Brazil signs decree to increase natural gas sales
Brazil's federal government adopted a decree today to increase natural gas deliveries to the market, hoping to reduce prices.
President Luiz Inacio Lula da Silva and mines and energy minister Alexandre Silveira signed the decree during a national energy policy council CNPE meeting.
The decree is based on Lula's gas for jobs program and would allow hydrocarbon regulator ANP to order companies to increase natural gas production for sale to the market. Many companies working in Brazil's pre-salt fields choose instead to re-inject gas to optimize oil recovery.
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‘Time has come’ for rate cuts: Fed chair Powell
‘Time has come’ for rate cuts: Fed chair Powell
Houston, 23 August (Argus) — US Federal Reserve chairman Jerome Powell today told a central bank symposium that the "time has come" for the Fed to begin lowering borrowing costs, just weeks before the next Fed policy meeting in mid-September. "The time has come for policy to adjust," he told an audience of central bankers and economists at the annual symposium at Jackson Hole, Wyoming. "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks." Powell's remarks today are the clearest signal that the Fed is ready to begin lowering borrowing costs, a move that would help spur economic activity as the economy has shown signs of slowing. The move would also come a little over two months before the presidential election in the US. After the 31 July Fed policy meeting that kept the rate unchanged, Powell said that if economic data continued to come in as expected, a rate cut "could be on the table" for the September meeting. After Powell's remarks today, the CME's FedWatch tool was signaling 65.5pc odds of a quarter point rate cut at the next Fed meeting and 34.5pc probability of a 50 basis point cut. That compares with 76pc for a quarter point cut and 24pc for a half point cut Thursday. "With an appropriate dialing back of policy restraint, there is good reason to think that the economy will get back to 2pc inflation while maintaining a strong labor market," he said today in the text of his speech. "The upside risks to inflation have diminished. And the downside risks to employment have increased." The Fed — which has a dual mandate of pursuing maximum employment and price stability — has been battling to bring down inflation for the last two years after it peaked at 9.1pc in June 2022. In the sharpest course of rate hikes in four decades, the Fed pushed up its target rate by more than five percentage points to a range of 5.25-5.5pc from early 2022 through July 2023. The Fed has maintained the target rate at that level since then, which has pushed the consumer price index to 2.9pc in the year through July, its lowest in three years. While inflation has slowed markedly, the economy has largely proven resilient. Still, the labor market has shown signs of weakening recently, especially as a much weaker-than-expected employment report for July caused a brief meltdown on financial markets several weeks ago. This prompted some economists to warn that the Fed had been too slow in adjusting its policy as recession fears had mounted. "We will do everything we can to support a strong labor market as we make further progress toward price stability," Powell said. "The current level of our policy rate gives us ample room to respond to any risks we may face." Powell noted that the labor market "has cooled considerably from its formerly overheated state," pointing out that unemployment had risen by nearly one percentage point to 4.3pc in July from early 2023, "still low by historical standards… Even so, the cooling in labor market conditions is unmistakable." By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Court endorses Maduro win amid warnings, violence
Court endorses Maduro win amid warnings, violence
Caracas, 23 August (Argus) — Venezuela's supreme court validated the reelection of President Nicolas Maduro to a third six-year term, maintaining he is the victor of the polemic 28 July vote. The court did not present any electoral material, ballots or tallies to support the claim, and no experts offered testimony. "This chamber declares ... the validity of the electoral material surveyed and validates the results of the presidential election," court chief justice Caryslia Rodriguez said. She also declared presidential candidate Edmundo Gonzalez to be in contempt of court for not attending the proceedings. Rodriguez's announcement came two hours after a UN mission questioned the official results. "We warn about the lack of independence and impartiality of the supreme court of justice and the national electoral council of Venezuela, which have played a role within the repressive machinery of the state," the UN fact-finding mission on Venezuela posted on social media. Gonzalez has produced electoral material, including tallies printed by voting machines and signed by witnesses on election day, giving him the victory by almost 70pc to 30pc. The "actas," as the tallies are known in Venezuela, were validated by several independent parties, including the Carter Center, the UN and the Organization of American states. The CNE electoral agency has also failed to present any of the other sets of these documents. Audits were never conducted. The Maduro government confirmed this week that 27 Venezuelans were killed in post-electoral violence, for which it blamed the opposition. Human rights non-government organization Provea said the bulk of the violence came from police and the military. Six anti-Maduro demonstrators were killed on 29 July near an army base. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Papua LNG FID set for late 2025: Australia’s Santos
