UnaCom Oil and Gas News

                                                               10th September - 16th September 


 Monday 10th September

Qatargas and China agree on 22-year LNG Gas Supply

Qatargas has said today, that is has agreed a 22-year deal with PetroChina International Co, to supply China with around 3.4 million tonnes of liquefied natural gas. In an effort by China to step up its efforts in combating air pollution. China needs LNG to replace its usage of coal with cleaner burning natural gas. China has become the second largest buyer of LNG, after recently overtaking South Korea. China's LNG imports may surge 70 percent to 65 million tonnes by 2020, according to consultancy SIA Energy.

Tuesday 11th September  

U.S Sanctions already starting to take its effect on Oil Buyers

The sanctions are set to come in place in November against Iran. And its effects are already starting to take place with JXTG Holdings Inc, Japan’s biggest refiner, and domestic rival Idemitsu Kosan Co. are both said to have skipped purchases of Iranian supplies loading in October. Bharat Petroleum is among Indian state-run refiners that haven’t booked any cargoes for the month either. These companies are waiting for their respective governments to negotiate import deals with the US. Companies are declining to buy October cargoes from Iran because of the possibility that those shipments may arrive only after Nov. 4. That’s when the U.S. will reimpose sanctions targeting Iran’s exports to force renegotiation over the Middle East nation’s nuclear program. With a drop-in export from Iran, coupled with disruptions in other producers like Libya, this could raise the price of Brent Crude over $80/bbl in the near-term. Meanwhile, China the biggest buy of Iranian oil, is increased Iranian crude imports via the Sino-Myanmar pipeline. 

SABIC signs deal to build a petrochemical complex in China 

Saudi Basic Industries Corp (SABIC) signed a memorandum of understanding (MOU) with China’s Fujian provincial government to build a petrochemical complex. This is the third major company to invest in chemicals in China over the past two months. With U.S. oil major Exxon Mobil and Germany’s BASF having announced plans to build ethylene complexes in southern China’s Guangdong province.

ExxonMobil planning on Upgrading UK Refinery for more than £500 million 

ExxonMobil is to potentially spend £500 million, to upgrade the UK’s largest oil refinery, Fawley, on England’s south coast. Fawley represents a fifth of British, refining capacity. The deal is not finalised, and an investment decision is still required, which is predicted to take place in the 2nd quarter next year. The upgrade would include, building a new hydrotreater and a new hydrogen plant, it would reduce Britain’s reliance on diesel imports. It will also allow the site to process a wider range of crude oils and secure up to 1000 jobs.

Wednesday 12th September

North Sea Drilling falls to its lowest levels since 1965 

The number of new wells being drilled in the North Sea, has fallen to levels not seen since the basin was first tapped over 50 years ago. Only four exploratory wells have been drilled in the first eight months of the year, with the most optimistic projections pointing to a total of 12 expected by the year end. This fall is a sign that companies are only willing to drill the most competitive and profitable wells. 

Thursday 13th September

North Sea Oil and Gas to generate £10bn surplus

North Sea Oil and Gas companies are set to generate a surplus of £10bn this year and the Treasury ready to set $2bn tax receipts, but companies are struggling with a drop-in discovery and drilling of wells. This surplus due to a report from Oil and Gas UK, links the increase in financial activity to a crude price rally since late 2016 combined with efforts to increase efficiency. The £10bn free cash flow will be the highest figure achieved since 2010, when the industry was at a boom.  However, with drilling falling 50% over the last five years, its causing concern for the ability of the industry to realise its potential. 

Friday 14th September  

West Shetland generating excitement in the industry

After reports yesterday that the UK was squandering its resources with a drop-in drilling reaching worrying levels. But now with Cairn energy generating huge amounts of cash from the Kraken field east of Shetland it brought into production last year and prominent Wood Mackenzie, noting that regulators thinks more than 1.5 billion barrels oil equivalent could be recovered West of Shetland with only less than 160 exploration wells having been drilled in the region to date. That compares with more than 500 in other area of the UK. They also said the huge fields that BP and Shell are likely to develop will drive production growth in the UK through the 2020s. And will encourage firms to look at other areas of the wilds West of Scotland.   

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