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ExxonMobil's Nigeria sale inches forwards

  • Market: Crude oil
  • 30/05/24

ExxonMobil's long-delayed sale of its Nigerian shallow-water oil and gas business to London-listed Seplat is one step closer, with the US major having agreed a settlement with state-owned NNPC that removes a legal obstacle to a regulatory review of the deal.

Exxon agreed the $1.58bn divestment, for its 40pc stake in more than 90 shallow-water and onshore platforms, in February 2022. The assets generate around 95,000 b/d of oil equivalent (boe/d).

Completion has been delayed by a dispute over pre-emption rights provided for in an NNPC-Exxon joint operating agreement, and the state-owned firm got a court injunction blocking the deal in July 2022.

Ministerial approval, appearing to ignore the court injunction, was first granted and then withdrawn in August 2022.

Nigerian upstream regulator NUPRC said at the start of May that Exxon and NNPC would have to reach a settlement before a review could be conducted or any recommendation for its approval submitted to the petroleum minister. Before recommending any deal for ministerial approval, the regulator said it has to determine if intending buyers have the financial resources and technical expertise to manage their acquisition targets, and whether sellers or buyers will be responsible for environmental remediation, host community obligations and decommissioning liabilities.

NUPRC also said the government had set 31 August as a deadline to clear Nigeria's backlog of unapproved upstream deals.

NNPC did not reveal the terms of today's settlement, which comes after Nigeria's president Bola Tinubu, who doubles as petroleum minister, and his two junior petroleum ministers met ExxonMobil upstream president Liam Mallon and its Nigerian business' managing director Shane Harris on 28 May.

"[The] president has given a clear directive to [NNPC's chief executive Mele Kyari] and I to resolve the issue of divestment, and we are doing whatever we can to achieve that", junior minister Heineken Lokpobiri said at the meeting.


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03/03/25

Looming tariff war adds to US refiner headwinds

Looming tariff war adds to US refiner headwinds

Houston, 3 March (Argus) — US independent refiners, already facing weaker margins, falling demand and regulatory uncertainty in their burgeoning renewables businesses, are braced for another imminent headwind from US tariffs. The US may impose a 10pc tariff on energy from Canada and a 25pc tariff on all imports from Mexico starting on 4 March. Refiners are scrambling to find alternative supplies, including switching to lighter crude slates, but this will come at a cost. Although short-term margins are due to improve with refinery closures and maintenance, a sustained tariff war could add another long-term problem. The potential tariffs come as US independent refiners including Marathon Petroleum, Valero and Phillips 66 are coming out of a rough fourth-quarter earnings season, with lower margins cutting into profits year on year. The tariffs have already caused problems in North American oil markets as trading desks struggle to understand how they would work in practice and some buyers hold off from committing to taking March cargoes until details are clarified. But one thing is becoming clear — tariffs will lead to higher feedstock costs and will cause some refiners to reduce runs, cutting further into profits. US independent refiner PBF Energy chief executive Matthew Lucey says tariffs on Canadian crude would cause US midcontinent refineries to cut throughputs, even if they find alternative crudes. Marathon Petroleum, the largest US refiner by volume, says it could pivot some of its midcontinent refineries to run domestic crude slates such as Bakken from North Dakota and Montana, crude from the Rockies, or crude from the Utica and Marcellus shale regions in the northeast US. Tariffs would lead to price increases, but most of it "will ultimately be borne by the producer" and to a lesser extent the consumer, Marathon chief executive Maryann Mannen predicts. Smaller refiner HF Sinclair also says it could switch to alternative, lighter crudes at its refineries if tariffs are implemented. Several refiners agree with Marathon that producers would bear the brunt of the tariff costs, but the impact on oil prices will have repercussions throughout the industry. US bank TD Cowen expects US refiners that run Canadian crude on the margin to switch to light sweet crude, increasing WTI and Brent prices. Meanwhile, inland refiners that run Canadian crude as a core part of their slate are likely to continue to do so, the bank says. Phillips 66's executive vice-president of commercial Brian Mandell agrees with that assessment, saying that Western Canadian crude will continue to flow to US refiners, but at a greater discount. Sour taste Meanwhile, US Gulf coast refiners will be likely to replace Mexican and Canadian heavy crude with crude from other heavy sour producers such as Iraq, TD Cowen says. The switching will be likely to tighten medium and heavy sour differentials already tight from Opec+ curtailments and US sanctions against Russia. If it becomes too expensive to switch to heavy sour crudes, refiners could run less-efficient crude slates, reducing product supplied. Despite the headwinds, US refiners have expressed optimism that margins will improve in 2025 as a result of a heavy spring maintenance season and expected capacity closures. Two large US refineries are shutting down this year — LyondellBasell's 264,000 b/d Houston, Texas, refinery is in the process of closing, and Phillips 66's 139,000 b/d Los Angeles refinery is planned to be shut by the end of the year. Marathon says it expects the US refining industry to remain structurally advantaged over the rest of the world in the long term "mainly due to the availability of low-cost energy". But US tariffs — and the increase in prices that is likely to follow — could challenge that notion. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil’s new Atlanta FPSO exports first crude cargo


