PRESS RELEASE:

Hydrogen central to oil & gas industry decarbonization as expectations for market 

growth surge - DNV GL research

 
  • Half (52%) of senior oil and gas professionals expect hydrogen to be a significant part of the energy mix by 2030, according to a new DNV GL report
  • The time is right to begin scaling the hydrogen economy, despite recent oil market shocks. A fifth (21%) of industry leaders say their companies have already entered the hydrogen market 
  • Greater industry and government collaboration is needed to enable market growth. Immediate focus areas are proving safety, developing infrastructure, scaling carbon capture and storage technology and incentivizing value chains through policy.

Oslo, Norway – 14 May 2020: A new report reveals that hydrogen has surged up the priority list of many oil and gas organizations, taking a primary position in the sector’s decarbonization efforts.  

A fifth (21%) of senior oil and gas industry professionals say their organization is already actively entering the hydrogen market, according to a new report published by DNV GL, the technical advisor to the sector. The proportion intending to invest in the hydrogen economy doubled from 20% to 42% in the year leading up to the Coronavirus-induced oil price crash.  

Heading for Hydrogen draws on a survey of more than 1,000 senior oil and gas professionals and in-depth interviews with industry executives. The report suggests that recent shifts in the industry’s investment priorities are unlikely to affect the sector’s long-term efforts to reduce carbon emissions. 

DNV GL found a significant rise in those reporting that their organization is actively adapting to a less carbon-intensive energy mix – up from 44% for 2018 to 60% for 2020. Carbon-free hydrogen production, transmission and distribution is now widely recognized as a central component to the oil and gas industry’s decarbonization efforts. 

“Hydrogen is in the spotlight as the energy transition moves at pace – and rightly so. But to realize its potential, both governments and industry will need to make bold decisions,” said Liv A. Hovem, CEO, DNV GL – Oil & Gas. “The challenge now is not in the ambition, but in changing the timeline: from hydrogen on the horizon, to hydrogen in our homes, businesses, and transport systems.”

More than half of respondents to DNV GL’s research in Asia-Pacific (56%), the Middle East & North Africa (54%) and Europe (53%) agree that hydrogen will be a significant part of the energy mix within 10 years. North America (40%) and Latin America (37%) are only a little behind.

The success of a hydrogen energy economy is closely aligned with the future of natural gas, renewable energy, and carbon capture and storage (CCS) technology, according to Heading for Hydrogen.

While hydrogen gas produced from renewable energy (green hydrogen) is the industry’s ultimate destination, analysis shows that the sector can only realistically scale up to large volumes and infrastructure with carbon-free hydrogen produced from fossil fuels combined with CCS technology (blue hydrogen).  

DNV GL’s 2019 Energy Transition Outlook, a forecast of world energy demand and supply, predicts that natural gas will become the world’s largest energy source in the mid-2020s, accounting for nearly 30% of the global energy supply in 2050. Natural gas and hydrogen can play similar roles within the global energy system, and the synergies between them – in application and infrastructure – will drive the hydrogen economy.

However, Heading for Hydrogen points to political, economic, and technical complexity in scaling the hydrogen economy. 

“To progress to the stage where societies and industry can enjoy the benefits of hydrogen at scale, all stakeholders will need immediate focus on proving safety, enabling infrastructure, scaling carbon capture and storage technology and incentivizing value chains through policy,” said Hovem

DNV GL is involved in projects spanning all four of these enabling factors, including: 

·    The Hy4Heat programme in the UK, which aims to establish whether it is technically possible, safe, and convenient to replace methane with hydrogen in residential and commercial areasTests on three specially constructed houses are proving the safety case for a switch from natural gas to hydrogen in a domestic setting at DNV GL’s Spadeadam Testing and Research site – the world’s first comprehensive hydrogen testing facility

·    A project run by Dutch gas and power networks operator Stedin demonstrating that zero-carbon hydrogen could help to decarbonize heating in a residential apartment block near Rotterdam, the Netherlands

·    A full-scale demonstration project, initiated by Gassnova, in which DNV GL qualified carbon capture technology developed by Aker Solutionsat Norcem’s cement plant in Brevik, Norway. DNV GL qualifies and verifies CCS technology and projects in accordance with DNV GL recommended practices and international standards. 

·    DNV GL supports governments with technical and market analysis to provide a knowledge base for decisions regarding national strategy and policy measures.

 

Download Heading for Hydrogen at: dnvgl.com/headingforhydrogen

 ENDS

 

Download: Heading for Hydrogen. The report is based on DNV GL’s survey of more than 1,000 senior oil and gas professionals, undertaken in the fourth quarter of 2019, about their confidence and priorities for the year ahead. 

Download images HERE

For media enquiries, please contact: 

 

Neil Slater 

Head of External Relations 

DNV GL – Oil & Gas 

Tel: +44 (0) 7876 578 353 

E-mail: neil.slater@dnvgl.com

 

Alan Gorham 

Account Director 

BIG Partnership 

Tel: +44 (0) 7483288807 

E-mail: alan.gorham@bigpartnership.co.uk 

About DNV GL 

DNV GL is the independent expert in risk management and quality assurance, operating in more than 100 countries. Through its broad experience and deep expertise DNV GL advances safety and sustainable performance, sets industry benchmarks, and inspires and invents solutions. Whether assessing a new ship design, optimizing the performance of a wind farm, analyzing sensor data from a gas pipeline or certifying a food company’s supply chain, DNV GL enables its customers and their stakeholders to make critical decisions with confidence.  Driven by its purpose, to safeguard life, property, and the environment, DNV GL helps tackle the challenges and global transformations facing its customers and the world today and is a trusted voice for many of the world’s most successful and forward-thinking companies. DNV GL is the technical advisor to the oil and gas industry. We bring a broader view to complex business and technology risks in global and local markets. Providing a neutral ground for industry cooperation, we create and share knowledge with our customers, setting standards for technology development and implementation. From project initiation to decommissioning, our independent experts enable companies to make the right choices for a safer, smarter and greener future.

