Eni set to sign landmark Libyan gas deal worth $8bn
Libya's state-owned NOC is poised to sign an 845mn ft³/d offshore gas project deal with Italy's Eni worth an estimated $8bn, representing the largest single investment in the north African country's upstream sector since the 2011 civil war.
"We have reached an agreement with Eni and the signing ceremony will take place on 28 January," NOC chairman Farhat ben Gudara told local TV channel Al Masar. Eni declined to comment.
The long-delayed deal will not only help Libya meet rising domestic gas demand but will also boost its gas exports to Italy, which slumped to the lowest level since 2011 last year. The agreement is due to be signed in Tripoli during the first visit to Libya by Italian prime minister Giorgia Meloni, who is pushing her "Mattei plan" that seeks to deepen Italy's energy and political ties to Africa. Italy has been scrambling for alternative gas supplies since Russia's invasion of Ukraine and is looking to north Africa in particular.
Central to the agreement with Eni is the Structures A&E project in Block NC-41, which will have the capacity to produce 760mn ft³/d of gas and 47,000 b/d of liquids, mostly condensate. This is equal to about 65pc of Libya's current 1.2bn ft³/d of sales gas production capacity. The agreement is also likely to include the 85mn ft³/d Bouri Gas Utilization project, which plans to capture associated gas output that is currently being flared at the 25,000 b/d Bouri oil field in Block NC-41. With its own climate goals in mind — and Libya's nascent decarbonisation ambitions — Eni has floated the possibility of incorporating a carbon capture and storage (CCS) element to its projects in the block.
The company said in October last year that it expects first gas from Structures A&E in 2024, with the project slated to reach full capacity in 2027. The relatively safe location of the two projects offshore Tripoli makes them less vulnerable to disruption than Libya's onshore fields. The country's decade-long political quagmire has not only hampered new oil and gas projects from getting off the ground but has also frequently led to existing output being shut down for political purposes.
With Libya roughly split between rival western and eastern administrations, political division still poses a threat. The head of the eastern-aligned Government of National Stability (GNS), Fathi Bashagha, has pushed back against the Eni deal, saying the western-based Government of National Unity (GNU) lacks the legitimacy to sign such an agreement.
Eni is Libya's largest foreign gas producer, overseeing most of the country's gas output via its Mellitah Oil and Gas joint venture with NOC. Mellitah's production is split between the offshore Bahr Essalam project and the Wafa wet gas project located on the border with Algeria, as well as some fields in the Sirte basin, Libya's oil heartland. Mellitah's western output feeds the 775mn ft³/d Greenstream pipeline — Libya's only gas export outlet — which has been running at well below capacity over the past few years. Exports through Greenstream hit their lowest level since the 2011 revolution last year, averaging some 250mn ft³/d.
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Azerbaijan wants certainty from EU on gas needs
Azerbaijan wants certainty from EU on gas needs
London, 26 April (Argus) — Azerbaijan needs long-term guarantees and available financial instruments to invest in gas production growth, its president Ilham Aliyev said earlier this week. Azerbaijan and the EU signed a strategic partnership agreement in 2022, in which Azerbaijan committed to increasing its supply to the EU to 20bn m³/yr by 2027 from 8bn m³ in 2021. This is a "target that we are moving towards" and exports to Europe will be around 12bn m³ this year, Aliyev said on 23 April at the Cop 29 and Green Vision for Azerbaijan forum ( see Azeri gas production graph ). But Azerbaijan needs investments to reach this export target, and restrictions from financing institutions on fossil fuel projects make them harder to realise, Alyiev said. The European Investment Bank has removed fossil fuel projects from its portfolio and the European Bank for Reconstruction and Development has only a small share of such projects, Aliyev said. Corporations tend to finance 30pc of gas production or infrastructure projects on their own and the remainder through loans, he said. The other issue is a need to receive long-term guarantees for Azeri gas supply, as "Azerbaijan cannot invest billions only for 5-10 years and not be able to recover the costs", Aliyev said. Azerbaijan is still paying back loans for the Southern Gas Corridor and Shah Deniz Stage 2 projects, he said. A long-proposed Ionian-Adriatic pipeline that could provide the Balkan region with Azeri gas is yet to materialise because it lacks EU funding support and gas consumption in the countries involved is low, particularly considering the challenges involved with building a pipeline in a mountainous region, Aliyev said. But Azeri gas can already reach Croatia, Bosnia Herzegovina and Montenegro through Hungary, while it can flow to Serbia through Bulgaria, he said. Aliyev said he believes that the Croatian and Azeri governments are already in consultation about this. Referring to a long-mooted project to build a pipeline across the Caspian Sea to deliver Turkmen gas to Europe, Aliyev said that Azerbaijan has "received no messages from Turkmenistan". Azerbaijan as a transit country cannot become the initiator or co-ordinator of a trans-Caspian pipeline project, Aliyev said. The Southern Gas Corridor is fully