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Industry group eyes US crude export standards

  • : Crude oil
  • 24/10/17

After pushing to solve problems with blending crude grades at the US pipeline hub of Cushing, Oklahoma, an industry group has identified a potential similar issue of inconsistent specifications at US Gulf coast export terminals.

The Crude Oil Quality Association (COQA), which met in Galveston, Texas, this week, is known for its years-long efforts to lobby the CME Group, which operates the Nymex exchange, to adopt new specifications for West Texas Intermediate (WTI), the US crude futures benchmark delivered at Cushing.

While WTI originally was largely piped from west Texas oilfields, Cushing increasingly became the destination for other crude streams including heavy Canadian grades, raising concern that differing qualities of crude were being blended into WTI to the detriment of refiners.

"The situation in Cushing has largely been dealt with in terms of quality," said Pat Swafford, commercial director at Haverly Systems and a member of COQA's board of directors. The quality of domestic light sweet (DSW) blended at Cushing is still not completely consistent "but it is way better than it was," he said. "Refiners can see much more consistency in terms of the quality of that stream than was possible back in the mid-2000s."

Now crude quality standards at the Gulf coast terminals that predominantly export Midland-grade WTI could be a focal point for COQA's efforts in the future, Swafford said.

"As you look across the various terminals, each terminal has their own specifications," Swafford said. "They are not all the same, but they all sell 'WTI'." Specifications at docks operated by midstream companies like Enterprise Products Partners are similar, but they "are largely similar to the original Nymex specifications" and focus mostly on API gravity and sulfur, he said.

Overseas refiners, meanwhile, have raised concerns about metals and acid content in US crude streams, which damage their refining kit. Past COQA meeting attendees have referred to crude from the docks in Corpus Christi, Texas, as "the Gucci grade of WTI," which illustrates the variable quality of US exports, Swafford said.

Though COQA is not actively working on WTI export standards at the moment, "the industry as a whole needs to work together with this organization on the WTI export market" to maintain consistent quality at WTI export terminals, Swafford said. "That is my challenge to the industry on this."


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24/11/08

Argentina’s YPF sees jump in shale oil output

Argentina’s YPF sees jump in shale oil output

Montevideo, 8 November (Argus) — Argentina's state-owned YPF saw output of unconventional crude surge by 36pc to 126,000 b/d in the third quarter of the year compared to a year earlier. YPF's third quarter statement put total production at 559,000 b/d of oil equivalent (boe/d) with crude at 256,000 b/d, up by 8pc, and natural gas at 40.3mn m³/d, or 253,000 boe/d, an increase of 7pc, and 49,000 boe/d of natural gas liquids, up by 4pc. Unconventional crude accounted for 49pc of overall output. It was 39pc of total production a year earlier. YPF is the major player in Vaca Muerta, Argentina's unconventional formation that holds an estimated 16bn bl of crude and 308 trillion cf of gas, according to the US Energy Information Administration. The formation is at the heart of YPF's plans for Argentina to produce 1mn bl of crude and export up to 30mn metric tonnes/yr of LNG by the end of the decade. YPF is now Argentina's largest crude exporter, dispatching an average of 40,000 b/d in the third quarter, nearly all of this going by pipeline to neighboring Chile, according to Federico Barroetavena, chief financial officer. He said the company invested $1.35bn in the third quarter, with more than 70pc on upstream. It drilled 50 wells in the third quarter. YPF is moving ahead with its southern Vaca Muerta oil pipeline as it looks for partners for the full project. It has completed 50pc of the first 130km (81.4mi) segment. The second 440km, as well as storage tanks and a monobuoy platform, will require $2.5bn. The company anticipates construction to start in the first quarter of 2025. The initial capacity will be 180,000 b/d in 2026, increasing to 500,000 b/d in 2027 and, eventually, to 700,000 b/d. YPF is also the largest shareholder, with 37pc, in the Oldelval pipeline from Vaca Muerta to the coast. It is undergoing an expansion to 530,000 b/d in 2025. The state-owned energy company, Enarsa, completed in October the reversal of the country's northern gas pipeline to move Vaca Muerta gas to the north of the country. It will move more than 15mn m³/d of gas to northern Argentina. It previously moved gas from northern gas fields, now depleted, and Bolivia, to the capital, Buenos Aires. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Hungary’s Mol cuts forecast for 2024 refinery runs


