Francine shuts in about 42pc of US Gulf oil: Update 2

Spanish Market: Crude oil, Natural gas
12/09/24

Adds spot crude pricing information, NOLA port reopening.

Hurricane Francine, which has since weakened to a tropical depression as it passes over central Mississippi, shut in about 42pc of US Gulf of Mexico oil output.

About 730,472 b/d of offshore oil output was off line as of 12:30pm ET Thursday, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 991.68mn cf/d of natural gas production, or 53pc of the region's output, was also off line. Operators evacuated workers from 169 platforms this week ahead of the storm.

Companies including Chevron, ExxonMobil and Shell relocated offshore workers and suspended some drilling operations ahead of Francine, while a number of ports, including New Orleans, Louisiana, shut down.

Shell curtailed output at the Appomattox platform, around 80 miles south east of Louisiana, as well as the Mars, Vito, Ursa, and Olympus platforms because of downstream issues. Today Shell said it has started to redeploy staff to its Perdido facility, located about 190 miles south of Houston, where production is still shut. Operations at Shell's Auger and Enchilada/Salsa assets, about 120 miles south of Vermillion Bay, Louisiana. remain suspended. Drilling is still halted at the Whale platform, which is scheduled to start up later this year.

"As conditions continue to improve, we will begin the process of redeploying personnel to Auger and Enchilada/Salsa to bring staffing to normal operating levels," Shell said.

Offshore crude spot prices rise

Crude from Shell's Appomattox project moves through the offshore Proteus and Endymion pipelines to be marketed as part of the medium sour Thunder Horse stream, which has dedicated underground cavern storage in LOOP's Clovelly, Louisiana, hub. In today's spot market, prompt October Thunder Horse has been trading at a 30¢/bl premium to the US benchmark in Cushing, Oklahoma, today, 20¢/bl higher than in the prior session.

Crude from Shell's Mars, Vito, Ursa and Olympus platforms also delivers to LOOP's Clovelly hub, and is sold as Mars crude from there, where the medium sour also has dedicated cavern storage. Mars crude has sold in the spot market today at 70-80¢/bl discounts to the Cushing benchmark, in line with yesterday's 75-80¢/bl discounts.

Shell's Auger and Enchilada/Salsa production feeds primarily into the Bonito Sour crude stream, a light sour that is not often seen trading in the spot market.

Perdido feeds into ExxonMobil's Hoover Offshore Oil Pipeline System (HOOPS), that delivers the HOOPS Blend to the Texas Gulf coast. HOOPS Blend is a medium sour crude that is not actively traded in the spot market. Competing Texas-delivered medium sour Southern Green Canyon (SGC) was trading at a $1.25/bl discount to Cushing this morning, within yesterday's range of discounts between $1 and $1.30/bl. SGC discounts had tightened to as narrow as 70¢/bl this week — the tightest since mid-August.

Ports reopening

Conditions at the port of New Orleans were set to normal at 2pm ET today after the port was closed ahead of the storm, according to the US Coast Guard. The mouth of the Mississippi River remained closed to traffic however.

The port of Lake Charles reopened to vessel traffic at 11am ET Thursday after closing on Tuesday evening.

Francine was about 15 miles north-northeast of Jackson, Mississippi, as of a 12pm ET advisory from the National Hurricane Center, with maximum sustained winds of 35mph. It slammed into the Louisiana coast as a Category 2 hurricane Wednesday evening before weakening.

By Stephen Cunningham and Tray Swanson

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10/11/25

Cop: IMO pushes forward with carbon pricing

Belem, 10 November (Argus) — External politics rather than any failure of the International Maritime Organization (IMO) led to the delay in adopting a greenhouse gas (GHG) emissions pricing mechanism for global shipping, proposal supporters said on Monday. IMO members last month voted to delay the adoption of the Net-Zero Framework (NZF) by a year, despite some of those backing the delay previously supporting the carbon pricing system. The October gathering was "not a typical IMO" meeting, IMO secretary general Arsenio Dominguez said during a side event at the UN Cop 30 climate talks in Belem, Brazil. "We were affected by the global geopolitics that we all face right now. We're not immune to it," he said. Dominguez also sought to assure critics of the vote that the IMO is not backing down from the proposal, citing ongoing work to address some questions that member states raised during last month's meeting. "My message to you is very clear, don't judge IMO for what happened last October. Don't think that IMO stops there because we don't," he said. Dutch climate envoy Jaime de Bourbon Parme struck a similar tone, telling the audience that while the delay may give supporters a "sense of failure" very few countries last month argued the NZF should not be adopted. "I know the Netherlands and many other countries were ready to sign, however, the meeting went a very different direction," he said. While Dominguez and the Dutch prince did not single out any country for causing the delay, many NZF supporters have put the blame on the US. In the days leading up to the vote, the administration of US president Donald Trump threatened to retaliate against countries that back the proposal with measures such as visa restrictions, new port fees or sanctions on officials that sponsor "activist-driven" climate policies. The Trump administration "went outside the rules of engagement," said Andrew Forrest, non-executive chairman of Australian mining company Fortescue, calling US actions before the vote a form of "thuggery." By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Blending raises WTI quality concerns