03/03/25
News
03/03/25

Brazil’s new Atlanta FPSO exports first crude cargo

Singapore, 3 March (Argus) — Brazil's newly commissioned Atlanta floating, production, storage and offloading (FPSO) unit has loaded its first cargo of Atlanta crude aboard the Sonangol Namibe in end-February, data from global trade analytics platform Kpler show. This marks the unit's first shipment since achieving first oil in late 2024. Trading firm Trafigura is likely the charterer of the vessel, according to Kpler data. Brava Energia previously announced in February that it sold 6mn bl of oil from its Atlanta field to Singapore-based commodity trader Trafigura. The contract's price is linked to Singapore VLSFO benchmark prices. But the specific price could not be confirmed. Atlanta crude is classified as a heavy sweet crude and is primarily exported to the Singapore straits region, where it is highly valued for very-low-sulphur fuel oil (VLSFO) blending because of its low sulphur content and relatively heavy API content of about 14-16. The FPSO Atlanta unit is operated by independent producer Brava Energia, a Brazilian oil and gas firm created from the merger of oil companies 3R Petroleum and Enauta, with the FPSO chartered from Malaysia's Yinson Production. The unit operates in the Atlanta field in the Santos Basin offshore Brazil, and achieved first oil on 31 December 2024, according to Yinson. Heavy sweet Atlanta crude oil was previously produced from the Petrojarl I FPSO, which was decommissioned in late 2024. This is in line with the last observed export of Atlanta crude in early November, with no shipments recorded until the latest loading in February, according to data from Kpler. The newer Atlanta FPSO can process up to 50,000 b/d of oil, 70pc higher compared to the Petrojarl I, and has a storage capacity of 1.2mn bl, more than a sixfold increase, according to a document from Yinson. This latest development is likely to further pressure the Asian VLSFO market, which is already grappling with ample supplies in Singapore that have weighed on prices. Increased supplies from Brazil, Kuwait's KPC and Nigeria's Dangote are expected to discharge in the region this month, with March arrivals forecast to be over 1mn t higher than in February. But the latest shipment will likely spill over into April's supply and demand balance, given the typical 45–60 day voyage from Brazil to Singapore. By Asill Bardh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Ecuador awards Sacha field to Sinopec, Petrolia


02/03/25
News
02/03/25

Ecuador awards Sacha field to Sinopec, Petrolia

Quito, 2 March (Argus) — Ecuador will transfer operation of its highest-producing oil field, the 74,600 b/d Sacha, to a consortium of China's Sinopec and Canada-based Petrolia under a production-sharing contract aimed at increasing output, the energy ministry said today. The consortium, in which Sinopec as operators hold a 60pc share and Petrolia the remainder, committed to investing $1.7bn in the next six year to reach peak production of 100,000 b/d by 2028, up by 33pc compared with current output. State-owned Petroecuador currently operates the field in block 60 in the Orellana province in the Amazonian region. Energy minister Ines Manzano authorized the deal through a resolution, and vice minister of hydrocarbons Guilhermo Ferreira was charged with signing the 20-year contract. Most terms have already been negotiated and final signature should not take more than a few weeks, the ministry said. The consortium had proposed keeping from 80pc-87.5pc of production, depending on the price of WTI crude, Petrolia's general manager Ramiro Paez previously told Argus . If the WTI price is below $30/bl, the consortium will take 87.5pc of the production. But its production sharing will decrease on a sliding scale to a minimum of 80pc when the WTI price is $120/bl or above. Ecuador's government will keep 80pc of profits, when taxes and other fees are taken into account, the consortium has said. Transitioning operations from Petroecuador to Sinopec will take about six months, said Paez. Opposing forces Ecuador's oil workers' unions have rejected the plan as unconstitutional because it passes control of the field from the state-owned company, as have opposition legislators with the citizens' revolution party that holds a majority in congress. The deal will cost Ecuador's government $8bn, the party claims. They also complained that the government announced the decision at the start of a holiday weekend. Manzano defended the deal as constitutional as the hydrocarbons law allows the government to delegate crude field operations. The energy ministry will provide additional details about the deal on 5 March after the 3-4 March holiday for Carnival. From 1-27 February 2025, Sacha produced an average of 74,680 b/d, down by 4pc compared with 77,884 b/d in February 2024, according to the data published by the hydrocarbons regulatory agency (Arch) and Petroecuador. Ecuador produced 474,860 b/d in January. By Alberto Araujo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Weak Canadian dollar may offset US tariffs: MEG