Papua LNG FID set for late 2025: Australia’s Santos
London, 22 August (Argus) — A final investment decision (FID) on the 5.6mn t/yr Papua LNG project in Papua New Guinea is likely to be taken in late 2025, Australian independent Santos' chief executive Kevin Gallagher told an investor call marking the firm's half-year results to 30 June. The joint-venture partners are working to reset the initial engineering phase of the project, Gallagher said, with design optimisations under way to reduce capital expenditure on Papua LNG. Santos' "best estimate" is that the project partners would reach an FID towards the end of 2025, Gallagher said. The preferred development concept continues to include processing up to 2mn t/yr of Papua LNG's raw gas through the 6.9mn t/yr ExxonMobil-operated PNG LNG plant . The $10bn project to build Papua New Guinea's second LNG export terminal was initially expected to reach an FID by early 2024 ahead of first production in early 2028, but this was postponed in April by the need for more commercially viable engineering, procurement and construction contracts, operator TotalEnergies said . TotalEnergies holds a 37.55pc stake in Papua LNG, with ExxonMobil controlling 37.04pc, Santos 22.83pc and Japanese upstream company JX Nippon 2.58pc. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Oil producers sell US gas at lowest prices in years
Oil producers sell US gas at lowest prices in years
New York, 21 August (Argus) — Large crude oil producers in the second quarter sold their US natural gas output at the lowest prices in years as gas pipelines out of the Permian basin ran full and the US gas market remained oversupplied. The historically discounted gas — mostly associated gas production — did little to dent the crude producers' profits, however, as crude sales represent a much larger share of their revenue and crude prices have remained strong. Nevertheless, crude-driven associated gas production comprises a significant share of total US gas output. Chevron, which reported 2.6 Bcf/d (74mn m³/d) of US gas output in the second quarter, posted average realized sales at 73¢/mmBtu, the lowest for the oil major since the first quarter of 2020, according to company filings. This was down from its year-earlier sales realized at $1.18/mmBtu and its full-year 2022 sales realized at $5.35/mmBtu. A little more than half of Chevron's second-quarter US production, on an oil equivalent basis, came out of the Permian basin of west Texas and eastern New Mexico, while a quarter came out of Colorado. ExxonMobil fared little better, with average sales realized at $1/mmBtu for its 2.9 Bcf/d of US gas in the second quarter, down from $1.40/mmBtu a year earlier and the lowest since at least 2002, as far back as Internet-accessible company filings reach. If it realized a more middling price of $3/mmBtu on its US gas output, its second-quarter revenue would have been $548mn higher than its actual revenue of $51.2bn. EOG Resources in the second quarter averaged realized sales at $1.51/mmBtu for its 1.7 Bcf/d of US gas output, while ConocoPhillips realized 31¢/mmBtu for its 1.6 Bcf/d of lower-48 US gas output. Diamondback Energy posted such a low average price realization for its 564mn cf/d of US gas in the second quarter — 10¢/mmBtu — that earlier this month it said it had curtailed some oil production just to bring down the amount of gas that was coming up the well alongside the oil. State and federal regulations hinder indiscriminate so-called "economic" flaring, forcing producers to sometimes pay buyers to take gas off their hands in the absence of available pipeline takeaway capacity. "Obviously, we need to start making more money on our gas in the Permian," Diamondback chief financial officer Kaes Van't Hof said. Fly in the oil well Still, large crude producers are not exactly hurting. Exxon reported a $9.2bn profit, up from $7.9bn a year earlier, while Chevron reported a $4.4bn profit, down from $6bn a year earlier. Diamondback's second-quarter profit of $837mn was also up from its year-earlier profit of $556mn. Those profits, on the back of solid crude prices in the latest quarter, were also partly thanks to booming oil production in the Permian basin, which as a side effect has flooded the region with associated gas. The pace of that gas growth has outpaced developers' efforts to expand local gas pipeline takeaway capacity, plunging spot prices there into negative territory . The Waha spot index in the second quarter averaged -58¢/mmBtu. This upside-down market is not likely to last, however, as the 2.5 Bcf/d Matterhorn Express pipeline comes on line later this year to relieve takeaway constraints in the Permian. Argus forward curves show the September price of -48¢/mmBtu at Waha rising to 49¢/mmBtu in October, with the 2025-calendar strip there averaging $2.07/mmBtu — not so far below Tuesday's 2025 strip settlement at the US benchmark Henry Hub of $3.29/mmBtu. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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