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Petrobras ramps up gas imports amid drought

  • Spanish Market: Electricity, Natural gas
  • 14/05/21

Brazil's oil and gas regulator (ANP) today authorized higher imports of natural gas to generate more gas-fired electricity as drought saps hydropower output.

ANP authorized state-controlled Petrobras to import 31mn m³ a year of LNG while thermal power generation company Ambar Energia was authorized to import 2.3mn m³/d of natural gas from Bolivia.

Petrobras got the green light to import LNG from any country through January 2023, to be delivered at the Rio de Janeiro state port of Baía de Guanabara, the Ceara state port of Pecem, and the Bahia state port of Baia de Todos os Santos, where the state-controlled company has regasification facilities.

The authorizations are among measures the Brazilian government has announced since April to try to boost thermal power generation as the largely hydropower-dependant country faces its worst drought in its 91-years of record keeping.

The imports of LNG authorized for Petrobras are the equivalent of 51mn m³/d of natural gas, about 40pc of the country's daily natural gas output.

The Ministry of Mines and Energy also ordered that all maintenance on thermal power facilities be cancelled to avoid restrictions on power generation. The Electric Sector Operator (ONS) lists in its daily report around 4,000MW of natural gas and LNG thermal power capacity that is currently unavailable because of maintenance, restrictions in operations for unreported reasons, retrofitting or suspended commercialization.

The ministry also promised to move forward the dispatch of natural gas to thermal power plants. In December, the entity estimated that 4,010MW of thermal power capacity, comprised of mainly gas, was expected to start operation by 2021 and 2022. Brazil's natural gas production in April averaged 123.9mn m³/d, while imports from its main supplier Bolivia in February averaged 20.2 mn m³/day.

President Jair Bolsonaro's office has created a special group formed by ministries and regulatory entities focused on water and energy use planning. The first meeting of the group occurred yesterday, with discussions to avoid rationing water and electricity this year. An action plan will be presented within 15 days, aiming to help maintain water levels at the main reservoirs.

Planned maintenance at Petrobras' pre-salt Mexilhao field and its Rota 1 pipeline, expected in August, would reduce the gas supply for thermal power plants, which prompted the government to discuss measures that can be adopted to avoid shortages to gas power plants. The Rota 1 pipeline has a gas transport capacity of 10mn m3/d. Measures regarding the pipeline and Mexilhao were not disclosed by the ministry.

The ministry said a recently enacted new gas law will help the country cope with hydropower generation restrictions, and help stimulate more gas supply for the country. "There will be more actors that will compete to meet eventual gas demand from the thermoelectric segment," the ministry said in an email.


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12/05/25

Ukrainian gas imports double in May

Ukrainian gas imports double in May

London, 12 May (Argus) — Ukraine's gas imports have nearly doubled in the first 10 days of May from April, although still only the Polish and Hungarian routes are being used. Ukraine's net imports — after netting off inflows and outflows to and from Moldova — averaged 140 GWh/d on 1-10 May, nearly double the 73 GWh/d average in April, the latest available data from transmission system operators show. The increase has been driven by flows from Hungary at VIP Bereg rising to near full capacity of 103 GWh/d from 60 GWh/d, and a smaller 12 GWh/d increase from Poland ( see flows graph ). Net flows to Moldova also fell to 13 GWh/d from 23 GWh/d, leaving more gas in Ukraine. But imports would need to ramp up significantly to match the 4.6bn m³ that state-owned incumbent Naftogaz estimated would be needed over the entire summer. If Ukrainian net imports remain at 140 GWh/d until 15 October, around the typical start of the heating season, then cumulative net imports would reach around 22TWh, or around 2.1bn m³ using Ukraine's standard 10.5 kWh/m³ conversion rate. VIP Bereg is already flowing at near maximum capacity, as is the interconnection point with Poland, meaning that any additional flows will need to arrive from Slovakia at Budince or from Romania at Isaccea, both particularly expensive transit routes. Demand for third-quarter capacity along the Bereg route continues to outstrip available capacity, with the auction now in its sixth day and still not concluded. So far, Naftogaz has announced few public supply deals, although it has contracted 300mn m³ of LNG from Poland's Orlen , with some market participants saying Orlen would supply as much as 1bn m³. The firm has €410mn in funds from the European Bank for Reconstruction and Development , which it hopes will finance the purchase of around 1bn m³. But it is unclear where funding for additional purchases will come from, and the government does not intend to increase household or business tariffs to cover Naftogaz's higher costs. Even if Ukraine imports as much as Naftogaz said it will need, the country could still face shortages in the winter . Ukraine started the injection season in mid-April at the lowest stock level in at least a decade , and while Naftogaz managed to restore more than half of the output it lost in February following attacks on its production infrastructure, Ukrainian production still remains well below pre-2022 levels. Hungary maintains pivotal hub role Hungary has become an increasingly important transit hub over the past year, and Ukraine's import needs have increased its prominence further. With VIP Bereg at a 99pc utilisation rate this month and continued exports northward to Slovakia, Hungary has been pulling in more gas from other sources to maintain these flows. Inflows from Serbia at Horgos, where Russian gas arrives into Hungary through Turkish Stream, rose to 244 GWh/d on 1-10 May from 223 GWh/d in April, just below the point's technical capacity of 246 GWh/d. And inflows from Austria have also increased considerably, rising to 139 GWh/d from 92 GWh/d, while receipts from Romania more than doubled to 40 GWh/d from 19 GWh/d ( see Hungarian flows graph ). Hungarian prompt prices have risen to a premium over Austria and Romania in order to attract more gas ( see prices graph ). Slovakia remains at a premium to Hungary, though, driven by the need to incentivise flows from Hungary now that Russian transit through Ukraine has ceased. Hungarian transmission tariffs remain significantly cheaper than in Slovakia or Romania, so demand for Hungarian capacity at quarterly auctions last week held strong . The bookings suggest that the recent flow configuration is set to continue in the second half of summer, with all import capacity from Serbia booked and most available capacity from Austria. The export route from Romania to Ukraine remains unpopular, not just because of the high transmission tariffs paid in Romania and Moldova, but also because of the conditional nature of the flows. An equal amount of gas must be brought into Romania at Negru Voda 1 as is exported at Isaccea 1, as they are part of the same Trans-Balkan Pipeline string. Additionally, anyone hoping to bring gas from Greece or Bulgaria up to Ukraine must secure capacity in as many as 10 or more auctions, which take place simultaneously given that the transit route crosses in and out of Moldova several times. Even one failed auction could make exports along this route impossible. By Brendan A'Hearn Hungarian DA vs nearby markets €/MWh Ukrainian net flows by point GWh Hungarian net flows by point GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US shale M&A faces headwinds on oil price rout