28/02/25
News
28/02/25

Weak Canadian dollar may offset US tariffs: MEG

Calgary, 28 February (Argus) — The impact of the US' planned 10pc tariff on Canadian energy imports is likely to be "relatively muted" with a weaker Canadian dollar helping to cushion the impacts on US dollar-denominated Western Canadian Select crude, according to Canada's largest pure-play oil sands producer today. "You might see a $2-4/bl widening in the WCS diff, but we're also seeing a weakening in the Canadian dollar at the same time. That's going to offset that," MEG Energy chief financial officer Ryan Kubik told analysts. The Canadian dollar, on average, was worth C$1.37 to the US dollar in 2024, weakening from C$1.35 to the greenback in 2023 and the weakest since 2003, according to the Bank of Canada. The Canadian dollar has since depreciated further to C$1.43 to the US dollar in February, a benefit to Canadian producers selling crude in US dollars. Heavy sour Western Canadian Select (WCS) in Alberta was under pressure in early February when tariffs looked likely, but were subsequently postponed to 4 March. WCS trades at a discount to the US light sweet benchmark and this week has been hovering around a $13/bl discount, roughly $2/bl narrower than before the tariff threat nearly one month ago. US president Donald Trump said he plans to impose a 10pc tariff on energy, and a 25pc tariff on all other imports from Canada, next week. That has caused confusion for the market with little details on how it would work. Additionally, it is unclear who may bear the brunt of the added tax, but Canadian producers seem likely to share in that cost along with refiners and consumers, to a varying degree. Kubik discussed the prospect of hedging more volumes at current WCS prices, but said participants are limited by the "very illiquid" nature of the market. "There's not a lot of appetite to get out there and put a position on because it's just not that meaningful," said Kubik. "And when you consider the impact of tariffs, we actually think it may be relatively muted." For the moment, most of the volume moving westbound on the 890,000 b/d Trans Mountain system, which enables Canadian producers to bypass the US entirely by exporting to the Pacific Rim, is on existing contracts, according to MEG's senior vice president of marketing Erik Alson. "I think where you're likely to see spot shipments moving would be more around the time when, if, tariffs come into effect," said Alson. "That's when you'd see the extra incentive to move a significant amount of spot capacity." MEG is a committed shipper on TMX but also routes crude through the US Gulf coast, and more than half of MEG's sales could be non-tariffed, depending on the details in the executive order. MEG reported Friday its bitumen output fell to 100,100 b/d in the fourth quarter , down from 109,100 b/d in the fourth quarter of 2023. The Calgary-based company posted a profit of C$106mn ($73mn) in the fourth quarter, up from C$103mn in the fourth quarter of 2023. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Energy a priority for Uruguay’s new government


28/02/25
News
28/02/25

Energy a priority for Uruguay’s new government

Montevideo, 28 February (Argus) — Energy will play a central role as Uruguay's new president Yamandu Orsi begins his five-year term on 1 March. Orsi, of the left-wing Broad Front coalition, takes over one of South America's most economically and politically stable countries. The economy is forecast to expand by 3pc this year, above the regional average, and the government wants to attract investment to maintain growth. The energy sector is a priority. Uruguay already has one of the region's cleanest grids, with 99pc of power coming from renewable sources, and in February reached the goal of 100pc electrification nationwide, according to the state-run electric company, UTE. The Orsi administration is studying options for the second phase of the energy transition, which includes adding capacity to meet increasing demand from electrification of transportation and clean fuel production. New finance minister Gabriel Oddone said the administration would focus on reducing red tape and potentially provide incentives for investment in the energy sector. Uruguay currently has close to 5.3GW of installed capacity, with 78pc in renewable sources, for its population of 3.5mn. The UTE, which had a profit of $315mn in 2024, is adding 100MW in wind power in the next two years. The Orsi administration plans to prioritize solar capacity. The new government is keenly following the development of low-carbon hydrogen and e-fuel projects. The most advanced project is for production of 700,000 tonnes (t) of synthetic fuel by Chile's HIF Global and ALUR, the biofuel arm of the state-owned Ancap. Investment is estimated at $6bn, making it the largest planned single investment in the country's history. The company requested approval in January of environmental permits for the project's solar park that would include 1.84mn bifacial solar panels. It would produce a peak of 1,162MW. Construction would take 18 months from approval. The municipal council in Paysandu, in northwestern Uruguay where the project is planned, on 27 February approved a change in land use to facilitate plant construction. Ancap, which lost an estimated $130mn last year because its only refinery was closed for six months, has proposed offshore production of low-carbon hydrogen. The Orsi administration has not yet committed to the project. Reverse transition? The new government will also have to also have to decide on the future of seven offshore exploration blocks, with seismic testing planned for late this year, and the possible construction of a gas pipeline that would link Argentina and Brazil. A pipeline exists from Argentina to Uruguay, but it could be expanded and extended to supply southern Brazil. It would require an additional 415km (258mi) in Uruguay, and around 500km in Brazil's Rio Grande do Sul state. Orsi has taken a wait-and-see attitude toward exploration, while a gas pipeline would likely have more popular support because it could expand service from only a section of the coast to a wider region. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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