Sucre Energy bets on Venezuelan gas

Spanish Market: Crude oil, Emissions, Natural gas
08/09/21

Venezuela's abundant hydrocarbons are beckoning a new generation of investors, stepping in where more established companies are pulling out.

Sucre Energy, a Netherlands-based and Spanish-registered private equity company, acquired the central Venezuelan assets of Japan's Inpex in a deal that closed in May for an undisclosed sum. In an interview with Argus, Sucre directors Santiago Fontiveros and Nicolas Faillace say Venezuela is at an inflection point in the oil investment cycle, regardless of which way the political winds blow.

The main asset acquired by Sucre is a 70pc stake in Gas Guárico, currently producing around 53mn cf/d of gas. Venezuela's state-owned PdV, which has a wholesale gas monopoly through PdV Gas, holds the remaining 30pc. The other newly acquired asset is a 30pc stake in PetroGuárico, a marginal oil field joint venture controlled by PdV with 70pc.

The acquisition marks Sucre's first direct upstream investment in Venezuela. The company is already an indirect minority shareholder in PdV-led oil joint venture Petroregional del Lago (PRDL) through Maurel and Prom, the French unit of Indonesia's state-owned Pertamina that purchased Shell's 40pc stake for $80mn in late 2018.

Sucre sees the most upside in gas. "We believe there will be more realistic adjustments in the gas price so license holders will keep investing and producing gas," Fontiveros said. "We don't have a crystal ball, but we believe it will happen sooner rather than later."

Venezuela has long focused on crude rather than gas, much of which is flared. Capturing that gas offers potential carbon offset opportunities, Sucre says.

The partners do not share the view that Venezuela needs new hydrocarbons legislation to attract investment. Venezuela's gas law — which permits private sector control — is adequate and only five or six main articles of the oil law should be amended, along with implementation of tax cuts, to be competitive. And in the short term, Venezuela offers debt-for-equity opportunities, the partners say.

Sucre sees Venezuela as among the world's last oil suppliers. "In any energy transition scenario, the world in 2050 or 2060 will need to consume 20mn-50mn b/d of oil, and there are few countries that will be able to sell oil competitively by then," said Fontiveros, evoking the view of Chevron's former head of Latin America and African operations Ali Moshiri.

Faillace adds that Venezuela's infrastructure, albeit neglected, "can still be rehabilitated at a lower cost than a new project in the deep offshore or in the Arctic."

By Patricia Garip

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15/04/25

Net zero banking body ups flexibility for climate goals

London, 15 April (Argus) — The Net Zero Banking Alliance (NZBA) will increase flexibility around climate targets in its framework, allowing its members to set targets aligned with the upper temperature limit sought by the Paris climate agreement. Members voted to introduce less stringent targets "in response to changing external circumstances and member needs", the NZBA said today. The NZBA is a voluntary global initiative with more than 120 banks as members. The group aims to align financing with reaching net zero greenhouse gas (GHG) emissions by 2050 — in line with the Paris agreement. The Paris accord seeks to limit the rise in global temperature to "well below" 2°C above pre-industrial levels, while pursuing efforts to limit this to 1.5°C. Members "voted overwhelmingly in favour of adopting proposed changes", the NZBA said today. Banks that join the alliance commit to developing long-term and intermediate targets towards net zero GHG emissions and to reporting on progress towards these. The changes to the guidance "acknowledge a wider range of net zero pathways that align with the temperature goals of the Paris agreement… This acknowledgment increases flexibility for banks with exposures to a range of markets and sectors to manage targets and transition across their balance sheet", the NZBA said. The alliance also intends to further support members, including around sectoral engagement and to help members understand new and emerging practices and approaches. "Over 100 member banks have already set independent sectoral targets using net zero by 2050 1.5°C pathways. There is nothing in the adopted changes that would cause them to move away from this. 1.5°C remains the guiding star", an NZBA spokesperson told Argus . But the alliance noted that in recent years "the external landscape for banks has rapidly changed". The amended framework recognises that "net zero transitions in the real economy are progressing at different speeds across sectors and regions and that regulatory requirements for climate risk and disclosure have increased in some jurisdictions", the spokesperson said. Several large US banks exited the initiative earlier this year , days ahead of US President Donald Trump's return to the White House. Netherlands-based, sustainability-focused Triodos Bank today said that it would leave the NZBA, as "the new guidelines fall short of the needed urgency to align loans and investments portfolios" with the 1.5°C goal. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IEA slashes 2025 global refinery runs growth forecast

