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Oman latest to insist that oil, gas is 'here to stay'

  • Spanish Market: Crude oil, Natural gas
  • 24/04/24

Omani and Oman-focused energy officials this week joined a growing chorus of voices to reiterate the pivotal role that hydrocarbons have in the energy mix, even as state-owned companies scramble to increase their share of renewables production.

Some producers cite the risk of leaving costly, stranded oil and gas assets as renewable energy alternatives become more favoured.

"This is a common concern among producers who are focusing on short-term developments to maximize cash flow — [but] if we continue to do that, with the clean energy transition, will we be left with stranded assets in the long-term", state-controlled PDO's technical director Sami Baqi told the Oman Petroleum and Crude Show conference in Muscat this week. "We need to redefine and revamp our operation model to produce in a sustainable manner."

"We are in an era where most of the production does not come from the easy oil but comes from difficult oil," Oman's energy ministry undersecretary Mohsin Al Hadhrami said. "It requires more improved and enhanced oil recovery (EOR) type technologies to extract it."

Oman is heavily reliant on tertiary extraction technologies like EOR given its maturing asset base and complicated geology.

"We know that most of the oil fields [in the region] are maturing and costs are going to escalate, so we need to be mindful of it while discussing cleaner solutions going forward," Hadhrami said.

PDO, Oman's largest hydrocarbon producer, aims for 19pc of its output to come from EOR projects by 2025, and has said it is looking at 'cleaner' ways to implement the technology. PDO in November started a pilot project to inject captured CO2 for EOR at its oil reservoirs.

Baqi's concerns were echoed by PDO's carbon capture, utilisation and storage (CCUS) manager Nabil Al-Bulushi, who said even solutions like CCUS can be expensive and come with their own challenges. There is a need for a proper ecosystem or regulatory policies to avoid delays in executing such projects, he said.

When it comes to challenges associated with commercialising green hydrogen, Saudi state-controlled Aramco's head of upstream Yousef Al-Tahan said higher costs already make hydrogen more expensive than any other energy sources.

"Not only should the costs go down, but the market has to be matured to take in the hydrogen," he said. "We also need pipelines and facilities that are able to handle hydrogen, especially when it gets converted to ammonia."

Gas here to stay

Oman, like many of its neighbors in the Mideast Gulf, insists gas needs to be part of the global journey towards cleaner energies.

"Asia-Pacific is still heavily reliant on coal, this is an area where gas can play an important role," Shell Oman's development manager Salim Al Amri said at the event. "I think there is no doubt that gas is here to stay."

Oman is a particularly interesting case as it "has moved from a position of gas shortage to surplus", Al Amri said, enabled by key developments in tight gas. "Output from fields like Khazzan and Mabrouk will continue to produce nearly 50pc of output even by 2025, which is indicative of how important tight gas developments are," he said. The Khazzan tight gas field has 10.5 trillion ft³ of recoverable gas reserves. Mabrouk North East is due to reach 500mn ft³/d by mid-2024.

But even as natural gas is touted as the transition fuel, executives from major producers like state-owned OQ and PDO warned there are technical risks associated with extracting the fuel, including encountering complex tight reservoirs, water production and difficult geology.