booked, meaning that infrastructure developments are needed to transport more gas to Europe, which is "under discussion", Aliyev said. Azerbaijan plans renewables build-out Azerbaijan is targeting 5GW of additional renewable generation capacity, which it aims to substitute for gas, releasing this supply for export to Europe, Aliyev said. Azerbaijan's first 240MW solar plant was inaugurated in 2023. It plans to add four new 1.3GW solar and wind projects this year and is considering some offshore and onshore wind projects as well as solar and hydropower plants. Azeri gas consumption for power generation and heating needs increased to 6.6bn m³ in 2022 from 6.1bn m³ in 2020, and made up almost half of domestic consumption in 2022 ( see data and download ). Azerbaijan is in the last phase of a feasibility study for a green energy cable from the Caspian Sea to the Black Sea and then further down to Europe. The project aims to initially connect the Georgian Black Sea to the Romanian coast, and plans to expand it further down to the eastern Caspian and Kazakhstan, according to Aliyev. The state plans to keep investing to strengthen the energy grid to allow it to cope with the renewables build-out. Foreign investors are mainly involved with renewables projects. Oil and gas makes up less than half of Azerbaijan's GDP today, but 95pc of its exports, Aliyev said. By Victoria Dovgal Azeri gas production bn m³ Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US M&A deals dip after record 1Q: Enverus
US M&A deals dip after record 1Q: Enverus
New York, 26 April (Argus) — US oil and gas sector mergers and acquisitions (M&A) are likely to slow for the rest of the year following a record $51bn in deals in the first quarter, consultancy Enverus says. Following an unprecedented $192bn of upstream deals last year, the Permian shale basin continued to dominate first-quarter M&A as firms competed for the remaining high-quality inventory on offer. Acquisitions were led by Diamondback Energy's $26bn takeover of Endeavor Energy Resources. Other private operators, such as Mewbourne Oil and Fasken Oil & Ranch, would be highly sought after if they decided to put themselves up for sale, Enverus says. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Start-ups to help Total keep output stable in 2Q
Start-ups to help Total keep output stable in 2Q
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India's crude output steady, throughput rises in March
India's crude output steady, throughput rises in March
Mumbai, 26 April (Argus) — India's March crude production was steady on the year and up by 2pc on the month at 543,000 b/d. Output fell by 2pc to 546,000 b/d during the April 2023-March 2024 fiscal year. Total crude and condensate production was 590,000 b/d in March, up from 580,000 b/d in February and steady from March 2023, data from the oil ministry show. Crude output from state-controlled upstream firm ONGC was 354,000 b/d in March, up by 0.2pc on the month and down by 6pc on the year. This was likely because of a shutdown at the Panna-Mukta offshore platforms to commission a new crude pipeline and to modernise its evacuation facilities. The windfall tax for domestic crude production was raised to 4,600 rupees/t ($7.58/bl) during 1-15 March and then to Rs4,900/t during 16 March-3 April. The rate is reviewed every two weeks. The Indian government first imposed the windfall tax in July 2022 as a sharp increase in crude prices then resulted in domestic crude producers making windfall gains. Indian crude producers sell crude to domestic refineries at international parity prices. ONGC and fellow state-controlled upstream firm Oil India continued to produce the most of India's crude in March at 425,000 b/d, making up 78pc of the total production. Private-sector producers and joint ventures made up the remainder. India's dependence on crude imports declined to 88pc in March from 89pc in February and March 2023. Its dependence on crude imports rose to around 88pc in April 2023-March 2024 from 87pc in the previous year. India has steadily been trying to reduce its dependence on imports. It extended the deadline to 15 May for submitting bids for 28 upstream oil and gas blocks in the ninth Open Acreage Licensing Program bidding round. India's oil product exports fell to 5.3mn t in March from 6mn t in March 2023, but rose from 4.1mn t in February. Higher throughput Indian refiners processed 5.53mn b/d in March, higher from 5.28mn b/d in February and 5.44mn b/d in March 2023. Processing rose to 5.24mn b/d in April 2023-March 2024, up from 5.11mn b/d the previous year. Processing likely picked up as product demand increased in March. India's product demand — including diesel, gasoline, jet fuel, LPG, bitumen, naphtha and petroleum coke — increased by nearly 7pc from the previous month and was steady on the year to 21mn t in March. Crude throughput at state-controlled IOC's nine refineries was 1.6mn b/d, up by 8pc from a year earlier and by 10pc against the previous month. State-controlled BPCL processed 874,000 b/d at its refineries in March, up by 3pc from a year earlier and by 8pc from February. State-controlled HPCL's throughput rose by 3pc from the previous year and was steady from a month earlier at 709,000 b/d. ONGC's refineries processed 354,000 b/d in March, 6pc lower on the month and steady against a year earlier. India imported 4.7mn b/d of crude in March, 4pc lower from the previous year and up by 4pc from a month earlier, according to oil ministry data. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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