Mark Latham Commodity Equity Intelligence Service (2024)

Azerbaijan, the host of this year’s United Nations climate summit, shelved a planned levy on fossil fuel production in favor of creating a voluntary fund with at least $1 billion for mitigation projects in developing countries.

The proposed Climate Finance Action Fund would raise money from voluntary contributions by oil-producing countries as well as the industry.

It becomes operational once 10 countries pledge a combined $1 billion, with revenue from individual projects being reinvested into the fund. The donors would become shareholders and decide where to allocate the financing. Money would be used to back renewable energy projects, mitigate the ongoing impacts from climate change and help in the aftermath of natural disasters.

“We have assessed the shortcomings in financial markets,” said Yalchin Rafiyev, the COP29 chief negotiator. “This will be the first fund with both fossil fuel producing countries and companies across oil, gas and coal.”

Azerbaijan will make a contribution to the fund, but it’s unclear which other producers will sign up or what will happen if participation is lacking.

Climate finance is set to dominate the debate at COP29, which will be held in Baku in November.

Bloomberg previously reported that Azerbaijan was formulating an unprecedented levy on oil, gas and coal production with the potential to raise $6 billion a year or more. It was to be called the “North-South Financial Mechanism.”

Yet the idea faced pushback from a number of countries, including the US, the world’s largest producer of fossil fuels.

Nations agreed to transition away from fossil fuels for the first time at last year’s summit in Dubai, though Saudi Arabia has pushed back on the wording.

https://energynow.ca/2024/07/cop29-host-azerbaijan-shelves-fossil-fuel-tax-for-voluntary-fund/

SINGAPORE, (Reuters) – Exxon Mobil Corp intends to transfer the operations of all assets of two production-sharing contracts in Malaysia to state energy company Petronas, Exxon Mobil said yesterday.

Reuters had reported on Friday that Exxon Mobil had agreed to sell its Malaysian oil and gas assets to Petronas, citing two people with direct knowledge of the matter.

“This is not a sale and there will be no changes to EMEPMI’s working interest in the Production Sharing Contracts,” ExxonMobil Exploration and Production Malaysia Inc, or EMEPMI, said in a statement to Reuters.

“This does not impact our other businesses in Malaysia — we remain committed to conducting business here as we have for more than 130 years,” it added.

In a separate statement earlier yesterday, Petronas said Petronas Carigali Sdn Bhd is engaged in discussions with EMEPMI regarding the transfer of operations for two production-sharing contracts located offshore peninsular Malaysia.

“The discussions are subject to further agreements between both parties,” it said in response to a Reuters query. “Petronas Carigali remains committed to safe operations, as well as maintaining reliable and uninterrupted energy supply for our customers throughout the process.”

Malaysian media have reported that Exxon Mobil has been trying to sell its ageing upstream assets in the country since 2020.

Under the transfer plan, Petronas was taking over operations of Exxon Mobil assets including the Tapis oilfield in Terengganu, which began production in 1978, Reuters reported on Friday, citing three people.

Exxon Mobil staff would be transferred to Petronas as part of the deal, one of them said.

The terms of the deal were not immediately known.

In an article on its website dated Nov. 12, 2023, Exxon Mobil said it remained a significant energy producer in Malaysia, contributing about 40% and 50%, respectively, to Peninsular Malaysia’s crude oil and natural gas production.

The company operates 35 oil and gas platforms in 12 fields offshore Terengganu, and has a working interest in another 10 platforms in five fields in the South China Sea.

The combined operations produce about 15% of Malaysia’s crude oil and condensate of 600,000 barrels a day, and more than half of peninsular Malaysia’s natural gas of more than 2 billion cubic feet per day.

Its last major investment in the country was in a $2.5 billion enhanced oil recovery project at the Tapis field, which started up in late 2014.

https://www.stabroeknews.com/2024/07/21/news/guyana/exxonmobil-to-transfer-operations-of-assets-of-2-production-sharing-contracts-in-malaysia-to-petronas/

Shafaq News/ On Sunday, Fadi Al-Shammari, the political advisor to Iraq's Prime Minister, described the country's electricity issue as "extremely complicated," emphasizing the necessity of ensuring a proper foundation before making any promises.

Speaking to local media, Al-Shammari highlighted that Iraq's power transmission lines have been operating beyond their intended lifespan since 2000. He noted that $11 billion is paid annually for 58% of wasted electrical energy.

Al-Shammari attributed the collapse of the electricity sector primarily to corruption, asserting that "neither Iran nor the United States is responsible…issue continues to drain both citizens and the state, with $16 billion spent without effective solutions."

Despite these challenges, Al-Shammari pointed to the "successful privatization of electricity in certain areas," citing the example of the Zayouna district, where electricity consumption was reduced from 51 megawatts for just 4 hours to 21 megawatts for 24 hours.

"There are no immediate solutions to the electricity crisis…there are more than 400 projects aimed at alleviating congestion in the transmission and distribution of electrical energy, each requiring two years to complete." He said.

Today, Iraqi Prime Minister Mohammed Shia al-Sudani inaugurated the new Iraq-Turkiye power grid connection project.

The project aims to enhance Iraq's national power grid by linking it with Turkey's, providing an additional boost to the country's energy system.

Iraq is enhancing its electricity grid through several regional connections. The Iraq-Jordan link, now operational, supplies al-Rutbah, with plans to extend to al-Qaim by year's end. The cabinet has approved a link with Turkiye to provide 300 megawatts to the northern region.

The Gulf interconnection will add 500 megawatts to Basra, and a separate link with Saudi Arabia will initially supply 1,000 megawatts.

Despite these efforts, Iraq continues to rely on Iranian gas. However, it has signed a preliminary agreement with Turkmenistan and plans to develop a solar power capacity of 6,000 megawatts to diversify its energy sources.

https://shafaq.com/en/Economy/iraqi-pm-advisor-calls-electricity-issue-%22extremely-complicated,%22-cites-corruption-as-key-factor

President Recep Tayyip Erdogan made notable statements to the press upon his return from the Turkish Republic of Northern Cyprus (TRNC) where he attended the 50th anniversary of the Peace and Freedom Day on July 20.

Addressing the possibility of establishing joint naval and air bases with Turkish Cyprus amid reports of Greek Cyprus being used as a logistical base by Israel, Erdogan stated: “Participating in the massacre in Israel benefits neither the Greeks nor Greece. Furthermore, if required, we can establish a naval base and maritime facilities in the North. We have our own sea.”

‘It will be enough for them when they see the base’

Hinting that Türkiye is acquiring a new natural gas ship, he added: “It will be used in gas production from the Sakarya Gas Field and is a floating gas processing platform. It will be in Türkiye in about two months. It is 300 meters (984.2 feet) long and 58 meters (190.2 feet) wide.

“This platform will produce enough natural gas for 5 million households and might stay there for 15-20 years. It is almost like a base. It will set sail next week and come to Türkiye. When they see that base, it will be enough for them,” he concluded.

https://www.turkiyetoday.com/turkiye/turkiye-may-build-naval-base-in-northern-cyprus-says-erdogan-31351/

The leader of Slovakia, Robert Fico, who is known for his pro-Russian position, held telephone talks with the head of the government of Ukraine, Denys Shmyhal.

What Shmyhal and Fico discussed

The Slovak prime minister told his Ukrainian colleague that he does not agree with adding the Russian company Lukoil to the sanctions list.

As you know, its oil was also used by the Slovnaft refinery.

Robert Fizo also added that he considers these sanctions "ridiculous". He continues to claim that they are not attacking the aggressor country Russia, but are only harming individual members of the European Union.

The Slovakian leader complained that Ukrainian President Volodymyr Zelenskyi's decision means that the Slovak oil refinery Slovnaft, part of the Hungarian MOL group, will receive 40% less oil than it needs for processing.

This will have an impact not only on the Slovak market, but may also lead to the cessation of supplies of oil produced at Slovnaft to Ukraine, which make up almost a tenth of all Ukrainian consumption. Robert Fitzo Prime Minister of Slovakia

Fizo tries to solve the problem, but so far he does not succeed

According to the government office, the Prime Minister of Slovakia has been actively discussing this issue with the relevant members of the Cabinet of Ministers, as well as with MOL representatives, for several days in a row.

Earlier this week, the Slovak Ministry of Economy officially confirmed the suspension of transit of Russian oil.

According to representatives of the department, despite the fact that the Russian "Lukoil" provided part of the supplies to Slovnaft, the oil refinery ensured the supply of Russian oil from another supplier, and also ordered oil from alternative sources.

