TMX crude active ahead of line fill: Correction
Corrects price of cargo in second paragraph.
A second cargo of Access Western Blend (AWB) has been heard sold to an Asia-Pacific buyer this week as Canada's long-delayed Trans Mountain Expansion (TMX) pipeline nears an expected second quarter start.
Unipec, the trading arm of state-owned Sinopec, was heard buying a 550,000 bl AWB cargo from TMX for June arrival, which was sold at less than $4.50/bl under August Ice Brent, though this could not be confirmed directly by Argus.
Earlier this week Sinochem was heard buying another 550,000 bl AWB cargo for June arrival at a $5/bl discount to August Ice.
Both cargoes were priced on a delivered ex-ship (des) basis, according to market sources.
The two cargoes represent a win for Canada's oil sands producers, who have been targeting a direct link to customers in Asia-Pacific. Heavy crude from Canada has previously had to travel through the US where it is re-exported at the US Gulf coast.
The federally-owned TMX line is still targeting an in-service date within the next three months, Trans Mountain's chief financial and strategy officer Mark Maki said on Wednesday.
Trans Mountain in late February made a call for a combined 4.2mn bl of crude from shippers starting in April as it prepares to fill the new pipeline, according to Canadian producer MEG Energy, a committed shipper on the line.
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Elliott bids $7.3bn for Citgo assets
Elliott bids $7.3bn for Citgo assets
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 the court choose the Elliott affiliate, Amber Energy, pending a 1 October hearing with parties disputing the auction. But a final a 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. Since 2019 Citgo 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. But its ultimate parent company, state-owned PdV, remains under control of the Maduro government. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Haftar’s lucrative oil blockade
Haftar’s lucrative oil blockade
The general's eastern power base appears to be benefiting financially, but the country's economy is suffering, writes Aydin Calik London, 27 September (Argus) — Libya's oil blockade has entered its second month with more than half of its typical crude production of 1.2mn b/d off line. Although the UN's Libya mission reports progress in efforts to resolve a leadership crisis at the central bank that sparked the blockade, a workable solution could yet prove elusive. But whether the blockade is lifted in days or endures for weeks, the shutdowns have demonstrated eastern-based general Khalifa Haftar's ability to choke his rivals in the west of oil revenues at little cost to himself. Previous wide-scale blockades instituted by Haftar exacted a heavy toll on both the internationally recognised administration in the west and parallel administrations he has propped up in the east. But this time around, Haftar has managed to design the blockade to avoid the financial and political costs associated with past shutdowns. For one, the current shutdowns at oil fields can only really be described as a partial oil blockade. Libya has exported more than 400,000 b/d of crude so far this month, with almost all of this from eastern terminals where operations were ordered to stop in late August. Argus estimates Opec member Libya's current crude production at about 500,000 b/d. Most of this production is part of state-owned NOC's crude-for-products programme, which feeds a booming fuel-smuggling industry in the east. There has been no let-up here. Imports of refined products this month are at their highest on record at 300,000 b/d, according to Kpler, far beyond Libya's real domestic needs. Some crude is also being exported by eastern-based Libyan firm Arkenu Oil, which analysts suspect was set up to create a direct oil revenue stream independent of the central bank in Tripoli. "The Haftar family has managed the feat of orchestrating an economically lucrative oil blockade," senior fellow at the Atlantic Council Emadeddin Badi says. And some crude output is being kept on line to feed domestic refineries and allow associated gas production to supply power plants. Past blockades have tended to cause power cuts and reduce domestic supplies of diesel and gasoline, putting pressure on Haftar to lift them. But now, he can keep revenue channels open and mostly absolve himself from any backlash resulting from insufficient domestic energy supplies. General practice Haftar's ability to design the blockade to suit his interests partly derives from an informal deal in July 2022 that saw him end a months-long oil blockade in return for installing Farhat ben Gudara as chairman of NOC. In this role, ben Gudara has proven far more co-operative than his predecessor Mustafa Sanalla, who refused to allow Haftar to benefit from any blockade he imposed. That "deal" had underpinned the relative peace between the country's east and west since. If a durable solution to the current leadership crisis at the central bank is to be achieved, a new arrangement between east and west will need to be worked out. Horse-trading behind the scenes continues. "There's still a lot of negotiations to go as far as Libyan politics is concerned," an oil industry source says on the possibility of the blockade being lifted. The longer the central bank crisis persists, the more precarious Libya's economic predicament becomes. Oil revenues that usually flow into the bank have all but stopped and its ability to conduct international financial transactions has been degraded. But even if a resolution is found and oil production returns to normal levels, this would at best represent a fragile and temporary solution to a long-term problem — the lack of a coherent central authority. Worryingly, Libya is a long way from any sort of political process that could heal its divisions. Libya crude production Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf oil shut-ins drop as Helene nears landfall
US Gulf oil shut-ins drop as Helene nears landfall
