Lower oil prices have made Gabon’s task of reversing a decline in production almost impossible. Investments have slowed and drilling has practically stopped. Since prices started spiralling down in June 2014, at least 2,500 jobs have been lost in the sector, according to the country’s oil workers union Onep.
The oil and gas industry is generally of little interest to an outsider, other than for its impact on the environment and prices at the pump.
But the industry itself often wants the outsider — from an ordinary consumer to a potential investor or a government official — to understand the language it speaks, because it’s their behaviour that, in various ways, will determine the trajectory of the industry in its transition towards a lower-carbon future.
The extension to Rough’s injection unavailability until at least the end of June was priced into the NBP second-quarter 2017 market quickly, but the ripples along the curve have been much smaller.
Centrica plans not to have any obliged capacity for the 2017-18 storage year and said last week that it would update Ofgem as part of a consultation process.
Much of the focus was on the NBP second-quarter 2017 contract, understandably given that Centrica said explicitly that injection services would not be available in this period.
But reading last week’s update at the same time as December’s consultation document paints a much bleaker picture for the future of Rough. Continue reading
Shell gave its outlook for the LNG market during a media briefing yesterday. Afterwards, a number of news reports emerged saying that Shell predicted no oversupply in the LNG market.
I nearly choked on my coffee. What are they talking about?
Well, we listened to Shell’s comments again. It seems like the company said something more nuanced.
“In 2016, we didn’t see an oversupply… for the rest of the decade we expect strong supply growth but also strong demand growth and to the extent that there’s an imbalance between the two, we believe Europe can easily absorb those volumes,” Shell gas marketing and trading executive Steve Hill said.
So is the LNG market oversupplied? Perhaps it depends on the definition of oversupply.
It is true that all LNG produced in 2016 found a home. But that is true every year because of the way expensive liquefaction projects are financed and because regasification capacity is underutilised. Even if the LNG price is below the breakeven price, it is still better to claw back some of the investment than to shut down the export facility. And because liquefaction facilities are so expensive to build — or were built so many years ago that the project has been paid off, or makes all its money from associated condensates anyway — they are never shut down because of low LNG prices. Continue reading
US president Donald Trump says it has become much harder for him to make a deal with Russia because of “the false, horrible, fake reporting by the media.” But the real challenge to Trump’s proposed improvement in Russian relations is strong, bipartisan opposition on the Hill.
Trump on 13 February asked his national security adviser Michael Flynn to step down after revelations that prior to taking office Flynn had discussed possible sanctions relief with Russian ambassador to the US, Sergey Kislyak. The story is a “ruse,” Trump said in a press conference this week, even though he confirmed the substance of the discussion. Trump added that Putin must be thinking “it’s got to be impossible for President Trump to ever get along with Russia because of all the pressure he’s got with this fake story.” Continue reading