Venezuela returns to threats against Guyana drilling
Venezuela is threatening to use force against US major ExxonMobil over planned offshore Guyana drilling, violating an agreement reached in December to not make such threats.
ExxonMobil announced plans this week to drill two exploratory wells west of its existing Liza and Payara production operations in the Stabroek block. A decades-long disagreement over Guyana's Essequibo province has prevented the two countries from agreeing on a maritime border, which puts Stabroek in the middle of the dispute.
ExxonMobil's plan drew a strong response from Venezuela's defense minister Vladimir Padrino this week.
"If ExxonMobil operates in the maritime space that by right belongs to Venezuela, supported by its private security company represented by the US Southern Command, it will receive a proportional, forceful and legal response," Padrino warned on 7 February.
Such threats were supposed to be off limits following a meeting in December between Guyana and Venezuela officials to cool tensions Essequibo province.
ExxonMobil Guyana president Alistair Routledge said the company believes local and international law supports its rights to move forward with the drilling plan, but Venezuelan vice president Delcy Rodriguez characterized Exxon's statements as "threatening," saying the company was protecting its "illicit operations... under the warmongering mantle of the US in complicity with Guyana."
The foreign ministers of both countries have met since December's summit to continue discussions on the border dispute and to prepare for another meeting of the presidents, with the most recent occurring two weeks ago.
Earlier this week US national security advisor Jon Finer traveled to Guyana to meet with President Irfaan Ali to reaffirm the US' "...unwavering support for Guyana's sovereignty, territorial integrity, and defense capabilities," according to the White House.
Guyana has asked the UN's International Court of Justice (ICJ) to determine the merits of Venezuela's claim to Essequibo but Venezuela has rejected the ICJ's role. It is seeking direct bilateral talks on the dispute, which Guyana refuses.
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Canada to push for more climate cash as oil sands grow
Canada to push for more climate cash as oil sands grow
Calgary, 30 September (Argus) — Canada plans to advocate for more cash and accountability at the UN Cop 29 climate talks in Baku, but its record-high oil production and the threat of a general election might complicate its own climate ambitions. The resource-rich country will be pushing for greater financial commitments from Cop countries in November as they look to replace the current, but broadly recognised as inadequate, $100bn/yr target with a new finance goal for developing countries. Canada, like all developed countries, would not say how much it is willing to commit itself. But it favours broadening the goal's contributor base. "Public finance from a relatively small group of developed countries will not be sufficient to meet current needs," federal agency Environment and Climate Change Canada (EEEC) told Argus . The new goal will require "honest reflection". The country in negotiations mentioned the phase-out of fossil fuel subsidies and fossil fuel sector public financing as a mean to increase investments in energy transition sectors, but other key oil-producing countries disagree. Canada's government says it remains focused on the oil and gas industry and expects to see progress on Cop 28's commitment to transition away from fossil fuels. It became the first G20 country to release a framework targeting "inefficient" fossil fuel subsidies last year, accelerating a 2009 commitment to phase out support for its largest source of emissions. This has not stopped investment in Alberta's oil sands from growing, but the federal government is looking to steer more cash towards clean initiatives such as clean hydrogen, clean electricity and carbon capture. The latter could represent a big business for Alberta's producers if subsidised generously. But it could also be a licence to push Canada's crude production beyond its 4.9mn b/d record set last year. Greenhouse gas (GHG) emissions from Canada's oil and gas sector accounted for 33pc, or 217mn t, of the country's total in 2022, according to the National Inventory Report. Cutting them is critical to meet an overall goal of 403mn-439mn t by 2030, but the Office of the Auditor General of Canada says the country is only on track to lower them to 470mn t by that date. Domestic politics And Canada's climate ambitions might be at risk, with the Liberal minority government facing a general election no later than October 2025. Prime minister Justin Trudeau's popularity has dropped to the benefit of Conservative opposition leader Pierre Poilievre. Trudeau has resisted calls from within his party to step down, while Conservatives prepare for what they call a "carbon tax election". They want to axe the federal carbon tax, tanker bans and regulatory burdens. They promote pipelines and energy independence using a mix of energy sources, including fossil fuels, as part of a "gradual transition" to a low-carbon future, and say "the provinces should be free to develop their own climate change policies". Canada's 10 provinces hold jurisdiction over natural resources and that has posed a serious dilemma for the Liberals as they