Daily Digest: March 13th, 2020

US NOBLE CUTS SPENDING AFTER PRICE COLLAPSE

Texas-based Noble Energy has slashed planned spending for this year by $550mn, it said on March 12, in order to protect its returns, cash flow and balance sheet following the steep fall in oil prices.

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The Big Picture:

• Fellow Texan producer Apache also reduced its capital investment plan on March 12, from $1.6-1.9bn to $1.0-1.2bn. So too did US firm Murphy Oil, by $500mn to around $950mn.

• Some 80% of the capex reduction will be made at its US onshore business.

• The company noted it was moving ahead with its Alen gas monetisation project in Equatorial Guinea, on track for first production in early 2021, and would complete pipeline expansion work in Israel. The Noble-operated Leviathan field off Israel came on stream in January.

MURPHY CUTS 2020 CAPEX BY 35%

New York-listed Murphy Oil Corporation March 12 said it has cut its capital spending plans by 35% for 2020 given current market conditions and recent commodity price volatility.

The Big Picture:

• Murphy operates oil and gas projects in North America, South America, Australia, southeast Asia, and Mexico.

• The company said it plans to delay certain US Gulf of Mexico projects and development wells; postpone spud timing of two operated exploration wells; release operated rigs and frac crews in the Eagle Ford Shale, with no operated activity planned for the second half of 2020; and defer well completions in the Tupper Montney.

IOG TO PRESS ON WITH UK PROJECT DESPITE WEAK MARKET

London-listed Independent Oil and Gas (IOG) is moving ahead with the development of the Southwark, Blythe and Elgood fields in the southern North Sea despite "highly volatile market conditions," it said.

The Big Picture:

• IOG took a final investment decision in October last year on the first phase of its core project, which is scheduled to flow its first gas in July 2021.

• IOG is yet to sanction the second phase of the core project, which will involve the development of the Goddard, Nailsworth and Elland fields.

HUSKY CUTS 2020 UPSTREAM SPENDING BY 33%

Canada’s Husky Energy March 12 said its 2020 capital programme had been reduced by C$900mn (US$650mn), which represents a 33% cut in upstream spending as part of “a series of actions to fortify its business in response to challenging global market conditions.” Its upstream spending guidance now stands at C$1.75 – 1.9bn. 

The Big Picture:

• In the Asia-Pacific region, Husky has deferred the development of the Block 15/33 oilfield offshore China by a year. In Indonesia, development of the MDA-MBH natural gas field has been deferred.

• The Liuhua 29-1 field at the Liwan gas project is being advanced as planned, with first production expected by the end of 2020, the company said.

• Investment in resource plays and conventional heavy oil projects in Western Canada has been halted, with a focus on optimising existing production and lowering costs, Husky said. 

AIR PRODUCTS PICKED FOR MOZAMBIQUE LNG EQUIPMENT

Air Products has been selected to provide its proprietary LNG technology, equipment and related process licence and advisory services for the Total-operated Mozambique LNG export plant, it said in a statement.

The Big Picture:

• Mozambique LNG is designed to produce 13mn mt/yr of LNG, using gas from the Golfinho and Atum gas fields in the offshore Rovuma basin. The $20bn project is due on stream by 2024.

• Total operates Mozambique LNG with a 26.5% stake, while its partners are Japan’s Mitsui E&P (20%), India’s ONGC Videsh (10%) and BPRL Ventures Mozambique (10%), local players state-owned ENH Rovuma (15%) and Beas Rovuma Energy Mozambique (10%) and Thailand’s PTTEP (8.5%).

 FORTUM RELAXED ABOUT UNIPER'S GREEN DRIVE

Finnish state utility Fortum has welcomed Uniper’s strategy update, saying it "provides a good starting point for the strategy alignment and development of a joint vision for Fortum and Uniper."

The Big Picture:

• Fortum expects to take control of the German energy company in a matter of weeks. 

• It said [Uniper's] Russian business, where it has five plants totalling 11 GW of coal, lignite and gas power generating capacity, needed to do more work on decarbonising. 

• Fortum said it shares Uniper’s view on the importance of natural gas as an enabler for coal closures and thereby emission reductions while maintaining security of supply.