10/11/25

Blending raises WTI quality concerns

Houston, 10 November (Argus) — Rising levels of natural gas liquids (NGLs) and corrosive additives are being blended into Permian light sweet WTI crude, prompting concerns about inconsistent quality in the absence of an agreed market standard. NGLs and other additives are being blended into WTI early in the production process as part of efforts to maintain profitability in the face of lower crude prices and rising production costs. But the higher NGL levels being blended upstream are increasingly causing problems downstream. One key problem is the lack of an acknowledged market standard for the amount of butane allowed in Permian WTI, participants heard at a Crude Oil Quality Association (COQA) meeting in San Antonio, Texas, in early October. Since NGLs occur naturally, it is also difficult to determine where the additional volumes are being introduced along the delivery line, conference participants heard. COQA efforts in the past led to industry adoption of light-end limits for Nymex-deliverable domestic crude and light sweet grade LLS. Elevated butane levels lighten a crude, but some refineries are not equipped to handle grades with a higher level of light-end yields, and this can lead to capacity bottlenecks at their processing units. Crude blended with NGLs can also take up more pipeline space relative to standard crude. Mercaptans — naturally occurring sulphur compounds — have also become a quality concern, although there is a lack of consensus on how the problem is arising. Mercaptans are harder to treat and remove than other impurities, pose corrosion risks and damage refinery catalysts. High mercaptan levels can make it harder to produce lighter products that meet quality specifications. The jet fuel produced can exceed the regulated maximum amount of sulphur. WTI volumes accepted in the North Sea Dated benchmark-setting process have a mercaptans limit of 75ppm. A US-wide standard has yet to be adopted, although some US pipelines from the Permian use the 75ppm limit to better align standards, including Plains' 600,000 b/d Epic and Phillips 66's 900,000 b/d Gray Oak to Corpus Christi lines. Plains recently informed shippers that it will charge a 50¢/bl premium if WTI mercaptans exceed the 75ppm limit on its lines. WTI intended for export also has to meet stricter quality specifications in relation to several metals and has an upper limit for Reid Vapor Pressure (RVP), which can be affected by increased NGLs blending. Variability in gravity, sulphur, mercaptans, metals and RVP levels can undermine export demand for WTI. Zinc contamination Quality issues are not limited to WTI. Elevated zinc levels in offshore US Gulf medium sour Mars led to the US Strategic Petroleum Reserve having to provide a crude loan to ExxonMobil. The problem also contributed to the widest discounts for Mars against Nymex-quality WTI since December. Chevron found that the quality problem was connected to the start-up of a new offshore well, but not before the contamination had disrupted trade. The Shell-operated Mars pipeline system comingles crude from a variety of deepwater US Gulf oil fields, which it carries into the Mars stream. Reports of unexpected wax content in onshore US crude also suggest that Uinta Basin crude is sometimes entering the onshore mix. Uinta Basin crude contains high levels of paraffin and is mostly transported by rail because otherwise it needs to be moved in heated pipelines. As crude prices soften, Permian wells mature and drilling shifts to less optimal rock formations, some quality variability seems likely and blending may increase, which could present more problems for refiners in the future. By Amanda Smith and Mykah Briscoe Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New York approves Williams' NESE gas pipeline