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05/02/25

Trump proposes US take control of Gaza

Trump proposes US take control of Gaza

Washington, 4 February (Argus) — US president Donald Trump on Tuesday called for the US to take over Gaza, relocate the population of more than 2mn to other countries and then redevelop the enclave. Meeting with Israeli prime minister Benjamin Netanyahu at the White House, the one-time real estate developer sketched out a plan in which the US would "own" Gaza, level what has become a "demolition site" and remake the territory into the "Riviera of the Middle East". Assuming such a role would embroil the US far more deeply in what has been the deadliest conflict in the region in decades. Asked whether US troops would be involved in his plan, Trump said: "If it's necessary, we'll do that." Trump did not say where, exactly, the Palestinians from Gaza would be relocated, although he said he had a "feeling, despite them saying no" that Jordan's King Abdullah and Egyptian president Abdel Fattah el-Sisi "will open their hearts and will give us the kind of land we need to get this done". Trump said the only reason people want to return to their homes in Gaza is because they believe they have no alternative. Instead, they could be relocated and "live in comfort and peace". And after the rebuilding is completed, people from "all over the world" would live in the new Gaza — "Palestinians also," Trump said. Netanyahu praised Trump for his "willingness to puncture conventional thinking" and to propose ideas that could reshape the Middle East. "You cut to the chase," Netanyahu told Trump during the press conference. "You see things others refuse to see. You say things others refuse to say. And after their jaws drop, people scratch their heads. And they say, ‘You know. He's right.'" But Saudi Arabia's foreign ministry, in an apparent reaction to Trump's proposal, Tuesday argued the international community has a responsibility to alleviate the suffering of the Palestinian people "who will remain steadfast on their land and will not move from it". By David Ivanovich Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican peso volatility persists despite tariff delay


04/02/25
04/02/25

Mexican peso volatility persists despite tariff delay

Mexico City, 4 February (Argus) — The Mexican peso remains volatile despite a bump from the last-minute deal postponing US President Donald Trump's threatened 25pc tariffs on Mexican imports, financial analysts said. The US agreed Monday to delay the tariffs for one month after discussions between Trump and Mexican President Claudia Sheinbaum. In return, Mexico pledged to deploy 10,000 National Guard troops to its northern border to combat drug trafficking, with a focus on fentanyl. The peso initially reacted positively to the news, strengthening by nearly 3pc late Monday after the agreement was announced. Still, today the Mexican peso weakened 0.4pc to Ps20.5 to the dollar by the end of trading, according to data from Mexico's Central Bank (Banxico). The peso has depreciated 16.6pc against the dollar from a year ago, according to Banxico data. The currency will remain volatile until there is greater clarity on whether tariffs will ultimately be imposed and at what level, BBVA Mexico bank analysts said in a note. If the US proceeds with a 25pc tariff, the peso could weaken to Ps24/$1, pushing Mexico's economy into a 1.5pc contraction this year, according to the bank. A lower 10pc tariff would be more manageable, BBVA Mexico added, as peso depreciation would offset some cost increases for US importers. In that scenario, Mexico's economy could still grow by 1pc in 2025. "Markets have debated whether to take Trump's policy promises seriously but not literally, or both seriously and literally," Barclays analysts wrote in a note to investors. Barclays also noted that the US sees itself as having the upper hand in any trade war, as a far greater share of Canadian and Mexican exports depend on US demand than vice versa. Mexico's state-owned oil company Pemex typically benefits from peso depreciation because of its US dollar-denominated crude exports, which help offset higher fuel import costs. "Pemex's revenues are tied to international oil prices, providing a natural hedge," the company said in its latest earnings report. However, analysts warned that Pemex's shift toward domestic refining over exports could reduce this buffer, leaving the company more vulnerable to foreign exchange swings, particularly as it carries a large dollar-denominated debt load. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