make climate promises on the international stage. Leading oil province Alberta will be sending a delegation to Cop to promote its own emissions-reduction strategies, and counter those of federal environment minister Steven Guilbeault, as the provincial government slams Ottawa's "punitive regulations" and says its climate policies are unrealistic. Trudeau's pursuit of winding down the oil sands was already tricky considering a state-owned pipeline is effectively subsidising the industry by C$8.7bn ($6.45bn), according to non-profit International Institute for Sustainable Development. Export capacity to the Pacific coast tripled to 890,000 b/d when the Trans Mountain Pipeline Expansion opened this year, underpinning growth plans for Canadian oil. By Brett Holmes Canada GHG emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Libya parliament passes deal to end central bank crisis
Libya parliament passes deal to end central bank crisis
London, 30 September (Argus) — Libya's eastern-based parliament today approved an agreement to resolve a leadership crisis at the central bank, which is likely to lead to a lifting of the country's oil blockade. The eastern-based House of Representatives and the western-based High Council of State agreed on 26 September a deal to appoint Naji Mohamed Issa Belgasim as governor of the central bank and Marei Muftah Rhayyel Al-Bar'assi as deputy governor. The leadership of the central bank was thrown into disarray on 18 August when the western-based presidency council attempted to replace long-serving governor Sadiq al-Kabir — a move rejected by the country's eastern-based administration. The eastern-based Libyan National Army (LNA) imposed an oil blockade on 26 August in a bid to starve the western-based government of revenues. This has halved the country's crude output, which Argus estimates at about 500,000 b/d. The deal to resolve the leadership central bank crisis is likely to see the LNA lift its blockade, although precise timing is unclear. An oil industry source told Argus that he expects it to be this week. The El Sharara oil field is also likely to restart production when the blockade is lifted, a source told Argus . El Sharara was producing around 260,000-270,000 b/d when it was shut down in early August , in a dispute unrelated to the central bank crisis. A total lifting of the blockade would restore Libya's crude output to more than 1.2mn b/d. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
PE firm Elliott bids $7.3bn for Citgo assets: Update
PE firm Elliott bids $7.3bn for Citgo assets: Update
Adds reaction from Amber, details throughout. Houston, 27 September (Argus) — An affiliate of private equity group Elliott Investment Management has been selected as the top bidder in an auction for US refiner Citgo, with a bid of $7.286bn. The special master for the auction, being held in the US District Court for the District of Delaware, will need to make a final formal recommendation for the court to choose the Elliott affiliate, Amber Energy, pending a 1 October hearing with parties disputing the auction. But a final hearing to ratify the sale of over 800,000 b/d of refining capacity could be held in November. Final bids for Citgo's US refineries, lubricant plants, midstream and retail assets were submitted on 11 June, with the auction aiming to satisfy debts owed by the company's parent firm, Venezuelan state-owned PdV. If the sale to Amber moves forward following a successful November hearing, it will mark the largest purchase of US refining assets since Andeavor's acquisition by Marathon Petroleum in 2018. "Amber Energy's strategy for growth includes plans to reinvest in the business and potentially pursue strategic investments that enhance the profitability of Citgo," the company said. Citgo was not immediately available for comment. Amber is lead by chief executive Gregory Goff, who was previously chairman, president, and chief executive officer of Andeavor. Company president Jeff Stevens is currently president of Franklin Mountain Energy, which is focused on the Permian basin. He has also been an executive officer of independent refiner and marketer Western Refining. The company plans to keep the Citgo brand, and expects the deal to close by mid-2025. Conditions of the deal include the buyer applying for and acquiring a license from the US Treasury's Office of Foreign Assets Control, because the ultimate owner of Citgo is Venezuelan state-owned PdV, which is subject to US sanctions. "We look forward to partnering with the people of Citgo to ensure that the company continues to operate with the highest standards of safety and reliability," Amber said. Even though it is owned by PdV, Citgo since 2019 has operated under a board appointed by the Venezuelan opposition and vetted by the US government after the US rejected Venezuela's 2018 presidential election as illegitimate. PdV remains under control of President Nicolas Maduro's government. Maduro has rejected the US court proceedings on selling Citgo as "theft" and the issue is likely to feature in his protracted battle with the US-backed opposition, which claims to have defeated Maduro in the July presidential election. The court earlier this year approved a ranking order in which debtors will be paid out of proceeds, rather than allocating them on a pro rata basis. The first in line is defunct Canadian mining firm Crystallex, now owned by New York hedge fund Tenor Capital, with a $990mn claim. ConocoPhillips has a total of three claims approved by court, but only two of those are likely to be satisfied, potentially netting $1.4bn. The next largest is a $1.5bn claim by Russian-Canadian gold miner Rusoro, while energy company Koch's minerals arm is chasing a $457mn claim. Separate US court proceedings involve holders of $3.4bn in PdV 2020 bonds guaranteed by 50.1pc in Citgo Holding — a PdVH-owned legal entity that directly owns Citgo. In theory, the bondholders have the right to be paid first before other claimants are satisfied. The US government has blocked the bondholders' ability to pursue the claim, most recently issuing a ban that is valid until mid-October. