round will benefit from the availability of further seismic data which can be licensed to better inform the bids submitted."

The bidding round has attracted interest from several major international companies from the US, India, Europe and South America, officials confirmed to Argus.

Over 20 bids have been made so far by "majors and other well-established oil companies from many countries, and the level of interest has met our expectations," one official said.

Guyana's crude production in February averaged 390,090 b/d, up from 152,500 b/d a year earlier, according to data from the country's petroleum management agency (GPMI).

ExxonMobil is producing from two projects on the deepwater Stabroek block and is developing four more on the block, forecasting output of at least 1.2mn b/d by 2027.


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29/01/25

US Fed pauses, awaits Trump policy fallout: Update

US Fed pauses, awaits Trump policy fallout: Update

Adds Powell comments. Houston, 29 January (Argus) — The US Federal Reserve today paused in its course of rate cuts begun last year while signaling it would wait to see the impacts of President Donald Trump's new policies — ranging from tariffs to expulsions of foreign farm workers — on the labor market and inflation before considering any changes to its "policy stance." In its first meeting of 2025, the Fed's Federal Open Market Committee (FOMC) held its federal funds rate unchanged at 4.25-4.50pc after cutting it by a quarter point each in December and November last year following a half-point cut in mid-September, the first cut since 2020. "In the current situation, there is probably some elevated uncertainty because of, you know, significant policy shifts in those four areas that I mentioned: tariffs, immigration, fiscal policy and regulatory policy," Fed chairman Jerome Powell told reporters. "The committee is very much in the mode of waiting to see what policies are enacted," Powell said. "We need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be." "The economy is strong, the labor market is solid and the downside risks to the labor market we think has abated and continues on a sometimes slow and bumpy path," Powell said. "The broad sense of the Committee is we don't need to be in a hurry to adjust the policy stance." In December, the Fed penciled in 50 basis points worth of cuts for 2025, down from 100 basis points projected in the September median economic projections of Fed board members and Fed bank presidents. Fed fund futures have also indicated a likelihood of only 50 basis points of rate cuts this year on strong job growth and an uptick in inflation at the end of last year, along with concerns over Trump's plans to hike tariffs, expel illegal immigrants — many of whom work in agriculture, construction and services industries — and cut taxes. Those are all measures economists say are likely to unleash inflation and boost interest rates. Powell said Fed policymakers had heard that "businesses that are dependent on immigrant labor are saying that it is suddenly getting harder to get people," but that it had not showed up yet in aggregate labor data. Trump during his first term was openly critical of the Fed, which is independent of the executive branch, saying he wants a "say" in making monetary policy. "With oil prices going down, I'll demand that interest rates drop immediately, and likewise they should be dropping all over the world," Trump told the World Economic Forum last week in Davos, Switzerland. Asked if the Fed would continue to act independently of the executive branch, Powell replied: "This is who we are, this is what we do. We study the data, we analyze how it will affect the outlook, and the balance of risks, and we use our tools." The consumer price index (CPI) accelerated to an annual 2.9pc in December, a third month of gains from 2.4pc in September, which was the lowest since early 2021 before the economic reopening after Covid-19 lockdowns caused a supply-chain shock that sent CPI as high as 9.1pc in June 2022. The Fed, slow to react, began a series of rate hikes in March 2022 that took the target rate from near zero to more than five percentage points higher by July 2023, keeping it at 5.25-5.5pc through August 2024. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US Fed holds rate flat, signals vigilance on inflation


29/01/25
29/01/25

US Fed holds rate flat, signals vigilance on inflation

Houston, 29 January (Argus) — The US Federal Reserve held its target interest rate unchanged today, pausing its cycle of rate cuts begun last year while signaling it would be on guard against any outbreak of renewed inflationary pressures as policies enacted by President Donald Trump — ranging from tariffs to expulsions of foreign farm workers — are widely expected to spur inflation. In its first meeting of 2025, the Fed's Federal Open Market Committee (FOMC) held its federal funds rate unchanged at 4.25-4.50pc after cutting it by a quarter point each in December and November last year following a half-point cut in mid-September, the first cut since 2020. "The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid," The FOMC said in its statement. "Inflation remains somewhat elevated." "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook," it said, repeating stock language from prior statements. "The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge" that could impede attainment of achieving the goal of 2pc annual inflation and low unemployment. In December, the Fed penciled in 50 basis points worth of cuts for 2025, down from 100 basis points projected in the September median economic projections of Fed board members and Fed bank presidents. But Fed fund futures have since indicated the likelihood of only 50 basis points of rate cuts this year on strong job growth and an uptick in inflation at the end of last year, along with Trump's plans to hike tariffs, expel illegal immigrants — many of whom work in agriculture, construction and services industries — and cut taxes. Those are all measures economists say are likely to unleash inflation and boost interest rates. Trump during his first term was openly critical of the Fed chief Jerome Powell and has made remarks signaling he wants a "say" in making monetary policy. "With oil prices going down, I'll demand that interest rates drop immediately, and likewise they should be dropping all over the world," Trump told the World Economic Forum last week in Davos, Switzerland. The consumer price index (CPI) accelerated to an annual 2.9pc in December, a third month of gains from 2.4pc in September, which was the lowest since early 2021 before the economic reopening after Covid-19 lockdowns caused a supply-chain shock that sent CPI as high as 9.1pc in June 2022. The Fed, slow to react, began a series of rate hikes in March 2022 that took the target rate from near zero to more than five percentage points higher by July 2023, keeping it at 5.25-5.5pc through August 2024. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

