TMX crude linefill starts in April, May: MEG

Spanish Market: Crude oil
01/03/24

The operator of the Trans Mountain Expansion (TMX) in western Canada is calling for a combined 4.2mn bl of crude from shippers starting next month as it prepares to fill the new pipeline, according to producer MEG Energy.

Canada's 590,000 b/d TMX pipeline yesterday made a call for 2.1mn bl of linefill in April and another 2.1mn bl in May, said MEG Energy's chief executive Derek Evans today. The combined volume represents almost all of the 4.4mn bl line fill Trans Mountain had previously said it needed for its expansion project.

"We see this as incredibly positive," said Evans today. "Good news for not only us, but really everybody in the heavy oil business. That incremental egress will substantially reduce that [heavy crude] differential."

Heavy crude producer MEG is a committed shipper on TMX and plans to move 20,000 b/d on the line connecting Edmonton, Alberta, to Burnaby, British Columbia. The now C$34bn ($25bn) project has been mired in construction and regulatory delays, but has only one small section in British Columbia left to finish.

Trans Mountain plans by 4 March to start installing the last section of pipe in a tunnel about 100 kilometres east of Vancouver and said this week it intends on starting operations in the second quarter of this year.

TMX and the existing Trans Mountain system will combine for 890,000 b/d of capacity for Albertan oil producers to the west coast.

By Brett Holmes

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15/05/24

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

15/05/24

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.

India extends bid deadline for 28 oil, gas blocks again

15/05/24

India extends bid deadline for 28 oil, gas blocks again

Mumbai, 15 May (Argus) — India has further extended the deadline for submitting bids for 28 upstream oil and gas blocks in the ninth Open Acreage Licensing Programme (OALP) bidding round to 15 July. This is the second such extension in this bidding round under the Hydrocarbon Exploration and Licensing Policy's OALP. The ninth bidding round was announced on 3 January and bids were initially due by 29 February . The deadline was then extended to 15 May . The government did not provide a specific reason for extending the deadline. But a lack of investor interest could be behind the delay, said market participants, adding that declining crude production and a tax policy that is hard to navigate have kept interest in exploration limited to domestic participants. India's crude and condensate production was at 589,000 b/d in April 2023-March 2024, down by 24pc from 2013-14. Of the 28 blocks offered, nine are onshore blocks, eight shallow-water blocks and 11 ultra-deepwater blocks across eight sedimentary basins, with an area of 136,596.45 km². The Directorate General of Hydrocarbons (DHG) "carved out" five of these blocks, while the remaining 23 blocks are based on expressions of interest received from companies during April 2022-March 2023. The government had made offshore acreage of more than 1mn km² available for exploration and production operations off the west coast, east coast and the Andaman and Nicobar Islands, which were earlier called "no-go" areas. About 560,000km² will come under exploration by the end of 2024 after the ninth and tenth blocks are awarded. The tenth bidding round under the OALP will be launched as soon as the ninth round is completed and will have more "no go" areas available for exploration. India has held eight OALP rounds and awarded 144 exploration and production blocks comprising a total area of 242,055km². State-controlled upstream firm ONGC won seven blocks in the eighth licensing round, while a private-sector consortium of India's Reliance Industries and BP, state-controlled upstream firm Oil India and private-sector Sun Petrochemicals received one block each. The government introduced the OALP in 2017 to attract oil and gas firms to develop India's upstream sector. The OALP guarantees marketing and pricing freedom with a revenue-sharing model, apart from offering reduced royalty rates. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