The authorities of Ukraine, in particular Denys Shmyhal, have not yet commented on complaints and criticism from Robert Fitso.

https://news.online.ua/en/fico-is-panicking-over-ukraines-stoppage-of-transit-of-russian-oil-882274/

In this election year, conservatives are promising “energy independence” if oil companies are only allowed to drill for more oil on public lands; but there is no requirement that hydrocarbons pulled out from under our public lands would stay in the United States and lower gas prices here.

Very few people know that for the past six years, the United States has produced more crude oil than any nation at any time in history. There is such an abundance of oil from American producers that we are currently exporting about 40% of the oil we produce.

The conservative policy of maximizing oil production in a time when almost half gets exported does nothing for U.S. energy independence and it only serves the short-term financial interests of the oil companies. This is a “Drain America First” proposal that foolishly takes our most precious natural resources and sends them across the seas to the highest bidder. If you understand basic economics, you know that America can never drill its way to energy independence.

On the other hand, the energy sources that conservatives are trying to throttle, renewables, are the only way to truly achieve energy independence for America. Electricity created by renewable sources is not only environmentally clean, it cannot be exported and more electricity production means lower prices. From a local perspective, our hard-right Legislature is missing a profound opportunity by not promoting renewables within Utah.

Utah is to renewables as Saudi Arabia is to oil.

The Legislature’s religious attachment to fossil fuels is irrational from any perspective, but especially economically. Companies like Amazon, Meta, Google and Microsoft are all paying a premium to purchase renewable energy for their new A.I. data centers and Utah could receive well-paying jobs for our citizens if only our leadership would promote clean energy.

Rod Perry, Ogden

https://www.sltrib.com/opinion/letters/2024/07/21/letter-america-can-never-drill-its/

Offshore marine services company – Bourbon Guyana Inc. – now has seven vessels supporting oil and gas operations offshore in the Stabroek Block.

“The Bourbon Clear joins our local Bourbon Guyana fleet, increasing the number to 7 OSVs [offshore supply vessel] operating offshore Guyana,” Managing Director of the Company, Edward Cooper said in a July 19 LinkedIn post.

Cooper confirmed to OilNOW that the vessel will be on a “short campaign” supporting ExxonMobil’s Yellowtail development. He said another vessel – the Bourbon Front – is also on route for the same purpose. That vessel will arrive at the end of August.

Bourbon has three mooring support vessels in operation tending to the Liza Destiny and Liza Unity floating, production, storage, and offloading (FPSO) vessels. The other three vessels are platform support vessels that transport specialized equipment for developmental projects in progress. Bourbon’s fleet in Guyana includes the Bourbon Liberty, the Bourbon Diamond, the Bourbon Sapphire, the Bourbon Calm and the Bourbon Rhesos.

The development plan for Yellowtail includes six drill centers and the drilling of up to 67 development wells, including 26 production and 25 injection wells. A subsea umbilicals, risers and flowlines (SURF) production system comprising 51 enhanced vertical deepwater trees (EVDT) with associated tooling, as well as 12 manifolds with related controls and tie-in equipment, will also be installed for the project by TechnipFMC.

https://oilnow.gy/featured/bourbon-clear-vessel-in-guyana-to-support-yellowtail-development-operations/

MIDLAND, Texas – For all the focus on an energy transition, the US oil industry is booming, extracting more crude than ever from the shale rock that runs beneath the ground in West Texas.

After years of losing money on horizontal drilling and hydraulic fracturing, the companies that have helped the United States become the leading global oil producer have turned a financial corner and are generating robust profits. The stocks of some oil and gas companies, such as Exxon Mobil and Diamondback Energy, are at or near record levels.

The industry’s revival after bruising losses during the Covid-19 pandemic is due largely to market forces, though Russia’s war in Ukraine has helped. US oil prices have averaged around US$80 a barrel since early 2021, compared with roughly US$53 in the four years before that.

That the price and demand for oil have been so strong suggests that the shift to renewable energy and electric vehicles will take longer and be more bumpy than some climate activists and world leaders once hoped.

Oil companies’ success is not just the result of higher prices. Under pressure from Wall Street to improve financial returns, the companies that survived the 2020 oil price crash generally ditched the debt-fuelled growth strategy that had propelled the US shale boom.

Many pared spending and cut costs by laying off workers and automating more of their operations.

Since 2021, oil and gas wells in the US’ lower 48 states have generated more than US$485 billion (S$652 billion) in free cash flow, the money left over after spending on operations and new projects, according to estimates by Rystad Energy, a research and consulting firm. In the decade prior, the industry spent nearly US$140 billion more than it took in.

“People used to call us drunken sailors,” said Mr Steve Pruett, chief executive of oil and gas producer Elevation Resources, which is based in Midland, Texas, an industry hub in the Permian Basin. “Hopefully we’re shaking off that reputation now.”

https://www.straitstimes.com/business/why-is-the-us-oil-industry-booming

China's largest refiner China Petroleum & Chemical Corp., also known as Sinopec, processed 126,69 million tons of crude oil, or 5,08 million barrels per day, in the first six months of this year. This figure is only 0,1% higher year on year than in the same period in the past, the company said.

In the first quarter, when supplies of Russian oil were breaking records, the company recorded an increase in refining by 1,7%. Clearly, there has now been a sharp slowdown in refining in the second quarter due to high crude oil prices and weak domestic fuel demand.

Given market conditions, imports from Russia also slowed sharply, by as much as 17% in the third quarter of 2024.

Sinopec said total domestic refined fuel sales fell 2,5% year-on-year to 90,14 million tonnes, while retail sales fell 4,7% year-on-year to 56,96 million tonnes. Thus, Sinopec has seen its refining margins and production profits shrink, while its chemicals business continues to incur losses. This is quite a rare occurrence for China, especially in the country’s fastest growing industry.

At the same time, the reason for unsatisfactory results is not only a decrease in the consumption of raw materials from the Russian Federation.

The company's management expects that negative forecasts will also affect the near future. Thus, according to the analysis, sales of petroleum products in the domestic market will grow by 1,6% this year compared to an increase of 16% in 2023.

Sinopec and many Chinese refineries increased fuel production last year in anticipation of booming business once COVID-19 restrictions are lifted. For this purpose, many cheap hydrocarbons were purchased from the Russian Federation. However, hopes were not justified and now there is an unpleasant rollback to more economically justified production levels.

https://en.topcor.ru/49708-so-snizheniem-postavok-rossijskoj-nefti-krupnejshij-npz-kitaja-neset-ubytki-i-terjaet-marzhu.html

ONGC Videsh Ltd (OVL), the overseas investment arm of India’s state-owned Oil and Natural Gas Corporation (ONGC), has purchased Norwegian firm Equinor’s stake in an Azerbaijan oilfield and a related pipeline for $60 million. This move includes a 0.615% interest in the offshore Azeri Chirag Gunashli (ACG) oil field and a 0.737% share in the Baku Tbilisi Ceyhan (BTC) pipeline company.

Acquisition

The acquisition is expected to be completed in the coming months, raising OVL’s stake in both the ACG field and the BTC pipeline. Currently, OVL holds a 2.31% stake in the ACG field and a 2.36% stake in the BTC pipeline.

Equinor had earlier agreed to sell all its assets in Azerbaijan to SOCAR, the State Oil Company of Azerbaijan Republic. This included a 7.27% stake in the ACG oil fields, an 8.71% interest in the BTC pipeline, and a 50% share in the Karabakh field. SOCAR already held significant stakes in these assets.

Stake Acquired

OVL initially acquired a 2.72% stake in ACG in March 2013. The ACG contract was extended until 2049, but international oil companies saw their stakes reduced, with OVL’s share dropping from 2.72% to 2.31%.

BP operates the ACG field with a 30.37% stake, and other stakeholders include Japanese firms and ExxonMobil. The ACG field is a large offshore oil field in the Caspian Sea, operated by BP since 1999. The field has been developed in phases, with a seventh production platform commissioned in early 2024.

Oil Transpostation

The BTC pipeline transports oil from the ACG field and condensate from Shah Deniz across Azerbaijan, Georgia, and Turkey, linking the Sangachal terminal on the Caspian Sea to the Ceyhan marine terminal on Turkey’s Mediterranean coast.

OVL is involved in 32 oil and gas projects in 15 countries, including Vietnam and Venezuela, producing about 200,000 barrels of oil and natural gas daily from these assets.

https://sharepriceindia.com/ongc-acquires-equinors-stake-in-azerbaijan-oilfields-and-btc-pipeline-for-60-million/

By Curtis Williams and Mayela Armas

HOUSTON/CARACAS (Reuters) - British oil and gas producer BP, Venezuela's state oil company PDVSA and Trinidad and Tobago's National Gas Company are speeding negotiations for a Venezuelan license to develop natural gas deposits in the Caribbean Sea, four people familiar with the matter said.

