Hurricane Ian shuts in 11pc of Gulf oil output
US offshore operators shut 11pc of Gulf of Mexico oil production as a precaution ahead of Hurricane Ian, which is expected to hit the west coast of Florida Wednesday evening.
About 190,358 b/d of offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), and 184mn cf/d of natural gas production. A total of 12 platforms were evacuated.
Although the storm is the first major hurricane of the season to threaten the mainland US, it is expected to spare the majority of oil and gas facilities in the Gulf, a region that accounts for about 15pc of US crude output and 5pc of dry-gas production.
BP said it will redeploy personnel to two offshore platforms that were shut down yesterday, now that it is clear the hurricane no longer poses a significant threat to its offshore facilities. The company is working to return staff to the 130,000 b/d Na Kika and 250,000 b/d Thunder Horse platforms.
Chevron started evacuating all personnel from its Petronius and Blind Faith platforms yesterday. Production at the company's other facilities in the Gulf of Mexico remained at normal levels.
Ian was about 265 miles south of Sarasota, Florida, as of 3pm ET today, moving north at 10 mph, with maximum sustained winds of 120mph, according to the National Hurricane Center.
On its current forecast track, the center of Ian is expected to move over the southeastern Gulf of Mexico today before passing west of the Florida Keys later tonight, and then approaching the west coast of Florida within the hurricane warning area on Wednesday.
Ian is expected to re-strengthen through Wednesday and come ashore Wednesday evening as an extremely dangerous major hurricane.
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Troll and Oseberg gas production high in February
Troll and Oseberg gas production high in February
London, 19 April (Argus) — Gas output from Norway's Troll and Oseberg fields stayed high in February, and production from the two fields must fall over the remainder of the gas year unless the fields overproduce their quotas. Maximum output from Troll and Oseberg is capped by a yearly quota, set at 40.47bn m³ for Troll and 7bn m³ for Oseberg for October 2023-September 2024, although there may be some flexibility to overproduce or carry over unused quota from previous years. Production at Troll edged down in February from previous months to 124.6mn m³/d, but was still the fourth-highest for any single month. The three months with higher production were November 2023-January 2024. And production from the Oseberg area — including Oseberg proper and the South and East satellite fields — averaged 24.4mn m³/d, slightly down on the month but still the second highest since April 2022. High output from both fields means that they will have likely each produced more than half their quota in the first half of the gas year. Troll produced 18.9bn m³ from its 40.47bn m³ quota in the first five months of the gas year, the latest data available, while Oseberg produced 3.2bn m³ of its 7bn m³ quota. And deliveries on offshore system operator Gassco's network in March and April so far have been similar to in previous months, suggesting output from the two largest fields has held similarly high. Assuming this is the case, production from the two fields may have to hold at no more than 93mn m³/d and 17mn m³/d for the remainder of the gas year if they are to avoid exceeding their quotas. But if the fields were to produce to quota, plus unused quota from the 2022-23 gas year, output would be 103mn m³/d and 23mn m³/d, respectively. There is an average of 8.3mn m³/d of maintenance scheduled at Troll over the remainder of the gas year, leaving flexibility for the field to produce up to quota and still have capacity to produce another 10mn-15mn m³/d more. Oseberg has less than 1mn m³/d of maintenance scheduled, but producing to the quota while also producing unused quota from the 2022-23 gas year would take it much closer to its nameplate capacity of roughly 25mn m³/d. While the quotas could allow continued strong production, output in previous years has always been lower in summer than in winter. And operators could have an incentive to delay some production if prices in the remainder of the season fall far below prices for future summers. TTF monthly contracts for delivery in the remainder of the summer were assessed an average of €2.02/MWh ($2.15/MWh) below the summer 2025 price on Thursday, but €3.36-8.22/MWh above summer contracts for delivery in 2026-28. No return to strong reinjections Implied injections at fields where operators have halted gas reinjections — Skarv, Visund, Gina Krog and Gullfaks — ticked up to 8.2mn m³/d in February, the highest since November 2021. But the upwards move does not necessarily indicate a return to injections at levels similar to before mid-2021. Injections were low and steady on the month at Skarv and Visund, where operators have indicated that gas reinjections have mostly been halted for good. Injections were flat at Gina Krog as well, although production of 8.4mn m³/d was the highest since June 2022. And the spike in injections at Gullfaks was similar in size to other spikes since mid-2021, and still well below injections before mid-2021 (see implied injections graph). Aggregate output from all fields connected to the pipeline export network averaged 341mn m³/d in the month, down from January but up slightly on the year. By Rhys Talbot Monthly production from pipeline-linked fields Implied reinjections at selected fields Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Limited strike on Iran opens door to de-escalation
