US M&A deals dip after record 1Q: Enverus
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.
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Nigeria offers 12 oil blocks in 2024 licensing round
Nigeria offers 12 oil blocks in 2024 licensing round
Lagos, 10 May (Argus) — Nigeria has offered 12 oil blocks in a new licensing round. It plans to complete it in tandem with a previous round for seven blocks that stalled following last year's change in government. The 12 blocks in the new round were carefully selected to attract international investors with financial resources and technical expertise and are spread across three geological terrains, upstream regulator NUPRC's chief executive Gbenga Komolafe said. Norwegian geophysical services company PGS, which is providing seismic data support for the licensing round, said two of the blocks on offer are onshore in the Niger delta, six are on the continental shelf and the other four are in deep water. The round will span nine months and conclude with ministerial consent and contracting in January 2025. Entry fees will be competitive as part of government measures to support the commercial viability of investments, according to Komolafe. "The era of front-loaded, huge signature bonuses is over," he said. Nigeria's oil minister Heineken Lokpobiri echoed Komolafe's point about minimal barriers to entry but noted that the round is designed to bind successful bidders to strict timelines, suiting investors that are "able to do exploration almost immediately". Lokpobiri also revealed that Nigeria plans to award licences for seven offshore blocks offered in a 2022 licensing round in tandem with the 2024 round. "The 19 oil blocks presented for bidding are strictly reserved for capable investors," he said. The round for the seven offshore blocks started in December 2022 and had been scheduled to be completed in May 2023. NUPRC said in April last year that the schedule had been pushed back to July because of concerns about concluding "the bid process before transition to the new government". President Bola Tinubu's administration took office on 29 May last year but progress on the 2022 licensing round stalled. Tinubu has set a target to raise Nigeria's crude production to 2.6mn b/d by 2027. The country's current target under the Opec+ agreement is just 1.5mn b/d. Nigeria started an international roadshow for the new licensing round in the US on 7 May in Houston, Texas, and the next stop is scheduled for Miami, Florida on 14 May. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Korea's Kogas seeks short-term, long-term LNG from 2025
Korea's Kogas seeks short-term, long-term LNG from 2025
Singapore, 10 May (Argus) — South Korea's major importer Kogas is seeking short-term and long-term LNG through two separate tenders. The firm is seeking at least 700,000 t/yr of LNG for delivery over 2025-27, through a tender that will close on 3 June. Offers can be linked to a northeast Asian spot LNG price, Brent or Henry Hub. Kogas is also separately seeking 700,000 t/yr, 1.4mn t/yr or 2.1mn t/yr of LNG over a duration of 7-15 years, starting from 2027 or 2028. The firm is seeking offers on a fob or des basis, although it has specified a minimum vessel size of 135,000m³ for fob offers. Offers can be linked to either Brent or Henry Hub, and the deadline for submission is at 12am Korea time (3pm GMT) on 10 June. The firm's latest long-term requirement comes on the heels of another long-term agreement that it signed with BP just last month, for up to 9.8mn t of LNG over 11 years from mid-2026. This also comes after South Korea's trade, industry and energy ministry (Motie) announced on 2 May that Kogas will continue to seek new term import contracts for the super-chilled fuel, to stabilise prices and meet higher domestic gas demand. The renewed focus on securing term supply has come at an interesting time with spot LNG prices in a downward trend since late last year, right in the middle of the winter season when prices typically peak. The front half-month of the ANEA — the Argus assessment for spot LNG deliveries to northeast Asia — was last assessed at $10.165/mn Btu on 10 May, a drop of 40pc since prices peaked on 23 October 2023. More LNG importers are also seeking term volumes over 2025-27, which is widely deemed to be a period during which LNG supply could be tighter as it is just before the new US liquefaction capacity fully hits the market. Higher nuclear availability in South Korea over the upcoming northern hemisphere summer season could weigh on LNG demand over the season. The country may also further trim its LNG use in the years to come, as it increases its reliance on nuclear power generation. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US delays return of SPR crude until 2026
US delays return of SPR crude until 2026