The companies last year resumed negotiations for developing the Cocuina-Manakin gas field on the maritime border between Trinidad and Venezuela, which contains about 1 trillion cubic feet of natural gas.

The talks have progressed since the U.S. in May granted an authorization for the project, providing an exemption to energy sanctions on Venezuela. The parties now aim to sign the Venezuelan license needed to develop that side of the field before a presidential election in the South American country on July 28, the sources said.

A license signing ceremony Venezuelan authorities had planned for last week was postponed as there were outstanding agreements to reach. Trinidad's energy minister Stuart Young recently traveled to Caracas to take part in some meetings, the people added.

BP, which declined to comment on the issue, had previously said it was actively pursuing development of the field. PDVSA, NGC and Trinidad's energy minister did not immediately reply to requests for comment.

BP wants the gas primarily to supply Trinidad's flagship Atlantic LNG project. A smaller portion of the output would go to NGC for use in Trinidad's petrochemical sector, two of the people said.

Trinidad is Latin America's largest LNG producer and the world's second largest exporter of methanol and ammonia, but its industries have suffered in the last five years from a shortage of natural gas. Atlantic LNG has capacity to produce some 15 million metric tons per annum of the superchilled gas.

The U.S. authorization to Cocuina-Manakin is the second by Washington for energy projects between Trinidad and Venezuela that it sees as key to securing gas for international markets.

A previous license was granted early last year by the U.S. Treasury Department to Shell for developing the Dragon gas field in Venezuela. The project, whose infrastructure was partially built by Venezuela but remains idled, could begin gas output late next year.

Gas from both projects is expected to be converted into LNG in Trinidad for export to neighboring Caribbean nations, Venezuelan and Trinidadian officials have said.

(Reporting by Curtis Williams in Houston, and Mayela Armas and Deisy Buitrago in Caracas; Additional reporting by Marianna Parraga; Editing by Bill Berkrot)

https://uk.finance.yahoo.com/news/bp-pdvsa-rush-complete-gas-155226518.html

Ukraine and the European Union have asked Azerbaijan to supply natural gas to Europe through Ukraine after the current contract with Russia expires at the end of the year, announced President of Azerbaijan, Ilham Aliyev, writes Bloomberg .

Negotiations are ongoing with the authorities in Ukraine and the EU, as well as with Russia, and all parties seem to be interested in continuing the supply.

"We will help if we can. I think it’s possible to prolong this deal," the Azerbaijan leader said at a conference on Saturday in the town of Shusha.

Countries such as Austria and Slovakia will have "serious problems" if Russian gas supplies through Ukraine are cut off, as they will have to pay "hundreds and hundreds of millions" more to buy gas from other countries, Aliyev said.

Azerbaijan is trying to be "careful" because earlier it was "falsely accused" of re-exporting Russian gas, added President Aliyev.

Gas production in the country will increase thanks to new projects already operating in the Caspian Sea.

Bloomberg reported in June that European officials are discussing the continuation of gas supplies through Ukraine.

The agreement to replace Russian gas with Azerbaijani gas is "one of the proposals" currently under discussion, President of Ukraine Volodymyr Zelenskyy said at the beginning of July.

In an interview with LIGA.net last week, the Chairman of the Board of Naftogaz of Ukraine Oleksiy Chernyshov confirmed the negotiations regarding the transit of Azerbaijani gas. This was the initiative of the largest state holding of Azerbaijan, SOCAR, but there is no solution yet.

Chernyshov reiterated that Naftogaz will not extend the transit agreement with Gazprom. Negotiations are not underway and are not planned.

In 2019, Gazprom and Naftogaz signed a five-year transit contract, according to which the Ukrainian company is the organizer of gas transportation. Its term expires at the end of 2024 and will not be extended.

On March 4, 2024, Prime Minister Denys Shmyhal said that Ukraine is ready to provide a gas transit service from Russia after the end of the contract, if the EU countries order it. Above all, this concerns Austria and Slovakia, which import gas from Russia through Ukraine.

https://biz.liga.net/en/amp/all/tek/novosti/azerbaijan-president-confirms-readiness-for-gas-transit-through-ukraine

BAKU, Azerbaijan, July 22. The International Energy Agency (IEA) forecasts Eurasia's gas production to increase by 4 percent in 2024 to 864 bcm, Trend reports.

According to the agency's data, the region's gas output experienced a significant decline of 13 percent (or 130 bcm) between 2021 and 2023. This sharp decrease was primarily due to a dramatic drop in Russia's piped gas deliveries to Europe and declining upstream deliverability in Uzbekistan. However, the IEA's outlook indicates a recovery in the first half of 2024, with production increasing by 6 percent (or 25 bcm) year-on-year, driven by stronger domestic demand and higher exports.

According to the IEA, Russia's natural gas production fell by 15 percent (or 125 bcm) between 2021 and 2023, with 95 percent of this decline attributed to lower piped gas exports to Europe. Gazprom, Russia's monopoly pipeline exporter, saw a 30-percent (or 155 bcm) reduction in output during this period, while Novatek and Rosneft increased their production levels.

According to the IEA, Russia's natural gas production grew by over 7 percent year-on-year in the first half of 2024, with nearly 40 percent of this growth driven by stronger pipeline and LNG exports. Piped gas exports to China via the Power of Siberia pipeline grew by 35 percent year-on-year, with total deliveries expected to exceed 30 bcm. Piped supplies to Europe increased by over 5 percent year-on-year, supported by higher deliveries to the EU and Türkiye. Additionally, Russia began supplying Uzbekistan with around 9 mcm/d starting October 1, 2023. LNG output grew by nearly 10 percent (or 2 bcm) year-on-year, with Asia accounting for almost half of these exports. Domestic gas deliveries increased by 5.5 percent (or nearly 15 bcm) year-on-year, partly due to a colder-than-average first quarter and stronger thermal power generation.

Natural gas production trends varied across Central Asia, according to the IEA. Preliminary estimates indicate increased piped gas deliveries to China, primarily driven by higher output in Turkmenistan. Conversely, Uzbekistan's natural gas production declined by 5 percent (or 1 bcm) year-on-year in the first five months of 2024, reflecting deteriorating upstream deliverability and increasing reliance on imports, including from Russia.

The IEA's data shows that Kazakhstan's sales gas production grew by 4 percent (or 0.5 bcm) year-on-year during January-May 2024. Azerbaijan also saw a 4-percent (or 0.6 bcm) year-on-year increase in sales gas production in the first five months of 2024, supported by higher deliveries to Europe, which rose by 4 percent (0.4 bcm) year-on-year during the same period.

The IEA forecasts Eurasia's gas production to increase in 2024, although it will remain 10 percent below 2021 levels. Russia is expected to account for the bulk of this growth, with higher gas production supported by both domestic demand and exports.

https://en.trend.az/business/3925639.html

UPDATE 1-Lukoil adds 140,000 T of oil to Novorossiisk loading plan for July

Adds detail on Ukraine transit being shut, Hungary and Slovakia request to EU Commission, Kremlin spokesman in paragraphs 5-9

MOSCOW, July 22 (Reuters) -Russia's largest private oil company, Lukoil, has added about 140,000 metric tons of crude oil to its original Novorossiisk loading plan for July after Ukraine halted oil transit to Europe along the Druzhba pipeline, market sources said.

Lukoil plans to load the Suzemax vessel Arus in Novorossiisk on July 23-24, while total top-ups to Lukoil's original loading plan for this month will reach at least 0.34 million tons amid top-ups in Russia's Baltic Sea ports, they said.

Lukoil will load two Urals cargoes of 100,000 tons each from Primоrsk in the middle of July, according to trading and industry sources.

Lukoil did not reply to a Reuters request for comment.

Last week Slovakia and Hungary said they had stopped receiving oil from key supplier Lukoil after Ukraine imposed a ban last month on the transit of resources from the Russian energy company via its territory.

Kremlin spokesman Dmitry Peskov said on Friday that interruptions in Russian oil transit via Ukraine were painful for buyers of Russian oil.

Hungary and Slovakia have asked the European Commission to mediate a consultation procedure with Ukraine, Hungary's foreign minister said on Monday, after Kyiv placed Russian group Lukoil on a sanctions list, stopping its supplies to the two countries.

Russia's overall oil exports and transit from its western ports in July were expected to decline from June amid higher refinery runs and Moscow's pledge to stick to OPEC+ output cuts.

Russia's oil producers Rosneft and Lukoil had initially planned to sharply cut oil exports from the Black Sea port of Novorossiisk in July.