HU-SK summer 2025 gas capacity nearly fully booked


04/02/25
04/02/25

HU-SK summer 2025 gas capacity nearly fully booked

London, 4 February (Argus) — Gas transmission capacity from Hungary towards Slovakia is almost entirely booked for the summer following near sold-out quarterly auctions on 3 February. Following a decision in January to make higher capacity at Balassagyarmat/Velke Zlievce permanent , the additional 25.4 GWh/d of space was offered for the next two quarters, with 23 GWh/d allocated for both ( see table ). After these auctions, roughly 99.4 GWh/d out of total technical capacity of 101.8 GWh/d from Hungary towards Slovakia has been allocated for April-September, although bookings drop to 68.7 GWh/d from October, Entso-G data show. Flows in this direction have been strong this year, averaging 87 GWh/d on 1 January-3 February, driven by Slovakia's need to replace Russian gas after the end of transit through Ukraine. And on the Hungarian-Ukrainian border at VIP Bereg, roughly 35 GWh/d of unbundled exit capacity was booked. Flows to Ukraine at Bereg averaged 17 GWh/d on 1 January-3 February, well below 56 GWh/d in December. Interest in this capacity may have been spurred by buying interest from Ukraine's Naftogaz , although throughout last summer there were also quick flows at Bereg, which then transited to Poland making use of Ukraine's short-haul regime. Elsewhere in the region, there was strong interest in quarterly bookings at VIP Brandov, on the German-Czech border, where 53 GWh/d was booked towards the Czech Republic for the second quarter and 48 GWh/d for the third quarter. Brandov has served as the only entry point for Czech supply since the turn of the year, as flows from Slovakia at Lanzhot dropped to zero after Russian transit halted. Given that the Czech Republic has national targets obliging a 90pc stockfill by 1 November, and storage was 51.4pc full as of Monday morning, there will probably be a need for a strong stockbuild this summer, necessitating inflows from Germany. By Brendan A'Hearn Quarterly capacity bookings GWh/d Network point Period Capacity Type Exit TSO Quality Exit TSO Entry TSO Quality entry TSO Offered capacity Allocated capacity VIP Brandov (DE/CZ) 2Q25 Bundled Gascade FZK firm Net4Gas FZK firm 154.1 53.4 VIP Brandov (DE/CZ) 3Q25 Bundled Gascade FZK firm Net4Gas FZK firm 151.3 47.8 VIP Bereg (HU/UA) 2Q25 Unbundled FGSZ Firm GTSOU 103.5 34.8 Balassagyarmat (HU) / Velke Zlievce (SK) 2Q25 Bundled FGSZ Firm Eustream Firm 25.4 23.0 Balassagyarmat (HU) / Velke Zlievce (SK) 3Q25 Bundled FGSZ Firm Eustream Firm 25.4 23.0 Kireevo (BG) / Zaychar (RS) 2Q25 Unbundled Bulgartransgaz Firm Gastrans 82.9 6.0 — RBP, Prisma Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Baghdad, Erbil take steps to restart Kurdish oil flows


04/02/25
04/02/25

Baghdad, Erbil take steps to restart Kurdish oil flows

Dubai, 4 February (Argus) — Iraq's oil ministry has officially asked the Kurdistan Regional Government (KRG) to start delivering oil to state marketer Somo as part of a deal reached between Baghdad and Erbil to restart north Iraqi crude oil exports through the Turkish Mediterranean port of Ceyhan. "The Turkish and Iraqi governments are taking the steps to prepare the Iraq-Turkey pipeline [ITP] to export crude through the port of Ceyhan," Iraq's oil minister Hayan Abdulghani told state news agency INA. He said that no less than 300,000 b/d of the Iraqi semi-autonomous Kurdish region's crude will be exported once the pipeline is back in operation. "The debts owed by the Kurdistan region are being agreed upon between the two parties," he added. Abdulghani did not provide an official date for the resumption of exports. Iraq's oil ministry has been approached for comment. But his remarks signal that a restart of the country's northern crude is close, made possible by Iraq's parliament approving a key budget amendment on 2 February that will see oil companies operating in the semi-autonomous Kurdish region get $16/bl for their production and transportation costs , double the previous rate. As part of the amendment, an international consulting firm will be tasked with auditing Kurdish production and transportation costs over a 60-day period. Iraq's federal oil ministry and its KRG counterpart will co-ordinate on appointing the auditor but if they fail to reach agreement, the Iraqi government will make the selection unilaterally. Opec+ commitments Disagreement between Baghdad and the KRG over commercial terms has prevented the resumption of Kurdish crude exports have yet to resume from Ceyhan after the pipeline linking the port with oil fields in northern Iraq was closed by Turkey in March 2023. The closure followed an international arbitration ruling that said Turkey had breached a bilateral agreement with Iraq by allowing KRG crude to be exported without Baghdad's consent. While the resumption of oil flows via Ceyhan should give the Iraqi oil ministry more visibility on how much crude is being produced in the Kurdistan region, Baghdad may still find itself in a dilemma as regards its Opec+ commitments. Iraq has been the biggest overproducer in Opec+ for over a year, and officials there have said a lack of visibility about output from the northern region has complicated its efforts to comply. Baghdad will now have to balance its own production alongside that of Erbil, while ensuring it adheres to its Opec+ quota and its compensation commitments. Opec+ has come under pressure as US President Donald Trump recently called for the producer group to "bring down the cost of oil". But so far, Opec+ has not heeded those calls with its key ministerial panel agreeing on 3 February to keep its policy as is, meaning it would not see any production returned to market until at least April. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump makes U-turn on Canada, Mexico tariffs: Update


