Norway’s offshore production beats July forecast, still down for the year

Category : News

8/16/2019

OSLO – The Norwegian Petroleum Directorate’s preliminary production figures for July 2019 show an average daily production of 1,799,000 bbl oil, NGL and condensate, which is an increase of 402,000 bpd compared to June. Total gas sales were 9.5 billion Sm3 (GSm3), which is an increase of 0.1 GSm3 from the previous month.

Norwegian oil production 2019. Source: Norwegian Petroleum Directorate

Norwegian oil production 2019. Source: Norwegian Petroleum Directorate

Average daily liquids production in July was: 1,447,000 barrels of oil, 326,000 barrels of NGL and 25,000 barrels of condensate. Oil production in July is 2% higher than the NPD’s forecast, and 2.8% below the forecast so far this year.

The total petroleum production for the first seven months in 2019 is about 127.8 million Sm3 oil equivalents (MSm3 o.e.), broken down as follows: about 45.1 MSm3 o.e. of oil, about 11,8 MSm3 o.e. of NGL and condensate and about 70.9 MSm3 o.e. of gas for sale. The total volume is 7.0 MSm3 o.e. lower than in 2018.


China’s biggest energy company shuns Venezuela oil on tighter U.S. sanctions

Category : News

By Lucia Kassai on 8/16/2019

HOUSTON (Bloomberg) – China’s biggest energy company is backing away from direct purchases of Venezuelan crude as the Trump administration tightens sanctions against the South American nation.

China National Petroleum Corp. has canceled plans to load about 5 MMbbl of Venezuelan oil onto ships this month in the aftermath of the latest executive order by President Donald Trump, according to people with knowledge of the situation who asked not to be identified discussing proprietary information. The move could pose a setback for Venezuela President Nicolas Maduro, who has been counting on both China and Russia to keep the country going amid a humanitarian crisis, food shortages and hyperinflation.

A significant share of Venezuela’s crude exports go to China

China became the top destination for Venezuelan crude after U.S. sanctions against state-owned Petroleos de Venezuela SA were announced at the end of January. Venezuela may run low on options without the help of CNPC to load its oil, a main source of revenue that bankrolls the Maduro regime. The three August-loading cargoes canceled by CNPC’s subsidiary PetroChina Co. Ltd. haven’t so far attracted another buyer, according to reports seen by Bloomberg.

PetroChina’s press office declined to comment on market speculation, citing company policy.

On Aug. 5, Trump signed an executive order authorizing sanctions on anyone who provides support to Maduro. Opposition leader Juan Guaido, recognized by the Trump administration as the country’s leader, is backed by more than 50 countries.

PetroChina’s pullback doesn’t mean China will completely turn away from Venezuelan oil. Other companies can continue to supply China’s independent refiners known as teapots with the South American nation’s crude, according to people familiar with the matter.

China has been a staunch supporter of the Venezuelan government since its first oil-backed loan to the late president Hugo Chavez. The Asian nation has loaned $50 billion in the past decade in exchange for oil that Chinese refineries process into fuel. China, along with Russia, is one of 14 nations that support Maduro.

This will be the first time in more than a decade that PetroChina forgoes loadings of Venezuelan crude, according to data compiled by Bloomberg. China has imported 339,000 bpd of Venezuelan oil this year. Most of the barrels come via PetroChina, but in the wake of U.S. sanctions, Russia’s Rosneft Oil Co PJSC has stepped up to supply Venezuelan oil to the country’s independent refiners.


‘Back-loaded’ hurricane season in store for U.S. Gulf of Mexico

Category : News

By Brian K. Sullivan on 8/15/2019

BOSTON (Bloomberg) – Don’t be lulled by a quiet June and July, the real Atlantic hurricane season is about to kick off.

The hurricane season generally runs from June 1 to the end of November. But the next six weeks — “the season within a season” — is regularly the most dangerous and active time for storms to develop in the Atlantic, said Dennis Feltgen, spokesman for the National Hurricane Center in Miami.

Only two named storms have developed in the Atlantic so far this summer. Dry, dusty air from Africa’s Sahara robbed potential storms of moisture, and wind shear spurred by the El Nino climate systems ripped apart budding storms. Now, those brakes on hurricane development are gone.

The result: “A big change in the pattern over the Atlantic, going from a very lackluster quiet weather pattern to a much more active one,” said Dan Kottlowski, the lead hurricane forecaster at AccuWeather Inc. in State College, Pennsylvania. “We are thinking this season will be back-loaded.”

Last week, the U.S. National Weather Service forecast 10 to 17 named storms in the Atlantic. Last year, there were 15, including hurricanes Florence and Michael that killed a combined 96 people and caused more than $49 billion in damage. A storm is named when it reaches tropical storm strength, with maximum sustained winds of at least 74 miles per hour.

At risk is $17 trillion in U.S. real estate along the coasts, as well as some of America’s most valuable commodities. More than 45% of U.S. refining capacity and 51% of gas processing is along the Gulf of Mexico coastline. Florida is the world’s second-largest producer of orange juice after Brazil.

There are two other factors that could spur on storms in September, according to Bob Henson, a meteorologist with Weather Underground, an IBM business.

The first is the so-called Madden-Julian Oscillation, a ripple of rising and sinking air that swirls through the atmosphere about every 45 to 60 days that can spark typhoons and hurricanes when combined with other factors. It could affect the Atlantic in late August or September, Henson said.

The second is a fast-moving atmospheric system known as a “convectively-coupled kelvin wave” that’s affected by the earth’s rotation. When one runs into a tropical wave moving off Africa, it can give it a speedy boost to swirl into a hurricane or tropical storm. There is one now moving across the Pacific on its way to the Atlantic, Henson said.

Two Calm Weeks

All of this doesn’t mean the Atlantic will pop to life at high noon on August 20. The next two weeks should extend the streak of drifting doldrums across the basin, Henson said.

Once they do start rolling, though, look out. There is a deep pool of warm water tucked into the Gulf of Mexico, across the western Caribbean and along the U.S. Southeast coastline, according to Jim Rouiller, chief meteorologist at the Energy Weather Group outside Philadelphia. Any storm that reaches those areas could explode in power, he said.

“This is high-octane fuel that is all waiting in the wings for the first storm,” Rouiller said. “This is all untapped, and it will really intensify storms.”