Four VLCCs heading to US Gulf to store crude
At least four empty very large crude carriers (VLCCs) booked for floating storage are on their way to the US Gulf coast and will likely add to the tally of VLCCs storing US crude.
The four tankers are part of a flurry of floating storage bookings that occurred amid a growing oil glut on sharply lower demand from Covid-19-related restrictions on travel. The oversupply combined with an oil price crash resulted in high demand for crude storage.
The glut persists, but rising prices have eased some of the pressure on storage capacity. The Nymex WTI June futures contract closed today at $32.50/bl, compared with the -$37.63/bl close of the May contract on 20 April.
The Blue Nova, chartered by US oil producer Hess, is scheduled to arrive on 24 May, per data from oil analytics firm Vortexa. The Maxim, chartered by fellow US crude producer Occidental, is set to reach the US Gulf coast on 31 May. The remaining two VLCCs, the Occidental-chartered Sea Ruby and the Hess-chartered Leonidas, are scheduled to arrive on 3 June and 24 June, respectively.
Hess said it has chartered a third VLCC for storage. Occidental has no other known floating storage bookings.
The four tankers were chartered for 9- to 12-month durations at an average rate of $89,500/d, according to the Argus floating storage bookings database. VLCC short-term time charter rates have since dropped to around $75,000/d as the Opec+ cuts lower cargo demand and free up tonnage supply.
Excess US crude and limited land-storage capacity have already prompted traders to exercise floating storage options on at least four additional VLCCs with US crude. The Eliza, Maran Corona, and Maran Apollo, all chartered by Shell, have not moved far since loading full cargoes at Louisiana Offshore Oil Port (LOOP) at various points stretching back to early April. The Vitol-chartered Hunter Saga VLCC is sitting near Rotterdam with a US crude cargo at $100,000/d.
Other tankers — some of smaller sizes — are also sitting idle with US crude cargoes, though the reason may be port delays. The Agios Nikolas, a VLCC that Trafigura chartered on 6 February before the pandemic sapped oil demand, has been sitting idle in Taiwan for over a week, despite being initially booked for a standard US-Asia journey, not a short-term time charter.
Traders have booked at least 75 VLCCs, 47 Suezmaxes, and 36 Aframaxes on short-term time charters that include floating storage options, according to the Argus database.
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TotalEnergies rows back on Uganda oil project timeline
TotalEnergies rows back on Uganda oil project timeline
Kampala, 17 April (Argus) — The head of TotalEnergies' Ugandan operations said the company may miss its long-standing target to start crude production from the country's 230,000 b/d Lake Albert project by the end of next year. "I want to answer this question that everyone is asking, will first oil flow in 2025? I am not sure end of 2025 will be the timeline," TotalEnergies' general manager in Uganda Philippe Groueix told an oil and gas conference in Kampala today. The timing will depend on the agility of stakeholders to co-operate to resolve outstanding issues, Groueix said. The Lake Albert project has been controversial since its inception. It involves building the world's longest heated crude export pipeline to connect the TotalEnergies-operated 190,000 b/d Tilenga and Chinese CNOOC-operated 40,000 b/d Kingfisher oil fields in Uganda's Lake Albert basin to the port of Tanga on Tanzania's Indian Ocean coast. The project partners have faced a barrage of legal challenges in the last few years from environmental groups and non-governmental organisations who claim the pipeline poses a risk to the environment and the livelihoods of local populations. Meanwhile, international banks have come under pressure to distance themselves from the project and in 2022, the European Parliament passed a resolution calling on TotalEnergies to delay work on the pipeline by a year in order to study the feasibility of an alternative route. Despite the above-ground challenges, TotalEnergies, CNOOC and the Ugandan government have stuck rigidly to a 2025 start-up. More recently, TotalEnergies tweaked its estimate to the "end of 2025", with chief executive Patrick Pouyanne telling investors in February that the project would be around 60pc complete by the end of this year. Groueix's comments today mark the first time the company has flagged a potential delay, although he did not offer a new timeline. "First oil will depend on our agility to work together, although we are all aiming to produce as soon as possible," Groueix said, adding that four rigs are drilling at the oil fields, three at Tilenga and the other at Kingfisher. "It is Uganda's right to exploit her natural resources and we shall produce this oil in the most responsible way possible to decarbonize," he said. "Our projects will not flare gas, but we shall produce LPG from this gas and this will reduce the use of charcoal and firewood by a big percentage, thereby saving trees and improving climate. So the activists should know that we are part of the agenda to promote the environment." Uganda's energy minister Ruth Nankabirwa gave a sanguine response to news of a possible delay, comparing Uganda's oil and gas projects to a woman in labour. "The child can come before the set timeline or shortly after, but the signs are showing that the child is kicking," she said. Nankabirwa said she will head to Beijing early next month to meet Chinese president Xi Jinping to discuss financing for the $5bn crude pipeline. Chinese export credit agency Sinosure is in talks to provide up to $3bn for the pipeline and is due to make a decision on this in June. By Mercy Mastsiko Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Idemitsu builds stake in refiner Fuji Oil
Japan’s Idemitsu builds stake in refiner Fuji Oil
Tokyo, 17 April (Argus) — Idemitsu has agreed to buy an additional stake in fellow Japanese refiner Fuji Oil from domestic power producer Jera, adding to their existing partnership. Idemitsu on 16 April said it will buy Jera's entire 8.75pc share of Fuji, raising its stake to 21.79pc, for ¥2.5bn ($16.2mn). It is unclear when the companies will complete the deal. Jera declined to disclose the reasons for selling its stake. Idemitsu in March also bought domestic petrochemical producer Sumitomo Chemical's stake in Fuji to boost its share to 13.04pc from 6.58pc, becoming its main shareholder. It aims to further optimise fuel oil production and sales including refinery operations, while promoting decarbonisaton of its businesses. Idemitsu is enhancing its partnership with Fuji in the face of shrinking domestic oil and petrochemical demand and growing consumption in overseas, especially in southeast Asia. Idemitsu owns the 190,000 b/d Chiba refinery in the Keiyo industrial complex in east Japan's Chiba prefecture where Fuji operates the 143,000 b/d Sodegaura refinery. Their refineries are connected to Sumitomo Chemical's Chiba plant. Idemitsu's refineries also include the 150,000 b/d Hokkaido in the northernmost prefecture of Hokkaido, the 160,000 b/d Aichi in Aichi prefecture in central Japan and the 255,000 b/d Yokkaichi in Mie prefecture in the country's west. Idemitsu's subsidiary Toa Oil operates the 70,000 b/d Kawasaki refinery in east Japan's Kanagawa prefecture. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Shale discipline even at $200/bl: Ex-Pioneer CEO