DeepSeek undermines AI power demand forecasts


29/01/25
29/01/25

DeepSeek undermines AI power demand forecasts

New York, 29 January (Argus) — Unexpected efficiency achievements by Chinese artificial intelligence (AI) company DeepSeek have cast a shadow over a bullish narrative on booming US electricity demand in the coming decade to power data centers running AI software. Share prices for US independent power producers, natural gas producers and gas pipeline companies fell sharply at the beginning of the week as investors feared DeepSeek's achievement implied significantly less electricity might ultimately be needed to run and train AI models than has been expected. This greater efficiency "calls into question the significant electric demand projections for the US," as the investment case for independent power producers and most integrated utilities is "entirely dependent on data centers," US bank Jefferies said in a note to clients this week. DeepSeek's apparent ability to achieve comparable results to some major US AI companies using far less computing power — and thus far less electricity — may also be bad news for what is widely expected to be the main fuel source to generate incremental power for AI this decade: natural gas. EQT, one of the largest US gas producers by volume, has called growing power demand from planned data centers the "cornerstone" to its "natural gas bull case." Large US gas pipeline companies like Williams, operator of the Transcontinental pipeline, have also touted recent forecasts showing surging demand for gas-fired power, as greater gas generation would require greater pipeline capacity to move those incremental volumes from wellhead to generator. DeepSeek's achievement could even cast doubt on the investment case for nuclear power, which has been recast as something of a silver bullet for major technology companies looking to secure zero-emission electricity to enable their AI development efforts. While investors have generally assumed significant premiums for nuclear power, to the tune of more than $100/MWh, new demonstrated efficiencies might cause those assumptions to be questioned, Jefferies said. A loss in power demand for AI data centers may also undercut the investment case for next-generation small modular reactors (SMRs), into which tech companies like Google and Microsoft have poured substantial capital. Revising the revisions News of DeepSeek's efficiency achievements are a shock to prevailing expectations for surging US power demand in the coming decade, when those expectations have already been substantially revised over the past year, following decades of stagnant power demand. US grid operator PJM, which serves 65mn customers and is the largest US electric grid, on 24 January released a report showing significant upward revisions in its peak seasonal power demand projections. Peak summer power demand in PJM's territory in the mid-Atlantic was projected to surge to 210GW in 2035 and 229GW in 2045, substantially steeper than PJM's load forecast just one year earlier, which showed peak summer power demand in PJM rising to 177GW in 2034 and 191GW in 2039. Consultancy firm McKinsey in November forecast US data center power demand to reach 606TWh by 2030, up from 147TWh in 2023. Under this scenario, data centers at the end of the decade would comprise 11.7pc of total US power demand. If efficiency gains in AI reduce power demand as much as some investors fear, those big forecasts might require big revisions. But efficiency improvements can go two ways — they can reduce demand for fuel, or simply increase output. In the case of AI, more efficient operations could be exploited to accelerate the development of more powerful AI models — using the same amount of power that was previous expected, but to far greater effect. That latter explanation is why, "despite uncertainties," FactSet head of power markets Matthew Hoza tells Argus he remains "bullish" on power demand growth in the coming years. "With AI's increasing integration into company tech stacks and its growing presence in daily life through AI agents, we anticipate continued growth in AI adoption and the resulting power needs," Hoza said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US still eyes 1 February for Canada, Mexico tariffs


