Category: Nieuws

Southern Rock Energy Partners, LLC selected Cushing as the site for its next-generation crude oil refinery.

The project is a $5.56 billion investment into the “pipeline capital of the world”, also bringing in more than 423 full-time jobs.

The total economic impact for the first decade of operations of the facility to the Cushing area and the state of Oklahoma is estimated to be more than $18 billion.

Bruce Johnson is the director of the Cushing Economic Development Foundation.

“[They] selected Cushing, Oklahoma to be that location for the first refinery to be built in the United States in the last 40 years,” he said. “We’re looking to supply energy not only to our area, but to the rest of United States for decades, if not centuries, to come just like we have in the century past.”

Johnson said just in the construction alone, 1,250 jobs will be available over the next two to three years.

“Since the discovery of the Cushing-Drumright Oil Field in the early 1900s, Cushing has been at the epicenter of North America’s energy markets. More than 50 refineries have called Cushing home over our history, and we are looking forward to another successful energy-supplying partnership based upon modern technological advancements,” stated Chairman Ricky Lofton, Cushing City Commission.

Cushing has about 100 million barrels of storage in the tank farms surrounding the community.

The refinery complex will produce about 91.25 million barrels or 3.8 billion gallons annually of fuels including gasoline, diesel and jet fuel from crudes sourced domestically.

The project will take 36-months to build with work starting in 2024. Commercial operations are expected to start in 2027.

Some Cushing locals have shared their excitement for the refinery.

George Hatfield lives in Cushing and said it’s good news for the town.

“It’d be good for the economy, I believe,” he said. “Why not us? We got all the oil and all we need do is just refine it and send it places that needs the refined oil.”

Another local, Billy Cooper, told FOX23 he’s happy to hear about the plans.

“For all the people around here, [it would] bring so much business into town, for sure, and jobs like … high paying jobs long term,” he said.

There was a question regarding the environmental impact this may cause.

Nicholas Hayman is the state geologist for Oklahoma. He said Oklahoma is working hard on its carbon footprint.

When I hear about a big refinery, my first thought is not earthquakes, it’s the carbon footprint, but then I also know that we’re working on ways to deal with that,” Hayman said.

Hayman said there is a lot of time spent in trying to manage the impact these large businesses have on the planet.

“And that’s where we’re really spending a lot of time both in the state university world and businesses,” he said. “Some of the largest investors are the corporations. To understand how to do this, and it’s a very serious challenge, but Oklahoma can very much play a role in that.”

By Fox 23 News, June 1, 2023

The conversation surrounding the subject of oil refining in Africa, couldn’t have come at a better time.

Now more than ever, Africa needs to examine its options for reducing its energy expenses, as energy cost heavily influences the growth or decline of any given economy.

Energy cost is a key determinant of inflation, alongside basic amenities like food, water and other commodities distinct and essential to different regions.

For an economy to thrive, energy must be as cheap as possible. Unfortunately, this has hardly been the case in Africa for the past year.

The ensuing conflict between Russia and Ukraine has brought about a substantial spike in the cost of energy, globally.

Needless to say, for a developing continent like Africa, the brunt of this crisis is being felt to extensive degrees, as numerous countries on the continent for the past year have been dealing with some level of inflation.

The inflation, while spurred in parts by food hikes, and other nuanced factors, is still majorly a result of the rising cost of energy that has plagued the entire planet.

Africa hardly refines its own oil despite its tremendous oil reserves, which in hindsight has caused a gargantuan deficit in its oil bottomline.

Simply put, most oil-producing African countries, particularly Sub-Saharan African countries, sell their crude to countries outside the continent for a specific amount, and then buy back said oil in a refined state for a similar amount.

This in itself is as financially counter-productive as it gets, however, what makes things significantly worse is when external factors like war make the oil importation costs much more expensive. A plight which almost every African state suffered in the previous year.

It is also disturbing that this problem would persist for the next two years, as numerous global economists have hinted at the possibility of a recession this year.

With this in mind, the glaring solution to remedy this problem is to simply build refineries in Africa. Fortunately, this idea has not only been floating all across Africa for some time now, yesterday, it became a reality.

On Monday, May 22nd, 2023, Aliko Dangote triumphantly commsioned his massive oil refinery. The much awaited project represents an important turning point for the nation’s energy industry and Dangote’s ambitious endeavors.

Dangote’s dedication to meeting Nigeria’s domestic gasoline demand is demonstrated by the commissioning event, which was attended by Nigerian President Muhammadu Buhari.

With this new development, here are a few interesting facts to know about the Dangote oil refinery.