New York, 26 September (Argus) — US Gulf of Mexico oil production shut-in levels fell today as Hurricane Helene bore down on Florida's west coast as a category 3 storm, bringing the threat of dangerous storm surge and winds. Around 441,923 b/d of US offshore oil output, or 25pc, was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE). That is down from 29pc on Wednesday as the eastern Gulf path of the storm took it farther away from most offshore production facilities. About 363.39mn cf/d of natural gas production, or 20pc of the region's output, was also off line today, up from 17pc on Wednesday. Operators have evacuated workers from 27 offshore platforms. Helene was last about 145 miles west-southwest of Tampa, Florida, packing maximum winds of 120mph, according to a 4pm ET advisory from the US National Hurricane Center. Further intensification is likely and Helene could approach the coast at category 4 strength, with winds of at least 130mph. Landfall is expected near Port Leon on Apalachee Bay Thursday evening before Helene is forecast to turn northwestward and slow down over the Tennessee Valley on Friday and into the weekend. Earlier this week, offshore operators including BP, Equinor and Chevron took the precaution of suspending some operations and evacuating workers from offshore facilities in advance of the hurricane. Some facilities have since started back up as the hurricane's track shifted away from the main oil and gas hub in the region. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Opec+, Saudis have no target oil price: sources
Opec+, Saudis have no target oil price: sources
Dubai, 26 September (Argus) — Neither Saudi Arabia nor the wider Opec+ group have any specific target for oil prices, and no member of the producers' alliance is about to abandon output discipline in favour of chasing market share, multiple Opec+ sources have told Argus . Oil prices fell earlier on Thursday following unconfirmed press reports that Saudi Arabia may be willing to tolerate lower oil prices as part of a plan to increase crude output to regain market share. Sources within Opec+ have since dismissed those assertions outright, insisting that the basis for the group's collective decision-making will always be market fundamentals, and in particular the five-year average of crude inventories, rather than targeting any particular oil price. "Neither Opec+, Opec nor the Saudis have any price target, let alone $100/bl," one source said, in response to a Financial Times report that stated Saudi Arabia is ready to "abandon its unofficial price target of $100/bl". A second source said the $100/bl figure being reported is not a target but is more likely to refer to a recent estimate issued by banks and other financial institutions of Saudi Arabia's "so-called break-even oil price" — that is, the price the kingdom needs to cover its spending plans. In April, the IMF estimated Saudi Arabia's breakeven oil price at $96.20 for 2024, almost 20pc above the previous year and around a third higher than current Ice Brent futures. "The breakeven is, at best, indicative, but does not tell the full story," the source said. Focusing on it "is totally devoid of the idea that a government has a host of other tools to manage an economy — issuing bonds, borrowing, adjusting one's budget". Eight Opec+ producers, led by Saudi Arabia and Russia, were due to begin a phased return of around 2.2mn b/d of "voluntary" output cuts from the start of next month. But mounting concerns over the strength of the global economy, and in turn oil demand, prompted the group to defer the plan by two months to December. With worries around oil demand not going away, and the market looking likely to flip into a surplus from the start of next year, some observers are questioning whether there will be any need for an increase in Opec+ supply from December. And if the eight members go ahead with unwinding the cuts regardless, whether that would signal a shift in the group's focus to chasing market share. But a third source rejected that view, as the group would "only be reversing what we have cut". "As a group, we have said time and time again that these cuts were both voluntary and temporary, and always stressed that they could be paused or reversed," the source said. "And earlier this month, that's exactly what we did with the two-month deferral to December." December or bust? The rationale to delay the increase in production to December was twofold, according to Opec+ sources. It not only reflected the uncertainty around the global economy, the US and Chinese economies, interest rates and demand. But more importantly, the decision was made to allow Opec+ members that have overproduced this year ꟷ namely Iraq, Kazakhstan and Russia ꟷ more time to show they are serious about compensating for exceeding their output targets. "There is so much uncertainty today which we, as Opec+, have no control over," one of the sources said. "But what we do control is our own affairs." Iraq and Kazakhstan have been under intense pressure in recent months to not only adhere to their pledged targets, but also compensate for past overproduction. While Kazakhstan did manage to produce below its target in August, Iraq continued to struggle. All eyes will be on how these countries do in September. "The overproduction is impacting our credibility, and we need to tackle that. Discipline is paramount," the source said. Reports that Saudi Arabia is committed to start unwinding cuts from December, come what may, are wide of the mark for several reasons, another source said. "First, this is not a decision for Saudi Arabia to make. It is for all eight to decide," he said. The group also still has several weeks before it has to decide whether to proceed with the plan, or defer again, the source added. A decision is due in the first week of November, by which time the group should have better visibility on market fundamentals and Iraqi and Kazakh compensation efforts. "How could we make a decision now when we don't even have September production figures?" the source said. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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