Limited strike on Iran opens door to de-escalation
Dubai, 19 April (Argus) — A limited aerial assault on the central Iranian city of Isfahan earlier today could mark the beginning of the end of the latest escalation in the Mideast Gulf. Iranian state media reported in the early hours of Friday, 19 April, several explosions over Isfahan at 04:00 local time. These were later confirmed by the Iranian military to have been the result of air defences bringing down three small drones over the city. Isfahan is the home to a number of strategically important facilities, among them the Shekari airbase that houses some of Iran's F-14 Tomcat fighter planes and SU-24 Sukhoi bombers, and a uranium conversion facility. There was "no impact or damage" to either, according to Iranian army commander-in-chief Seyyed Abdolrahim Mousavi. Other Iranian officials also sought to downplay the strike. Hossein Dalirian, spokesman for Iran's National Center for Cyberspace, said on social media platform X that it was so minor "it would not be considered an attack anywhere in the world." Ice Brent crude futures rose by nearly $3/bl earlier today, but are now trading below the previous settlement level. Iran and the wider Mideast Gulf region were on high alert as Israel weighed its options for a response to Tehran's assault on Israeli territory last weekend. That attack, involving more than 300 drones, ballistic missiles and cruise missiles, was the first ever direct assault on Israel from Iranian territory. As yet, there has been no official confirmation from either side that today's attack originated from Israel. Media reports quoted unnamed US and Israeli officials saying Israel had launched the drones, and Oman's foreign ministry condemned Israel "for its attack this morning on Isfahan". Iran's attack on Israel last weekend was itself in response to a suspected Israeli air strike on an Iranian diplomatic compound in the Syrian capital, Damascus, at the start of April. That killed seven members of Iran's powerful Islamic Revolutionary Guard Corps (IRGC), including two generals. Despite its magnitude, the Iranian retaliation was not only highly choreographed, but also telegraphed to key stakeholders beforehand in an effort to limit damage and casualties. Israel said immediately after the attack that almost all of Iran's drones and missiles were intercepted with the help of allied forces in the region and that there were no fatalities, only "light" damage to the Nevatim military base in Israel's Negev desert. De-escalatory strike The limited nature of Iran's strike prompted Israel's western allies to urge it to show restraint. The US appealed to Israeli prime minister Benjamin Netanyahu to "take the win" and claim victory for its defence. But as it became increasingly clear that a response without a military dimension would be unpalatable for Israel, the US and Europe turned their efforts to making sure whatever Israel chose to do was also limited and fell below a threshold that could trigger yet another escalation in tensions. "This was probably the level of attack that on one hand was necessitated by internal Israeli calculations within the security cabinet and broader political coalition, and by virtue of the pressure by allies and what the US was willing to countenance," said Geneva Graduate Institute senior research associate Farzan Sabet. "It was a limited strike with the message that we can hit you anywhere, anytime, and without having to resort to a major strike involving 300-plus missiles." In the days following Iran's attack on Israel, several key IRGC figures said Tehran had "decided to create a new equation with Israel" ꟷ specifically that Tehran would retaliate to any Israeli attack on its interests or citizens from Iranian territory. This would be a shift from the previous status quo, which would see Israel regularly target Iranian interest and officials in third countries, many times without response from Tehran. But the limited nature of Israel's latest attack, and the very concerted effort by Iranian officials, military personnel and media to downplay its severity and impact so far, suggests it could feasibly provide a de-escalatory off-ramp for Iran. "Should Israel's response be limited to this, the Islamic Republic will not be under pressure to retaliate," said Arab Gulf States Institute senior fellow Ali Alfoneh. But is too early to say whether today's incident is the totality of Israel's response. "We're running up to [the Jewish holiday of] Passover [on 22-30 April]. The Israelis may not have wanted to carry out a major retaliation ahead of Passover so as to avoid the threat of war hanging over the country during the holiday," Sabet said. "So it is very possible that more [retaliatory attacks] could come after Passover." By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India mulls using more natural gas in steel sector
