Brazil oil regulator announces details on October deepwater oil auction
Brazil’s oil regulator ANP on Monday announced details of the 16th-round auction of oil areas under the concession regime, stipulating a higher bonus amount for the CM-541 block in the Campos Basin, which surpasses 1 billion reais ($259 million). According to an ANP statement, the round must take place on Oct. 10, with the signing of the agreements in February 2020. There will be public consultation of the rules until April 9 and public hearing the next day in Rio de Janeiro. Registration for the tender ends on Aug. 20. The ANP added that a total of 29,300 square kilometers will be offered in the round, which will have 36 different blocks from the Campos, Jacuipe, Camamu-Almada, Pernambuco-Paraiba and Santos basins.
Saudi Aramco building global gas business to cut carbon footprint
Saudi Aramco, the world’s biggest oil producer, was building an international gas business and converting more crude oil into chemicals in a bid to lessen its carbon footprint, Chief Executive Amin Nasser said on Tuesday. Aramco is building “an energy bridge” between Saudi Arabia and China to meet the Asian energy consumer’s increasing need for oil and gas as well as for chemicals and liquefied natural gas (LNG), according to a copy of Nasser’s speech at an industry event in Beijing. “We need to help our stakeholders – including here in China and the wider Asia region – realise that oil and gas will remain vital to world energy for decades to come,” he said. “We need to reassure them with our own long-term investments that the safety belt we have always provided is one they can continue to rely on.” Aramco’s gas expansion strategy needs $150 billion of investment over the next decade as the company plans to increase output and later become a gas exporter, Nasser had said in November. The state-owned company is pushing ahead with its conventional and unconventional gas exploration and production program to feed its fast-growing industries, freeing up more crude oil to export or turn into chemicals. Nasser said that the carbon footprint of Saudi oil is among the lowest in the world, and has the lowest greenhouse gas intensity of any supplier of crude oil to China. Aramco is a major investor in China’s energy sector. In February, Aramco inked a deal with Chinese defence conglomerate Norinco to develop a $10 billion refining and petrochemical complex and another agreement to buy a stake in Zhejiang Petrochemical. Saudi Arabia was China’s biggest crude oil supplier in February, data from the general administration of Chinese customs showed on Monday, reclaiming the crown from Russia after ranking no. 2 in January.
Regulator drops plan to force LNG terminals to reserve share for common use
The downstream regulator has scrapped its plan to force LNG terminals to reserve a share of their capacity for common use after industry opposed the move arguing the proposal was premature and would hurt local gas demand. In March 2018, the Petroleum and Natural Gas Regulatory Board (PNGRB) had published a draft regulation for LNG terminals in the country, requiring them to register with the board, follow certain safety standards and, most contentiously, offer some common carrier capacity. The draft mandated an LNG terminal to “offer at all times, after registration, 20 per cent of its short term (less than five years contract) uncommitted regasification capacity or 0.5 million metric tonnes per annum (MMTPA), whichever is higher, as common carrier capacity.” Uncommitted capacity means the part which is net of the entity’s own and contractual requirement. “We will bring regulation only to the extent of registration and safety,” PNGRB chairman DK Sarraf told ET, adding the proposal on common carrier capacity has been dropped. “We would like to support LNG terminals by keeping them away from regulatory burdens until they are fully established and their capacity utilisation goes beyond a level where some regulation becomes necessary to protect consumer interest,” he said. Regulator drops plan to force LNG terminals to reserve share for common use The draft provoked strong reaction from industry players, who felt proposed rules could upset the economics of LNG terminals as they may have to make additional investment for the capacity that will have to be reserved for common use. This would mean either longer payback period or higher toll for customers that could hurt demand for gas. “Industry told us that they respected the consumer protection intent of the regulator but it was unnecessary at this point in time,” Sarraf said. “They said so many new terminals were coming up that there will be a lot of capacity in the country, and utilisation will be low for a long time. Therefore, capacity will anyway be available to every customer. But a new regulation will place unnecessary financial burden on LNG terminals, they said.” India has added about 10 million tonnes a year LNG regasification capacity in the past six months to about 37 million tonnes now. This is expected to rise to 50 million tonnes a year by 2022. The capacity explosion and the government’s aim to push up gas usage in India’s primary energy mix to 15 per cent from 6 per cent had triggered temptation to regulate LNG terminals.