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UAE, Azerbaijan and Brazil juggle oil and climate goals
UAE, Azerbaijan and Brazil juggle oil and climate goals
Sao Paulo, 27 September (Argus) — Oil and gas producers the UAE, Azerbaijan and Brazil — the Cop presidencies Troika — are pushing for increased global climate ambitions, but are seemingly avoiding the question of fossil fuels in relation to their own new climate targets. Countries party to the UN Framework Convention on Climate Change (UNFCCC) must submit their nationally determined contributions (NDCs) — emissions-cut targets — for 2035 in November-February. Since July, the Troika has been calling on countries to step up. They also said they would signal their own commitments early, which the UAE and Brazil did during a meeting at the UN on 26 September. They will submit their new targets aligned with the Paris agreement's most ambitious temperature limit — 1.5°C — ahead of Cop 29 in Baku in November. Azerbaijan's incoming Cop 29 president Mukhtar Babayev did not offer a timeline, but encouraged all parties to "come forward with 1.5°C-aligned NDCs… well ahead of the 10 February deadline". Cop 28 last year ended with an agreement including transitioning away from fossil fuels and tripling renewable energy capacity globally by 2030. At the UN meeting, Cop 28 president and Abu Dhabi's state-owned Adnoc chief executive, Sultan al-Jaber, reiterated the latter but not the former. Al-Jaber said that the UAE's NDC will remain focused on nature and "will continue to drive investments in diversifying our energy mix", adding the country is on track to triple its renewable energy capacity by 2030. The UAE's focus is likely to be on technologies, with Al-Jaber saying that the new NDC "will leverage artificial intelligence to drive decarbonisation". Cop 30 host Brazil did not mention fossil fuels either, but highlighted efforts to reduce deforestation. The country "will come forward with an ambitious, economy-wide emissions-reduction target covering all greenhouse gases", secretary for climate, energy and environment Andre Correa do Lago said. Oil Change International says the Troika ignores "a simple reality". Delivering NDCs that keep to the 1.5°C goal will not be possible "without an immediate end to fossil fuel expansion". And the three countries all plan to expand oil and gas production. National circumstances The UAE targets crude production of 5mn b/d — from 4.85mn b/d today — before 2027. The third-largest crude oil producer within Opec has received two upward revisions for its production quota in the past two years. It is also expanding gas production capacity. Natural gas output in Azerbaijan reached a new high of 132mn m³/d in 2023, and the country aims to increase it further. Upping exports to the EU to 20bn m³/yr by 2027, from the current 12bn m³/yr, has been a key government commitment since 2022, when Europe was desperate for alternative gas suppliers. Brazil could hit output of 5.3mn-5.4mn b/d by 2029-30, up from 3.4mn b/d in 2023. The government has its eyes on the south and in the environmentally sensitive equatorial margin for new oil exploration. The Troika countries look at fossil fuels through the lens of their own national circumstances — with their economies being heavily reliant on them. Azerbaijan's increasing gas exports spurred an economic boom, with GDP increasing tenfold over 2003-13. Babayev pointed to the "difficulties of developing ambitious NDCs", saying Azerbaijan faces them itself. He recognised the need to deliver "deep, rapid, and sustained emissions reduction, including transitioning away from fossil fuels. But at the same time, Azerbaijan's Ilham Aliyev, "as the head of a country rich in fossil fuels" is defending "the right of these countries to continue investments and production". It is the same for Brazil. President Luiz Inacio Lula da Silva said in June that the country will make "an extraordinary leap" as soon as it begins exploring the equatorial margin. "We want to do everything legal, respecting the environment. But we are not going to throw away any opportunity to make this country grow." Still, the UAE brokered a Cop 28 outcome that included wording on fossil fuels despite pressure from fellow oil producer neighbours. But if it continues to push for the oil and gas sector to increase decarbonisation efforts, it prefers the focus to lie on the industry's emissions rather than output. And oil and gas use accounts for 33pc and 22pc, respectively, of global emissions, the IEA says. By Caroline Varin, Lucas Parolin, Bachar Halabi and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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