7th May 2020

Oil Price
Both Brent Crude and WTI are hovering around the same trading price from yesterday: Brent Crude trading at $29 dollars today with WTI trading at $24 dollars both up 1% from yesterdays close of business.

 

Subsea 7 wins ‘sizeable’ North Sea contract for IOG’s Core project
Independent Oil and Gas (IOG) has awarded a “sizeable” contract to Subsea 7 for its flagship development in the UK North Sea.  Subsea 7 has won the sought-after engineering, procurement, construction and installation deal for the recently-sanctioned Phase 1 of IOG’s “Core Project” which is due to begin production next year. 

The value has not been disclosed, but Subsea 7 said it was between £40.4million and £121.3million.  It includes the Subsea, Umbilicals, Risers and Flowlines work for Phase 1, covering the Southwark, Blythe and Elgood fields which was approved in October.

 

Equinor’s profits crash by 98% due to oil price slump
Norway’s Equinor saw its profits slide by 98% – a drop of £3.8billion – year-on-year as the Covid-19 pandemic and oil price crash took effect.  The energy giant is the latest in a line of oil majors to be struck by the commodity price drop, which saw the firm take write-downs of £1.9bn for its assets, a large chunk being in Norway and onshore US.  Despite achieving record high production in the first quarter of 2020, partly due to the Mariner field in the UK, chief executive Eldar Saetre said Equinor will “prioritise value over volume” going forward.

Equinor has already started activity reductions, particularly in the US onshore, and will consider more as necessary.

Pre-tax profits in Q1 were £65.7million, down from £3.9billion in the same period last year, while daily production was up 3% to 2.2million barrels of oil equivalent per day.

 

QP lines up Mexico move
Qatar Petroleum (QP) has bought into three blocks offshore Mexico, in the Campeche Basin, under an agreement with Total.  The Qatari company said it would acquire 30% stakes in Blocks 15, 33 and 34, under a farm-out agreement. Approval is required from the regulators and Total’s existing partners.

“We are pleased to sign these agreements, which further expand [QP’s] footprint in Mexico, and demonstrate our commitment to achieving our international growth strategy, with Latin America as a core area in our international portfolio,” said the company’s president and CEO Saad Sherida Al-Kaabi, who also serves as the Minister of State for Energy Affairs.


Saipem, CDP Sign Energy Transition Agreement

Italian energy contractor Saipem has agreed with state lender Cassa Depositi e Prestiti (CDP) to study the development of energy transition projects in Italy and abroad.

In a joint statement on Wednesday, the two groups said the agreement was focused on carbon-cutting initiatives, the circular economy and energy efficiency.

The protocol is aimed at helping Italy achieve the targets in its National Energy and Climate Plan which, among other things, require the installation of new capacity from renewable energy sources up to about 42 gigawatts.

Saipem is jointly controlled by CDP and Italian energy group Eni.


Petrofac safeguards almost 200 jobs with £81m contract renewals

Energy services firm Petrofac has said it has safeguarded nearly 200 jobs with a pair of contract renewals.  The UK deals are worth a combined £80.7million, spanning three years each with options to extend.Petrofac did not say who the contracts were with, but said it involved a competitive tender process with an international oil company and covered 195 jobs.


Tesla Is Now The UK’s Best Selling Car-Brand

Tesla Model 3 was the best-selling car in the United Kingdom in April, while total UK new car sales plunged by 97.3 percent year on year to the lowest level since 1946, due to the lockdown in the country to curb the spread of COVID-19.  

Car sales in the UK plunged to just 4,321 vehicles in April, down from 161,064 cars sold in the same month last year, according to data from the UK’s Society of Motor Manufacturers and Traders (SMMT). The April 2020 new car registrations hit their lowest level since immediately after World War II, in 1946.

In this distorted market statistics for April 2020, Tesla Model 3 was the best-selling car in the UK with 658 Model 3s sold, ahead of 367 new car registrations for Jaguar I-Pace and 264 new Vauxhall Corsas sold.


Morgan Stanley Says The Worst Is Over For Oil

The worst for oil is over, but the road to recovery will be long and windy, Bloomberg’s Javier Blas tweeted, citing Morgan Stanley analysts.

According to them, April was the worst month for oil demand, which from now on will begin to recover, albeit slowly. Oil inventories will continue to rise, however, which suggests it will be a while before oil prices could post any palpable improvement.

Because of this, the Morgan analysts kept their price forecasts unchanged, with Brent seen at $35 a barrel in the fourth quarter of the year, up from $25 during the current quarter.

Last week, Morgan Stanley’s analysts warned that oil demand was unlikely to return to pre-crisis levels until the end of 2021.


DNO presses ahead with Kurdistan exploration
Norway’s DNO has tested and appraised its Baeshiqa-2 exploration well in Kurdistan and is moving to spud an exploration well on a separate prospect on the same licence.  The Baeshiqa-2 well found oil and gas in three Triassic reservoirs. Initial testing was carried out in November and, following a workover and acid stimulation, further investigation in March.

The next exploration well, Zartik-1, should be spudded on May 15. Site construction works have been completed.

Initial testing in November 2019 saw production from the upper part of the Triassic Kurra China B reservoir of between 900 and 3,500 barrels per day of 40-52 degree API crude.

6th May 2020

Oil Price
Further recovery today for Brent Crude as it’s tipped over the $30 dollar a barrel for the first time in some months, trading up 2% on yesterday’s close at $31 dollar’s a barrel.