15/04/25

IEA slashes 2025 global refinery runs growth forecast

London, 15 April (Argus) — The IEA has sharply lowered its forecast for refinery run growth this year, citing escalating tensions in global trade. In its latest Oil Market Report (OMR) published today, the energy watchdog said it expects growth in global crude runs of 340,000 b/d, down by 40pc from its previous forecast of 570,000 b/d. The IEA sees total global crude runs averaging 83.2mn b/d this year. Increased throughput from non-OECD countries still drives this year's growth, with the IEA expecting an increase of 830,000 b/d to 47.6mn b/d. The IEA has not adjusted this figure, as stronger runs in China through the first quarter of this year and higher Russian forecasts have offset downgrades in other non-OECD countries. Chinese crude runs in January and February averaged 15.2mn b/d, around 470,000 b/d higher than the IEA's forecast, it said. The body raised its Russian forecasts from the second quarter as Ukrainian attacks on Russian infrastructure have slowed. The IEA forecasts OECD refinery runs will fall by 490,000 b/d this year because of refinery closures, resulting in a cut from its previous forecast of 100,000 b/d, to 35.6mn b/d. OECD Europe runs are forecast to fall by 310,000 b/d on the year to 10.9mn b/d. OECD crude runs rose by 200,000 b/d on the year in February, 40,000 b/d higher than the IEA expected. Throughput was particularly weak in the first quarter of 2024, when extreme cold cut US run rates. In Mexico, state-owned Pemex's 340,000 b/d Olmeca refinery has still not reached stable operations having started up in mid-2024. The refinery ran no crude in January because of crude quality constraints, the IEA said, and February output there was 7,000 b/d. The IEA estimates the refinery's second crude unit will come online in the fourth quarter. The IEA said refiners will add more than 1mn b/d of global capacity in 2026, but it forecast growths in crude runs of only 300,000 b/d for that year. Assuming all new and expanded refineries come into operation by then, producers will have to cut runs at older refineries, it said. Capacity additions will be largest in Asia-Pacific. The IEA expects China's 320,000 b/d Panjin refinery to come online in the second half of 2026, and for producers to add capacity of 480,000 b/d in India. It sees growth in crude runs as focused on the Mideast Gulf, and runs across the OECD falling. By Josh Michalowski Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UN carbon market advances on leakage, baseline issues

15/04/25

UN carbon market advances on leakage, baseline issues

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VG begins contracted LNG deliveries at Calcasieu Pass