Reporting by Reuters; Editing by Timothy Heritage and Emelia Sithole-Matarise

https://www.xm.com/research/markets/allNews/reuters/lukoil-adds-140000-t-of-oil-to-novorossiisk-loading-plan-for-july-53885860

BUDAPEST, July 22 (Reuters) - Hungary and Slovakia have asked the European Commission to mediate a consultation procedure with Ukraine, Hungary's foreign minister said on Monday, after Kyiv placed Russian group Lukoil on a sanctions list, stopping its supplies to the two countries.

Slovakia and Hungary have stepped up pressure on Kyiv after they said last week they had stopped receiving oil from Lukoil via Ukraine. Hungary receives 2 million metric tonnes of oil from the Russian group annually, around a third of its total oil imports, Peter Szijjarto said.

"I spoke with the Ukrainian foreign minister yesterday, he said they allow every oil transfer through, but it's not true," Szijjarto told reporters while in Brussels.

The two countries have now initiated a consultation with the European Commission, he said. "The Commission has three days to execute our request, after which we will bring the issue to court."

Szijjarto said if the consultation procedure did not bear fruit, Hungary and Slovakia will bring the issue to an international court of their choosing instead.

Russia continues to supply natural gas and oil to landlocked Hungary and Slovakia via Ukraine despite the war in the country and existing EU sanctions on Russian crude.

The countries have exemptions from oil sanctions to give them more time to transition to alternative sources of supply.

Both Slovakia and Hungary also supply energy to Ukraine. Szijjarto said Hungary provided 42% of Ukrainian electricity imports last month.

Slovakia's Prime Minister Robert Fico said over the weekend that his country helped supply diesel to Ukraine, in comments in which he blasted the sanctions and said Slovakia would not be "hostage" to Ukraine-Russia relations.

On Monday Slovak Foreign Minister Juraj Blanar reiterated some of Fico's comments, saying that the sanction had a bigger impact on the Slovakia and the EU than Russia itself.

Ukraine's ban does not affect other Russian oil exporters whose oil was still allowed to transit through Ukraine. (Reporting by Boldizsar Gyori, Editing by Jason Hovet and Jan Harvey)

https://in.marketscreener.com/quote/stock/LUKOIL-6491736/news/Hungary-Slovakia-ask-European-Commission-to-mediate-with-Ukraine-over-Lukoil-47435523/

Oil prices are expected to drop to the mid-$70s next year amid a surplus on the market, according to Morgan Stanley.

Currently, the oil market is tight and warrants the $80s per barrel price range, but with seasonal demand starting to abate in the fourth quarter, market balances are set to return, the investment bank said in a note carried by Reuters on Monday.

In the fourth quarter of 2024, the market would be balanced “when seasonal demand tailwinds abate and both OPEC and non-OPEC supply return to growth,” Morgan Stanley’s analysts wrote.

Next year, the market will even tip into a surplus amid rising supply from both OPEC+ and non-OPEC+ producers, the bank’s commodity strategists reckon.

According to the bank, global refinery runs will hit their 2024 peak in August and are not expected to reach this level again until July next year.

That’s why Morgan Stanley expects Brent Crude prices to drop from current levels to the mid $70s to high $70s per barrel range in 2025.

Early on Monday, Brent Crude prices were up by 0.52% at $83.07, while the U.S. benchmark, WTI Crude, was trading 0.49% higher at $80.46.

Morgan Stanley reiterated in the note its price forecast of $86 per barrel Brent oil for the third quarter of 2024.

Goldman Sachs has also recently reaffirmed its outlook from June that Brent crude prices are set to rise to $86 per barrel this summer amid strong consumer demand which will put the market into a sizeable deficit in the third quarter.

The Joint Ministerial Monitoring Committee (JMMC), the OPEC+ panel monitoring the oil market, is not expected to recommend in August any changes to the current production policy plan of the group, OPEC+ delegates told Bloomberg last week.

When the panel meets again on August 1, the meeting is expected to be a routine one, and no recommendations on oil production policy – other than the OPEC+ group has already announced – are expected to be issued, according to Bloomberg’s anonymous sources among the OPEC+ delegates.

https://oilprice.com/Latest-Energy-News/World-News/Morgan-Stanley-Sees-Oil-Prices-Dropping-to-the-Mid-70s-Next-Year.html

Last week, SLB (SLB) reported strong second-quarter 2024 results, driven by widespread activities in the international market and margin improvements across all business segments. Despite the oilfield service giant's core business capitalizing on its favorable momentum, the overall business outlook is not impressive.

Before delving into the underlying reasons for the subdued outlook and addressing the critical question of how investors should strategically position themselves regarding the stock, let’s first review the second-quarter results.

Impressive Q2 Earnings

On Jul 19, SLB, carrying a Zacks Rank #4 (Sell), reported second-quarter 2024 earnings of 85 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 83 cents. The bottom line increased from the year-ago quarter’s level of 72 cents.

The oilfield service giant recorded total quarterly revenues of $9.14 billion, which beat the Zacks Consensus Estimate of $9.07 billion. The top line also improved from the year-ago quarter’s figure of $8.10 billion.

These results underscore a robust performance across all operating segments, showcasing significant contributions from each area of the business. For a detailed analysis, read our blog on second-quarter earnings:SLB Q2 Earnings Beat Estimates, Revenues Rise Year Over Year.

Like SLB, Halliburton Company (HAL) , another major player in the oilfield services sector, also released its second-quarter 2024 earnings report on Jul 19. For more details, check out our blog: Halliburton (HAL) Q2 Earnings in Line with International Growth.

North American Rig Count Drop Sparks Alarm

Baker Hughes Company (BKR) reported the North American rig count of 738 for the June quarter, a notable decline from 831 rigs in the previous quarter and 803 rigs in the fourth quarter of 2023. This reduction is indicative of a broader trend where exploration and production companies are probably implementing cuts in their capital expenditure budgets for drilling activities. This shift is primarily due to increased pressure from shareholders, who are advocating for capital returns over further investments in exploration and production.

The U.S. Energy Information Administration, in its latest short-term energy outlook, forecasts U.S. crude oil production at 13.2 million barrels per day (MMB/D) for this year, up from 12.9 MMB/D in 2023 and 11.9 MMB/D in 2022. Despite this overall increase in production, the growth rate is expected to slow down to 2.3% in 2024, a significant deceleration from the 8.4% growth observed in 2023. This decline underscores a broader trend of reduced drilling activities in North America, which could diminish demand for services from major oilfield service provider SLB.

The rig count data from Baker Hughes also indicates a slowdown in drilling activities in the international market, which significantly contributes to SLB's revenues. Consequently, the demand for SLB's services, such as reservoir productivity and performance optimization, is expected to decline in both North American and international markets. These company-specific risk factors are reflected in SLB's price performance. Year to date, the stock has lost 3.9% against the industry’s growth of 5%.

Debt Refinancing & Overvaluation

The issuance of $1.5 billion of bonds in the second quarter to refinance debt obligations could be seen as a negative aspect, indicating a significant level of debt that requires careful management to avoid financial strain.

Despite the year-to-date price decline, SLB still appears relatively overvalued, indicating the potential for further price decreases. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) ratio is 9.49, which is trading at a premium compared to the broader industry average of 7.78.

Time to Get Rid of the Stock

Given that SLB's overall business outlook remains bearish despite its strong second-quarter results and considering its overvaluation, it would be wise to sell this stock.

https://www.zacks.com/stock/news/2306126/should-investors-steer-clear-of-slb-stock-after-q2-earnings

Stocks of oil marketing companies (OMCs) today ended in the red after the Union Budget 2024 did not make any budgetary allocation for them for FY25. The development assumes importance given that the government had in its FY24 budget earmarked Rs 30,000 crore for capital support to the OMCs which did not crystallise the financial year gone by.

Shares of Bharat Petroleum Corporation (BPCL) today ended at Rs 306 on the NSE, down by Rs 2.25 or 0.73% over the previous closing price. Meanwhile, Hindustan Petroleum Corporation (HPCL) shares settled at Rs 345 falling by 0.5%. Indian Oil Corporation (IOC) was the top loser falling 1.4% to close the session at Rs 165.85.

Decoding the impact, Nuvama Institutional Equities said that the miss implies that OMCs are expected to continue to bear LPG under-recoveries due to a lack of provisioning. Furthermore, the government’s plan to infuse capital in OMCs appears to have been scrapped, courtesy, lack of budgetary allocations, it said in a note. The infusion plan appears off the table now, Nuvama opined."BPCL management had indicated in an earlier earnings conference call that the proceeds of the capital-raise were expected to be utilised for achieving its net-zero targets, facilitating energy transition and increasing energy security," the brokerage pointed out.