WTI (West Texas Intermediate) is also in recovery mode and as the world slowly comes out of ‘lockdown’ Industry demand is pushing up the price, today’s WTI is trading at $25 dollar’s a barrel.


Brent crude rockets nearly 12%
The price of a barrel of Brent crude surged above $30 on Tuesday amid growing hopes that global demand for oil is rising again.Brent was nearly 12% higher at $30.43 by the London market close, while leading financial markets also made gains as countries around the world laid plans for reopening their economies. 

The FTSE 100 rose 95.64

Jersey Oil and Gas eyes GBA farm-out later this year despite Covid-19
Jersey Oil and Gas has said it plans to launch a farm-out process later this year for its Greater Buchan Area in the North Sea, despite the Covid-19 and oil price crises.  First oil from the Moray Firth development is due in 2025, and Jersey aims to launch a sales process once the concept selection stage is completed in summer.  It comes as Jersey announced its full-year results for 2019, a £2million pre-tax loss as the firm does not yet have production and is therefore not generating revenue.

The firm has already outlined plans for a new platform for GBA, electrified with power from shore.

The Buchan field alone, which first started producing in 1981, has potential to produce 80million barrels, while the wider GBA can deliver free cash flow of more than $3bn (£2.4bn).


Archer Knight plans £1m cash for equity fundraiser
Subsea market intelligence and consultancy firm Archer Knight is planning a £1 million cash for equity fundraiser.

The Aberdeen firm raised £500,000 from 21 “high net worth” investors last year and aims to launch an even bigger second call for funds next month.  Co-founder and executive director David Sheret told TigerLive there was potential for further support through the new £250m Future Fund, launched by Chancellor Rishi Sunak last week to help innovative businesses affected by Covid-19.

Mr Sheret, who founded Archer Knight with fellow executive director Mike Watson in mid-2016, revealed the firm – which currently employs 10 people plus contractors – also plans to take on more staff in the coming months.


Aminex strikes tax deal to progress Ruvuma deal
Aminex has agreed to secure a loan to pay its capital gains tax in Tanzania in order to move its farm-out plans ahead.

Payment of the tax bill is expected to secure approval for the deal with ARA Petroleum from the Tanzanian authorities. ARA will lend Aminex $2 million, the companies agreed under a non-binding head of terms. The loan will be repaid from the amount ARA was to pay Aminex on completion of the farm-out.


Van Oord to Install Saint-Brieuc Wind Farm Foundations
Dutch offshore contractor Van Oord has won a contract for installation and transportation of components for the offshore wind farm development in the Bay of Saint-Brieuc, France.

Under the contract awarded by the wind farm developer Ailes Marines – fully owned by Spain’s Iberdrola – Van Oord will transport and install the 62 jacket foundations – steel lattice structure – and the foundation piles for the offshore substation for the wind farm.

Van Oord told TigerLive it will start the offshore operations in 2021 with the installation of the pin piles using its offshore installation vessel Aeolus, equipped with the main crane with a lifting capacity of more than 1,600 tonnes.

Industry remains relentlessly vigilant in spite of fall in number of suspected Covid19 cases
Passenger movement figures released today by Step change in Safety and OGUK show a decline in suspected coronavirus cases across the UK’s offshore oil and gas industry.  The data tracks the numbers of workers travelling back offshore, with four different categories of transport depending on their status.

 The dataset released today shows the number of individuals displaying what could potentially be Covid19 symptoms has reduced from 56 in the week ending 5 April 2020 to 20 in the week ending 3 May 2020.  As with all sectors, the oil and gas industry holds no information on confirmed cases and continues to call for expanded testing capability across the workforce as an additional preventive measure to stop the virus reaching offshore platforms.

Commenting, OGUK HSE Director Trevor Stapleton told TigerLive:

“This apparent reduction is a small move in the right direction but we can’t stress enough the need to remain alert, to continue to follow protocols and to raise any concerns in both on and offshore working environments. OGUK continues to work on a cross industry basis through our Pandemic Steering Group, where our focus remains on increasing testing capacity for our key workers and improving our understanding of how COVID-19 is impacting our sector as we look towards ensuring our industry is able to recover from the significant challenges we are currently faced with.”


Woodside Watching Oil Supermajors’ Woes for Opportunities
Woodside Petroleum is keeping a close eye out for assets that might come up for grabs from the oil supermajors amid the oil market rout, seeing itself in a position to bid, Chief Executive Peter Coleman has told TigerLive.

The head of Australia’s top independent gas producer said, however, deals were unlikely until the third or fourth quarter of this year.

“We are watching closely the super majors,” Coleman told reporters on a conference call the day after Woodside’s annual meeting.

He said Woodside was watching how the supermajors manage their debt and dividends and how they value their assets through impairments amid the oil market collapse driven by oversupply and the fall in fuel demand.

Woodside is partners with supermajors Exxon Mobil Corp , Royal Dutch Shell(RYDAF), BP Plc and Chevron Corp at LNG projects in Australia and Canada.


OGA unveils plans to force operators to meet government’s net zero goals
The UK’s oil regulator has unveiled plans to force North Sea operators to meet the government’s 2050 net zero goals.  The Oil and Gas Authority proposes to amend its principle objective of maximising economic recovery (MER) to bring in a number of low carbon obligations on operators, who would be open to penalties if they are not met.These include reducing flaring and emissions as much as possible, fully assessing low carbon development options like platform electrification, and requiring negotiations in “good faith” on carbon capture and storage (CCS).

Failure to meet the new rules is sanctionable, the regulator said, with penalties including licenses or operatorships being revoked.

 

5th May 2020

Oil Price
Brent Crude continues to trade up this morning at $29 dollars a barrel, positive news as the industry looks on to see some strong recovery.
WTI (West Texas Intermediate) is also trading on a positive this morning and is currently trading at $24 dollars a barrel, moving up from yesterday.