India mulls using more natural gas in steel sector
Mumbai, 19 April (Argus) — India's steel ministry is considering increasing natural gas consumption in the sector as it aims to lower carbon emissions from the industry. Steelmakers held a meeting with the steel ministry earlier this month, to discuss challenges and avenues to increase gas allocation to the sector, according to a government document seen by Argus . Steel producers requested that the government set gas prices at an affordable range of $7-8/mn Btu for them, to make their gas-based plants viable, as well as for a custom duty waiver on LNG procured for captive power. India's LNG imports attract a custom duty of 2.5pc. City gas distribution firms sell gas at market-determined prices to steel companies. Representatives from the steel industry also requested for the inclusion of gas under the purview of the country's goods and service tax, and to be given higher priority in the allocation of deepwater gas, which has a higher calorific value. Deepwater gas is currently deployed mostly to city gas distribution networks. Steelmakers are currently undertaking feasibility tests for gas pipeline connectivity at various steel plants. But a gas supply transmission agreement requires a minimum five-year period for investment approval. The steel industry is heavily reliant on coal, and the sector accounts for about 8-10pc of carbon emissions in the country. A task force of gas suppliers including IOC, Gail, BPCL, Shell, and HPCL and steel producers like Tata Steel, AMNS, All India Steel Re-roller Association and the Pellet Manufacturers Association has been set up, and the team is expected to submit a report on increasing natural gas usage and lowering carbon emissions by 15 May, the government document said. This team is one of the 13 task forces approved by the steel ministry to define the country's green steel roadmap. The steel ministry aims to increase green steel exports from the country in the light of the policies under the EU's Carbon Border Adjustment Mechanism (CBAM), which will take effect on 1 January 2026. Under the CBAM, importers will need to declare the quantity of goods imported into the EU in the preceding year and their corresponding greenhouse gas emissions. The importers will then have to surrender the corresponding number of CBAM certificates. CBAM certificate prices will be calculated based on the weekly average auction price of EU Emissions Trading System allowances, expressed in €/t of CO2 emitted. This is of higher importance to Indian steelmakers as the EU was the top finished steel export destination for Indian steelmakers during the April 2022-March 2023 fiscal year with total exports of 2.34mn t, and has been the preferred choice for Indian steel exports in the current fiscal year owing to higher prices compared to other regions. Indian steelmakers have started to take steps to lower their carbon emissions by announcing collaborations with technology companies to decarbonise, and are trial injecting hydrogen in blast furnaces, and increasing the usage of natural gas in ironmaking. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Karoon cuts 2024 guidance on lower US output
Karoon cuts 2024 guidance on lower US output
Sydney, 19 April (Argus) — Australia-listed oil producer Karoon Energy has cut its production guidance for 2024 to reflect lower production from its stake in the Who Dat floating production system in the US' Gulf of Mexico. Who Dat's weaker well and facility performance has led to the lower guidance, with Karoon now expecting to produce 29,000-34,000 b/d of oil equivalent (boe/d) in 2024, down from a previous 31,000-37,000 boe/d guidance. Karoon said it and joint-venture partner LLOG Exploration will continue to prioritise higher value oil production over gas for the remainder of the year. The firm's January-March output rose by 17pc against October-December 2023 . Who Dat's production on a net revenue interest (NRI) basis was 9,000 boe/d for January-March, with Karoon downgrading its forecast NRI production from 4mn-4.5mn boe in 2024 to 3-3.5mn boe. But output from Karoon's Bauna asset offshore Brazil was 15pc lower than the previous quarter because of continuing reliability problems with Bauna's floating production, storage and offloading (FPSO) vessel, the shut-in of the SPS-88 well for the full period and natural field decline. Production for January-March at Bauna was 24,000 b/d, down from 28,000 b/d the previous quarter. Karoon expects to resume production from the well during July-September following an intervention, assuming no delays in regulatory approval. Bauna's annual maintenance will take place next month with a three-week shutdown of the FPSO planned to boost reliability. By Tom Major Karoon Energy results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 y-o-y % ± q-o-q % ± Sales revenue ($mn) 197 209 144 37 -6 Production (b/d) 34,000 29,000 22,000 55 17 Sales volume (b/d) 30,000 28,000 22,000 36 7 Average prices ($/bl) Bauna oil price 76 83 73 4 -8 Who Dat sales gas ($/mn ft³) 2.95 2.22 n/a n/a 33 Who Dat oil, condensate, NGLs 78 73 n/a n/a 7 Source: Karoon Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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