Below are 5 things you need to know about Dangote’s new oil refinery:

Timeline: Although traders claim there are no indications of a rapid ramp-up in manufacturing, initial shipments are anticipated in July or August of 2023.

Location: The refinery is situated in Lagos Nigeria, specifically the Lekki Free zone, covering a land area of approximately 2,635 hectares, which according to the site is about six times the size of Victoria Island.

Capacity: The refinery would be able to produce 650,000 oil barrels per day, subsequently, with an initial rollout of 540,000 barrels per day. Also, the facility will produce 3 billion standard cubic feet of gas, 65 million liters of premium motor spirits (petrol), 15 million liters of diesel, and 4 million metric tones of jet fuel each day, approximately, 8 million tons of petroleum products annually. Additionally, Nigeria National Petroleum Co. has signed a contract to provide 300,000 barrels of crude oil per day to Dangote’s refinery.

Objective: With the refinery’s projected capacity, Dangote has noted that it would be in charge of Nigeria’s entire oil supply, effectively eliminating the need for oil importation. However, the company also disclosed plans to produce a petroleum surplus intended for sale across fellow African countries and perhaps other regions outside the continent, which would bring about an estimated $11 billion in petroleum products from Nigeria per year. The refinery is also intended to reduce the $26 billion spent on petroleum imports in 2022.

Cost: The ambitious projects costs a total of $19 billion to build, according to Bloomberg. This cost was initially estimated at $9 billion. However, the governor of the Central Bank of Nigeria disclosed that the Dangote refinery was delivered at a cost of $18 billion, 70% of which the governor, noted has been repaid, trhe 70% of course coming from the 50% of the entire cost, which the governor said Dangote borrowed from financial insstitutions. “Today, total loans outstanding have dropped from over $9 billion when this project started to N2.7 billion,” he said.

Business Insider Africa by Chinedu Okafor, June 1, 2023

“It may have some impact but countries once again reiterated that if there are some impacts to slow down in that area, they are going to accelerate in the other areas that it will not change their determination of reaching the 1.5 degree Celsius goal,” Birol said.

The International Energy Agency (IEA) does not expect moves by the Group of Seven nations to counter the evasion of price caps on Russian energy will change the supply situation for crude oil and oil products, the IEA’s Executive Director Fatih Birol said.

The G7, the European Union and Australia agreed to impose a $60-per-barrel price cap on Russian seaborne crude oil and also set an upper price limit for Russian oil products to deprive Moscow of revenues for its invasion of Ukraine.

The G7 will enhance efforts to counter evasion of the caps “while avoiding spillover effects and maintaining global energy supply”, the group said on Saturday, without giving details, during its annual leaders’ meeting.

The IEA, which provides analysis and input to the G7 on energy, does not see the enhanced enforcement of the price caps affecting the global oil and fuel supply, Birol told Reuters in an interview on the sidelines of the summit.

“Any significant changes in the markets as always we will reflect in our analysis, in our reports, but for the time being I don’t see a reason to make a change in our analysis,” he said.

According to Birol, the price cap reached two main objectives: it did not trigger tightness in the markets as Russian oil continued to flow but at the same time Moscow’s revenues were reduced.

“Russia did play the energy card, and it did fail. But there are some loopholes, some challenges for the better functioning of the oil price cap,” Birol said.

GAS INVESTMENTS

The G7 has also brought support for the gas investment back to the communique on Saturday in that it said was a ‘temporary’ solution to address potential market shortfalls and as nations are trying to de-couple from the Russian energy.

The move has alarmed climate activists who warned the group may fail to deliver on its goal to achieve net-zero carbon emissions by 2050 and limit global warming to 1.5 degrees Celsius (2.7 Fahrenheit).

“The clean energy transition is happening and much faster than many think.”

The language change was brought in by Germany, once a top buyer of Russian gas, sources have said, and the communique did not have a time frame for investments into the gas sector.

“There is no determination of any time frame there, but I think the main issue is because of the reliance of especially European countries on Russian gas almost for decades. Now it is not easy to change everything from one day to another,” Birol said.

“(German) Chancellor (Olaf) Scholz made clear again and again that Germany is very keen to reach this 1.5 degrees target. And I believe in his words.”

By Reuters, June 2, 2023

The government has planned to set up three more liquefied natural gas (LNG) terminals in addition to the existing two currently being operated to regasify imported gas.

Besides, the existing two floating storage and regasification unit (FSRU) will also be extended to 630 mmcft per day from 500 mmcft.