12/05/25
12/05/25

US shale M&A faces headwinds on oil price rout

New York, 12 May (Argus) — Dealmaking in the US shale patch, which had been on a roller-coaster ride in the past few years, is at risk of grinding to a halt as a result of an oil price slump. Just as a growing number of producers are unveiling plans to cut spending and slow activity as crude prices teeter around levels needed to profitably drill wells, prospects for mergers and acquisitions (M&A) in the shale patch are also souring. That marks a departure from the start of 2025 , when dealmakers were expecting a bumper year with recent acquirers looking to offload non-core assets and private equity gearing up to make a return after raising new funds. April brought five deals with a combined value of $2.3bn, bringing the year-to-date total for M&A activity in the US upstream space to $19.2bn, consultancy Enverus says. That was down by 60pc from a year earlier, when the latest round of consolidation was in full sway. "We're just hearing over and over again, across the board, that companies are overwhelmingly sitting on their hands," law firm Sidley partner Stephen Boone says. Recent deals include natural gas giant EQT buying the upstream and midstream assets of privately held Olympus Energy for $1.8bn . Gas is increasingly likely to dominate dealmaking going forward, as not only has the commodity fared better than oil on a relative basis, but investors are likely to be drawn by the US LNG boom and rapid growth of gas-fired power generation demand to meet the energy needs of data centres required for artificial intelligence . "The trouble is, there aren't enough potential gas deals to make up for a drop in oil asset activity, which we do anticipate is going to fall off a cliff," Enverus principal analyst Andrew Dittmar says. Aside from the trade tariff-induced market volatility that has sent crude prices tumbling to four-year lows, a lack of high-quality targets on the oil side also suggests deals will be few and far between this year. Most publicly-held operators will be focused on protecting their bottom line as they remain focused on shareholder returns rather than growth, and might well be reluctant to take on debt to fund deals. And private equity may prefer to bide its time. "That group is likely looking for some sign of a bottom on crude before jumping in, rather than trying to catch a falling knife of asset values," Dittmar says. That is not to say that deals have completely dried up, with Permian Resources agreeing this week to snap up assets in the New Mexico part of the top US shale play from APA for $608mn. But Diamondback Energy, a top Permian producer which has played an active role in the most recent round of M&A, might sum up the view of many with its plan to remain on the sidelines for the time being. Too much noise "We're in the period right now where there's so much noise and volatility that not a lot gets done," Diamondback's president, Kaes Van't Hof, says. "Anything that we would look at would have to be extremely cheap, and I just don't think we're there yet today." Even if some relief comes on the tariff front and the economy avoids a recession, it will take time for deals to pick up again, and that could push a resurgence in dealmaking well into 2026. The fact that public operators have spent the years since the pandemic on repairing balance sheets and focusing on investor payouts might also count against any uptick in transactions anytime soon. "That's actually going to keep M&A down, because now that we see the downturn, we have significantly less distressed companies out there that will be forced to sell, and we have more and more companies that think they are better situated to just ride it out," Sidley's Boone says. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australian PM reaffirms climate priority in new cabinet


