Industry news

Equinor to divest Bahamas oil terminal to Liwathon

22 February | Investment

Norwegian oil and gas producer Equinor has agreed to divest its South Riding Point oil terminal in the Bahamas to Estonian logistics and investment company Liwathon Group.

Located at the Grand Bahama Island, the South Riding Point oil terminal was purchased by Equinor in 2009 to trade oil primarily originating from the American markets. The facility has terminals with a total storage capacity of 6.8 million barrels.

Liwathon currently operates four oil liquid terminals in Estonia, with a total storage capacity of over one million cubic metres. Upon completion of the deal, Liwathon will assume the responsibilities for the South Riding Point terminal’s employees.

Equinor and Shell Offshore recently started production at the Vito deepwater platform in the US Gulf of Mexico. The Vito four-column, semi-submersible host facility is expected to have a peak production capacity of 100,000 barrels of oil equivalent per day. It comprises eight subsea wells, gas lifts, and associated subsea flowlines and equipment.

Equinor crude, products and liquids senior vice-president Alex Grant said: “Since we bought the South Riding Point terminal in 2009, the flow in the oil market in North America has changed significantly for Equinor and the company has increasingly sold crude to other regions globally."

Main image: Oil tanker. Credit: Mike Mareen via Shutterstock

21 February | Exploration

Greece conducts 2D seismic surveys for two offshore gas blocks

Greece has completed two-dimensional seismic surveys for two blocks off the island of Crete, reported Reuters, citing a state-owned energy resources company.

The work forms part of the country’s efforts to identify potential gas reserves and boost domestic production. Following the Russia-Ukraine conflict in 2022, Greece has accelerated its exploration plan at six onshore and offshore blocks this year to assess potential gas reserves.

Hellenic Hydrocarbons and Energy Resources Management Company (HEREMA) said that the 2D seismic surveys were carried out by processing company PGS offshore Crete on behalf of ExxonMobil and Greece’s biggest oil refiner, HelleniQ Energy.

ExxonMobil and HelleniQ Energy own 70% and 30% stakes, respectively, in the gas exploration rights of the two offshore blocks. The operators will now assess the 2D seismic survey data to enter the next exploration phase. The next stage of the HEREMA’s gas exploration plan involves the collection of more enhanced 3D seismic data to determine the need for test drilling by the operators.

The country, which earlier produced crude oil in small quantities, attempted to undertake hydrocarbon exploration work. However, the exploration plans were stalled due to low crude prices in previous years. This forced the country to shift its focus towards green energy.

Greece Energy Minister Kostas Skrekas said: “Our goal is to have the first exploration drilling within 2025. We need to discover if a new potential source of wealth exists.”

20 February | Results

India’s Russian oil imports surge to record high in January

India’s imports of Russian oil climbed to an all-time high of 1.4 million barrels per day (bpd) in January. This marks a 9.2% increase from December last year, keeping Moscow as the top oil seller to New Delhi.

Russian oil accounted for 27% of the five million bpd of crude oil imported by India last in January, data from trade sources via Reuters showed. Russia is followed by Iraq, Saudi Arabia, the United Arab Emirates and Canada as India’s top oil suppliers.

State-run oil refiners typically avoid maintenance shutdowns in December and January in efforts to meet their annual production targets for the first quarter. As a result, rises in oil imports in India frequently occur in December and January.

However, until February 2022, Russian oil was rarely bought by refiners in India due to high costs. In December 2021, India imported 36,522 bpd of crude oil from Russia, with its overall share of imports from Russian oil for the year totalling about 1%.

Since Russia’s invasion of Ukraine and the breakdown of trading between it and Europe, the country discounted its oil supply. After this, India, China, and other countries have significantly increased their buying of Russian crude oil, with India now standing as Russia’s key oil client.

India’s oil imports from Canada also rose significantly last month, hitting 314,000bpd at its peak. Iraqi oil imports climbed to a seven-month high of 983,000bpd, up 11% from December, the data showed.

“India’s oil imports from Russia would continue to rise this year, mainly because of discounts if there are no further stringent actions by the Western countries targeting Russian oil,” a source at an Indian refiner told Al Jazeera.