15/04/25

VG begins contracted LNG deliveries at Calcasieu Pass

Houston, 15 April (Argus) — US LNG exporter Venture Global began deliveries of long-term contractual cargoes at its 12.4mn t/yr Calcasieu Pass terminal in Louisiana today after the facility started commercial operations, more than three years after producing its first LNG. "We are excited to reach this milestone and are grateful for our regulators and supply chain partners who have worked with our team to reach commercial operations as efficiently and safely as possible," said Venture Global chief executive Mike Sabel. But the long-delayed and highly contested start comes amid ongoing arbitration proceedings against Venture Global, which some customers including Shell, BP, Italian utility Edison and Spanish company Repsol argue was unjustified in deferring the contracted supplies (see offtakers table) . The LNG exporter originally sought to begin commercial operations in 2022 but cited impacts from Covid-19, two hurricanes and "major unforeseen manufacturing issues" related to one of the plant's heat recovery steam generators, equipment that helps power the facility. Because several of the plant's facilities, including the power island, were not officially placed in service with federal authorization, Venture Global maintained that the plant was not commercially operating — despite producing 444 cargoes totaling 28.2mn t of LNG (about 1.28 trillion cubic feet of natural gas) since its first in March 2022, according to Vortexa data. The start-up Tuesday comes on the final day before Venture Global could have lost control of the project. The company said in a December filing with the US Securities and Exchange Commission (SEC) that the agreement under which it had financed debt requires commercial operations to be completed by 1 June 2025. Should commercial operations have not begun 45 days prior to this date — which is Tuesday — then the agreement defaults, allowing "certain investors" to exercise control over the project. Before Tuesday, the company instead sold cargoes on the spot market for prices much higher than the terms of its offtake agreements. Calcasieu Pass produced its first LNG in January 2022 and exported its first cargo on 1 March 2022 — less than a week after Russia, then a key supplier of gas to Europe, invaded Ukraine. The facility produced its first LNG just 29 months after reaching a final investment decision (FID) on the project, compared with the industry average of four to five years. The timing of the project's start dovetailed with the war-driven volatility in the European gas market, helping Venture Global realize much larger profits than it would have under contracted volumes. The firm's liquefaction fees in 2023 and 2024 averaged $12.23/mn Btu and $7.28/mn Btu, respectively, compared with the average $1.97/mn Btu in its long-term deals, according to a company presentation in March. The lengthy commissioning process generated $19.6bn in revenue by the end of September 2024, Venture Global said in the December SEC filing. Shell estimated that Venture Global sold cargoes in 2023 at an average of $48.8mn per shipment, "raking in billions of dollars while shirking its contractual obligations", according to a filing with US energy regulator FERC in March 2024. Venture Global said in March that the customer arbitration cases are not likely to be resolved until after 2025. LNG facilities usually produce commissioning cargoes for a few months before beginning long-term contracts. But Venture Global has said its unique plant design, which uses a higher number of smaller, modular liquefaction trains compared with traditional trains, requires a longer start-up process. Calcasieu Pass LNG consists of 18 trains paired in nine blocks, and a similarly long commissioning period is expected at the first two phases of Venture Global's 27.2mn t/yr Plaquemines facility consisting of 36 trains. The company also has plans for an 18.1mn t/yr expansion at Plaquemines. An FID is expected in mid-2027, with first LNG production 18-24 months later. Venture Global estimated that its third LNG facility, the 28mn t/yr CP2 facility adjacent to Calcasieu Pass, could export up to 550 commissioning cargoes . The company expects to make an investment decision on the first phase of CP2 this year. By Tray Swanson Calcasieu Pass offtake deals Offtaker Volume, mn t/yr Contract length, yrs Shell 2.0 20 Galp 1.0 20 Sinopec 1.0 3 CNOOC 0.5 5 Edison 1.0 20 Repsol 1.0 20 PGNiG 1.5 20 BP 2.0 20 — US DOE Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Europe saw rising weather extremes in 2024: Report

15/04/25

Europe saw rising weather extremes in 2024: Report

London, 15 April (Argus) — Europe experienced a high level of extreme weather events — such as storms, heatwaves and floods — in 2024, a report from EU earth-monitoring service Copernicus and the World Meteorological Organisation (WMO) found today. "Heatwaves are becoming more frequent and severe, and southern Europe is seeing widespread droughts", while changes in precipitation patterns, "including an increase in the intensity of the most extreme events" has been observed, the report found. Europe experienced last year the "most widespread flooding since 2013", it added. The extreme weather events "pose increasing risks to Europe's built environment and infrastructure… and urgent action is needed", the WMO and Copernicus said. Last year was the hottest on record , both for Europe and globally. Europe is the fastest-warming continent, the report noted. The global surface air temperature has increased by around 1.3°C since the 1850-1900 period, while Europe's surface air temperature over land has risen by 2.4°C over the same period, the report found. The Paris climate agreement seeks to limit the rise in global temperature to "well below" 2°C above pre-industrial levels, and preferably to 1.5°C. Climate scientists use 1850-1900 as a baseline pre-industrial period. The WMO and Copernicus also flagged "a pronounced east-west contrast" in weather conditions across Europe last year. Western Europe experienced above-average precipitation, while conditions across most of eastern Europe were drier than average. Southeastern Europe in particular experienced "record-breaking numbers" of "strong heat stress" days — those with a "feels-like" temperature of 32°C or higher — and tropical nights in 2024. Nights during which the temperature does not fall below 20°C are classified as tropical. Monitoring from agencies such as Copernicus and the WMO form a central basis of multilateral climate talks such as the annual UN Cop summits, and mid-year UN climate talks which take place in Bonn, Germany each June. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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