12/05/25
12/05/25

Australian PM reaffirms climate priority in new cabinet

Sydney, 12 May (Argus) — Australian prime minister Anthony Albanese has reaffirmed renewable energy commitments with cabinet picks after the Labor party's election victory on 3 May. Chris Bowen, who led key changes to the safeguard mechanism , the capacity investment scheme (CIS) and fuel efficiency standards for new passenger and light commercial vehicles, remains minister for climate change and energy. Madeleine King, the minister for resources and northern Australia, retains her cabinet position, while Tanya Plibersek, previously the minister for environment, is now the minister for social services and is replaced by Murray Watt, formerly the minister for workplace relations. In the previous term, Plibersek failed to establish an environment protection authority and reform the Environment Protection and Biodiversity Conservation Act, which was an election promise in 2022, after intervention from Western Australian state minister Roger Cook. Environmental lobby group the Australian Conservation Foundation (ACF) has welcomed Watt, who was also the minister for agriculture for two years to 2024, into his new role. "Having a former agriculture minister in environment increases the opportunities for co-operation on the shared challenges facing nature protection and sustainable agriculture," the ACF said. The ACF also welcomed Chris Bowen in returning to his role as environment minister for his "clear mandate" to continue the energy transition. Josh Wilson remains assistant minister for climate change and energy. Participants in the renewable energy carbon credit industry are urging the new Department of Climate Change, Energy, the Environment and Water to speed up the creation of new Australian Carbon Credit Unit (ACCU) methods in the new government term. They are also seeking greater transparency in ACCU data base , which requires legislative change. And renewable energy companies and lobby groups will be closely following a review of Australia's National Electricity Market wholesale market settings , which will need to be changed following the conclusion of the CIS tenders in 2027 and as Australia transitions to more renewables from its ageing coal-fired plants. By Grace Dudley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Saudi Aramco cuts dividend after fall in 1Q profit


12/05/25
12/05/25

Saudi Aramco cuts dividend after fall in 1Q profit

Dubai, 12 May (Argus) — State-controlled Saudi Aramco has announced a sharp cut to its quarterly dividend after reporting a 5pc year-on-year decline in profit for the first three months of 2025. The company's profit fell to $26.01bn in January-March from $27.3bn in the same period last year after lower oil prices squeezed revenues. Aramco said its bottom line was also hit by higher operating costs. The company said it sold its crude for an average $76.30/bl in January-March, down from $83/bl the first quarter of 2024. "Global trade dynamics affected energy markets in the first quarter of 2025, with economic uncertainty impacting oil prices," Aramco's chief executive Amin Nasser said. The company said its overall dividend for the quarter will be $20.61bn, down from $31bn in the corresponding period in 2024. The steep drop is due to the performance-linked element of the dividend being slashed to just $219mn for the quarter, from $10.7bn a year earlier. Aramco already announced in March that it expected its dividends for the full year to fall to $85.4bn from $124.3bn in 2024. Despite the current economic uncertainty, Aramco's capital expenditure (capex) rose to $12.5bn for January-March from $10.83bn in the same period last year, although this puts investment broadly in line with the lower end of the full-year 2025 capex guidance of $52bn-58bn that the company announced in March. The aggressive capex programme will help drive growth plans for the downstream and new energies sides of Aramco's business, as well as fund the firm's strategy to maintain its maximum sustainable crude capacity at 12mn b/d and expand its gas output by 60pc by 2030 compared with 2021 levels. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India, Pakistan reach US-mediated, fragile ceasefire


11/05/25
11/05/25

India, Pakistan reach US-mediated, fragile ceasefire

Dubai, 11 May (Argus) — A US-mediated ceasefire reached on Saturday between nuclear-armed neighbours India and Pakistan is still holding, following four days of intense fighting. "After a long night of talks mediated by the United States, I am pleased to announce that India and Pakistan have agreed to a FULL AND IMMEDIATE CEASEFIRE," US president Donald Trump posted on his social media platform Truth Social on Saturday. India and Pakistan will now start negotiations on a broad set of issues at a neutral site, US secretary of state Marco Rubio said on social media platform X. India's military on 7 May launched attacks against targets in Pakistan and Pakistan-administered Kashmir in retaliation for an April terrorist attack that killed dozens. But by Saturday, the two countries seemed to be edging toward all-out war, as their militaries targeted each other's bases. India's foreign minister Subrahmanyam Jaishankar confirmed the ceasefire, saying on X that "India has consistently maintained a firm and uncompromising stance against terrorism in all its forms and manifestations. It will continue to do so." Pakistan "responded positively to the ceasefire proposal for regional and global peace, and its people and I hope that dialogue will now be chosen for resolution of water and Kashmir disputes," Pakistan's prime minister Shehbaz Sharif said in a televised address. Trump also praised leaders of both countries for agreeing to halt the aggression and said he would "substantially" increase trade with them, although this was "not even discussed". Kashmir is a contested area between India and Pakistan, and the two have twice gone to a war over the region. Fear of the conflict spreading roiled global financial markets. India is the region's second-biggest oil buyer after China — importing around 4.5mn b/d last year — and a major customer for other commodities, including LNG and coal. Pakistan also imports fertilizers, coal, oil products and LNG. The escalation between the two severely limited direct trade between them. Airlines in the region as well as some Mideast Gulf carriers rerouted or cancelled flights to avoid Pakistani airspace. But the Pakistan Airports Authority said on Saturday that "Pakistan's airspace has been fully reopened for all types of flights." By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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