Opec+ ministers say bigger group would be better
Some Opec+ ministers today called for more oil producing countries to join them in a bid to gain a larger share of the global market.
"Imagine if we are 60pc of the producers or 70pc of the producers [of the world]," the UAE's energy minister Suhail al-Mazrouei said at the Opec Seminar in Vienna today. "Imagine… we would do a better job."
The 13 members of Opec and 10 non-Opec countries form the Opec+ alliance, which accounts for just under 40pc of global crude production. It is unclear which producing countries could either be asked or would seek to join Opec+. Opec in June formally denied it had invited rising South American producer Guyana to be a member.
Equatorial Guinea's minister of mines and hydrocarbons Antonio Oburu Ondo said today that "the bigger [Opec] is the better it is and it just creates market certainty."
"Because having so many producers going in a different way and implementing different policies… I don't see how that will prevent market volatility," he said. "If we are larger, we can impact better on transparency and also with the certainty of data."
Azerbaijan's energy minister Parviz Shahbazov went further, suggesting "we need to expand beyond the realm of oil and into the energy sector as a whole because we are in a transitional time. We have to act widely."
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Iran oil min nominee struggles for parliament approval
Iran oil min nominee struggles for parliament approval
Dubai, 14 August (Argus) — New Iranian president Masoud Pezeshkian's nominee to lead the country's critically important oil ministry is facing an uphill battle to secure a vote of confidence in parliament, largely because of the highly polarized nature of Iranian politics. Mohsen Paknejad, an oil sector veteran with close to three decades of experience in senior leadership roles in Iran's energy sector, was named as Pezeshkian's pick for oil minister early on 11 August, alongside the new president's other cabinet nominees that included former deputy foreign minister Abbas Araqchi to head up the foreign ministry and ex-central bank governor Abdolnaser Hemmati to lead the finance ministry. The response to many of Pezeshkian's cabinet nominees has been mixed, with some of the negative reaction coming notably from those who supported the new president as the sole reformist candidate in the election. Paknejad is no exception. Since his first meeting on 12 August with members of parliament, who must ultimately ratify the president's cabinet picks, Paknejad has been facing criticism from some quarters for a perceived lack of suitable experience and for the absence of a coherent plan for his proposed tenure in the oil ministry. "The nominated ministers of oil and energy appeared at a meeting of the parliament's energy commission yesterday to answer questions… [but] neither had a plan to present," energy commission member Ramezan Ali Sangdovini said on social media platform X on 13 August. There have also been objections over Paknejad's close relationship with ex-oil minister Bijan Zanganeh, who most recently served for the whole of former president Hassan Rohani's two terms in office. Zanganeh, who has had two separate stints as oil minister and one as energy minister, has become a divisive figure in Iranian politics, praised by those who favour opening up Iran's oil industry to foreign investment but reviled by those who consider outside involvement as interference. Zanganeh has also faced allegations of corruption over a gas supply contract that Iran signed with a UAE company in 2001, allegations he vehemently denies. The contract with Crescent Petroleum was to export 1bn ft³/d (10.3bn m³/yr) of gas from Iran to the UAE but the supplies never materialized and Iran was later forced to pay damages. "Zanganeh was in and around the oil ministry for more than 15 years," says one former official at state-owned oil company NIOC. "He made many friends, but also many enemies. And not just in oil circles, but also beyond." Late addition Paknejad held his most senior positions while Zanganeh was oil minister. And it is this close relationship, as well as Zanganeh's strong and public support for Pezeshkian during his election campaign, that has prompted suggestions among some parliamentarians that Paknejad's selection was ultimately Zanganeh's doing. "In terms of political and management policies, he and Zanganeh are like two faces of the same coin," energy commission member Mohammad Kaab-Omir said on X. Others think Zanganeh's role in the nomination should not be overstated. "Was Zanganeh consulted on Paknejad? That is very likely, yes. But to say it is his pick is not accurate," the former NIOC official said. In the days leading up to Pezeshkian's cabinet nominations, Paknejad was not even in the frame, according to the Iranian press, which instead touted a host of other names as likely candidates including former NIOC managing directors