Nuvama, had in its post Q1 earnings review of BPCL had called the risk-reward unfavourable, retaining a 'Reduce’ rating on the counter."BPCL is trading at 7x 2Y forward EV/EBITDA, close to long-term average. We believe past quarterly performances have peaked with unfavourable risk-reward (Irrationality prompts downgrade). We are cutting FY26E EBITDA by 6% as we moderate GRM estimates," the note said.State-owned company BPCL on Friday reported a standalone net profit of Rs 3,015 crore for the first quarter ended June 2024. This is a fall of 71% from Rs 10,551 crore reported in the previous year quarter. Revenue from operations was flat at Rs 1.28 lakh crore in the reporting period as against Rs 1.28 lakh crore in the corresponding period of the previous year.

Finance Minister Nirmala Sithraman today presented her 7th budget, first of the Modi 3.0 government.

https://m.economictimes.com/markets/stocks/news/budget-2024-gives-a-miss-to-capital-infusion-in-omcs-how-it-impacts-bpcl-others/articleshow/111967405.cms

Russia plans to increase gas supplies to China via the Power of Siberia pipeline to 38 billion cubic meters in 2025, Deputy Energy Minister Sergey Mochalnikov said, News.AZ reports citing Russian media.

"In 2023, Russia exceeded the plan for gas supplies to China via the Power of Siberia pipeline by 800 mln cubic meters (mcm), in 2025 supplies will reach 38 bcm," the deputy minister noted." In 2023, the plan for supplies [of gas via the Power of Siberia] was exceeded by 800 mln cubic meters, they amounted to 22.7 bln cubic meters. Next year we plan to reach the design capacity of 38 bln cubic meters," he said.Mochalnikov added that according to the data as of July 1, 2024, a total of 68 bln cubic meters have been pumped through the Power of Siberia since the launch of the gas pipeline. Power of Siberia is the largest gas transportation system in Eastern Russia. In the coming years, Gazprom's total exports to China will reach 48 bln cubic meters of gas per year (due to the implementation of a project for gas supplies to China via the Far Eastern route), and taking into account the transit gas pipeline through Mongolia - almost 100 bln cubic meters per year, Gazprom CEO Alexey Miller said.

News.Az

https://news.az/news/russia-plans-to-boost-gas-supplies-to-china-next-year

Woodside Energy Group Ltd. is searching for partners for its just-purchased US liquefied natural gas project in a bid to finally launch the troubled development.

“We’ve got an opportunity with the acquisition to put together the dream team of LNG,” said Meg O’Neill, chief executive officer at the Australian oil and gas producer. The company plans to “talk to a number of different players who will have things to add to the venture,” she said in an interview on Tuesday.

Woodside announced the $900 million purchase of Tellurian Inc. on Monday, and is aiming to sell down as much as 50% of the project, with the goal of reaching a final investment decision from first quarter 2025. The American LNG developer had struggled to move its Gulf Coast Driftwood project forward since its founding in 2016.

O’Neill pointed to end-users, like the Japanese gas importers that recently took stakes in Woodside’s Scarborough gas project in Australia, as an example of potential partners. She also mentioned a “high quality infrastructure company,” like Global Infrastructure Partners LP, which invested in the expansion of Woodside’s Pluto facility.

“Those companies share our vision for the role of LNG in meeting the world’s long-term energy needs,” O’Neill said. Woodside can get into advanced discussions with potential partners, but won’t sign anything binding until its deal with Tellurian is closed, she said. The transaction is expected to be completed in the fourth quarter.

Saudi Aramco, which had previously been in talks to purchase a stake in Tellurian, is another potential partner, said Saul Kavonic, an energy analyst at MST Marquee in Sydney. Abu Dhabi National Oil Co., as well as Japanese buyers and US infrastructure players, could also invest in Driftwood, he said.

©2024 Bloomberg L.P.

https://www.energyconnects.com/news/oil/2024/july/woodside-looks-to-build-dream-team-of-lng-at-acquired-us-plant/

Archrock, a US-based natural gas infrastructure company, has finalised a definitive agreement to acquire Total Operations and Production Services (TOPS) for $983m.

The purchase will be made through a combination of cash and stock, with Archrock issuing approximately 6.87 million new shares and intending to fund the $826m cash portion with equity and debt.

TOPS is engaged in providing contract gas compression services in the Permian Basin.

It is a portfolio company of investment funds managed by Apollo Global Management.

It will bring approximately 580,000hp of predominantly young electric motor drive compression assets to Archrock.

This acquisition is expected to enhance Archrock's position in contract compression in the US, increasing its operating horsepower by 30% in the Permian Basin.

With this deal, Archrock's pro forma operating horsepower is anticipated to reach approximately 4.1 million, and its pro forma enterprise value will exceed $6bn.

The company's assets in the Permian Basin will represent about 52% of its total operating horsepower, and its electric compression horsepower will increase to around 648,000.

Furthermore, the acquired assets from TOPS are projected to generate around $136m of third quarter 2024 annualised adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), not accounting for any expected synergies.

Brian Green will continue to lead TOPS following the closure of the transaction. Archrock plans to maintain a presence in Midland, Texas, with no planned changes to the TOPS organisation, personnel or operations.

Green said: “We are excited to join together with Archrock during an important time for our company and our industry.

“TOPS’ horsepower is contracted with blue-chip customers in the Permian Basin, making the addition of our electric motor business highly strategic and complementary for Archrock.”

Archrock president and CEO Brad Childers said: “Our acquisition of TOPS is an exciting opportunity to expand and diversify our contract compression operations, increase sustainability and create significant value for Archrock shareholders.

“This transaction will accelerate the meaningful progress we have made advancing our strategy of high-grading our fleet, improving profitability, expanding our operations in basins with strong long-term growth prospects and helping our customers achieve their emissions reduction goals.”

The board of directors of Archrock has unanimously approved the transaction, which is expected to close by the end of 2024, pending customary regulatory approvals and other closing conditions.

"Archrock to acquire Total Operations and Production Services in $983m deal" was originally created and published by Offshore Technology, a GlobalData owned brand.

https://finance.yahoo.com/news/archrock-acquire-total-operations-production-101722612.html

Oil futures: Crude at multi-week lows amid demand growth concerns

Quantum Commodity Intelligence – Crude oil futures Tuesday were sliding lower, with benchmarks tumbling to monthly lows as macroeconomics continued to overshadow geopolitical events.

Front-month Sep24 ICE Brent futures were trading at $80.88/b (1625 GMT), compared to Monday's settle of $82.40/b, posting the lowest levels since the price slump in the wake of the early-June OPEC+ meeting.

At the same time Sep2424 NYMEX WTI was trading at $76.80/b, versus Monday's settle of $78.40/b. Aug24 expired at $79.78/b.

Faltering demand growth continued to add to summer woes with Chinese refiners running lower throughputs, although this has in part been offset by state inventory building.

"The lack of concrete stimulus measures from China at the key Communist Party conference has added to the downbeat mood, pointing to a bumpy road ahead for policy implementation. This comes as the Chinese economy grew at a slower-than-expected pace in Q2," commented City Index analyst Fiona Cincotta, referencing last week's gathering of top CCP party officials.

Meanwhile, Morgan Stanley expects Brent to average $86/b in the third quarter but will drop into the $70s/b during 2025 as markets return to oversupply.

The US investment bank expects OPEC and non-OPEC supply to grow around 2.5 million bpd next year, outpacing demand growth. OPEC+ is scheduled to start unwinding cuts from October.

President Biden's decision not to run for reelection was seen as having little impact on immediate oil prices, but analysts said the move makes it more likely that former President Donald Trump will be returned to the White House, likely creating a more friendly environment for the drilling industry.

Spot prices in the North Sea were also easing in the early part of the week as flagship Forties traded in Monday's MOC window at +$1.40/b to the underlying Dated Brent swap on a CIF Rotterdam basis, the equivalent of around $0.50/b FOB.

Forties had traded as high as +$2/b on a CIF basis last week.

https://www.qcintel.com/article/oil-futures-crude-at-multi-week-lows-amid-demand-growth-concerns-27232.html

No Free Money:

• Retailers made record profits in FY24 after suffering losses in FY23

• Retailers resisted daily price changes citing volatility

• Retailers say they need to recoup losses from keeping prices low in FY23

• IOC profit jumped from Rs 8,241 crore in FY23 to Rs 39,618 crore in FY24

New Delhi: The government has scrapped the Rs 30,000 crore equity infusion it had planned in state-owned fuel retailers after they made record profits in the fiscal year ended March 31, according to the Budget Finance Minister Nirmala Sitharaman presented on Tuesday.

Sitharaman had on February 1 last year, while presenting the annual Budget for the 2023-24 fiscal (April 2023 to March 2024), announced an equity infusion of Rs 30,000 crore in Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) to support the three state-owned firm’s energy transition plans.