03/02/25
03/02/25

Trump makes U-turn on Canada, Mexico tariffs: Update

Washington, 3 February (Argus) — US president Donald Trump reversed course on planned tariffs on imports from Canada and Mexico, delaying their implementation by one month. Trump over the weekend issued executive orders for a 25pc tariff on all imports from Mexico, a 25pc tariff on non-energy imports from Canada, a 10pc tax on Canadian energy imports and a 10pc tariff on all imports from China, all to be effective on 4 February. But Trump delayed the tariffs on Mexico and Canada by a month and has indicated that tariffs on China likewise could be subject to negotiations with Beijing. Trump's decision-making on Mexico and Canada tariffs so far looks like a signature move from his first term — escalatory rhetoric and action followed by de-escalation after extracting concessions that do not appear to be significant. Trump said today he agreed to postpone the implementation of tariffs on Mexican goods after receiving assurances from Mexico president Claudia Sheinbaum that she would immediately reinforce the shared border with 10,000 national guard troops. Trump also cited similar assurances from Canadian prime minister Justin Trudeau. "As President, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that," Trump said via his social media platform. "I am very pleased with this initial outcome." In both cases, the border security pledges touted by Sheinbaum and Trudeau recast initiatives already planned or underway. Trump told reporters today he would "be speaking to China probably over the next 24 hours" — likely meaning the country's president Xi Jinping. Unlike Mexico and Canada, China has taken a restrained stance to Trump's announcement of tariffs. Like the US immediate neighbors, China already has been taking steps to cut off the illegal manufacturing and exports of precursors for fentanyl — the pretext for Trump's tariffs. Things can only get bitter The announcement of tariffs that would have directly hit US energy trade will leave many in the industry scratching their heads about Trump's future moves. A major trade war that would have severely curtailed the flow of energy and other commodities across North America is averted for now, but Trump is signaling that tariffs remain a key plank on his policy agenda. Trump has shrugged off any negative impacts on the US energy sector and the broader economy, saying over the weekend that "WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID." In remarks to reporters today, Trump pushed back against criticism of negative impacts of his tariffs. "Very simply, every single country that you're writing about right now is dying to make a deal," Trump said. In the immediate term, the Trump administration will hold high-level talks with the governments of Mexico and Canada against the deadline for the delayed imposition of tariffs. But down the line, there are other motivations for Trump to move forward with tariffs against key US trading partners. Trump today once again decried the "massive deficits" the US has in trade with Canada, Mexico, China, the EU and the UK. And then there is the lure of tariff revenue that Trump — with an eye toward upcoming congressional deliberation of extending tax cuts beyond 2025 — says would be sufficient to offset lower personal and corporate taxes. Trump set a 1 April deadline for US government agencies to prepare a report on "unfair trade practices" by key US trading partners, which would kick off a legal process for imposing tariffs in the following two months. Trump is separately planning to review the US-Mexico-Canada free trade agreement that his first administration negotiated in 2019. Unlike the tariffs that were due to be imposed on Tuesday by an executive order, the broader plan for tariffs scheduled to kick in after 1 April would be harder to reverse or to negotiate away. And his first two weeks in office show that, despite his claim to be championing America's "energy dominance", the US energy industry would not be exempt during the upcoming trade wars. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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