24/11/08
24/11/08

Hungary’s Mol cuts forecast for 2024 refinery runs

Budapest, 8 November (Argus) — Hungarian integrated oil firm Mol has revised down its 2024 forecast for crude runs at its two landlocked refineries after a "turnaround-heavy" third quarter, it said today. The company expects to refine around 11.5mn t of crude combined at the 161,000 b/d Szazhalombatta plant in Hungary and the 115,000 b/d Bratislava complex in Slovakia this year, down from its previous guidance of about 12mn t. The two refineries processed 8.25mn t of crude in January-September, down from 9.09mn t a year earlier. Their combined crude throughput was down by 11pc on the year at 2.81mn t in the third quarter. Mol carried out scheduled maintenance at Szazhalombatta between 26 July and 19 September and expects to complete maintenance work on petrochemical units at Bratislava in the first half of November. Crude intake at Mol's third refinery, the 90,000 b/d Rijeka plant on Croatia's Adriatic coast, rose by 2.6pc on the year to 802,000t in the third quarter and was largely unchanged year-on-year at 1.26mn t in January-September. The company's crude throughput forecast only includes the Hungarian and Slovakian refineries. Mol cut the share of imported crude in its overall slate to 3.35mn t, or 93pc, in the third quarter from 3.8mn t, or 97pc, a year earlier, while it almost doubled intake from its own crude production to 255,000t in July-September from 129,000t in the same period last year. Szazhalombatta and Bratislava mostly process Russian crude received through the Druzhba pipeline system under an EU oil ban waiver, while Rijeka mainly takes non-Russian seaborne crude. The profitability of Mol's refining business was hit by a 71pc year-on-year fall in its refinery margin indicator — calculated based on the Dated Brent crude benchmark — to just $3.70/bl in July-September. Its oil product sales fell by 4.2pc from a year earlier to 4.88mn t in the third quarter. This included 1.52mn t of products Mol had to buy from third parties to complement its own output and satisfy demand, a significant rise from 1.25mn t of third-party oil products it sold a year earlier. The firm's upstream oil and gas production rose by 11pc on the year to 96,100 b/d of oil equivalent (boe/d) in the July-September quarter. It has raised its full-year forecast to about 92,000-94,000 boe/d from previous guidance of around 90,000 boe/d. Mol's profit fell to 111.5bn forint ($295mn) in the third quarter from Ft175.8bn a year earlier. By Béla Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US extends oil service firms' Venezuela waiver


24/11/07
24/11/07

US extends oil service firms' Venezuela waiver

Washington, 7 November (Argus) — The outgoing administration of US president Joe Biden extended authorization for oilfield services companies Halliburton, SLB, Baker Hughes and Weatherford to continue working in Venezuela until 9 May 2025. The waiver allows the service companies to pay their staff and maintain limited operations, but it prevents them from drilling new wells or otherwise contributing to state-owned PdV's production and exports. The Biden administration reimposed sanctions on Venezuela's oil sector in April, after a six-month reprieve. The sole exemption is a waiver for Chevron allowing it to import oil into the US from its joint venture with state-owned PdV. US crude imports from Venezuela averaged 212,000 b/d in January-August, US Energy Information Administration data show. Chevron's Venezuela output has stood at about 200,000 b/d. Neither president-elect Donald Trump nor his campaign addressed the Venezuela sanctions regime or indicated if they would change it. Republicans in Congress ahead of the election called for the Chevron exemption to be revoked. The Biden administration separately extended a prohibition for holders of $3.4bn in PdV 2020 bonds guaranteed by 50.1pc in US refiner Citgo's holding company to exercise their claim, this time until 7 March 2025. The PdV bondholders in theory hold a superior claim to Citgo Holding — a legal entity that directly owns Citgo and, in turn, is owned by Citgo parent company PdVH. A federal court in Delaware recently oversaw an auction of PdVH shares that yielded a $7.3bn bid from a company backed by investors including Elliott Investment Management. Legal wrangling over the bids and the distribution of auction proceeds is likely to keep Citgo ownership unresolved in the near term. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Mexican peso plummets on Trump win