28/01/25
28/01/25

US still eyes 1 February for Canada, Mexico tariffs

Washington, 28 January (Argus) — President Donald Trump is still keen to impose tariffs on all imports from Canada and Mexico as soon as 1 February, the White House said today. Trump in multiple public comments since taking office on 20 January said he was still considering a 25pc tariff on Canada and Mexico, even though his administration has yet to provide any details on the proposal. Trump spent much of his meeting on Monday with Republican lawmakers at their annual retreat in Florida blasting Canada and Mexico over their allegedly unfair trade practices. Tariffs should become a key source of income for the US government, just as they were in the nineteenth and early twentieth century before being supplanted by income taxes, Trump told the lawmakers, who are looking at ways to extend tax cuts enacted during his first term and set to expire at the end of 2025. Trump also said he would impose tariffs on all imported computer chips, semiconductors and pharmaceuticals. Trump's messaging on China tariffs has been more mixed. He said last week he would go on with his initial plans to impose a 10pc tax on all imports from China, but he also said he preferred to avoid a trade war with Beijing. An executive order Trump signed on 20 January lays out a process suggesting timelines of June-July for imposing tariffs on the US' key trading partners, with no reference to the 1 February deadline. But Trump has the legal authority to impose tariffs on imports from any country by a variety of executive actions and with very short notice, as he demonstrated over the weekend during a high-profile confrontation with Colombia over deporting migrants from the US. Trump told the lawmakers on Monday that he expects to wield the threat of tariffs as a negotiating tool often, because even "a very strong country" like Colombia caved in to his demands. Canada and Mexico appear to be preparing for a protracted trade confrontation with the US if Trump follows through on his threat, with retaliatory measures targeting specific US products and companies. The looming faceoff has unnerved the US oil producers and refiners, which are warning of severe impacts to the integrated North American energy markets if taxes are imposed on flows from Canada and Mexico to the US. Industry group American Petroleum Institute is lobbying the Trump administration to exempt crude and other energy products from any tariffs he plans to impose. Trump last week shrugged off the arguments from the US energy industry about potential negative impacts from confronting Canada and Mexico. "We don't need their oil and gas," Trump said. "We have our own, we have more than anybody." Almost all of Mexico's roughly 500,000 b/d of crude shipments to the US through November are waterborne, targeting Gulf coast refiners, and can be diverted to Asia or Europe. Canadian producers have much less flexibility — more than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Only around 900,000 b/d can be directed away from the US via the recently expanded Trans Mountain pipeline system to the Pacific coast, although late-2024 flows were actually closer to 400,000 b/d, split evenly between the US west coast and Asia. Conversely, many refineries in the US midcontinent have no practical alternative to the Canadian crude. US gasoline prices would move higher by 30-70¢/USG if the 25pc tariffs that Trump has threatened were applied to Canada's oil, Canada's TD Bank projects. Trump's commerce secretary nominee Howard Lutnick will face a confirmation hearing at the Senate Commerce committee on Wednesday, with trade wars likely to feature high among the questions lawmakers direct at him. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Traders expect low uptake of 5-year Latvian gas storage


28/01/25
28/01/25

Traders expect low uptake of 5-year Latvian gas storage

London, 28 January (Argus) — Market participants expect limited demand for a new five-year gas storage product that Latvian operator Conexus will begin offering later this year. Conexus will offer a five-year product for its 25TWh Incukalns storage site for the first time ever on 11 February. This five-year offering will be in addition to the one and two-year products already previously offered by Conexus, along with the storage transfer and interruptible capacity products. All market participants surveyed by Argus expect weak demand for the five-year product, mostly because of unfavourable summer-winter spreads and traders' lack of willingness to commit to bookings that far ahead. Several respondents highlighted that only a limited pool of firms would be interested in planning their activities five years out. Most traders "do not look to the so distant future in the gas storage business", one said. "Not so many market players are ready to tie themselves to local gas markets for five storage cycles in a row," another said. Several respondents criticised the product's rules, with one noting that it could even lead to storage utilisation falling, "considering the fines for inventory transfer between storage seasons". Traders would try to "squeeze out the pipeline/LNG supply potential, rather than over-injecting", they added. Another said they were concerned that the share of the overall storage capacity allocated to the five-year product was "too high" and would make it possible for some market participants to "hijack this very much needed capacity in a similar way" to what happens at the Latvian-Lithuanian border point of Kiemenai. Several traders have expressed frustration that annual capacity at Kiemenai has been fully booked but only a small part is at times used , blocking other shippers from accessing the capacity and resulting in low utilisation rates. Another trader highlighted the product's limitation of only allowing a user to transfer up to 50pc of the total booked capacity from one storage cycle to the next without having to pay additional fees. The previous set of capacity products has been "tested for years and proven to be working", another market participant said, arguing that "imperfect but certain conditions are better than uncertain ones". One trader pointed out that a lack of interest in the five-year product could increase demand for the traditional one and two-year products, increasing the premium at these auctions further. Two other traders pointed out that given prevailing inverted summer-winter spreads, there is little financial incentive to book any capacity products, let alone make a five-year commitment. Ultimately, the "behaviour of local players is and will continue to be influenced by the closest summer-winter spread and the difference between this spread and the one-year storage tariff, not by long-term storage capacity of injection/withdrawal limits," one concluded. By Brendan A'Hearn Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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