The proposed three new LNG terminals will be set up in Payra, Moheshkhali and Matarbari whose total regasification capacity would be 2000 mmcft per day including two floating and another land based.

Two floating terminals with 500 mmcft capacity will be set up at Payra and Moheshkhali while the land based terminal with the production capacity of 1000 mmcft will be set up at Matarbari.

Negotiations for signing agreement with foreign and local investors have been going on.

“Agreements with those investors may be signed by the current year,” Md Kamruzzaman Khan,Petrobangla Director of Operation told the Daily Observer on Saturday.

Petrobangla sources said that Excelerate Energy of USA has made an offer for the Payra site while Summit Group made an offer for Moheshkhali. Petrobangla has shortlisted 12 firms for the Matarbari site, sources said.

If the government gives approval for setting up the terminals, it will take 3-5 years to get them installed and ready for operation, Petrobangla source said.

Presently two floating LNG terminals have been in operation since 2018, of which one was set up by Excelerate Energy at Moheshkhali of Cox’s Bazar with 500 million cubic feet per day while another with the same capacity was set up by the Summit Group in the same area.

With the operation of three terminals including the extension of the existing terminals, the LNG production of the country will rise to 3200 mmcft per day.

Current demand of gas in the country is 4000 mmcft per day. But Petrobangla can supply only 3000 mmcft per day, Petrobangla sources said.

In future the demand of the country will increase furhter. So, there is no alternative to boost up production of gas in the country.

Meanwhile, the floating storage and regasification unit (FSRU) of Petrobangla went into operation on Saturday night after remaining suspended for 8 days.

A two-day disruption in the supply from LNG terminals inflicted by Cyclone Mocha has laid bare the energy crisis Bangladesh is facing, with power stations and factories forced to suspend or reduce production.

Besides power cuts denying people any respite from the scorching heat, low pressure or lack of gas in the kitchen has spelled trouble for many. Cars, auto-rickshaws and other vehicles waited in long queues for gas at refuelling stations. The government decided to suspend gas supply from two floating LNG terminals in Moheshkhali due to severe cyclonic storm Mocha since May 12. The Ministry of Power Energy and Mineral Resources issued a notice on May 12 last.

The daily observer by Nurul Amin, May 31, 2023

The oil ministry is drafting a proposal to combine the two publicly traded subsidiaries of Oil and Natural Gas Corp (ONGC), Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corp Ltd (HPCL).

When ONGC bought HPCL from the government five years ago, the notion of a merger between MRPL and HPCL was discussed, but little progress was achieved. According to the aforementioned sources, the ministry is currently pressing for the merger, which will probably involve a share exchange.

They claimed that there would be no financial outlay and that HPCL would most likely issue new shares to MRPL owners as part of the merger. The ONGC and HPCL are MRPL’s promoters. The public owns 11.42% of MRPL, followed by HPCL at 16.96% and ONGC at 71.63%.

Through the acquisition, ONGC’s present 54.9% holding in HPCL will be dramatically increased, lowering the free float. The oil ministry will probably ask the cabinet for approval of the proposed combination of HPCL and MRPL. ONGC, HPCL, MRPL, the oil ministry, and ONGC all declined to comment.

The HPCL-MRPL combination might need to wait until next year, according to one individual, who argued that the rule calls for a minimum two-year buffer between any two mergers a business undertakes. Last year, MRPL completed the merger of its subsidiary, OMPL, with itself.

The merger plan, which aims to combine the majority of the downstream assets of the ONGC group under HPCL, will probably result in some tax gains. More fuel is sold by HPCL, which has a substantial retail network, than is produced at its refineries.

It will have internal access to MRPL’s goods following the merger. Since MRPL doesn’t have a robust domestic sales network, a substantial amount of its items are sold to merchants outside of Karnataka and are therefore subject to central sales tax (CST). People claimed that a merger may reduce MRPL’s CST expenses.

According to a person with knowledge of the matter, MRPL personnel may be concerned about a merger because they may be transferred to HPCL’s other refineries.

The oil ministry had suggested the former to conduct a three-way merger of HPCL, MRPL, and OMPL to combine the group’s downstream businesses shortly after ONGC’s Rs 37,000 crore acquisition of HPCL. However, the relationship between the two businesses had deteriorated as a result of HPCL’s year-long refusal to acknowledge ONGC as its promoter.

The merger of OMPL and MRPL was completed because ONGC opposed giving HPCL authority over MRPL. According to the previously referenced individuals, top officials at ONGC and HPCL have changed in the last year, and the two businesses are now more receptive to the concept of a combination.