07/11/25

New York approves Williams' NESE gas pipeline

New York, 7 November (Argus) — New York and New Jersey state environmental regulators today approved key permits for US natural gas pipeline company Williams' planned Northeast Supply Enhancement (NESE) gas pipeline project. Williams in 2024 shelved the controversial pipeline, which would increase gas transportation capacity from Pennsylvania gas fields into New York City by 400mn cf/d (11mn m³/d), because it was unable to acquire key water quality permits from state regulators in New York and New Jersey. But after US president Donald Trump retook office this year and began signaling his intention to revive NESE and Williams' unrelated 650mn cf/d Constitution pipeline, Williams in May asked federal regulators to reinstate its earlier authorization of NESE. If built and put into operation, NESE would be the first major interstate gas pipeline project to move forward in the northeastern US since the 2 Bcf/d, West Virginia-to-Virginia Mountain Valley Pipeline entered service in June 2024. That project only moved forward because congressional action allowed it to bypass federal permitting hurdles, which make such projects daunting for developers. Williams on Friday also withdrew its application for water quality permits for Constitution from the New York State Department of Environmental Conservation after failing to fulfill repeated information requests, the state regulator said. But the pipeline company "continues to advance" Constitution "and is preparing to follow up with additional filings" to ensure it is approved for construction and operation, a Williams spokesperson told Argus . "We're proud to move NESE forward and do our part in providing New Yorkers access to clean, reliable and affordable natural gas," Williams chief executive Chad Zamarin said in a statement. "Expanding natural gas infrastructure is vital to lowering costs and increasing economic opportunity, and the NESE and Constitution projects are important to connecting energy to opportunity in the Northeast." New York City, which is deeply dependent on gas for its power generation and home heating, pays considerably higher prices for wholesale gas than buyers from within the nearby massive gas fields of Appalachia because the pipelines that ferry that gas east to urban population centers often run full. Spot prices at Transco zone 6 in New York, an indicator for New York City gas prices, over the past year averaged $3.77/mmBtu, 41pc higher than gas prices at the Leidy Line hub, an indicator for northeast Pennsylvania gas prices. The revival of NESE and Constitution earlier this year followed negotiations between Trump and New York governor Kathy Hochul (D) on energy infrastructure. Those negotiations came after the Trump administration's decision in April to block work on Equinor's Empire Wind project off the coast of New York, only lifting a stop work order after talks on pipeline capacity took place. The Trump administration alleged the administration of former US president Joe Biden had rushed the approval process. The Norwegian developer at the time called the order "unprecedented" and "unlawful". Hochul has consistently denied allegations that Williams' renewed hopes for gas pipelines into New York stemmed from any sort of deal between herself and Trump. "We need to govern in reality," Hochul said in a statement Friday. "We are facing a war against clean energy from Washington Republicans, including our New York delegation, which is why we have adopted an all-of-the-above approach that includes a continued commitment to renewables and nuclear power to ensure grid reliability and affordability." While NESE met the standards required by state environmental regulators to obtain a water quality permit, Constitution did not, she added. New York's approval of the NESE pipeline drew the ire of community groups. "Hochul just did Trump's bidding by approving the massive Williams fracked gas pipeline," activist group New York Communities for Change said Friday on social media site X. "Hochul's decided to sell us out to Trump." By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Petrobras increases spending by 24pc in 3Q: Update

07/11/25

Petrobras increases spending by 24pc in 3Q: Update

Updates with investment plans in paras 3-4 and explorations plans in paras 8-9 Rio de Janeiro, 7 November (Argus) — Brazilian state-controlled Petrobras' investments increased by 24pc in the third quarter from a year earlier, as the firm continues to focus on production in the offshore pre-salt. Petrobras spent $5.5bn in capital expenditure (capex) in July-September, of which $4.7bn was for exploration and production. Of this investment in exploration and production, $2.7bn went to developing production of the pre-salt cluster in the Santos basin, particularly the construction of seven new floating production, storage and offloading units that will serve the Buzios, Atapu and Sepia fields. A further $900mn went to developing production in the Campos basin's pre- and post-salt, and $500mn went to exploration. Total investments over the first nine months of the year were $14bn, a 29pc increase on the same period last year. The company has speeded up investment execution due to projects being brought forward, rather than higher costs, and is on track to meet guidance by year's end, directors said. Capex guidance for 2025 as outlined in Petrobras' 2025-2029 business plan is $18.5bn. The firm is due to present an updated plan at the end of November. There are no plans to cut investments next year, said the director for engineering, technology and innovation, Renata Baruzzi. Petrobras posted a profit of R32.7bn ($6bn) in the third quarter, a 0.5pc increase on the same quarter last year and 23pc more than in the previous quarter. Higher crude production as well as stronger crude exports and domestic sales of diesel drove the third quarter result, Petrobras said. It also cited a small rallying of oil prices, with the price of Brent growing by 2pc compared with the second quarter, and lower operational costs, as contributing factors. The company's board approved a payout of R12.16bn ($2.3bn) to shareholders, or R0.9432/share, down from R1.3282/share a year earlier. Dividends will be paid in two installments, in February and March. Exploration going forward Petrobras celebrated receiving regulatory approval last month to drill an exploratory well in the Foz do Amazonas basin off Brazil's northern coast. This is the most coveted area in the equatorial margin, a new oil frontier which could contain reserves similar to those found off Guyana. The company hopes to find oil in this first well, named Morpho, but if not it will continue exploration, director for exploration and production Sylvia Anjos said. "We are already planning for eight wells in the region," she said. By Constance Malleret Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US EPA grants more waivers from biofuel quotas