Washington, 9 May (Argus) — President Joe Biden's administration has delayed by up to two years a requirement for oil companies and traders to return about 15.3mn bl of crude that have been loaned out from the US Strategic Petroleum Reserve (SPR). Oil companies and traders were initially scheduled to return up to 19mn bl of crude to the SPR from June-September and to return up to 8mn bl of additional crude over the following year. The US Department of Energy (DOE) loaned out most of that crude in 2022 because of supply shortages related to the war in Ukraine and a temporary shutdown of the Keystone pipeline. DOE had loaned the crude using a mechanism called an "exchange," under which companies agree to return the crude to the SPR at a later date, along with an in-kind payment in exchange for the loan. But over the last two months, DOE has modified at least nine contracts with ExxonMobil, Shell and other companies that had borrowed the crude, delaying the return of about 15.3mn bl of the borrowed crude to the SPR until 2026, according to contract modifications Argus Media obtained after filing a request under the Freedom of Information Act. DOE said it delayed the return of the exchange crude in support of a separate SPR program, where it has directly purchased more than 27mn bl of crude that will be added the SPR's Big Hill storage site in Texas. That purchase program will inject about 3mn bl/month to the SPR through the first nine months of this year, and DOE last week restarted efforts to buy more crude for the SPR for delivery starting in October. "These actions strategically moved back exchange returns to take advantage of stable crude oil market windows to directly purchase oil at a good price for taxpayers, while having consistently available capacity to drawdown in the event of an emergency," DOE said. The nine contract modifications were signed between 26 March and 16 April, at a time when Nymex WTI spot prices briefly surged past $80/bl, to the highest price in more than five months. Delaying the return of the exchanges will effectively free up crude that would otherwise have been injected into the SPR in June-September, during the peak of the summer driving season. Nearly all of the revised contracts will delay the return of "all remaining exchange oil" until July-October 2026. Republicans have repeatedly attacked the administration's management of the SPR, which they argue is dangerously low after Biden ordered the emergency sale of 180mn bl of crude from the reserve in 2022 in response to the war in Ukraine. Republicans have pushed the administration to prioritize refilling the SPR, which is at about half of its design capacity with 367.2mn bl of crude, given the value the reserve could have in mitigating supply shortages. US energy secretary Jennifer Granholm, in congressional testimony in March, said the administration was carrying out a plan to refill the SPR to "essentially where we would have been" if the emergency sales had never happened. DOE has already been able to cancel 140mn bl of congressionally mandated SPR sales and lined up the purchases of more than 30mn bl of crude. DOE also has said it "accelerated" the return of 4mn bl of crude exchanges. By Chris Knight SPR crude injections from exchanges mn bl Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vertex to pause Mobile renewable fuels refining
Vertex to pause Mobile renewable fuels refining
Houston, 9 May (Argus) — US specialty refiner Vertex plans to pause renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery by the end of the year, returning a converted hydrocracker to produce what it says are wider-margin fossil fuel products. Vertex completed the conversion of the Mobile refinery and produced its first barrels of renewable diesel (RD) in May last year , having bought the refinery from Shell in 2022 . The company plans to use a third quarter turnaround to convert its renewable hydrocracker back to petroleum fuels production and to be up and running by the end of the year, after facing significant macro headwinds for renewable fuels, the company said on an earnings call today. The decision to return to full fossil fuels production is ultimately a near-term financial decision for the company which has an outstanding $196mn term loan, management said on an earnings call Thursday. The time line for a return to petroleum product production is contingent on permitting approvals and a successful completion of the turnaround and catalyst change in the unit. Vertex plans to sell its renewable feedstock inventories prior to the conversion. Vertex said it will retain the flexibility to return to renewable fuels processing should market conditions improve for the fuels, but does not believe headwinds to renewable markets will abate in at least the next year and a half. Conventional crude and other feedstock throughputs at the Mobile refinery were 64,000 b/d in the first quarter, down from 71,000 b/d in the same three months of 2023. Renewable throughputs were 4,000 b/d in the most recent quarter. The company expects 68,000-72,000 b/d of conventional crude and other feedstock throughputs in the second quarter and 2,000-4,000 b/d of renewable throughputs. Vertex reported a first quarter loss of $18mn compared to profits of $54mn in the first quarter of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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