24/11/06
24/11/06

Mexican peso plummets on Trump win

Mexico City, 6 November (Argus) — The Mexican peso fell sharply against the US dollar as markets priced in potential retaliation against Mexico following former president's Donald Trump's victory in the US presidential election. "A Republican Senate majority and potential House win raise the chances of Trump's radical reforms, which could hurt Mexico's economic dynamism," said a financial analyst from Mexican bank Monex in a note today. The peso initially dropped around 3pc to Ps20.71/$1 early today, hitting a two-year low before recovering to Ps20.20/$1 by midday. The peso may weaken further, as Mexico is vulnerable to tariff hikes amid strained relations over issues like immigration and the opioid crisis, according to a desk report from a major Mexican bank. Trump repeatedly threatened tariffs on Mexico during his presidential campaign, most recently pledging a 25pc tariff on all Mexican imports unless President Claudia Sheinbaum's administration launches a severe crackdown on Mexico's drug cartels, which ship fentanyl and other drugs across the border to the US. Recent constitutional amendments in Mexico, including judicial reforms and proposed eliminations of independent regulators, may also add downward pressure on the peso, according to the report. "The government's goal to direct private-sector involvement could limit market forces," it noted. Mexico's state-owned oil company Pemex typically offsets peso depreciation due to its dollar-denominated oil export revenues, which help cover increased import costs. "Pemex's exports and domestic sales are tied to international hydrocarbon prices, providing a natural hedge," the company stated in its most recent report. Still, analysts warn that Pemex's focus on domestic refining over crude exports could erode this hedge, leaving it more exposed to foreign exchange swings on USD-denominated debt. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop 29 finance talks need leadership after Trump win


24/11/06
24/11/06

Cop 29 finance talks need leadership after Trump win

Edinburgh, 6 November (Argus) — Donald Trump's US presidential election victory will likely affect finance negotiations during the UN Cop 29 climate summit starting next week, but the US can still play a role while other developed countries step up to the plate, according to observers. Key negotiations at Cop on a new finance goal for developing nations, the so-called NCQG, could be "severely undermined" by Trump's victory, as the prospect of Washington withdrawing from the Paris Agreement may discourage other countries from engaging with US officials, non-profit IISD's policy adviser Natalie Jones told Argus . Trump pulled the US out of the Paris Agreement during his last term in office, calling it "horrendously unfair", and he has signalled he will do so again. "This could potentially weaken ambitions" at Cop 29, but it is unlikely to derail negotiations, Jones said. Observers agree that the US can still play a role in talks on the new finance goal, a key topic at this year's summit. Parties to the Paris deal will seek to agree on a new finance goal for developing nations, following on from the current $100bn/yr target, which is broadly recognised as inadequate. "The Biden administration still has a critical window to support vulnerable nations' calls to mobilise climate finance and deliver a strong climate target," civil society organisation Oil Change International's US campaign manager Collin Rees told Argus . The Biden administration's delegation, which will still take part in Cop 29, will not change position at this stage, according to Jones. And the US could continue to show some leadership, she said, adding that Washington likely intends to release its 2035 Nationally Determined Contribution (NDC) early. Countries' new climate plans must be submitted to the UN climate body the UNFCCC by February 2025, but the US could release its NDC at Cop 29 before Trump takes power early next year, she said. "President Biden must do everything he can in the final weeks of his term to protect our climate and communities," including on fossil fuels, Rees said. The prospect of Trump pulling the US out of the Paris accord could cause initial anxiety at Cop 29, Climate Action Network executive director Tasneem Essop said. But "the world's majority recognises that climate action does not hinge on who is in power in the US". "As we saw before and will see again, other countries will step up if the US reneges on their responsibilities and stands back," Essop said. Trump's victory might also present the EU with an opportunity to strengthen its leadership among other developed countries, according to Jones. "It is really on the EU and other countries to step up now," she said. This is a view echoed by German Green lawmaker Michael Bloss, a member of the European Parliament's delegation at Cop 29. "Europe needs to become the adult in the room," Bloss told Argus . The EU cannot rely on the US anymore and must become a global climate leader to ensure success at Cop 29, he said. Meanwhile, Oil Change's Rees stressed that the NCQG is a collective goal. "Other major economies must now step forward to fill the gaps, much as they would have needed to in any scenario given how the US has long refused to pay its fair share," he said. By Caroline Varin and Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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