17 February | Projects

Wintershall Dea and Ineos secure carbon dioxide storage licence offshore Denmark

Germany’s Wintershall Dea and British firm Ineos have secured a carbon dioxide storage licence for Project Greensand in the Danish North Sea.

The licence has been awarded by the Danish Ministry of Climate, Energy and Utilities on the recommendation of the Danish Energy Agency (DEA). The two firms will each own 40% stakes in project while the remaining 20% stake will be held by the state-owned company Nordsøfonden.

Backed by around $30m (€26m) in public funding from the Danish government, Project Greensand will involve the storage of carbon dioxide in the Nini West field, a depleted oil reservoir, in the Danish North Sea.

Project Greensand aims to store up to 1.5 million tonnes of carbon dioxide per year by the end of 2025 and increase the figure to up to eight million tonnes annually by the end of 2030.

Wintershall Dea chief technology officer and board member Hugo Dijkgraaf said: “We are pleased with the trust that the Danish Energy Agency has placed in us and are glad that our project concept has convinced the authorities in Copenhagen.

“This licence enables us to launch the pilot injection phase of Project Greensand at the beginning of March and then to rapidly enter into commercial operation. With its CO₂ storage potential, Greensand will also become relevant to German emitters.”

17 February | Deals

Galp looking to offload stake in Mozambique offshore gas project

Portugal’s Galp Energia is planning to divest its 10% stake in the natural gas project in Mozambique’s Rovuma basin, Reuters reported, citing a report published by Negocios.

As a part of this plan, the Portuguese energy firm has hired the Bank of America to conduct the stake sale in the gas project, reported Negocios, citing an unidentified source linked to the sector. Other partners in the Rovuma LNG Project include Mozambique Rovuma Venture, holding operatorship stake of 70%; Mozambique’s National Hydrocarbons Company ENH, who owns a 10% interest; and Korea’s Kogas holds the remaining 10% stake.

The Mozambique Rovuma Venture comprises ExxonMobil (35.7%), Eni (35.7%) and the China National Petroleum Corporation (28.6%). The Rovuma LNG Project is located in the Area 4 block of the offshore Rovuma basin, in the northern Mozambique region of Cabo Delgado.

The sale forms part of Galp’s plan to shift its focus towards its main upstream business in Brazil, where it also operates renewable plants. Galp agreed to sell a 9% stake in block 14, a 4.5% stake in block 14-K, a 5% stake in block 32 and the CNE development project.

16 February | Investment

Germany’s Uniper to divest marine fuels refinery in UAE

German utility Uniper has agreed to divest a 100% stake in its oil refinery in the UAE to a consortium of Montfort and the private office of Sheikh Ahmed Dalmook Al Maktoum.

Financial terms of the deal have not been made public, however it is assumed that the consortium will acquire Uniper’s UAE-based crude oil processing and marine fuel trading business, named Uniper Energy DMCC. Uniper Energy DMCC operates a crude processing facility in the Port of Fujairah that produces and supplies IMO 2020 compliant low sulphur fuel oils to the Fujairah market.

The business sells more than 30 million barrels of low-sulphur fuel oil to the shipping industry annually. Subject to satisfaction of certain conditions precedent, the transaction is planned to be closed in the coming months.

The sale forms part of the remedies package required by the European Commission for approval of the bailout and subsequent nationalisation of Uniper that was agreed in 2022.

Maktoum was quoted by Reuters as saying: “We are delighted to enter into a strategic partnership with the Private Office to acquire a leading position in a sector that is central to our trading activity.

In brief

Iraq partners with UAE and Chinese firms to develop six oil and gas fields

Iraq has signed deals with two Chinese companies and UAE-based Crescent Petroleum for the development of six oil and gas fields.

The country aims to cut gas imports by improving domestic production to meet the needs of the power stations, reported Reuters. Crescent Petroleum signed three contracts with Iraq’s Ministry of Oil to develop oil and natural gas fields in the Basra and Diyala provinces in northeastern Baghdad.

Equatorial Guinea awards production sharing contracts for offshore blocks

The Equatorial Guinea Ministry of Mines and Hydrocarbons has awarded production sharing contracts for three offshore oil and gas blocks.

