Daily Digest: March 24th, 2020
Sweden's Lundin Delays Projects, Cuts Costs
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Sweden's Lundin Petroleum has delayed non-committed projects and aims to cut planned costs in 2020 by $170mn, according to a company statement on March 23.
The Big Picture:
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The company, which produces oil and gas off Norway, said it was looking to boost its liquidity because of the impact of the Covid-19 pandemic and low commodity prices on its business.
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Lundin achieved a near 45% growth in profits in the fourth quarter, on the back of the launch of the Equinor-operated Johan Sverdrup oil project in October.
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Chevron Cuts 20% From 2020 Capex
US major Chevron said it would cut “organic capital and exploratory spending” in 2020 to $16bn, a 20% reduction from its initial guidance of $20bn.
The Big Picture:
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Half the reduction, or $2bn, will occur in Chevron’s upstream unconventional operations, primarily in the Permian basin, while the balance will be spread across upstream projects and exploration ($700mn), upstream base businesses in the US and internationally ($500mn), and in downstream, chemicals and other sectors ($800mn).
UK Upstream Regulator Relaxes Rules
The UK upstream regulator Oil & Gas Authority (OGA) has re-prioritised its work in response to the difficulties that the Covid-19 virus has created, it said.
The Big Picture:
- It still expects to offer the 32nd Offshore Licensing Round awards in summer 2020 but it will be open to dialogue with applicants at the time of award, it said.
- It is also taking a pragmatic approach to compliance and said it would "take a flexible approach to considering amendments to licence timelines."
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Gazprom Neft Takes Steps to Monetise More Arctic Gas
Russian state oil company Gazprom Neft has reported that it had made progress in efforts to use more gas at its remote oilfields in the Arctic.
The Big Picture:
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It is converting its existing gas treatment facility at the site into a fully-fledged gas processing complex capable of handling 15bn m3/yr of gas. Designs for the complex were approved by state authorities in January.
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Supplies from the complex will be pumped into Russia’s national gas system via a 20.5bn m3/yr pipeline Gazprom Neft wants to construct across the Gulf of Ob.
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France's Engie Raises $2.5bn from Bonds
French energy firm Engie has issued a triple tranche senior bond worth €2.5bn ($2.7bn), it said.
The Big Picture:
- The issue brings the company's total outstanding green bonds to €11.5bn, making it the largest corporate issuer of green bonds.
- It significantly oversubscribed, Engie said, with the total order book exceeding €9.5bn.
Sale of Greek Gas Supplier Attracts 9 Bids
Greece's state privatisation fund Taiped has collected nine, non-binding bids for a 65% stake in the country's main gas supplier Depa Commercial, the agency said on March 23.
The Big Picture:
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The remaining 35% interest in Depa Commercial is held by Hellenic Petroleum, Greece's biggest refiner.
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The fund is also preparing to privatise Depa Infrastructure, the country's main gas distribution firm. It has also secured nine EoIs for that company.
Gas Output at Key Chinese Field up 7.5% in Winter
Natural gas output at China's Changqing oilfield rose by 7.5% yr/yr to 15.54bn m3 in the winter season spanning from November 15 to March 15, the project's operator CNPC said in a statement.
The Big Picture:
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The Changqing oilfield, one of China’s biggest, is located in the country's northern Ordos basin. It supplies gas to cities including Beijing, Tianjin and Hebei.
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Last month, CNPC reported that the oilfield’s average daily natural gas production hit an all-time high.
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Work Fully Resumes at Sinopec's Fuling Field
Sinopec has fully resumed work at its Fuling shale gas field in China’s Sichuan basin, the company said in a statement. The work had stopped owing to coronavirus (Covid-19) outbreak.
The Big Picture:
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Fuling was the first shale gas project in China to achieve commercial production in 2015.
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A total of four shale fields have been discovered in the Sichuan basin in recent years: Fuling, Weiyuan, Changning and Weirong.
Japan's MOL to Book Extraordinary Loss of $146mn
Japanese shipping firm Mitsui OSK Line (MOL) said it expects to record an extraordinary loss of $146mn on the consolidated basis for the 12-months ending March 31 on account of losses at its subsidiaries.
The Big Picture:
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Tokyo-based MOL is one of the largest shipping companies in the world. Its fleet includes dry cargo ships, LNG carriers, tankers, container ships, and container terminals.
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On the charter-out contracts of containerships to its subsidiary Ocean Network Express, MOL said it expects to record a loss of $75mn related to business restructuring for the 12-months that ended in March 2018.
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Canada’s Suncor Cuts $1.5bn from 2020 Capex
Canadian integrated producer Suncor said it would cut C$1.5bn (US$1.03bn) from its 2020 capital expenditures budget, bringing it to between C$3.9bn and C$4.5bn.
The Big Picture:
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Suncor operates largely in Canada’s unconventional oil sands sector and in refining and marketing under the Petro-Canada retail banner.
