Natural Gas Daily: May 1st, 2020
Global Gas Demand to Fall 5%: IEA
Global gas demand in 2020 is expected to decline 5% yr/yr, the International Energy Agency said in its latest report.
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The Big Picture:
- This drop would be the first in annual consumption since the 2% drop in 2009, and the largest recorded year-on-year drop since natural gas demand developed at scale during the second half of the 20th century, the report says.
- Natural gas consumption is expected to fall in every sector and region in 2020, but most of the declines are in power generation, which expected to consume 7% less than 2019.
Norway Plans Tax Relief for Oil Industry
Norway's plans to ease the tax burden of oil and gas producers, to provide the sector with a "shot in the arm" and curb the decline in investment caused by low prices, its government said on April 30.
The Big Picture:
- The proposals are aimed at boosting investment by up to $9.7bn in 2020 and 2021, the government said.
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While the government is keen to support investment, it will also impose production cuts starting in June, to help prop up flagging oil prices, which will result in some field start-ups being delayed.
US February Output, Exports Rise
US gas production grew 5.2% yr/yr in February 2020 and its exports soared as the domestic demand drop also boosted the deliveries to the international markets.
The Big Picture:
- Despite growth in output, estimated gas demand in February declined 2.3% yr/yr.
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LNG continues to drive the exports boom. LNG exports in February 2020 more than doubled compared with February 2019.
Novatek to Cut 2020 Capex by up to 20%
Russia's Novatek will cut its capital expenditure plan for 2020 by up to fifth, its CFO Mark Gyetvay told investors in a conference call on April 30.
The Big Picture:
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The move comes after Novatek swung to a net loss in the first quarter because of the impact of the ruble's devaluation on its debts.
Chevron Bucks Peers with $1bn Earnings Improvement
US major Chevron said it had earnings of $3.6bn in Q1 2020, a $1bn improvement over the comparable period a year ago, which it attributed to gains from asset sales, favourable tax items and foreign exchange effects.
The Big Picture:
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In March, Chevron cut 2020 capital expenditure plans by 20%, to $16bn from $20bn; it has cut another $2bn from capex, and expects 2020 operating costs will decrease by $1bn.
- The company has also suspended share repurchases and completed additional asset sales, primarily in Azerbaijan and the Philippines.
Inventory impairments push ExxonMobil to Q1 Loss
Non-cash charges totalling nearly $2.9bn related to tumultuous global oil and gas markets in the midst of the Covid-19 pandemic and in the wake of the Saudi-Russia price war pushed US supermajor ExxonMobil to a $610mn loss in Q1 2020, the company reported.
The Big Picture:
- About half the total non-cash charges – about $1.53bn – were from ExxonMobil’s non-US downstream operations, and related primarily to inventory valuations and asset impairments under the company’s last-in/first-out inventory accounting practice.