One of the PSCs has been awarded to Panoro Energy, and its partners Kosmos Energy, and state-owned GEPetrol for block EG-01. Panoro Energy operates block EG-01 with a 56% stake while Kosmos Energy and GEPetrol own 24% and 20% interests, respectively.

Capricorn terminates merger plan with NewMed Energy

British oil and gas producer Capricorn Energy has scrapped the plan to merge with Israeli gas group NewMed Energy after shareholders’ opposition.

Activist investor Palliser and some of the biggest shareholders of Capricorn had opposed the merger plan. The latest decision follows a strategic review of Capricorn launched by the new directors, who entirely replaced the company’s board, including its chief executive, as proposed by Palliser earlier this month.

Well-Safe Solutions partners with Apache to decommission wells in North Sea

Well-Safe Solutions has entered into a multi-year framework agreement with Apache Corporation to decommission wells in the North Sea.

The agreement forms part of Well-Safe Solutions’ Plug and Abandonment Club offering, which focuses on offering operational and cost efficiency to energy producers. The UK-based decommissioning specialist will deploy its Well-Safe Defender and Well-Safe Guardian to complete the job for the US energy producers.

15 February | Deals

Williams closes Southwest Gas’ MountainWest Pipelines business acquisition

Williams Companies has completed the acquisition of MountainWest Pipelines Holding from Southwest Gas Holdings for an enterprise value of $1.5bn.

The divestment is part of Southwest Gas’ plan to simplify its portfolio of businesses. The deal follows a months-long battle with activist investor Carl Icahn.

MountainWest business includes approximately 2,000 miles of interstate natural gas pipeline systems primarily located across Utah, Wyoming, and Colorado.

These pipeline systems have a transmission capacity of approximately eight billion cubic feet (bcf) per day. The natural gas transmission and storage business also owns 56bcf of total storage capacity, including the Clay basin underground storage reservoir.

Southwest Gas plans to use proceeds from the sale to repay its term loan of nearly $1.07bn. The company also plans to completely spin off its owned subsidiary Centuri Group to create a new, independent, publicly traded utility infrastructure services company during Q4 2023 or Q1 2024.

With the acquisition, Williams intends to expand its infrastructure network and strengthen its FERC-regulated natural gas transmission and storage business.

Southwest Gas president and CEO Karen S Haller said: “This is a significant step toward returning Southwest Gas to its core regulated utility business of providing reliable, sustainable, and affordable energy to meet the expectations of customers and communities while continuing to maximise its growth potential.

“We look forward to continuing to enhance our focus as we move forward with the planned spin-off of Centuri to create two focused industry leaders.”

14 February | Projects

Santos gains regulatory approval for Dorado project in Western Australia

Santos has secured approval from the National Offshore Petroleum Safety and Environmental Management Authority for its Dorado oil and gas development project in Western Australia.

The approval allows Santos to undertake the first phase of the Dorado liquids and gas development project in the Bedout Sub-basin, located in Commonwealth waters, approximately 140km offshore Port Hedland.

The initial phase of the project involves liquids development, with gas re-injection enhance resource recovery, while the second phase will see gas recovery and supply via a pipeline to the Western Australian domestic and liquefied natural gas (LNG) markets.

As per the estimates, the Dorado and Pavo fields hold gross 2C contingent resources of 189 million barrels of liquids and 401 petajoules of gas.

The Dorado project is expected to have liquid handling rates of 100,000 standard barrels per day and a gas reinjection capacity of 235 million standard cubic feet per day over a period of 20 years.

Santos owns an 80% stake in the Dorado project and a 70% interest in the Pavo field. The remaining stakes in the project are owned by Carnarvon Energy.

Santos managing director and CEO Kevin Gallagher said the Dorado development opportunity is further enhanced by the recent discovery at the adjacent Pavo field.

Gallagher added: “Our focus now is to finalise the concept for an integrated liquids and gas development and obtain the remaining approvals required to support a final investment decision.

“Dorado will provide a welcome boost to Australia’s energy security while the potential subsequent gas development provides a future source of supply for Western Australia’s domestic market and LNG projects.”

In brief