Canada’s Oil And Gas Industry Expects Upstream Investment To Surge This Year
The Canadian oil and gas industry could see investments topping pre-pandemic levels at some C$40 billion, or $29.36 billion, the Canadian Association of Petroleum Producers said. The sum also represents an 11% increase over 2022 investment levels, equal to C$4 billion. “The year 2023 may be one of the most pivotal moments in time for Canada’s oil and natural gas industry. With an emerging liquefied natural gas export industry, the expected completion of the Trans Mountain pipeline expansion, and billions of dollars in emissions reduction investments waiting to be unlocked, Canada is positioned to play a much larger role in providing responsibly produced energy resources to the world,” CAPP president and chief executive Lisa Baiton said. Canada’s oil and gas industry has been plagued by problems such as excessive red tape and the tightening government grip around emissions from oil and gas production. Yet demand for both oil and gas globally has helped it tackle these and, as suggested by the expected investment, will cause the industry to grow. Alberta, Canada’s top oil-producing province, recently announced plans to expand its reach into new markets by building what it calls economic corridors to the coasts of Canada and Alaska as a way of circumventing regulatory restrictions on new pipelines. Meanwhile, the country’s largest natural gas producer, Tourmaline Oil Corp., is sending its natural gas to the U.S. Gulf Coast, where it gets liquefied and sent to international markets. That’s because there are still zero LNG facilities in Canada and the only one that authorities have approved is currently under construction. The government, meanwhile, has signaled it does not share CAPP’s belief that Canada has a future as an LNG exporter. According to CAPP, the industry is also investing in emission reduction, not without a solid push from the federal government. Last year, Canadian oil and gas producers spent C$1.4 billion on research and development in that area and by 2025 the annual investment is seen rising to over C$2 billion.
State Department Says India Is Buying Russian Crude Below Price Cap
India is buying Russian crude oil at a deep discount to a price cap set by the G7 and the European Union, State Department officials told U.S. media this week. The topic of Russian oil imports is under constant discussion between Washington and New Delhi, the officials said, according to Bloomberg, but for now the former is happy that the latter is buying Russian crude at below $60 per barrel. Russia became India’s largest single supplier of crude oil last year as the Western sanction barrage against Moscow prompted the latter to find new markets. Ever since the G7 and the EU decided to try and squeeze Russian oil exports in a bid to reduce revenues India and China have become the biggest buyers of discounted Russian crude. The two heavily import-dependent countries aren’t abiding by the G7 price cap—they seek opportunistic purchases of cheap crude. The West believes that the price cap is benefiting the two large Asian oil importers with bargaining power to negotiate steep discounts from Russia, with traders covering shipping costs. The U.S. and the EU consider the increased leverage of China and India in driving a hard bargain for Russian oil as a success of the price cap policy. However, recent research has suggested that Russia is actually selling its crude at prices above the cap set by the G7 and the EU. Bloomberg reported last month that in the first month after the embargo, Russian oil sold abroad for an average of $74 per barrel, according to calculations made by academics from the Institute of International Finance, Columbia University, and the University of California. India’s imports of Russian crude hit a record in January, at 1.4 million bpd, only to break it next month, when imports rose to 1.85 million bpd, according to tanker tracking data.