Shale discipline even at $200/bl: Ex-Pioneer CEO
New York, 16 April (Argus) — Public independent shale oil producers will remain disciplined and keep production steady even if crude prices soar on geopolitical tensions, according to the former chief executive officer of Pioneer Natural Resources. "Even if oil gets to $200/bl, the independent producers are going to be disciplined," Scott Sheffield said today at the Columbia Global Energy Summit in New York. Public independents showed restraint when oil prices jumped in the immediate aftermath of Russia's invasion of Ukraine in 2022, as they focused on improving shareholder returns rather than ramping up production to take advantage of short-term prices, he said. One benefit of the recent wave of consolidation is that it may kickstart some growth in a sector that has showered shareholders with excess cash via dividends and share buybacks in recent years. Before Pioneer agreed to be bought for $59.5bn by ExxonMobil late last year, the company was only increasing output at around 5pc a year. Once the acquisition closes, the top US oil major is going to grow Pioneer's assets at 10-15pc a year, said Sheffield. "That's an example where somebody is stepping up and adding production," he added. Global crude prices have moved very little since the weekend when Israel and allies thwarted a massive missile and drone attack from Iran. WTI today fell by just 5¢/bl to $85.36/bl while June Ice Brent fell by 8¢/bl to $90.02/bl. The industry veteran stepped down as chief executive at the end of last year but remains on the board of Pioneer. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australian new environment agency to speed up approvals
Australian new environment agency to speed up approvals
Sydney, 16 April (Argus) — The Australian federal government announced today it will introduce new legislation in the coming weeks to implement the second stage of its Nature Positive Plan, which includes setting up a national environment protection agency to speed up approval decisions. The planned Environment Protection Australia (EPA) will initially operate within the Department of Climate Change, Energy, Environment and Water until it transitions to become an independent statutory agency, with "strong new powers and penalties" to better enforce federal laws, the government said on 16 April. The EPA chief will be an independent statutory appointment, similar to the Australian federal police commissioner, so that "no government can interfere" with the new agency's enforcement work. The agency will be able to audit businesses to ensure they are compliant with environment approval conditions and issue environment protection orders to anyone breaking the law. Penalties will be increased, with courts able to impose fines of up to A$780mn ($504mn) or jail terms for up to seven years in cases of extremely serious intentional breaches of federal environment law. EPA will also be tasked with speeding up development decisions, including project assessments in areas such as renewable energy and critical minerals. Almost A$100mn will be allocated to optimise the approval processes, with its budget directed to support staff to assess project proposals and help businesses comply with the law. A new independent body Environment Information Australia (EIA) will also be created to provide environmental data to the government and the public through a public website. EIA will need to develop an online database giving businesses quicker access to data and helping EPA to make faster decisions. It will also need to publish state of environment reports every two years. The government said that an audit ordered by environment minister Tanya Plibersek last year found that around one in seven developments could be in breach of their offset conditions, when a business had not properly compensated for the impact a development was having on the environment, highlighting "the need to urgently strengthen enforcement". The planned new legislation is part of the federal government's reform of Australia's environmental laws including the Environment Protection and Biodiversity Conservation Act. Resource project decisions are currently made by the environment minister, with the move to an independent agency will removing any perception of political interference in such decisions, the government said when it first announced the reforms in late 2022. The first stage of the reform was completed late last year with new laws passed to create the Nature Repair Market, with further stages expected to be implemented in the future, the government said. Tight timing Resources industry body the Chamber of Minerals and Energy of Western Australia (CMEWA) welcomed the announcement that the federal government will take a "staged approach" to the implementation of the reforms but noted the timing of EPA's implementation was "tight". "We continue to hold reservations about the proposed decision-making model and will continue to advocate for a model that balances ecologically sustainable development considerations and includes the [environment] minister as the decision maker," CMEWA chief executive Rebecca Tomkinson said. The Minerals Council of Australia (MCA) said that it had been advocating for the creation of EIA, whose future collated data "will provide greater certainty and reduced costs for both government and project proponents", which "may shave years off project development". But it was cautious about potential "unintended consequences" stemming from more bureaucracy. "Australia has one of the most comprehensive environmental approvals processes in the world and the MCA has been clear about the significant risks of duplicative, complex and uncertain approvals processes pose to the minerals sector, the broader economy and the environment if we do not get this right," it warned. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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