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About 42pc of US Gulf oil output still shut on Francine

  • Spanish Market: Crude oil, Natural gas
  • 13/09/24

About 42pc of oil output in the Gulf of Mexico was still shut-in on Friday, just days after Hurricane Francine passed through the region.

Around 732,316 b/d of offshore oil output was off line as of 12:30pm ET Friday, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 973.20mn cf/d of natural gas production, or 52pc of the region's output, was also off line. The volume of crude production shut in rose slightly from yesterday, by about 2,000 b/d, while curtailed gas output fell. Operators evacuated workers from 144 platforms this week ahead of the storm.

Shell said today it is ramping up production at its Appomattox, Mars, Vito, Ursa and Olympus platforms after resolving downstream issues.

However, the company's Perdido, Auger and Enchilada/Salsa assets remain shut-in due to other downstream issues. And drilling remains on hold at its Whale asset, which is scheduled to begin operations later this year.

The port of New Orleans resumed all normal operations Thursday evening. Preliminary damage assessments showed no significant damage to facilities or infrastructure, port officials said, while onshore refinery operational issues appear to be minor.


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07/10/24

Concerns remain over plans of firm tapped to run Citgo

Concerns remain over plans of firm tapped to run Citgo

London, 7 October (Argus) — The top bidder in the auction for Venezuelan state-run PdV's US refining subsidiary, Citgo, says it plans to reinvest in its 804,000 b/d of refining capacity, but concerns remain over the private equity-backed buyer's intentions. Amber Energy was selected on 27 September as the top bidder in an auction for the seventh-largest US refiner, with a bid of $7.3bn. The company, backed by investors including Elliott Investment Management, says it would focus on "enhancing the value of its [Citgo's] core assets" by prioritising "operational excellence", reinvesting in the business and pursuing "strategic investments". Amber is led by industry veterans Gregory Goff and Jeff Stevens. The latter was chief executive of Western Refining from 2010-17, while Goff ran refiner Andeavor from 2010-18, during which time it changed its name from Tesoro, bought Stevens' Western Refining and was then bought by Marathon Petroleum. Goff and Stevens' refining pedigree has not allayed concerns in the market that one of their investors, Elliott, and other undisclosed backers, want to split up the assets and sell them for a combined price higher than the investment group's $7.3bn bid. Elliott's track record of activist investing in North American refiners shows a clear preference for improving the core business of processing crude into fuels, with little interest in what the investment firm views as non-core assets. Elliott pushed Canadian integrated energy company Suncor in 2022 for board changes and divestment of its 1,500 retail stores, which it ultimately did not sell. The firm had more luck with Marathon, which agreed to sell its 3,900-store Speedway network in 2019, the year after it bought Andeavor. Last year, Elliott purchased a $1bn stake in Phillips 66 and called for the company to refocus on its refining business and reduce operating costs. Phillips 66 divested some of its retail network and pipelines this year. The investment group, which started out trading in the 1970s but has since expanded into a multi-strategy hedge fund and private equity firm, has shown a clear preference for merchant refiners within its activist investments, and criticised the strategy of integrated refining companies. It is not clear whether that preference carries through to its private-markets investment in Amber, which could also be eyeing an initial public offering for the assets down the line. Elliott did not respond to requests for comment on its strategy. A spokesperson for Amber declined to discuss details of the company's strategy on the record. Seeking closure Amber said it expects the sale to close in mid-2025, pending regulatory approval and a final recommendation by the US Court for the District of Delaware. But investors involved in the auction process and other downstream operators told Argus that higher bids from other refiners or groups are likely, as Amber's bid is considered relatively low for what are widely viewed as attractive refining assets. The auction comes at a time of flatlining domestic demand for road fuels such as gasoline, and ongoing worries about the future of the US refining industry, where smaller and less profitable plants are the most likely to shutter operations. But Citgo's two Gulf coast assets — a 455,000 b/d refinery in Louisiana and a 165,000 b/d plant in Texas — are large, complex refineries that could benefit from access to export markets as domestic demand wanes and the Gulf coast readies for the 2025 closure of LyondellBasell's 264,000 b/d Houston plant. Citgo's 184,000 b/d Lemont refinery in Illinois could gain access to cheap Canadian heavy crude and sell products to the US market when major plants such as ExxonMobil's 252,000 b/d Joliet refinery in Illinois and BP's 435,000 b/d Whiting facility in Indiana are off line owing to outages or maintenance. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Africa seeks trillions in climate finance at Cop 29