07/11/25

US EPA grants more waivers from biofuel quotas

New York, 7 November (Argus) — President Donald Trump's administration today granted small refiners even more exemptions from federal biofuel blend mandates, raising the stakes of a debate about whether larger oil companies should shoulder more of the burden. The US Environmental Protection Agency (EPA) granted two full exemptions from the program's annual blend requirements, halved obligations in response to 12 petitions, and denied two others. The agency requires oil refiners and importers to annually blend biofuels or buy credits from those who do, though small facilities that process 75,000 b/d or less can request program waivers that can save them tens of millions of dollars. The agency used the same methodology as its sweeping August decision , which responded to a historic backlog of petitions and granted most refiners some relief from years of mandates. New petitions poured in afterwards, including from refiners that had not requested waivers in years. And more decisions could come soon, with EPA committing Friday to "address new petitions as quickly as possible" and to try to meet a legal requirement to decide requests within 90 days. Farm and biofuel groups fear that widespread waivers curb demand for their products and have lobbied the Trump administration to follow through on a plan to make oil companies without exemptions blend more biofuels in future years to offset past exemptions for their smaller rivals. Particularly for higher-cost products like renewable diesel and biogas, any dip in demand can prompt biorefineries to slash output. The debate has intensified in recent weeks after a refiner granted generous exemptions in August announced plans to convert a renewable diesel unit back to crude. "The impact on biofuel and agriculture markets will be devastating" without compensating for these exemptions in future biofuel quotas, said Geoff Cooper, president of the ethanol lobby Renewable Fuels Association. EPA already planned on estimating future exemptions from 2026-2027 requirements when finalizing biofuel mandates those years. But the agency has added more work to its plate with a subsequent plan to force large oil refiners to compensate for either all or half of the biofuel volumes lost to actual and expected exemptions from 2023-2025 requirements. The impact of older exemptions is less significant since the credits are expired. The challenge for EPA is that small refiners can submit new or revised petitions at any time, including for years-old mandates. That makes it hard for EPA to accurately forecast future exemptions, and biofuel groups have feared that the agency could muddle the effects of its "reallocation" plan by underestimating volumes ultimately lost to program waivers. Indeed, EPA with its Friday decisions has already waived more requirements than it predicted earlier this year. The agency last forecast that exemptions from 2023 and 2024 mandates would amount to around 1.4bn Renewable Identification Number credits (RINs) of lost demand — but now, the waivers have already reduced obligations those years by 1.92bn RINs, according to program data. If EPA sticks to its plans, that means large refiners will have to blend an even greater share in future years than expected. But if the Trump administration waters down its reallocation idea, biofuel demand could sink more than previously forecast too. There is also the risk that EPA underestimates exemptions for the 2025 compliance year. EPA last forecast that exemptions from those requirements will amount to 780mn RINs of lost demand but has not yet decided any of the 12 pending petitions for that year. Many more requests are likely. Small refiners add to their winnings The August exemptions were a windfall for some oil companies. HF Sinclair, which owns multiple small refineries, last week reported $115mn from lower compliance costs as well as a $56mn indirect benefit from "commercial optimization" of its RIN credit position. And HF Sinclair won more Friday, winning full waivers from 2023 and 2024 biofuel mandates for the "east" section of a larger 125,000 b/d complex in Tulsa, Oklahoma that before September had not previously requested relief in at least three years. The company also won partial relief for two other units from 2021 mandates. Phillips 66 won four years of partial relief for its 66,000 b/d Montana facility, as did Big West Oil for its 35,000 b/d Utah plant. Silver Eagle won exemptions from 2023 blend mandates for two smaller units it owns in Wyoming and Utah. The only Friday denials were for Chevron's 45,000 b/d Utah refinery, which applied for the first time in years just last month. But the increasingly generous relief for small refiners is likely to provoke further backlash from larger oil companies, which argue that making them blend more biofuels is anticompetitive and illegal. EPA is months behind schedule on setting biofuel mandates for 2026 and 2027 and has a deadline Friday to tell a court more about how its reallocation plan affects its timeline. Biofuel groups have asked the court to force the agency to finalize program updates by year-end. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Francine shuts in about 42pc of US Gulf oil: Update 2

Offshore crude spot prices rise

Ports reopening

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Blending raises WTI quality concerns

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