By Industry Outlook, May 31, 2023

With just four more years to go before the Philippines‘ only gas field might halt production, the country has started importing liquefied natural gas (LNG), adding upward pressure to already worryingly high inflation.

Seven terminal projects have been approved by the Philippines‘ Department of Energy, as it looks to expand LNG usage into industrial, commercial, residential and transport sectors in addition to power.

Following are the project proponents and their partners, proposed capacities, timetable and status as of April 24, according to the energy department.

PHLNG import terminal

(previously Atlantic Gulf & Pacific Co of Manila Inc)

Partner: Osaka Gas Co Ltd 9532.T, which has technical services agreement with AG&P

Description: Floating Storage Unit and Onshore Regasification, and buffer LNG storage tank

Location: Batangas City

Capacity: 3 million tonnes per annum (mtpa)

Estimated Commercial Operations Date (COD): FSU and Onshore Regasification in May 2023, and buffer LNG storage tank in December 2023

Status: LNG cargo from trader Vitol has arrived and will fuel San Miguel Corp’s SMC.PS 1,200-megawatt power plant in Batangas, which is scheduled to come online by May 26

FGEN LNG of First Gen Corp FGEN.PS

Partner: Tokyo Gas Co Ltd 9531.T, which has a 20% interest

Description: Floating Storage and Regasification Unit (FSRU)

Location: Batangas City

Capacity: 5.26 mtpa

Estimated COD: September 2023

Status: Commissioning scheduled in third quarter

Energy world gas operations Philippines Inc.

Proponent: Energy World Corp Ltd EWC.AX

Description: LNG Storage and Regasification Terminal

Location: Pagbilao Grande Island, Quezon Province

Capacity: 3 mtpa

Estimated COD: December 2023

Status: Permit to construct extended for 1 year and issued on Jan. 31, 2023

Shell energy Philippines Inc. 

Proponent: Shell Pilipinas Corp SHLPH.PS

Description: FSRU

Location: Batangas City

Capacity: 3 mtpa

Estimated COD: September 2025

Status: 20-month extension of Notice To Proceed issued in January 2023

Luzon LNG Terminal Inc. 

Description: FSRU

Location: Batangas Bay

Capacity: 4.4 mtpa

Estimated COD: December 2025

Status: Permit to Construct issued in December 2022

Vires Energy Corp

Description: FSRU

Location: Batangas City

Capacity: 3 mtpa

Estimated COD: September 2025

Status: 2-year extension of Notice To Proceed issued and valid until October 2023

Samat LNG Corp

Description: Small-Scale LNG Terminal

Location: Mariveles, Bataan

Capacity: 0.32 mtpa

Estimated COD: Phase 1 in March 2024, Phase 2 in May 2025

Status: Notice To Proceed issued in January 2023

By Intraksyon, May 30, 2023

The oil companies share a lot of similarities.

ExxonMobil (XOM -0.89%) is a global oil and gas industry behemoth. It’s a leading hydrocarbon producer. It also boasts a globally integrated business, enabling it to maximize the value of the hydrocarbons it produces. Meanwhile, Exxon has an emerging low-carbon business.

Occidental Petroleum (OXY -0.59%) shares many of those same features, albeit on a smaller scale. However, the company has grand growth ambitions – it beat out oil giant Chevron (CVX -0.62%) to acquire Anadarko Petroleum in 2019. Here’s a look at whether it could eventually become a mega-cap oil stock like Exxon.

How Occidental stacks up against ExxonMobil

ExxonMobil is currently the largest U.S. oil company by market cap:

As that chart shows, Exxon is over seven times the size of Occidental Petroleum, which currently ranks as the 6th largest U.S. energy company.

Exxon has a much larger global production base. The company produced an average of 3.8 million barrels of oil equivalent per day (BOE/d) during the first quarter. For comparison, Occidental Petroleum produced 1.2 million BOE/d during the period. 

However, oil and gas production is only part of Exxon’s story. The company’s integrated operations also feature a large-scale downstream business of refining, chemicals, and marketing assets. Exxon’s downstream business is a big value driver. The company generated over $4 billion in energy products earnings during the first quarter to go along with nearly $6.5 billion of upstream production earnings. 

Occidental Petroleum isn’t nearly as integrated as Exxon. It has some midstream assets, including owning a stake in Western Midstream (WES -0.50%). It also has a chemicals business, OxyChem. However, they’re not big earnings drivers for the company. OxyChem produced $472 million of income in the first quarter, while the company’s midstream and marketing business only generated $2 million of income.