Lukoil Signs Sonatrach MoU
Algeria’s Sonatrach has signed a memorandum of understanding (MoU) with Russia’s Lukoil, following a number of similar agreements.  The Algerian company said the agreement was focused on identifying investment options for exploration and production in the North African state and also international opportunities.  Algeria passed a new Hydrocarbons Law in December 2019. Following this, Sonatrach has signed MoUs with a number of companies, including ExxonMobil.

650 workers move to new consortium PBS for Total North Sea contract
More than 650 workers have completed a transfer to a brand new consortium in Aberdeenshire for the start of a five-year contract with Total.  Heads were turned back in January, when the little-known group named PBS won the maintenance and operations deal, estimated to be worth tens of millions of pounds.  PBS, which has now opened its new offices in Westhill, is comprised of Paris-headquartered Ponticelli UK, Brand Energy and Infrastructure Services – which is part of US group BrandSafway – and Danish firm Semco Maritime.

The huge TUPE transfer of more than 650 includes workers from Total, Petrofac, Worley, Aker, Bilfinger and Stork, plus 50 new hires directly to PBS.


Petrofac delays £11m decommissioning contract with Awilco Drilling
Petrofac has deferred an £11million decommissioning contract for Aberdeen-headquartered Awilco Drilling.  A three-well campaign, expected to last 100 days, was due to begin at the Rubie and Renee fields in early May using the WilPhoenix rig.  The work is now being postponed until May 25, Awilco said, with the rig remaining on a standby rate during the interim.  The US-based Hess Corporation, whose UK operations now only cover decommissioning, operates Rubie and Renee.


Venezuela Oil Exports Climb As OPEC Agreement Kicks In
While OPEC begins to scale back oil production to offset at least partially some of the world’s excess oil supply, Venezuela was busy ramping up its oil exports—even in the face of US sanctions and Rosneft pulling the plug on its dealings with PDVSA.

After the United States sanctioned two Rosneft subsidiaries for propping up the Maduro regime by reselling oil and oil products from Venezuela to other markets including Asia, Rosneft pulled back, sending Venezuela’s March oil exports to lows not seen since mid-2019.

Petrobras Sets Record Of 1 Million Bpd Oil Exports

Brazil’s Petrobras set a new oil exports record of 1 million bpd in April, as domestic demand plunged, the state-controlled oil firm said on Monday, days after a large group of other oil producers, OPEC+, began a 9.7-million-bpd collective cut aimed at rebalancing the market.   Brazil is not part of the OPEC+ group and hasn’t pledged formally any cuts.

Petrobras set its previous oil export record back in December 2019. Back then, the company exported 771,000 bpd of oil.  


Tesla Applies To Sell Electricity In The UK
Tesla has applied for a license to supply electricity in the United Kingdom, The Telegraph reports, citing a document.

According to sources the daily cited in its report, Tesla will use its battery technology to enter the UK energy market. Other details were not disclosed.

Tesla, which reported a surprising profit for the first quarter despite the coronavirus outbreak, has been expanding its presence in battery storage alongside its growth in EVs. Its solar business, however, has not been doing all that well. For the first quarter of the year, Tesla reported $325 million in power generation and storage product sales revenue, a decline from the end of 2019. Elon Musk explained the decline with “Covid essentially shut us down.”


Repsol announces discoveries in Polok and Chinwol

The consortium formed by Repsol, PC Carigali, Wintershall DEA and PTTEP announced a few moments ago two discoveries of hydrocarbons in Mexican deep waters.

The discovery was made in block 29 of round 2.4 located in deep waters of the Gulf of Mexico 88 kilometers from the Tabasco state coasts, in the Polok-1EXP and Chinwol-1EXP wells.

On January 23, the National Hydrocarbons Commission (CNH) authorized Repsol to drill both exploratory wells, in which $ 97 million was invested.

“Both exploratory wells showed high potential,” said Repsol.

The consortium, made up of Repsol (30% and operator), PC Carigali Mexico Operations (28.33%), Wintershall DEA (25%) and PTTEP México E&P Limited (16.67%), will evaluate all the data obtained from the wells to prepare the delineation plan, which will be submitted to the Mexican National Hydrocarbons Commission (CNH), the regulatory body, before the end of the year.



Oil on the rise as demand starts to come back – Rystad Energy comments

The market is still vulnerable but now one thing is clear, the demand bottom is behind us, and this is manifesting in oil prices which are on the rise.

The existing problems did not magically get resolved, the storage constraint is still there, but a couple of weeks away, so we will see its effect on prices soon, as the market will get tight.

But for traders, first things first, the prices cannot only decline daily, the boost in demand has to be cheered for and the current price rebound is exactly that. Make no mistake, this is how the market works, but lower prices will return, hitting a bottom around mid- to end of May.

Key reason behind the price strengthening is regional traffic data, which indicate the demand bottom is behind us.

1st May 2020

Oil Price

Brent Crude continues to regain lost ground and has opened today at a trading price just North of $25 dollars, up 2.4% on yesterdays close.

WTI (West Texas Intermediate) is also up and is currently trading at $18 dollars a barrel which is up just over 3% from yesterdays close.


Welcome boost’ for UK offshore sector as gas project gains approval

The Oil and Gas Authority (OGA) has given the nod for a southern North Sea gas project to go ahead.

London-listed Independent Oil and Gas (IOG) said the decision was a major milestone for the company and its partner CalEnergy Resources.  IOG farmed out 50% of the licences to CalEnergy in July, with the Australia-headquartered firm paying an initial £40m plus up to £125m for the first two phases of the project.

The partners made a final investment decision on phase one of their “core” project in October and were targeting first gas in July 2021.

The core project comprises the development of 410 billion cubic feet of gas reserves across six discovered southern North Sea gas fields.