IEA downgrades 2024 oil demand growth

15/05/24

IEA downgrades 2024 oil demand growth

London, 15 May (Argus) — The IEA now sees oil demand growth in 2025 outpacing this year, after it again downgraded its forecast for 2024 — mostly because of lower than anticipated first-quarter demand in Europe. In its latest Oil Market Report (OMR), published today, the Paris-based agency lowered its oil demand growth forecast for this year by 140,000 b/d to 1.06mn b/d, citing weak gasoil consumption. This would leave total oil demand in 2024 at 103.16mn b/d. "Poor industrial activity and another mild winter have sapped gasoil consumption this year, particularly in Europe where a declining share of diesel cars in the fleet were already undercutting consumption," the IEA said. The agency again lowered its 2024 forecast for Chinese oil demand growth, this time by 30,000 b/d to 510,000 b/d. It sees China's growth slowing to 360,000 b/d in 2025, but the country will remain the largest single contributor to global growth. The IEA also highlighted a rise in global oil inventories, which increased for a second consecutive month in March — by 36.4mn bl. It said preliminary data show further stock builds in April as "onshore oil inventories skyrocketed after oil on water was discharged." This after onshore stocks fell in March to the lowest since at least 2016, and OECD inventories to a 20-year low. The latest estimates mean the IEA now sees oil demand growth coming in higher in 2025 at 1.18mn b/d, up by 30,000 b/d from last month's estimate. This contrast sharply with Opec , which continues to see much higher growth this year at 2.25mn b/d and next year at 1.85mn b/d. On global oil supply, the IEA lowered its 2024 growth estimate by 160,000 b/d to 580,000 b/d citing maintenance in Canada, outages in Brazil and logistical constraints in the US. It noted a 150,000 b/d fall in Russian output in April, related to a new Opec+ production cut. It forecasts non-Opec+ growth to rise by 1.4mn b/d this year, and an 840,000 b/d fall from Opec+ because of production cuts. The agency projects global gains next year at 1.8mn b/d, with supply hitting a record 104.5mn b/d. The US, Guyana, Canada and Brazil continue to dominate global supply gains with a combined forecast 1.1mn b/d of additions this year and next. The IEA's latest forecasts imply a tighter market in 2024 than it previously anticipated. Its balances now show a global oil supply deficit of 460,000 b/d this year, compared with 270,000 b/d in last month's report. The projections assume Opec+ voluntary cuts remain in place until the of the year, although the group has yet to decide its output policy for the second half of the year. It may do so at a ministerial meeting scheduled for 1 June in Vienna. The IEA's latest balances put the call on Opec+ crude at around 42mn b/d in the second half of this year — 700,000 b/d above the group's April output. A recent slide in oil prices could keep pressure on the alliance to keep the cuts in place for longer. The IEA put the fall in oil prices down to concerns over the health of the global economy and dissipating fears of a wider conflict in the Middle East. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Alberta wildfire forces oil sands communities to flee

14/05/24

Alberta wildfire forces oil sands communities to flee

Calgary, 14 May (Argus) — A state of local emergency is unfolding near a major city in Alberta's oil sands region as an out-of-control wildfire grows in size, potentially putting various communities in its path. The wildfire to the southwest of Fort McMurray, Alberta, has grown to about 10,000 hectares (25,000 acres) after more than tripling in recent days, prompting officials to issue an evacuation order to residential communities on the southern part of the city on Tuesday. The Regional Municipality of Wood Buffalo has told residents in Beacon Hill, Abasand, Prairie Creek and Grayling Terrace to evacuate while the rest of Fort McMurray and neighbouring communities remain on an evacuation notice. "These neighbourhoods directly interface with where the fire could potentially spread. Regional Emergency Services will better be able to defend these neighbourhoods from wildfire if they are uninhabited and clear," said the municipality. Alberta's largest northeast city has a population of about 75,000 with many employed by oil sands operators in the region which pump out a combined 2mn b/d of crude. This comes in the form of both synthetic crude and diluted bitumen, representing roughly half of Alberta's output. No evacuation orders have been made for oil sands projects, so far, with most being about 40 kilometres (25 miles) or more north of Fort McMurray. Some oil sands projects have already been winding down for seasonal maintenance. There are about 50 active fires in the province. One other, near Grande Prairie in the northwest, is also out of control. About 400,000 b/d of oil equivalent (boe/d) were shut in a year ago in what was the worst wildfire season on record, according to the province. The blazes mostly affected operations in the liquids- rich northwest part of the province, but at least one oil sands project also had to temporarily evacuate. Wildfires also affected Alberta production in 2019, but the most devastating for the region was three years earlier, when fires forced mass evacuations and destroyed parts of Fort McMurray. Wildfires in the spring of 2016 knocked about 1mn b/d of crude output off line. "It's important to note that fire activity is very different than the 2016 Horse River wildfire and we are well positioned to respond to this situation," said regional fire chief Jody Butz on Tuesday. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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