Alongside, she had also proposed Rs 5,000 crore for buying crude oil to fill strategic underground storages at Mangalore in Karnataka and Visakhapatnam in Andhra Pradesh that India has built to guard against any supply disruptions.

In the interim budget, the finance minister presented in February this year ahead of the general elections, the capital support to the three oil companies was halved to Rs 15,000 crore and the plan for filling strategic underground storage was deferred. In the full budget for 2024-25, both plans have been scrapped.

The budget documents showed nil allocation for capital support to the three oil marketing companies (OMCs) in 2024-25 against Rs 30,000 crore that was provisioned in the 2023-24 budget. While the interim budget in February this year showed the amount against this entry at Rs 15,000 crore, the revised allocation in the full budget presented today showed Rs 0.01 crore as the expenditure for 2023-24 and nil in the 2024-25 budget provision.

While other state-owned oil companies like Oil and Natural Gas Corporation (ONGC) and GAIL (India) Ltd too have lined up billions of dollars of investment to achieve net-zero carbon emissions, the equity support was limited to the three fuel retailers, which had suffered huge losses in 2022 when they held retail petrol, diesel and cooking gas (LPG) prices despite a spike in raw material (crude oil) prices, following Russia’s invasion of Ukraine.

But with three retailers IOC, BPCL and HPCL reporting record profits totalling about Rs 81,000 crore in FY24 (2023-24), which is far more than their annual earnings of Rs 39,356 crore in pre-oil crisis years, the capital support has gone.

The retailers have resisted calls to revert to daily price revision and pass on softening in rates to consumers on grounds that prices continue to be extremely volatile - rising on one day and falling on the other - and that they needed to recoup losses incurred in the year, when they kept rates lower than cost.

https://www.bizzbuzz.news/industry/energy/govt-cancels-rs-30k-cr-capital-support-for-profitable-fuel-cos-1330882

NEW DELHI: Reliance Industries has received approval from the United States to resume importing oil from Venezuela despite Washington's sanctions, a source familiar with the matter said on Wednesday.

The United States in April re-imposed sanctions on Venezuela's oil sector in response to President Nicolas Maduro's failure to meet his election commitments, but said some firms would be authorised to trade and operate in Venezuela.

The US Treasury Department and Reliance did not immediately respond to a request seeking comment. The news was first reported by Bloomberg.

Before US oil sanctions were first imposed on Venezuela in 2019, Reliance was the second-largest individual buyer of Venezuelan crude after China's CNPC.

Reliance had re-submitted a request to the US in May for authorisation to import crude oil from Venezuela, after the US Treasury Department refused to grant licences to Indian refiners including Reliance following the easing of sanctions in October.

Refiners, however, resumed Venezuelan oil purchases through intermediaries, until the sanctions kicked in again in June.

Oil and Natural Gas Corp has also sought a waiver from the US Office of Foreign Assets Control to lift crude oil from Venezuela, an industry source said.

https://timesofindia.indiatimes.com/business/india-business/reliance-gets-us-nod-to-import-oil-from-venezuela-source/articleshow/111986758.cms

GEORGETOWN, Guyana (AP) — A fifth major offshore oil field being developed by a consortium led by ExxonMobil at an estimated cost of $12.7 billion will add another 1.3 billion barrels of recoverable oil reserves to the 10-billion barrel Guyana-Suriname basin, the Guyanese government said Tuesday.

The Uaru-Mako project currently under review could come on stream in the next three years, adding add as many as 63 more wells to the 30 already drilled in the Stabroek Block by the consortium, which also includes Hess Corporation and China's CNOOC.

With two fields in production and two more approved, the consortium is the first among many multinational entities seeking to exploit the massive basin, which promises to transform two small South American nations into some of the world’s largest fossil-fuel producers.

Guyana’s Environmental Protection Agency released the oil field's specifications on Tuesday for public review, saying that Uaru-Mako has at least 1.3 billion barrels of sweet, light crude to add to the more than 10 billion barrels in recoverable reserves the consortium has estimated so far.

Current production from the first two fields is nearly 400,000 barrels per day. The agency required the consortium to take out insurance to cover the costs of any potential oil spills in those fields.

Exxon has said that once it's approved by the local EPA and a final investment decision is made, a fifth giant floating production storage and offloading vessel (FPSO) will be brought in to fill tankers for international markets. The consortium’s licenses cover stretches of the Caribbean located about 120 miles (193 kilometers) offshore in an area near Guyana's maritime border with Suriname.

The announcement about a fifth major oil field comes amid calls from opposition parties and rights groups for Guyana to get a better deal.

The consortium is paying the up-front development costs, and will recover 75% when revenues roll in. ExxonMobil will receive additional revenues equivalent to another 12.5% of the cost. Guyana will collect the final 12.5% — roughly $1.6 billion — as well as a 2% royalty on any revenues thereafter.

Guyana earned more than $1 billion last year from its portion of the production sharing agreement with the consortium, but that's well below industry norms. The International Monetary Fund, among other outside observers, has urged the government to seek better deals as the oil rush contributes to world-leading economic growth, increasing Guyana's GDP by nearly 60% in 2022.

Guyanese authorities have said they will not push to renegotiate the existing deal, but will demand better terms from any new licensees. Bidding by the industry's major global players will close in mid-April for 14 new blocks near the consortium’s Stabroek Block.

https://ca.news.yahoo.com/guyana-1-3-billion-barrels-193140800.html?src=rss

(Bloomberg) -- Russia’s first oil shipment of the year is traveling through the nation’s Northern Sea Route to China, with more vessels expected to follow suit.

The 2,500-mile shipping route, which traverses waters off the Siberian tundra, is typically only used during summer months when ice conditions are less severe. But Western sanctions and Houthi drone attacks in the Red Sea have boosted its appeal as the shortest passage between ports in Russia and China.

Last year, the waterway saw a record 36 million tons of cargo pass through, of which more than half was super-chilled liquefied natural gas, according to Rosatom, a Russian energy company that also operates the Northern Sea Route.

While journeys can still prove onerous, particularly if ships need icebreaker assistance, ongoing attacks by Yemen’s Houthis in the Red Sea have made the route a safer choice. More Russian tankers may opt to use the Northern Sea Route in a bid to avoid the violence and get their cargoes to buyers more quickly.

Shturman Ovtsyn is the first oil tanker to make use of the passage this year and is already over halfway through its journey. The voyage is unusual for this small tanker, which usually hauls cargoes from Gazprom Neft’s Arctic Gates terminal on the Ob Gulf to the port of Murmansk.

In late June it loaded a cargo as normal, but headed east instead of west when it entered the Kara Sea and is making its way to Rizhao, a Chinese port north of Shanghai, where, like many other Russian tankers, it may undergo maintenance as well as drop off its load.

Three tankers owned by Russian tanker group Sovcomflot are due to arrive in Murmansk before the end of the month. The NS Arctic and SCF Baltica both traversed the NSR last year and, once loaded, it’s likely they will head to China via Russia’s northern coast. For the SCF Baikal, the NSR would be new territory.

Another two, also owned by Sovcomflot, are heading from China to the Bering Strait and will make the westward journey to Murmansk. The LNG-fueled tankers Korolev Prospect and Vernadsky Prospect are due to be delivered this year on a 10-year charter to the Sakhalin 2 project.

Before taking up their roles, both vessels need to be upgraded with a bow loading system and modification of their bunkering equipment. They may be headed to a Murmansk shipyard for that work and could then carry cargoes back to China before taking up their new jobs.

https://www.bnnbloomberg.ca/investing/2024/07/24/western-sanctions-houthi-attacks-boost-appeal-of-russias-arctic-sea-route/

OSLO: Equinor 's second-quarter profits declined by 4% year on year as natural gas prices fell, the energy company reported on Wednesday, although the results still outperformed analysts' expectations.

The Norwegian oil and gas producer's adjusted earnings before tax for April-June eased to $7.48 billion from $7.80 billion a year earlier, beating the $6.96 billion predicted in a poll of 22 analysts compiled by Equinor. "Our operational performance continued to be strong through the quarter," CEO Anders Opedal said in a statement.

Compared to the same quarter last year, the realised European piped gas price decreased due to mild temperatures and lower market prices driven by high storage levels and reduced demand, Equinor said.

The Dutch TTF front-month gas contract, Europe's benchmark, averaged 31.76 euros per megawatt hour (MWh), or $10.02 per mmbtu, in the second quarter, down from 34.86 euros/MWh, or $11.13 per mmbtu a year earlier.

Equinor lowered its renewable energy production growth forecast for 2024 to 70% from a forecast doubling previously, amid a delay to the start-up of the 1.2 GW Dogger Bank A offshore wind farm in the UK to 2025 from late 2024.

