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Venezuela optimistic despite diluent, power challenge

  • : Crude oil, Natural gas
  • 23/11/27

Venezuelan energy production has risen to 850,000 b/d of oil and 4.5 Bcf/d of natural gas since the lifting of US sanctions a year ago, but obstacles remain, top industry officials told Argus last week.

The short-term production goal is 1mn b/d, Venezuelan vice minister for hydrocarbons Erick Perez said on the sidelines of a Venezuela oil chamber conference in Caracas, but it depends heavily on a steady flow of diluent to blend with extra heavy oil from the Orinoco region.

"Once we can have it in volume and quality, the goal is achievable," Perez said.

Venezuela produced roughly 680,000 b/d of crude a year ago, according to Argus estimates.

US producer Chevron has been bringing in more cargoes of naphtha and condensate for state-owned oil company PdV to use as diluent, according to shipping data, but the industry needs more, Perez said. Shipments from Iran, which provided a lifeline in recent years when US sanctions were in full force, have all but disappeared.

Venezuela is now receiving an average of $65/bl for its oil, Perez said. Venezuela has stopped officially reporting its crude basket prices, but sources last year estimated it was receiving about $60/bl.

Unreliable power service also remains an issue, particularly in Zulia state, Perez said. Any small fluctuation in power can curtail oil well operations.

But overall oil and gas production has increased in 2023, in large part because of the White House relaxing many of the sanctions imposed during the administration of former US president Donald Trump, allowing Chevron to resume work on its four joint ventures (JVs) with PdV.

The Petro Piar JV in the Orinoco is producing about 80,000 b/d, according to Perez. Petro Independencia, also in the Orinoco, is producing around 25,000 b/d. In Zulia state, the Petro Boscan JV is now at 60,000 b/d — or 65,000 b/d on a good day, according to Perez — while the Petro Independiente JV is at 3,000 b/d.

Perez declined to comment on reports from sources that Chevron is seeking to exit Independiente.

"In Zulia we have managed to open a closed field, Boscan, and that is crude that Chevron is placing in the North American market," Perez said.

And natural gas that was once flared is now being produced and sold, PdV vice president for gas Luis Gonzalez said.

For many in Venezuela's oil industry the turnaround since last year is both surprising and encouraging, as the four JVs that were practically mothballed a year ago are now sending thousands of barrels per day to the US. "I for one can't believe it's been a year already," oil chamber president Enrique Novoa told Argus. "We just hope that this business model [with Chevron] can be applied in other associations."

Offshore Eni and Repsol operations at the Cardon IV project are producing 580mn cf/d gas and 17,000 b/d of much-needed condensates.

"And we are carrying out a seismic-data offshore project that could put us in fifth place of proven natural gas reserves, worldwide," Gonzalez said.


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24/11/01

TMX exports reach new record in October

TMX exports reach new record in October

Houston, 1 November (Argus) — Crude exported via the 590,000 b/d Trans Mountain Expansion (TMX) pipeline reached a new high in October at 413,000 b/d. TMX loadings out of Vancouver were up by 103,100 b/d from September and surpassed the previous record of 368,800 b/d in August by 12pc, according to data by analytics firm Vortexa. The exports loaded onto 24 Aframax tankers, up from an average 20 per month, according to Teekay Tankers in an earnings call. Of those 24 Aframaxes, nine went directly to Asia-Pacific ports while at least four went to the Pacific Area Lightering zone (PAL), where the vessels discharged onto very large crude carriers (VLCCs) for Asia-Pacific. The rest traveled to ports along the US west coast. China overtook the US west coast as the largest importer of TMX crude in October, increasing its loadings from 139,900 b/d in September to 208,300 b/d, or over 50pc of the total volume. A record amount of TMX crude still departed for the US west coast in October at 204,700 b/d, up 20pc from the prior month. Future imports into the region might be stifled in the short-term, with US independent refiner PBF planning to run less TMX crude during the fourth quarter amid higher prices and ongoing maintenance on equipment used to remove impurities from heavy sour crude, like the grades exported from TMX. Long-term, TMX transportation rates could become more economical for California refineries, PBF said in its third quarter earnings call. Canadian high-TAN crude fob Vancouver averaged a roughly $11.35/bl discount to December Ice Brent in August, when October cargoes were trading, while heavy sour Cold Lake averaged a roughly $10.60/bl discount. By Rachel McGuire Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Mexican hydrogen regulatory efforts gain ground