Masoud Karbasian and Rokneddin Javadi, former oil minister Gholamhossein Nozari and former deputy oil minister Seyed Emad Hosseini. Nozari had been a leading contender up until late last week, but pushback from the reformist camp saw him fall by the wayside, according to former NIOC officials. Hosseini was then tipped to be the final nominee, only for a last minute change of heart by Pezeshkian. The reason for the shift away from Hosseini is unclear but it could explain why Paknejad appeared so unprepared in his preliminary meetings with members of parliament. Parliament typically has a week to study the president's cabinet picks before taking a vote of confidence. The open sessions to vote on the nominees are due to begin on 17 August. At this point, the cards look stacked against Paknejad but given the role of internal politics in the vetting process, he still has time to turn it around. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Pipeline fire disrupts crude flows to Libyan port
Pipeline fire disrupts crude flows to Libyan port
London, 13 August (Argus) — Crude supplies to Libya's Es Sider export terminal have been disrupted by a fire along a pipeline connecting the port's storage tanks with oil fields, traders and shipping agents told Argus . The fire, which operator Waha Oil said was extinguished today, affected a pipeline 30km south of Es Sider's crude oil storage facilities. The Es Sider terminal is located in the country's east and is connected to the Sirte basin, Libya's oil heartland. Any reduction in crude exports from Es Sider will depend on the severity of the damage. Waha Oil produced 261,000 b/d of crude on 12 August and 271,000 b/d flowed through its pipeline system to the terminal, according to an operational report seen by Argus . One source told Argus that crude flows to the terminal have fallen to around 125,000 b/d, while two others said Waha Oil had been forced to reduce production by 100,000 b/d. The terminal exports Waha Oil's medium sweet Es Sider grade. Loadings in the three months to July averaged 292,000 b/d, according to Kpler data. Waha Oil was scheduled to export 15 cargoes totalling 9.4mn bl this month, according to loading schedules. Six tankers have loaded Es Sider crude from the port so far this month. The last one to do so was the TotalEnergies chartered Pacific Pearl, which is currently just off the terminal. The next tanker due to load at Es Sider is the BP-chartered T.Kurucesme, which was set to arrive on 14 August. Crude stocks at the terminal stood at 1.76mn bl as of 12 August, the operational report said. Waha Oil, which is a consortium of TotalEnergies, ConocoPhillips and state-owned NOC, recently said it boosted production capacity to 322,000 b/d . It produced 280,000 b/d last year. The disruption to operations at Es Sider comes after the country's largest oil field, El Sharara, was forcibly shut down earlier this month. This has led to the shut-in of around 250,000 b/d of production and has prompted NOC to declare force majeure on crude exports from the Zawia terminal . Opec member Libya typically produces around 1.2mn-1.25mn b/d of crude, but its output has been frequently impacted by political unrest and decrepit infrastructure over the past decade. By Aydin Calik, Lina Bulyk, Kuganiga Kuganeswaran and Matthew Mitchell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China’s oil demand outlook weakens further: IEA
China’s oil demand outlook weakens further: IEA
The IEA issued updates to its numbers London, 13 August (Argus) — The outlook for China's oil demand growth this year has weakened further, the IEA said today. China's oil demand fell for a third consecutive month in June, with crude oil imports in July hitting their lowest since September 2022 when the country was locked down because of Covid, the Paris-based agency said in its latest Oil Market Report (OMR). China's oil demand is now forecast to grow by 300,000 b/d in 2024, compared with 410,000 b/d in last month's report and well below the 710,000 b/d the IEA had projected in January. For next year, the agency pegs growth at 330,000 b/d, "but with risks skewed to the downside." "Chinese oil demand growth has gone into reverse due to a slowdown in construction and manufacturing, rapidly accelerating deployment of vehicles powered by alternative fuels and comparison to a stronger post-reopening baseline," the IEA said. Lower Chinese consumption data feed into the IEA's narrative that the country's pre-eminence as a source of global demand growth is fading . The IEA's global oil demand growth forecast for 2024 remained unchanged at 970,000 b/d as the downgrade from China was mostly offset by better than expected gasoline consumption in the US. The agency now sees US oil demand growth at 140,000 b/d this year, compared with 70,000 b/d last month. The IEA's demand growth forecast for this year remains well below that of Opec which downgraded its forecast by 140,000 b/d to 2.11mn b/d . Opec sees Chinese