The group maintained a projection that its oil and gas output would be unchanged in 2024 from 2023 and kept a forecast for capital expenditure of $13 billion this year.

Equinor in the second quarter pumped 2.05 million barrels of oil equivalent per day (mboed), slightly above expectations in the analyst poll for 2.03 mboed and up from 1.99 mboed a year ago.

The company in 2022 overtook Russia's Gazprom as Europe's biggest supplier of natural gas when Moscow's invasion of Ukraine upended decades-long energy ties.

Equinor's share price has declined by 10.4% so far this year, lagging a 1% rise in the wider index of major European energy stocks.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/equinor-q2-profit-down-but-beats-forecast/111979780

Bulgaria has offered to help Hungary manage the difficulties that have arisen after Ukraine's ban on the transit of oil from Russia's Lukoil, Peter Szijjarto, the minister of foreign affairs and trade, said in Bucharest on Wednesday.

Speaking after talks with Vladimir Malinov, Bulgaria’s minister for energy affairs, Szijjarto said they had reviewed the situation that had arisen due to Ukraine’s “unacceptable” move to render Lukoil’s crude oil transits to Hungary and Slovakia impossible.

“Not only are they endangering Hungary’s and Slovakia’s energy security by doing this, but they are also violating the association agreement between the European Union and Ukraine,” Szijjarto said, according to a ministry statement.

Meanwhile, he said the EU’s Trade Policy Committee set to discuss the issue had convened in Brussels on Wednesday.

“It’s clear that certain EU member states continue to represent a political stance, and despite the fact that the step taken by Ukraine obviously violates the security of Hungary and Slovakia’s energy supply as well as the EU-Ukraine association agreement, they’re trying to defend Ukraine and clearly don’t care about the European Union’s internal solidarity,” Szijjarto said.

“We’ll see when the European Commission formulates its position and convenes the consultation between the European Union and Ukraine, which we expect to result in Ukraine lifting the ban on Lukoil oil transits,” he added.

Szijjarto noted that a significant share of Hungary’s natural gas supply was delivered via Bulgaria, and that the country was among the most reliable in the region.

Hungary received 5.6 billion cubic metres of natural gas through Bulgaria last year and 3.9 billion so far this year, he said.

“Bulgaria respects all of its obligations as a transit country,” he said.

Szijjarto said his Bulgarian partner had offered to help Hungary in connection with the situation that has arisen after the Ukrainian ban.

“Though there’s no direct crude oil delivery link, i.e. pipeline between the two countries, he did say that if we needed further volumes of oil, they are capable of getting it to Hungary,” Szijjarto said. “Offering this kind of help is another nice and friendly gesture from Bulgaria.”

https://www.budapesttimes.hu/hungary/bulgaria-offers-to-help-hungary-manage-difficulties-caused-by-ukraine-oil-transit-ban/

MOSCOW (Sputnik) - Hungary will only harden its position on blocking 6.5 billion euros ($7 billion) from the European Peace Facility as compensation to EU countries for supplying arms to Ukraine over Kiev stopping the transit of Russia's Lukoil oil, Slovak President Peter Pellegrini said on Wednesday.

Hungarian Foreign Minister Peter Szijjarto has said that Hungary and Slovakia had launched consultations between the European Commission and Ukraine due to the suspension of the transit of Russian oil. Szijjarto then said that Hungary would not approve the allocation of 6.5 billion euros for arms sent to Ukraine through the European Peace Facility until Kiev resolves the issue of oil transit.

"I think after Ukraine's reaction with regard to stopping Lukoil's oil transit, this strong position against allowing the disbursem*nt of these funds will further strengthen and Hungary will continue to block them," Pellegrini told a press conference.

Pellegrini also said that Slovakia would like to receive the funds that are intended for it for the military equipment it transferred to Ukraine, but respected Hungary's position.

"Hungary is exposed to a really serious risk of shortage of raw materials and reacts appropriately due to this step from Ukraine," the president added.

Last week, Szijjarto said that Lukoil's oil supplies through Ukraine via the Druzhba oil pipeline had been stopped. The Slovak Economy Ministry confirmed that the republic had stopped receiving oil from Lukoil due to Ukraine stopping its transit through its territory. It noted that Lukoil had been sanctioned by Ukraine. Slovakia's Slovnaft refinery is supplied with Russian oil from another supplier, but the country is discussing the current situation with the Ukrainian side.

https://sputnikglobe.com/20240724/hungary-to-step-up-blocking-aid-to-kiev-over-russian-oil-transit-issues-slovak-president-1119486765.html

Crude oil prices ticked higher today after the U.S. Energy Information Administration reported an inventory decline of 3.7 million barrels for the week to July 19.

This compared with an inventory draw of 4.9 million barrels estimated by the EIA for the previous week. The American Petroleum Institute, meanwhile, on Tuesday estimated another inventory draw in crude oil for the week to July 19, at 3.9 million barrels.

In fuels, the EIA reported more draws.

Gasoline stocks shed 5.6 million barrels in the week to July 19, with production averaging 10.2 million barrels daily.

This compared with a build of 3.3 million barrels for the previous week, when production averaged 9.5 million barrels daily.

In middle distillates, the agency estimated an inventory decline of 2.8 million barrels for the week to July 19, with production averaging 4.9 million barrels daily.

This compared with an inventory build of 3.5 million barrels for the previous week, when production averaged 5.2 million barrels daily.

Oil prices, meanwhile, moved higher on Tuesday, following the American Petroleum Institute’s report and continuing wildfires in Canada’s oil heartland, Alberta. Some of the fires have forced oil producers to curb production, affecting prices positively, ING’s Warren Patterson and Ewa Manthey wrote in a note.

“Oil supply risks from wildfires in Canada continue to grow. While wildfires have already forced some producers to curtail production, these fires still threaten a large amount of supply,” they said.

The analysts noted lukewarm Chinese oil demand as a bearish factor but added that “the market is nearing oversold territory and we still believe that the fundamentals support prices moving higher from current levels over the remainder of the third quarter on the back of a deficit environment.”

At the time of writing, Brent crude was trading at $81.35 per barrel, with West Texas Intermediate changing hands at $77.37 per barrel, both up from opening.

https://oilprice.com/Energy/Crude-Oil/Oil-Moves-Higher-on-Crude-Fuel-Inventory-Draw.html

Spot premiums for Middle East crude benchmarks Oman, Dubai and Murban eased on Wednesday despite the flurry of activities on window that led to the delivery of another two cargoes to PetroChina.

ARBITRAGE

India's Reliance Industries RELIANCE1! has received approval from the United States to resume importing oil from Venezuela despite Washington's sanctions, a source familiar with the matter said on Wednesday.

Before U.S. oil sanctions were first imposed on Venezuela in 2019, Reliance was the second-largest individual buyer of Venezuelan crude after China's CNPC.

SINGAPORE CASH DEALS

Cash Dubai's premium to swaps fell 11 cents to $1.61 a barrel.

PetroChina will receive a September-loading Upper Zakum crude cargo from Reliance and a Murban cargo from BP following the deals.

SELLER-BUYER PRICE ($/BBL) BP-PETROCHINA 80.65 RELIANCE-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 EXXONMOBIL-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-SHELL 80.60 HENGLI-PETROCHINA 80.65 EXXONMOBIL-GUNVOR 80.55 VITOL-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-PETROCHINA 80.66 HENGLI-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.66 EXXONMOBIL-SHELL 80.63 HENGLI-PETROCHINA 80.65 BP-PETROCHINA 80.65 EXXONMOBIL-SHELL 80.63 HENGLI-PETROCHINA 80.66 HENGLI-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.66 BP-PETROCHINA 80.65

PRICES ($/BBL)

CURRENT PREV SESSION DME OMAN 80.66 81.95 DME OMAN DIFF TO DUBAI 1.62 1.72 CASH DUBAI 80.65 81.95

NEWS

Indonesia, the world's biggest palm oil producer, is testing fuel with a view to increasing to 40% from 35% the share of palm-oil blended into biodiesel next year, the energy ministry said.

The Russian government is considering a ban on exports of diesel due to rising domestic prices, the Kommersant daily reported on Wednesday, citing several unnamed sources.

Ship owner Hafnia, operator of the Hafnia Nile oil tanker, is in discussion with Singapore's Maritime and Port Authority (MPA) about transferring the damaged ship's cargo of naphtha to a safe location, the MPA said on Wednesday.

https://www.tradingview.com/news/reuters.com,2024:newsml_L4N3JG0X7:0-benchmarks-ease-petrochina-picks-up-another-two-cargoes/

French supermajor TotalEnergies (NYSE: TTE) reported lower-than-expected net income for the second quarter of the year amid lower LNG sales and prices and weaker refining margins.