Energy-Related CO2 Emissions Hit Record High In 2022
Global energy-related carbon dioxide emissions increased by 0.9% to reach a new record high in 2022, although the pace of growth was lower than feared, the International Energy Agency (IEA) said in a new report on Thursday. Despite the coal-to-gas switching amid the energy crisis and soaring natural gas prices, the increase in CO2 emissions was lower than initially feared, thanks to the rise in deployment of clean energy technologies and industrial production curtailment, particularly in China and Europe, the IEA said in the CO2 Emissions in 2022 report. “The rise in emissions was significantly slower than global economic growth of 3.2%, signalling a return to a decade-long trend that was interrupted in 2021 by the rapid and emissions-intensive economic rebound from the Covid crisis,” the IEA said. Last month, the IEA said that an expected surge in renewables electricity generation over the next few years signals that the world is close to the tipping point of emissions in the power sector. In 2022, “The impacts of the energy crisis didn’t result in the major increase in global emissions that was initially feared – and this is thanks to the outstanding growth of renewables, EVs, heat pumps and energy efficient technologies. Without clean energy, the growth in CO2 emissions would have been nearly three times as high,” IEA Executive Director Fatih Birol said, commenting on today’s report. China’s emissions were flat last year, dropping by 0.2% from 2021, due to weaker economic growth and the Covid-related restrictions. Europe saw a 2.5% decline in CO2 emissions, due to mild winter weather that resulted in lower emissions from the buildings sector, the IEA said. Conversely, the buildings sector, due to extreme temperatures, drove a 0.8% growth in U.S. emissions, the agency added. The IEA called on fossil fuel companies “to take their share of responsibility” to lower emissions. “While rising emissions from fossil fuels undermine efforts to meet the world’s climate goals, many fossil fuel companies made record profits in 2022,” the IEA’s Birol said. “Given their public pledges, it’s vital that they review their strategies to ensure they’re aligned with real emissions reductions.”
High prices squeeze gas demand by 6% in 2022: IEA
India’s gas consumption is estimated to have declined 6% in 2022 as record prices in the aftermath of the Russia-Ukraine conflict squeezed demand, the International Energy Agency said Lower gas demand combined with a 3% rise in domestic gas production saw LNG (liquefied natural gas) imports drop 17%, marking the steepest fall on record and the first decline covering two consecutive years in India’s two-decade history as an LNG importer, IEA said in its latest gas market report Consumption in the petrochemicals sector saw the sharpest year-on-year fall at 32%, followed by the refining sector that saw a drop of 30% and power generation 24%. The report said city gas (CNG and PNG) demand was broadly flat. Consumption in the fertiliser segment and other end-uses, including agriculture, upstream operations and other industries, saw modest expansion.
India’s LPG imports rise on year in February: Vortexa
India’s LPG imports rose on the year in February, with shipments mostly from the Middle East, according to data from oil analytics firm Vortexa. The rise was likely driven by higher domestic use of the cooking fuel compared with a year earlier when Covid-19 weighed on demand. Imports totalled 2.07mn t in February, up by 25pc from a year earlier when India was battling the Omicron variant. This pushed down cylinder refill rates among low-income consumers, especially those that were left in a worse financial position as a result of Covid-19. The UAE was the top Middle East supplier to India in February, with deliveries of 602,100t, up by 26pc on the year, followed by shipments from Qatar and Kuwait that rose by 35pc and 20pc to 580,400t and 199,500t respectively. But shipments from Saudi Arabia fell by 20pc on the year to 381,200t. The Middle East is India’s main LPG supplier. Deliveries from the region accounted for 88pc of India’s total imports during the month, stable from a year earlier. The US was India’s second-biggest supplier in February, although imports fell by 33pc on the year to 92,700t. India took the lowest volumes of February LPG from Malaysia, China and Taiwan at 10,900t, 5000t and 2,800t respectively. But India’s total February imports fell by 5pc on the month following a sharp rise in state-controlled Saudi Aramco’s contract price (CP) last month. Aramco’s February propane CP rose to a nine-month high of $790/t, while its butane CP was $185/t higher from January at $790/t, which rendered the propane-butane CP spread at parity. If this trend is followed in March, imports are likely to rise as Aramco has cut its March propane and butane CPs. India’s LPG demand could come under pressure this year as the government has removed LPG subsidies for low-income households in its budget for the 2023-24 fiscal year starting in April. Consumers under the government’s Pradhan Mantri Ujjwala Yojana (PMUY) subsidy scheme may switch back to harmful solid cooking fuels if they are unable to afford higher LPG prices. Indian oil marketing companies raised the price of domestic LPG cylinders on 1 March after holding them steady in the past seven months, while commercial cylinder prices were lifted by Rs350, continuing their uptrend since January.