Oil on course for first weekly gain in a month as output cuts start

Oil headed for its first weekly gain in a month as global production cuts began to take effect, while early signs the coronavirus-driven plunge in demand might be starting to bottom out also aided sentiment.

Futures in New York rose toward $20 a barrel in Asian trading and are up around 16% so far this week. The OPEC+ bloc’s 10 million barrels a day of output reductions officially start from Friday, while other producers — including Norway and ConocoPhillips — have said they’re also cutting back.


Savannah cashes in on Nigerian gas work

Savannah Energy has paid down $40 million of debt as of the end of March as a result of its Nigerian gas supply business.  The company, which was known as Savannah Petroleum until mid-April, acquired the gas assets in November 2019, which come in addition to a number of discoveries it has drilled in Niger’s Agadem Rift Basin.

The company collected $96mn in Nigeria to date in 2020, Savannah said, with production increasing 34% from its Uquo gas asset.

Equinor’s Helleneset Offshore Well Comes Up Dry

Norwegian oil and gas company Equinor has completed drilling of the offshore exploration well Helleneset, formally known as well 30/6-31 S, without finding hydrocarbons.

The well was using the West Hercules semi-submersible drilling rig drilled about 7 kilometers southeast of the Oseberg C platform in the North Sea and 140 kilometers west of Bergen.

The objective of the well was to prove petroleum in Middle Jurassic reservoir rocks (Intra Heather Formation sandstones).

According to the Norwegian Petroleum Directorate, the well encountered poorly developed sandstones in the Intra Heather Formation with poor reservoir quality and no traces of petroleum and is classified as dry.


Wind farm density fears

Almost two-thirds of the major wind farms currently proposed for Scotland are in the north of the country, new figures have revealed.

And campaigners have alleged many of these developments will not even benefit the locals who will be affected by them most.

Information from the Scottish Government shows there are 27 wind farms currently in the pre-application, or scoping, phase, and a further 49 are at the next step of the process awaiting approval from ministers.

 

Builders sought for EastMed pipe

IGI Poseidon has invited companies to submit plans for the offshore parts of the proposed EastMed gas pipeline, which will run from the southeast Mediterranean into Europe via Greece and Cyprus.

A statement from Greece’s DEPA said it was seeking interested parties to carry out work on the project, with the aim of pre-selecting two candidates.

DEPA said the plan was for engineering, procurement, construction and installation (EPCI) work to be carried out on four parts of the link.

30th April 2020

Oil price rises amid output cuts and early signs of demand recovery

Oil advanced for a second day on signs fuel consumption is starting to recover in the world’s biggest economies, while global production cuts also begin to offset the demand destruction caused by the coronavirus.  Futures in New York rose around 15% to above $17 a barrel. They surged by more than a fifth of their value on Wednesday as Energy Information Administration data showed a surprise drop in American gasoline stockpiles and a jump in demand.

 
Seafox tees up offer for GMS

Seafox International has expressed interest in acquiring Gulf Marine Services (GMS) and is now required to make a firm offer – or declare otherwise – by May 28.  GMS advised shareholders to take no action as yet in response to Seafox, describing the interest as “unsolicited and non-binding”. The company will announce its preliminary results for 2019 on May 1.

 
Ithaca still eyeing Captain EOR project in 2020 but new infrastructure firm ‘on ice’

Ithaca Energy is still planning to move ahead with a project to boost production from one of its flagship North Sea fields this year, despite deferrals and slashed spending.  The operator was due to sanction the second phase of the Captain Enhanced Oil Recovery (EOR) scheme in the first half of this year, but that has been delayed due to the Covid-19 outbreak.  However, chief executive Les Thomas said the firm “hopes to still reach an FID (final investment decision) point in 2020” in the second half of the year.

Ithaca acquired Captain as part of its £1.6bn takeover of Chevron’s North Sea assets in November.

 
Dubai and Abu Dhabi go head to head in solar pricing

Dubai Electric and Water Authority (DEWA) has awarded the fifth phase of a solar park project to a consortium led by ACWA Power claiming a new record price.  The work will be carried out as part of a 900 MW phase at the Mohammed bin Rashid Al Maktoum Solar Park. The $570 million project was awarded at a tariff of $0.016953

 
New entrants join farmout process for Talon’s North Sea prospects

Talon Petroleum said today that interest in three of its UK North Sea prospects remained “strong” in spite of the “challenging macroeconomic environment”.  Headquartered in Perth, Australia, Talon said new entrants had joined the farmout process for the Skymoos, Rocket and Vantage prospects in recent weeks.  But the company could not indicate when a deal might be struck, saying timing was “fluid” as potential partners attempt to “complete review and approval processes in changed workplace conditions”, referring to the Covid-19 lockdown.

 
St Fergus terminal operator buys majority stake in well management firm

St Fergus terminal operator px Group has bought a majority stake in an Aberdeen-based oil well management firm.  The buyer said the acquisition of a 65% stake in NRG Well Management would bolster its capability to the “full upstream asset lifecycle”.  NRG provides managerial and technical services covering the whole exploration, appraisal, development and plug and abandonment life cycle.

 
RockRose Energy slashes spending and cuts number of North Sea wells for 2020

RockRose Energy has slashed spending for 2020 by more than £80m in response to the Covid-19 outbreak and cut the number of UK wells it will participate in.  Since mid-March, the North Sea operator has reduced capital expenditure plans by £64m, 40% of £160m planned at the start of the year.  RockRose is also deferring spending on abandoning wells by a further £16million.

 
All Turbines Installed at East Anglia ONE Offshore Wind Farm

ScottishPower Renewables and Macquarie’s Green Investment Group (GIG) said Wednesday that all of the 102 offshore wind turbines were installed on the East Anglia ONE offshore windfarm.