oil demand growing by 700,000 b/d this year. For next year, the IEA nudged down its oil demand growth projection by 30,000 b/d to 950,000 b/d, mostly on lower forecast Chinese demand. On global oil supply, the IEA lowered its growth estimate for 2024 by 40,000 b/d to 730,000 b/d. Much bigger growth is forecast next year at 1.95mn b/d, led by gains from the US, Guyana, Canada and Brazil. In terms of supply and demand balances this year, the agency's numbers point to a slightly tighter market than previously thought. It now sees a deficit of 130,000 b/d in 2024, compared with 80,000 b/d in last month's report. The deficit in the second half is seen at 390,000 b/d. The IEA said that after four months of stock builds, global observed oil inventories fell by 26.2mn bl in June and preliminary data showed further draws in July. But the IEA points to an oversupplied market next year, particularly given a plan by some Opec+ members to unwind some of their production cuts from October. But even if those cuts remain in place, the agency says global inventories could build by 860,000 b/d in 2025. By Aydin Calik IEA oil demand and supply balance Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US majors offer up mixed fortunes on M&A
US majors offer up mixed fortunes on M&A
New York, 12 August (Argus) — ExxonMobil's $64.5bn acquisition of shale giant Pioneer Natural Resources is already showing signs of paying off, but Chevron's $53bn takeover of US independent Hess is stuck in limbo because of a simmering dispute with its major rival over a Guyanese oil stake that is likely to drag on into 2025. The contrasting fortunes of the two blockbuster deals that ushered in a frantic round of dealmaking in the shale patch, with billions of dollars of assets changing hands, could have far-reaching consequences for ExxonMobil and Chevron as the two US majors double down on fossil fuels and chase low-cost and lower-carbon barrels that can withstand the challenges of the energy transition. The stakes are high as both have set out ambitious plans to ramp up shareholder returns in the forthcoming years. In a preview of its global outlook due out later this month, ExxonMobil forecasts that world energy demand will be 15pc higher in 2050, with oil demand holding firm around 100mn b/d, even as renewables and natural gas grow. "We anticipate this year will be a record, and then next year will be a record, so demand continues to be fairly healthy from an oil standpoint," chief executive Darren Woods says. ExxonMobil looks set to extend its lead over its smaller rival Chevron after closing the Pioneer deal in record time. Woods is citing "extremely encouraging" early results from the integrated assets to hint at even greater cost savings from the Pioneer takeover than the initially estimated $2bn/yr. ExxonMobil has already started to deploy its more efficient "cube" production strategy to the Pioneer assets, which enables it to drill multiple horizontal wells in stacked intervals from a single location. Pioneer, in turn, is contributing expertise in logistics and procurement. ExxonMobil is now producing more oil than at any other time since the Exxon and Mobil merger in 1999, after achieving record second-quarter output from the Permian and the prolific Stabroek block off Guyana. Output is set to grow further as the latest results only included two months of production from the Pioneer assets. I drink your milkshake The story is different over at Chevron, where chief executive Mike Wirth has had to put on a brave face after having his hopes of closing the Hess deal by the end of the year dashed. International arbitration to resolve a disagreement with ExxonMobil over its right of first refusal to a 30pc stake in the Stabroek block currently held by Hess — and the main impetus behind Chevron's proposed takeover — will now not take place until May 2025. That will likely postpone the deal's closure until late 2025, almost two years after it was first announced. Wirth does not expect the spat to be settled outside of arbitration, saying such a strategy had been tried but "that time has now passed". With the Hess deal on hold, Wirth is talking up Chevron's robust pipeline of projects from the Permian to the Gulf of Mexico and Kazakhstan. Wirth has not ruled out further acquisitions, even as the company waits for the Hess deal to be completed. "If another opportunity were to present itself that was compelling, we're certainly in a position to consider it," he says. But the Hess deal, with its highly prized Guyana asset, is seen as essential by some analysts for the company to answer questions over its long-term growth plans. That ExxonMobil is refusing to back down shows the extent to which the company is determined to protect its rights over one of the biggest discoveries seen in recent decades, with an estimated 11bn bl of recoverable oil. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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