TotalEnergies reported on Thursday an adjusted net income of $4.7 billion for the second quarter, down by 9% from the first quarter and also down from the $4.96 billion earnings for the second quarter of 2023.

The Q2 2024 adjusted net income missed the analyst consensus estimate of a net profit of $4.96 billion.

TotalEnergies’ upstream production averaged 2.44 million barrels of oil equivalent per day (boepd), down by 1% quarter-on-quarter, due to higher planned maintenance, notably in the North Sea.

But oil and gas output in the second quarter rose by 3% annually, thanks to start-ups and ramp-ups of projects in Brazil, Oman, Norway, Nigeria, and Azerbaijan.

The adjusted net operating income of the Exploration & Production division rose by 5% quarter-to-quarter to $2.667 billion, as higher oil prices offset lower gas realizations and production, TotalEnergies said.

In the LNG division, the company – which is the world’s second-largest LNG trader after Shell – saw LNG sales falling by 18% sequentially in the second quarter, “notably due to lower spot purchases, in a context of lower LNG demand in Europe.”

Adjusted net operating income at the Integrated LNG division slipped by 6% from the first quarter, due to lower LNG prices and sales.

“Moreover, gas trading did not fully benefit in markets characterized by lower volatility than during first half of 2023,” TotalEnergies noted.

In the downstream, the Refining & Chemicals business saw operating income plunge by 34% quarter-to-quarter, due to lower refining margins mainly in Europe and the Middle East that were partially offset by higher refinery utilization rates.

Looking ahead, TotalEnergies expects its oil and gas production to remain between 2.4 million boepd and 2.45 million boepd in the third quarter.

In the downstream, “Global refining margins, which have sharply decreased since the end of the first quarter 2024, remain impacted by low diesel demand in Europe, as well as by the market normalization following the disruption in Russian supply,” TotalEnergies said.

https://oilprice.com/Latest-Energy-News/World-News/TotalEnergies-Misses-Earnings-Estimates-Amid-Weak-LNG-Sales-and-Refining-Margins.html

The EUC member states did not support the call of Hungary and Slovakia to lift sanctions against Russia's Lukoil in order to restore the transit of Russian oil. This is reported by the Financial Times, citing its sources, reports UNN.

Details

The FT recalls that Hungary and Slovakia were granted exemptions from the pan-European ban on Russian oil imports after Moscow's full-scale invasion of Ukraine. But Kiev's recent decision to stop transit of Lukoil products from Russia through the Druzhba pipeline could lead to a reduction in supplies, according to representatives of the two countries.

So they asked the European Commission, which handles EU trade policy, to start consultations as part of a trade agreement with Ukraine.

But Valdis Dombrovskis, the EU trade commissioner, told the Financial Times that Brussels would need more time to gather evidence and assess the legal situation.

According to the FT, citing three diplomats, at yesterday's meeting of trade officials from EU member states, 11 countries spoke in favor of his view, and none sided with Budapest and Bratislava. One said the trade agreement with Ukraine includes a security clause that could allow supplies to be cut off.

If Slovakia loses its ability to import oil from russia, “the consequences would be huge,” an EU diplomat said.

Supplement

Slovak President Peter Pellegrini said he would be “forced to react” if Ukraine does not change its stance on Lukoil.

Lukoil supplies passing through Ukraine account for about 25-30 percent of the country's oil imports.

https://unn.ua/en/news/eu-not-in-favor-of-lifting-sanctions-on-russias-lukoil-to-restore-oil-transit-ft

Oil prices were trading down nearly 2% in early-morning trading on Thursday, with markets attempting to digest the impact of lagging Chinese consumption on other positive U.S. inventory reports against the backdrop of another interest rate cut by Beijing.

At 6:50 a.m. ET on Thursday, Brent crude was trading down 1.77% at $80.26, while the U.S. benchmark, West Texas Intermediate (WTI), was trading down 1.80% at $76.19.

Though this week saw another big U.S. crude inventory draw reported by the Energy Information Administration (EIA), the market remains focused today on the global economic outlook and China demand.

Refinery margins worldwide are also taking a hit, with big refiners lining up ahead of earnings reports to warn investors of a weak Q2 earnings season.

Throughout the year, China has seen crude oil imports on a downward trend, with refinery runs also trending lower, year-on-year, suggesting sustained economic growth weakness.

On Thursday, China’s central bank cut interest rates again, lending more concern to analyst fears that demand is shrinking. The People’s Bank of China slashed rates from 2.5% to 2.3% on Thursday in a surprise move that is being interpreted as a response to weak economic growth.

Also potentially weighing on prices is Wednesday’s news that Russia, Kazakhstan, and Iraq have established clear plans to compensate for overproduction to raise compliance with OPEC+ output cuts. According to OPEC, the entire over-produced volumes will be fully compensated for over the next 15 months through September 2025, with Russia ‘paying back’ a cumulative 480 kb/d, Iraq 1,184 kb/d, and Kazakhstan 620 kb/d.

Earlier this week, Exxon, Shell, and BP warned of flagging refining margins that will be reflected in Q2 earnings. On Thursday, European refiners French TotalEnergies and Neste also warned of sluggish demand and profit margin weakness. Earlier on Thursday, TotalEnergies reported a 34% drop in operating income for the quarter for its refining and chemicals arms.

https://oilprice.com/Energy/Energy-General/Oil-Prices-Tank-on-Fears-Chinas-Rate-Cuts-Herald-Demand-Weakness.html

Middle East crude benchmarks Oman, Dubai and Murban extended losses on Thursday as most refiners have completed their purchases for September loading cargoes.

Indian refiner BPCL has bought 1 million barrels of Murban at $1.60-$1.70 a barrel via a tender in addition to the U.S. West Texas Intermediate crude it purchased earlier, traders said.

SINGAPORE CASH DEALS

Cash Dubai's premium to swaps fell 13 cents to $1.48 a barrel.

SELLER-BUYER PRICE ($/BBL) VITOL-PETROCHINA 80.65 VITOL-SHELL 80.65 VITOL-PETROCHINA 80.65 VITOL-PHILLIPS 66 80.65 VITOL-PETROCHINA 80.65 VITOL-SHELL 80.65 EXXONMOBIL-PETROCHINA 80.65 VITOL-PHILLIPS 66 80.65 EXXONMOBIL-PETROCHINA 80.65 EXXONMOBIL-SHELL 80.65 EXXONMOBIL-PETROCHINA 80.65 VITOL-PHILLIPS 66 80.65 EXXONMOBIL-PETROCHINA 80.65 EXXONMOBIL-SHELL 80.70 VITOL-SHELL 80.70 EXXONMOBIL-SHELL 80.65 VITOL-PETROCHINA 80.65

PRICES ($/BBL)

CURRENT PREV SESSION DME OMAN 80.66 80.66 DME OMAN DIFF TO DUBAI 1.49 1.62 CASH DUBAI 80.65 80.65

REFINERY

Japan's biggest refiner, Eneos Corp, restarted the 175,000 barrels-per-day crude distillation unit (CDU) at its Kashima refinery north of Tokyo, on July 11 after fixing a system glitch, a company spokesperson said on Wednesday.

China's newest mega refiner Shandong Yulong Petrochemical Co plans to start test runs its 400,000 barrels-per-day plant around Sept. 30, according to two sources with knowledge of the matter.

NEWS

The European Commission is seeking more information on Hungary and Slovakia's request that it mediate a consultation procedure with Ukraine over disrupted oil flows from Russia, and has rejected a three-day deadline to respond to the countries' complaint.

Russia will compensate for exceeding crude oil production quotas set by OPEC+ partners and there is no friction over the issue, Russian Deputy Prime Minister Alexander Novak told reporters on Thursday.

Democratic U.S. lawmakers on Wednesday introduced a bill to hold energy companies accountable if they are found by federal regulators to have colluded with the Organization of the Petroleum Exporting Countries to raise oil prices.

One crew member was still missing after a tanker carrying industrial fuel capsized early on Thursday morning off the Philippines, the country's transportation minister said, and the incident had caused an oil spill.

India's monthly oil imports from its biggest supplier Russia slipped marginally in June while those from the United States rose to the highest since February 2022, data obtained from the industry sources showed.

Singapore's middle distillates stockpiles were above 11 million barrels for a second straight week as gains in jet fuel/kerosene net exports offset the rise in diesel/gasoil imports, though the country turned a net importer of the latter this week, official data showed on Thursday.

https://www.tradingview.com/news/reuters.com,2024:newsml_L1N3JH0E9:0-middle-east-crude-benchmarks-extend-losses-as-trade-slows/