The installation began in June 2019, and now a total of 102 Siemens (SIEMENS.NS) Gamesa SWT-7.0-154 offshore wind turbines are standing tall at the wind farm site, 43km off the Suffolk coast.

Installation was carried out by Siemens Gamesa using the Sea Installer and Sea Challenger vessels, operated by DEME.

All turbine components were pre-assembled and loaded out from Peel Ports Great Yarmouth, following ScottishPower Renewables’ £5 million co-investment in the port to prepare it for construction and marshalling activity.

 
Shell Cuts Dividend for First Time Since World War Two

Royal Dutch Shell cut its dividend for the first time since World War Two on Thursday as the energy company retrenched in the face of an unprecedented drop in oil demand due to the coronavirus pandemic.

Shell also suspended the next tranche of its share buyback program and said it was reducing oil and gas output by nearly a quarter after its net profit almost halved in the first three months of 2020.

Shell’s shares in London dropped 6.7% in early trading on Thursday, underperforming rival BP.

29th April 2020

Oil Price

Brent crude has seen a 4.3% increase this morning, trading up at $21 dollars a barrel, good news, the right way.
WTI (West Texas Intermediate) has also rallied this morning with a substantial increase in trading value, up 14% this morning and currently trading at $14.13 cents a barrel.

 

SSEN to ‘connect’ with north-east elderly customers during coronavirus crisis

Members of SSEN’s Connections teams are joining colleagues from across the business to offer a ‘friendly ear’ to over-75s on the Priority Services Register (PSR).  Stephen Wood is used to leading SSEN’s Connections team in Aberdeen, where the admin, wayleaves and design teams all work together to connect customers large and small to the north-east electricity network.  Now Mr Wood is working on “connections” of a very different kind, heading up the newly-formed team of Aberdeen-based colleagues who are calling elderly customers across the region to check on their welfare during this difficult time, and signpost local community support groups if required.

Corallian tempts ‘large E&P’ firm with Moray Firth licence

UK firm Corallian has entered into an exclusivity period with a “large European E&P company” which is interest in its 174 million barrel Dunrobin prospect.  Corallian will stop marketing licence P2478, in the inner Moray Firth, to the wider industry while the unspecified E&P firm assesses the prospect.  The exclusivity period initially runs until September 30, but can be extended until the end of 2020 if the interested party wished to negotiate farm-in terms.

Seplat ups spending, delays ANOH start

Seplat Petroleum’s revenue fell to $130 million in the first quarter, down 18%, with the company blaming an under lift of oil and lower prices.  While times may be tough, Seplat said it had decided to increase its capital expenditure this year to $120mn, from the previous plan of $100mn. The extra cash will be spent on two more gas wells, plus infrastructure.

St Fergus terminal operator buys majority stake in well management firm

St Fergus terminal operator px Group has bought a majority stake in an Aberdeen-based oil well management firm.  The buyer said the acquisition of a controlling stake in NRG Well Management would bolster its capability to the “full upstream asset lifecycle”.  NRG provides managerial and technical services covering the whole exploration, appraisal, development and plug and abandonment life cycle.

Archer finances ‘robust’ after completing debt refinancing

Drilling contractor Archer has said a newly-completed debt refinancing will help it withstand a “meaningful drop in activity”.  Archer said the new agreements had given it more than £70 million in “available liquidity”, giving the firm a “robust financial foundation”.  The company is cutting a large number of offshore jobs due to clients’ decisions to reduce drilling activity in response to the oil price collapse and Covid-19 pandemic.

Wood wins Sasol framework deal

Sasol has appointed Wood to act as engineering partner under a five-year partnership framework agreement, with a focus on operations across South Africa.  Wood will provide services to Sasol ranging from feasibility studies and front-end engineering and design (FEED) to engineering, procurement and construction (EPC). The company said this was a new way of working for Sasol that was “mutually beneficial”.

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Offshore Wind Firm Orsted Beats Profit Forecasts

Orsted beat first-quarter profit expectations on Wednesday and said the coronavirus would not “materially” hit earnings this year although it might slow U.S. projects.

The world’s largest offshore wind developer said it did not expect the coronavirus outbreak to “significantly impact our earnings for the year” while it stuck to its outlook for EBITDA excluding new partnerships this year of 16-17 billion crowns.

The Danish company is in the midst of a $30 billion investment program as it seeks to become one of a handful of future “renewable majors” leading a shift away from fossil fuels.

It said all of its construction projects remain on track but acknowledged an increased risk of delays from suppliers of components and services.

27th April 2020​

Oil Price
Brent Crude is showing a drop under the $20 dollar mark today and is currently trading at $19 dolars and 60 cents. WTI (West Texas Intermediate) is dropping due to the huge glut in stored product and is therefore trading at a shade over $10 dollars this morning.

Sparrows achieves UKAS accreditation for global inspection services

Sparrows Group has enhanced its reputation for inspection services with a United Kingdom Accreditation Service (UKAS) accreditation.

The global provider of specialist equipment and integrated engineering services achieved the UKAS certification to the ISO/IEC 17020 standard for its onshore and offshore inspection activities. The award followed a three-day audit at its Aberdeen headquarters.

UKAS is the sole national accreditation body of the United Kingdom appointed by the UK Government. It assesses organisations which provide certification, testing, inspection and calibration services against internationally agreed standards.

After successfully meeting the strict criteria, the business has been accredited for provision of thorough examination of lifting equipment under LOLER 98, inspection of work equipment under PUWER 98 and non-destructive testing. To achieve UKAS accreditation, the company demonstrated that its technical employees can operate to externally verified practices and procedures safely and competently.

ADNOC launches offshore power network tender

ADNOC and ADPower have launched a joint tender for a subsea power transmission network, connecting offshore production facilities to the onshore power grid.