24/11/01
24/11/01

Mexican hydrogen regulatory efforts gain ground

Mexico City, 1 November (Argus) — The Mexican hydrogen association (AMH2) has made significant strides in recent discussions with regulators and officials, unveiling a comprehensive roadmap for industrial hydrogen adoption. The group's report estimates there will be demand for about 392,189 tonnes (t) of hydrogen per year across seven major industries during Mexico's pilot hydrogen development phase. This includes sector-specific hydrogen demands of 148,350 t/yr from oil refining through 10 potential applications; 107,325 t/yr for mining; 55,877 t/yr for hydrogen blending in natural gas; 23,932 t/yr in the metals industry; 35,040 t/yr tied to ammonia production; 15,265 t/yr for public transport; and 6,400 t/yr for methanol production. AMH2's strategy urges the administration of President Claudia Sheinbaum to designate a lead ministry for hydrogen development, prioritize green hydrogen production and introduce incentives for project financing, technology development and energy transition initiatives. Additionally, it calls for regulatory adaptations to facilitate hydrogen's integration into Mexico's natural gas infrastructure, including quality, transportation, distribution and safety standards, especially for industrial equipment. Legal reforms to support hydrogen development will also be needed, according to the report, targeting laws governing mining, water, hydrocarbons, nuclear energy, energy transition, environmental protection, electric power, bioenergy and geothermal power. For green hydrogen — generated with renewable energy — the focus would be on the latter five areas. These efforts align with Mexico's long-term energy plan (Prodesen 2023-2037), which envisions converting 12 combined cycle power plants, totaling 1.024GW, to operate on a 70pc natural gas and 30pc hydrogen blend between 2033 and 2036. AMH2 president Israel Hurtado said although Mexico's pipeline infrastructure could handle up to a 15pc green hydrogen blend, achieving a 30pc blend would require further technological advances expected over the next decade. Prodesen also identifies regions for hydrogen injection into pipeline networks, including Sonora, Sinaloa, Tamaulipas, Oaxaca, Veracruz, Baja California and the Yucatan peninsula. Yet new regulations will be crucial to establish a robust framework for hydrogen blending in existing infrastructure. The Sheinbaum's administration has committed to reducing carbon emissions and promoting clean energy, Hurtado said, with a $13.5bn investment pledge in renewables over six years and a target for 45pc of national power from renewables by 2030. AMH2 has built early connections with Sheinbaum's team, including Jorge Islas, her energy and climate advisor during the campaign, who now heads the energy ministry's (Sener) energy transition unit and supports green hydrogen initiatives. AMH2 leaders also recently met with energy regulator (CRE) president Leopoldo Melchi and commissioner Walter Jimenez, who expressed strong interest in hydrogen regulation. The association and CRE agreed to form a technical workgroup to develop clean hydrogen regulations collaboratively. Looking ahead, AMH2 plans to meet with energy minister Luz Elena Gonzalez and Mexico's economy ministry to further discuss the hydrogen strategy. But CRE's workgroup is on hold pending potential legislative reforms that could reorganize Mexico's energy regulators under Sener's supervision. Projects in development AMH2 has identified 16 hydrogen projects in Mexico, with eight in various development stages and eight announced. Primarily focused on green hydrogen, these projects represent an estimated $19bn investment. The largest, Helax, is a $10bn green hydrogen production facility in Oaxaca, connected to the Interoceanic Trans-Isthmus Corridor. AMH2 anticipates production to start within two years following initial permitting. The roadmap suggests that, even if only six projects are operational by 2030, the sector could generate 3.351GW and attract $1.8bn in investments. These projects are projected to bring in $2.5bn in revenue over six years and yield $1.9bn in tax contributions. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US job growth slumps in October, jobless rate at 4.1pc