Add in its oil and gas earnings, and Occidental Petroleum’s total earnings were only $1.1 billion in the first quarter. Exxon’s profits were almost 10 times higher at $11.4 billion. 

What can Occidental Petroleum do to bridge the gap?

The quickest path for Occidental to join Exxon as a mega-cap oil stock is to continue making needle-moving acquisitions like Anadarko Petroleum. It could pursue a merger of equals transaction with a rival like Pioneer Natural Resources (PXD -2.39%), which would boost its market cap up into the triple digits. However, it would have competition since Exxon has already set its sights on acquiring Pioneer to beef up its presence in the Permian Basin.

If it wanted to become more like Exxon, the company could seek to build a more integrated platform by acquiring a refiner like Phillips 66 or Marathon Petroleum. Both refiners used to be part of an integrated oil company (ConocoPhillips and Marathon Oil , respectively).

However, those formerly integrated oil companies spun off their refining and midstream assets over a decade ago so that each company had the freedom to independently pursue growth opportunities.

While Occidental may eventually pursue another needle-moving acquisition, its main focus is organically growing its oil and gas production and carbon capture and storage (CCS) platform. CCS could be a major growth driver. Occidental estimates CCS could eventually become a $3 trillion-$5 trillion global market. The company believes that one day it could generate as much earnings from CCS as it currently makes from producing oil and gas. 

The company is investing heavily to build out its CCS capabilities. Occidental is spending more than $1 billion to build the first of what it hopes will be many direct air capture plants to pull carbon dioxide out of the air. It’s also working to develop sequestration hubs. 

However, Occidental isn’t alone in seeking to capture the CCS opportunity. Exxon is also working to capitalize on what it believes will be a multibillion-dollar revenue opportunity for the company. Exxon thinks CCS could eventually supply it with steadier revenue to help offset some of the volatility of its oil and gas business.

Occidental Petroleum has a long way to grow

Occidental has shown it wants to become a big oil company by wrestling Anadarko away from Chevron a few years ago.

However, to become the next Exxon, it would either need to become more integrated by acquiring a refiner or show it can go toe-to-toe with Exxon in capturing the emerging CCS opportunity. While Occidental could eventually boast an Exxon-sized market cap, it has a long way to grow to catch up to that oil behemoth.

The Motley Fool by Matthew DiLallo, May 23, 2023

The Hong Kong liquefied natural gas or LNG project, whose trial operations started on Sunday, is expected to significantly optimize the energy structure of the Guangdong-Hong Kong-Macao Greater Bay Area while ensuring domestic energy security, industry experts said on Monday.

The LNG project, which includes a dual-berth offshore LNG receiving terminal, an onshore LNG receiving terminal and two submarine pipelines, is the largest offshore energy infrastructure construction project in recent years in Hong Kong, according to its operator China Offshore Oil Engineering Co Ltd or COOEC.

The core of the LNG project, the receiving terminal is the world’s first offshore all-steel double-berth structure, said COOEC, a listed company controlled by China National Offshore Oil Corp or CNOOC.

It is capable of accommodating two of the world’s largest FSRUs — floating storage and regasification units — or LNG transport ships for berthing and operation at the same time, COOEC said.

According to Liu Zhigang, deputy director of the COOEC Hong Kong Offshore LNG Terminal EPC project, the designed service life of the terminal is 50 years, more than twice that of conventional offshore LNG receiving terminals.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said CNOOC has, in recent years, formed a complete LNG engineering construction capability, ranging from liquefaction to regasification onshore and offshore. Its assets and capabilities now rank among the world’s top modular, super large LNG storage tanks and LNG receiving terminal construction expertise.

“The company has been strengthening the key core technology research and development of clean energy engineering over the years, which has in turn promoted China’s energy structure transformation and the realization of the dual-carbon goals,” Lin said.

The operation of the Hong Kong LNG project will provide stable and clean power generation fuel to Hong Kong via submarine pipelines and substantially increase the proportion of clean energy generation in the Hong Kong Special Administrative Region, he said.

Oil and gas production of CNOOC reached a record high of 120 million metric tons of oil equivalent last year, with domestic crude oil and natural gas production up by 3.39 million tons and 2.7 billion cubic meters year-on-year, respectively. The increase in crude oil production accounted for over 60 percent of the country’s total increase, it said.

CNOOC imported 26.69 million tons of LNG last year. Overseas oil and gas production rose to 46.24 million tons of oil equivalent so far in 2023 as the company continuously strengthens international energy cooperation while optimizing asset layout in countries and regions participating in the Belt and Road Initiative, it said.

CHINADAILY by Zheng Xin, May 23, 2023