07/10/24
07/10/24

Africa seeks trillions in climate finance at Cop 29

Africa faces the heaviest economic burden from climate change, and the most uncertainty over funding, writes Elaine Mills Cape Town, 7 October (Argus) — A key priority for African countries at the UN Cop 29 climate talks in Baku next month is to secure a new climate finance goal for developing countries. But as well as serious commitments on an amount, the continent wants increased accessibility and cheaper funding. Regional alliance the African Group of Negotiators (AGN) is seeking a climate finance commitment from developed countries of $1.3 trillion/yr by 2030, under a new climate finance goal currently being negotiated — the so-called new collective and quantified goal (NCQG). The NCQG is the next stage of the $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. It was met for the first time in 2022, according to the OECD, but some countries in Africa have complained that the money never reached them. The AGN wants to steer clear of the old target, contesting whether it has even been met. The group says it wants lessons to be learned, especially regarding the quality of the finance and the difficulties countries have had in accessing it. Uganda asks that the new goal avoids "political statements that are not implemented", referring to uncertainties over how the finance was counted and accessed. African states want the funding to come mostly from public sources, largely in the form of grants and highly concessional loans. This should improve borrowing costs and ease debt burdens, which are forcing countries to make trade-offs with critical development needs. The group does not want market-based loans to be counted as climatefinance — the majority of multilateral climate loans were market-based in 2016-22. Most African countries face an unsustainable debt situation that has been worsened by higher global interest rates, AGN chair Ali Mohamed says. "Our focus is on agreed obligations within the multilateral climate process and the need to improve investments to unlock the continent's potential to tackle the climate crisis, which is paralysing most economies," he says. Africa receives only 2pc of total global climate finance, according to think-tank Climate Policy Initiative. The new NCQG must create the right conditions to push that share to at least 30pc, "otherwise it is a failed process", a South Africa negotiator said last month. The heaviest price The first global stocktake at Cop 28 in Dubai last year acknowledged the world is off track in meeting the Paris Agreement's goals, with significant ambition and implementation gaps in mitigation and adaptation, as well as loss and damage, Mohamed says. African countries submitted ambitious nationally determined contributions, but there has not been corresponding financial and technical support for their implementation. "We lack clarity on the amount of current and future funding, capacity building and technical support," Kenya's cabinet secretary for environment, climate change and forestry, Aden Bare Duale, says. This vagueness undermines transparency of support under the Paris accord, and addressing it should be prioritised in the forthcoming negotiations, he says. African countries lose 2-5pc of their GDPs annually and many divert up to 9pc of their budgets responding to climate extremes, according to the State of the Climate in Africa 2023 report by the World Meteorological Organisation. The report serves as a stark reminder of the urgent need for climate action in Africa, where extreme weather events disproportionately impact the continent's socio-economic development, Zambian environment minister Mike Mposha says. "It is African nations who pay the heaviest price," Simon Stiell, head of UN climate body the UNFCCC, says. "But it would be incorrect for any world leader — especially in the G20 — to think ‘It's not my problem'. The economic and political reality — in an interdependent world — is we are all in this crisis together." Climate finance flows and needs in Africa Bilateral climate finance loans in 2016-2022 Multilateral climate finance loans 2016-2022 Multilateral climate finance loans 2016-2022 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Nigeria starts local currency crude sales to Dangote


07/10/24
07/10/24

Nigeria starts local currency crude sales to Dangote

Lagos, 7 October (Argus) — Nigeria's state-owned oil firm NNPC began selling crude to the country's 650,000 b/d Dangote refinery in the local currency on 1 October, as planned, the Nigerian government said. Co-ordinating minister of the economy Wale Edun said he has conducted "a post-commencement review" of the programme, where downstream regulator NMDPRA, NNPC and Dangote officials confirmed the start of sales in naira. "From 1 October, NNPC will commence the supply of approximately 385,000 b/d of crude oil to the Dangote refinery, which will be paid for in naira," Edun had said previously. The programme will also involve Dangote supplying gasoline and diesel of "equivalent value to the domestic market to be paid for in naira". The crude and product sales will be valued in dollars at prevailing international market prices, but financial settlements will be completed in naira at a fixed exchange rate that has so far not been disclosed. Maritime and port regulatory costs for coastal deliveries of crude and products under the programme, which are normally collected in dollars, "will also be paid for in naira", Edun said. The Nigerian Ports Authority's managing director, Abubakar Dantsoho, previously confirmed the set-up of a "one-stop shop that will co-ordinate service provision from all regulatory and security agencies", listing Nigerian ports, maritime, customs and tax authorities and the navy as participants. Dangote will sell diesel volumes under the programme "to any interested offtaker", the government said, but gasoline will only be sold to NNPC. "NNPC will then sell to various marketers for now," according to the government. "Since gasoline is still subsidised by the government, using discounted foreign exchange [available] only to NNPC, prices at wholesale and retail are still considerably below the market. That is why only NNPC can buy Dangote's gasoline today," said Bob Dickerman, the chief executive of local oil trader Pinnacle. Nigeria's diesel market has been deregulated since 2003 but efforts to remove the country's longstanding gasoline subsidy have stalled. Dangote started sales of gasoline to NNPC on 15 September under an older contract in which the national oil company pays the refiner in dollars. Argus tracking shows Dangote's crude receipts rose by 5pc on the month to 195,000 b/d in September. Dangote said it is aiming for a run rate of 350,000 b/d in its first phase of operations but has fallen short of that level in every month this year except for June. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Biden urges Israel against Iran oil strike