24/11/01
24/11/01

US job growth slumps in October, jobless rate at 4.1pc

Houston, 1 November (Argus) — The US added only 12,000 nonfarm jobs in October, reflecting the impacts of two hurricanes, a strike at aircraft manufacturer Boeing and a slowing trend in hiring prompted by high borrowing costs. The unemployment rate remained unchanged at 4.1pc, still close to a five-decade low of 3.4pc reached in early 2023, the Labor Department reported today. Last month's gains were far fewer than the 113,000 forecast by analysts surveyed by Trading Economics. Job gains for the prior two months were revised down by a combined 112,000 jobs, leaving September with a still robust 233,000 and August with 78,000 jobs. A Labor Department report earlier this week showed job openings in September were at their lowest since January 2021. Still, job gains for the 12 months through October averaged 194,000, a little higher than the 12-month period before Covid-19 struck the US beginning in early 2020, causing millions of job losses and a sharp but short recession. Today's employment report, the last before next week's US presidential election, cements odds of a quarter point cut in the Federal Reserve's target rate next week to nearly 100pc from about 96pc Thursday, according to CME's FedWatch tool. The Fed cut its rate by half a point in late September, the first cut since 2020, as it is just beginning to loosen monetary policy after the sharpest tightening in decades to battle surging price gains. Inflation has since moved close to its 2pc target and job gains have gradually slowed, even as the economy remains robust, growing by nearly 3pc in the second and third quarters of the year. Hurricane Helene made landfall in northern Florida in late September and slammed northwards into Georgia, the Carolinas and Virginia, leaving major damage in its wake. Hurricane Milton struck Florida on 9 October, within the period of both surveys used for the job report. About 32,000 unionized workers at Boeing have been on strike since early September. Job growth trended up in government and in health care and social services, which added 40,000 and 51,000, respectively, while manufacturing declined by 46,000, partly due to strikes. Construction added 8,000 jobs. Average hourly earnings edged up to an annual 4pc from 3.9pc. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Lyondell Houston refinery closure to begin in January


24/11/01
24/11/01

Lyondell Houston refinery closure to begin in January

Houston, 1 November (Argus) — LyondellBasell's 264,000 b/d Houston, Texas, refinery will begin shutting units in January and complete its previously-announced exit from the crude refining business by the end of the first quarter 2025. The Houston plant will shut a crude distillation unit (CDU) and coking unit in January followed by a secondary CDU, coking unit and the refinery's fluid catalytic cracking unit (FCC) in February, the company said in an earnings presentation today. The February unit shutdowns will include the closure of "ancillary units", LyondellBasell said. The company today re-iterated its time line of exiting the refining business by the end of the first quarter and continues to evaluate an advanced recycling or renewable fuels conversion at the plant. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

TMX adds to ‘pulse’ of 4Q freight market: Teekay


24/10/31
24/10/31

TMX adds to ‘pulse’ of 4Q freight market: Teekay

Houston, 31 October (Argus) — An increase in monthly Aframax crude tanker loadings in Vancouver, British Columbia, is poised to add a new dynamic to the tanker market this winter, Teekay Tankers chief executive Kenneth Hvid said. So far, tanker rates in the fourth quarter, often the strongest time of year for the market, have lagged the trajectory of fourth quarter 2023. But it is too early in the quarter to assume a rally will not happen, Hvid said. "It feels like the market has called the winter over before it started," he said. "But there is absolutely a pulse in the markets." Part of the support for tanker rates likely will come from heightened demand on Canada's Pacific coast, where exports in Vancouver are continuing to rise following the Trans Mountain Expansion (TMX). In October, 24 Aframaxes loaded in Vancouver, Hvid said. That marks a new high since TMX began operations in May, with the monthly average at around 20 loadings from June through September, according to Teekay. Nine of the 24 cargoes went directly to Asia-Pacific ports and at least four went to the Pacific Area Lightering zone (PAL), where the vessels discharged onto very large crude carriers (VLCCs) for shipment across the Pacific. An increase in direct shipments from Vancouver to Asia-Pacific can clear out available tonnage on the west coast of North America and pressure rates higher, which lifted rates in September . Teekay profits down on year Teekay reported a profit of $58.8mn in the third quarter, down from $81.4mn in the third quarter of 2023, with rates under pressure from lower Chinese crude oil imports. The tanker company expects rates to climb in the fourth quarter on seasonally higher oil demand. Teekay has a fleet of 42 tankers, including 24 Suezmaxes and 18 Aframax/long range 2 tankers, with six additional vessels on time charter. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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