The project should help reduce the carbon footprint for ADNOC’s offshore facilities by up to 30%, providing operational efficiency and system reliability.

This will be the region’s first high-voltage, direct current (HVDC) subsea transmission system.

Gas that is currently consumed offshore to provide power will be diverted, as a result, allowing ADNOC to cash in on this resource and generate additional revenues.

Requests for proposal have been issued to international companies with the required experience. The system will involve two independent subsea HVDC transmission links and converter stations. This will connect to ADPower’s Abu Dhabi Transmission and Despatch Company (TRANSCO) subsidiary’s grid.

The system will have a total installed capacity of 3,200 MW and commercial operations are due in 2025, ADNOC said. It will be carried out on a build, own, operate and transfer (BOOT) basis.

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Glenmont sells off minority stake in Finnish wind farm to Kansai Power
Glennmont Partners has agreed to the sale of a 15% minority stake in a Finnish wind farm project to Kansai Electric Power Company. Project Piiparinmäki, a 211.4MW wind farm onshore wind farm, located in central Finland, is currently under construction and has an expected completion date of late 2021.  Once operational, Piiparinmäki will be the largest wind farm in Finland and one of the biggest non-subsidy wind farms in Europe. Piiparinmäki was acquired by Glennmont from Ilmatar Energy in September 2019 in their first ever investment in the Nordic market. Joost Bergsma, chief executive at Glennmont Partners, said: “We are delighted to partner with Kansai Electric Power Company on this deal by finalising this important investment in Finland.
Inpex Sells Ichthys LNG at Record Low

Inpex sold a liquefied natural gas (LNG) cargo from Australia’s Ichthys plant for loading in May at what traders say is a record low price.

Inpex had offered two cargoes for loading in May and has sold at least one of them at about $1.70 to $1.75 per million British thermal units (mmBtu), four traders said.

The cargo was sold on a delivered ex-ship (DES) basis, two of them said. Details of the buyer and the second cargo could not immediately be confirmed. 
GFS Storage Tanks Aid Green Energy Growth

Balmoral Tanks introduced a new range of glass fused to steel (GFS) liquid storage tanks, part of the company’s portfolio of storage tanks for the water, wastewater, anaerobic digestion and processing markets.

The development follows a $20m+ investment in manufacturing facilities at its South Yorkshire facility.

“International markets require technology which allows their economy to thrive while being mindful of the impact on the environment,” said Allan Joyce, MD at Balmoral Tanks. “Against this background, we have established ourselves as a global player in the design, manufacture and installation of bulk liquid storage tanks to support the anaerobic digestion green energy revolution.”

Delivering to the WWT sector in the UK for many years, Balmoral now exports to a significant number of markets that have established a renewable energy sector as part of their future infrastructure plans.

BP sinks to £3.6bn pre-tax loss as Covid-19 and oil price plummet take effect

Energy giant BP fell to a £3.6billion pre-tax loss in the first quarter of 2020 as the coronavirus and oil price slump made its impact on the business.

The deficit compares to a £3.76billion profit in the same period a year ago.

BP reiterated that staff were told in March that no one would face job cuts for three months, but did not give any update beyond that in the results today.

Up to 30k oil jobs could be lost as Covid-19 energy sector impact deepens, OGUK ( Oil & Gas UK) report warns

Up to 30,000 oil jobs are predicted to go, along with billions of pounds in investment, due to Covid-19 and a 20-year low in oil prices. A sector report released by representative body Oil and Gas UK (OGUK) today warns up to 30,000 direct and indirect jobs could be cut in the next 12-18 months, mostly in the North Sea supply chain.

FTSE 100 on the rise but Brent crude starts week in reverse

European markets started the week in positive territory, with all the leading financial indices enjoying gains yesterday.  London’s blue-chip FTSE 100 was up 94.56 points, or 1.6%, at 5,846.79, while the German Dax and French Cac 40 rose by 3.13% and 2.55% respectively. But Brent crude was down by more than 8% at the London market close on Monday, to $22.80