04/10/24
04/10/24

Biden urges Israel against Iran oil strike

Washington, 4 October (Argus) — President Joe Biden today suggested that Israel should not strike Iran's oil facilities, a day after confirming that such an attack was being discussed. "If I were in their shoes, I'd be thinking about other alternatives than striking oil fields," Biden said. He added that "Israelis have not concluded what they're going to do in terms of a strike that's under discussion." Biden's comments on Thursday lifted crude futures out of concern over the damage of a potential Israeli strike and the Iranian response that could follow. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Global bio-bunker demand to pick up, US left behind


04/10/24
04/10/24

Global bio-bunker demand to pick up, US left behind

New York, 4 October (Argus) — Tightening vessel carbon intensity indicator (CII) scores and looming 2025 FuelEU marine regulation are expected to raise biodiesel demand for bunkering, but non-competitive US prices should continue to weigh down on US bio-bunker demand. Houston B30, a blend of used cooking methyl ester (Ucome) and very low-sulphur fuel oil (VLSFO), in September averaged at $821/t, a $45/t premium to B30 sold in Amsterdam-Rotterdam-Antwerp, and a $55/t premium to B24 sold in the west Mediterranean hub of Gibraltar and Algeciras (see chart) . Houston B30 was also priced at $115/t and $61/t premium to B24 sold in Singapore and Guangzhou, China, respectively. The price premium would continue to incentivize ship owners with global, ocean-going fleets to pick Asia first for their biodiesel bunker purchases, followed by northwest Europe and western Mediterranean. US demand for biodiesel for bunkering would continue to stagnate unless the US passes a legislation allowing Renewable Identification Number (RIN) credit under the US Renewable Fuel Standard (RFS) program be used by ocean-going vessels fueling with biodiesel in US ports. The legislation could level US' price playing field. Two bipartisan bills were put forward in support of renewable fuel for ocean-going vessels, one in the US Senate this year and one in the US House of Representatives last year, but they are currently dead in the water. Conventional marine fuels are priced cheaper than biodiesel and green varieties of LNG, ammonia, methanol, and hydrogen. But tightening International Maritime Organization (IMO) and EU regulations are forcing the hand of ship operators to consider green fuels to avoid hefty penalties and having their vessels suspended from trading. Ship owners whose vessels are outfitted with LNG-burning engines, are poised to have the lowest marine fuel expense heading into 2025, as fossil LNG is currently ship owners' cheapest low-carbon fuel option. But retrofitting a vessel to burn LNG could range from $5-$35mn, depending on the size of the vessel. Biodiesel, a plug-and-play fuel that does not require a vessel retrofit, is the second cheapest low-carbon fuel option after fossil LNG. IMO's CII regulation came into force in January 2023 and requires vessels over 5,000 gt to report their carbon intensity, which is then scored from A to E. The scoring levels are lowered yearly by about 2pc, so even a vessel with no change in CII could drop from C to D in one year. If a vessel receives a D score three years in a row or E score in the previous year, the vessel owner must submit a corrective actions plan. E scoring vessels could be prohibited from entering some ports' territorial waters, but this penalty is yet to be imposed on any E vessels. In 2023, the IMO reported that 40pc of the vessels scored A or B, 27pc scored C, 19pc scored D or E and 14pc were unresponsive. The EU's FuelEU maritime regulation will require ship operators traveling in, out and within EU territorial waters to gradually reduce their greenhouse gas (GHG) intensity on a lifecycle basis, starting with a 2pc reduction in 2025, 6pc in 2030 and so on until getting to an 80pc drop, compared with 2020 base year levels. It imposes a penalty of €2,400/t ($2,629/t) of VLSFO equivalent energy for vessel fleets exceeding its GHG limits. By Stefka Wechsler Biodiesel blends* Houston less global ports $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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