27th April 2020

Oil Price
Little movement over the weekend really on Brent Crude, still hovering around the $20 dollar per barrel price point, a slight drop this morning of less than 1% when trading opened. WTI (West Texas Intermediate) has also been reasonably stable over the weekend and held it’s gain from a negative trading price to sitting around $14 dollars per barrel, down 2% from market opening this morning. We will of course keep you updated throughout the show.
Oil Giant BP reconfirms intention to sell Alaskan business to Hilcorp despite market ‘volatility’
Oil giant BP has reconfirmed its intention to sell off its Alaskan business to Houston-headquartered Hilcorp for more than £4.5 billion. The supermajor said it had renegotiated the financial terms of the deal “to respond to the current environment” and market “volatility”. BP announced plans to sell entire Alaskan upstream and midstream business in August 2019.  It includes BP Exploration Alaska, which owns all of BP’s upstream oil and gas interests in Alaska, and BP Pipelines (Alaska) Inc’s interest in the Trans Alaska Pipeline System (TAPS).
Aminex wins time at Mtwara
Aminex has received an extension to its Mtwara licence, in Tanzania, satisfying one of the remaining conditions of its farm-out agreement with ARA Petroleum Tanzania.The deal with ARA will provide Aminex with a $35 million carry, taking it to the start of gas production. The extension is for one year but will be insufficient to carry out all the required work.
ADNOC launches offshore power network tender
ADNOC and ADPower have launched a joint tender for a subsea power transmission network, connecting offshore production facilities to the onshore power grid. The project should help reduce the carbon footprint for ADNOC’s offshore facilities by up to 30%, providing operational efficiency and system reliability. This will be the region’s first high-voltage, direct current (HVDC) subsea transmission system. Gas that is currently consumed offshore to provide power will be diverted, as a result, allowing ADNOC to cash in on this resource and generate additional revenues.
Diamond Offshore files for Chapter 11 bankruptcy amid historic oil price crash
Diamond Offshore Drilling Inc., the rig contractor controlled by Loews Corp., filed for bankruptcy amid an unprecedented crash in crude prices that’s wrecking demand for oil exploration at sea.
The company listed $5.8 billion of assets and $2.6 billion of debt in a Chapter 11 petition filed in Houston, citing year-end 2019 data. It has about $434.9 million of cash on hand, according to the document
Vattenfall to build its UK’s largest onshore wind farm in Scotland
Swedish renewable energy firm Vattenfall is set to build its largest UK onshore wind farm in Scotland. Planned near Dalmellington and between East Ayrshire and Dumfries and Galloway, South Kyle the wind farm will generate enough energy to power 170,000 homes. Vattenfall has entered a partnership with Greencoat UK Wind, who will acquire the wind farm following its completion.
Oil and gas industry rolls out protective snood to offshore workforce.
OGUK (Oil and Gas UK) today confirmed it is supporting the roll-out of a special protective face covering designed for workers travelling to offshore installations in the UK Continental Shelf. The covering can be best described as a snood or buff and is better suited for helicopter travel because it is easier to pull away from the mouth if the emergency breathing equipment is required, it is more comfortable to wear, communication is easier and the risk of FOD (Foreign Object Debris ) damage is eliminated. OGUK has been working on the use of the snood for the offshore workforce through its Pandemic Steering Group. It has been tested for surface and underwater escape purposes and its use is endorsed by the four helicopter companies. The process will be managed by Survitec who are procuring supplies for use by the offshore industry at all helicopter departure locations, with guidance on the use of the snoods issued by OGUK shortly.The snood is for use on the flight only, and forms part of a range of measures to support the safety offshore workforce.

26th April 2020

Oil Price
 A week of huge flux with the Oil price as we have been updating:
 Brent Crude is slightly up today with a barrel of oil trading at a shade over $21 dollars.
 WTI (West Texas Intermediate) has changed much overnight and opened trading this morning at $16.50
Gas sales keep Wentworth on plan for dividend
Demand for Wentworth Resources’ gas in Tanzania will stay flat this year, with heavy rains driving hydropower generation, but things should pick up towards the end of 2020.Revenue for Wentworth reached $18.6 million in 2019, up from $16.2mn in 2018, while net profit reached $2.4mn.
Total to buy Tullow’s Uganda licences
Tullow Oil has struck a deal to sell its entire stake in Uganda’s Lake Albert project to France’s Total for $575 million. Proceeds from the sale would see Tullow pay down debt and would represent a major part of its plans to sell $1 billion worth of assets. The price agreed, though, represents a climbdown for Tullow from previous deals. In January 2017, Tullow agreed to sell 21.57% of its stake to Total for $900mn. This would have left it with 11.76% in the licences. Tullow valued the Ugandan assets at $992.2mn.
DNV GL leads global pilot to grow trust in digital twins
DNV GL has issued an international call to oil and gas operators and the supply chain to pilot a methodology that will prove whether the data generated by digital twins can be trusted, and if the technology is delivering value.
Companies manufacturing hardware across the oil and gas value chain must prove the safety, quality and integrity of components, equipment and assets through recognised quality assurance principles.
Pulse Wins Taiwan Offshore Wind Farm Contract
Pulse Structural Monitoring signed its first major contract for the provision of digital structural monitoring and insight services and equipment on an offshore wind farm.  The contract, which provides for the design, fabrication, yard installation and commissioning of its market-leading monitoring instrumentation on three wind turbine foundations to be installed offshore Taiwan was awarded by global offshore wind leader Ørsted. Pulse will supply its cutting-edge NX2 digital platform for acquiring a range of high-quality measurements that include bending and torsional strain, inclination, displacement and acceleration in key components of the jacket legs, nodes and wind turbine generator towers.
Many firms ‘torn’ between protecting business and supporting staff with furlough scheme, OGUK boss says
Many North Sea oil and gas firms are currently “torn” between protecting the long-term sustainability of their business and supporting those staff whose jobs were connected to now delayed or cancelled  projects, according to an Oil and Gas UK (OGUK) boss.  Mike Tholen, OGUK sustainability director, said that it was “desperately hard” for affected workers and their families, but added that many firms feel it might be worse to give workers false hope of future work.
VFuels wins Malabo modular refinery study
Quatorial Guinea has awarded a feasibility study on a proposed modular refinery, in Punta Europa, to VFuels Oil & Gas Engineering.  The study should be delivered within 12 weeks, the ministry said in a statement. The plant will have capacity of 5,000 barrels per day and will provide refined products for domestic consumption.  The Ministry of Mines and Hydrocarbons said the refinery plan was part of its “year of investment”, which it has designated 2020 as.
Serica Energy’s 13m barrel Columbus project ‘likely’ to be delayed due to virus
Serica Energy’s 13million barrel Columbus gas project in the North Sea is facing potential delays due to the Covid-19 outbreak. First production from the scheme, approved by the Oil and Gas Authority in 2018, is “likely” to be pushed back six months to late 2021, although a decision has not yet been made.  This is due to Shell delaying the commissioning of the pipeline for its Arran field, sanctioned two years ago, to the Shearwater platform – Columbus’ planned offtake route.
200 workers switching to Petrofac as part of ‘enhanced’ Repsol Sinopec deal
About 200 workers will transfer to Petrofac to help the oilfield services firm fulfil a beefed-up contract with Repsol Sinopec Resources UK (RSRUK).  Petrofac will provide operations and maintenance support services on six additional RSRUK platforms in the UK North Sea, under the enhanced deal.  Crew members employed by Worley will switch to Petrofac following a period of transition.