French Bank Pulls Funding for Two LNG Projects
French lender Credit Agricole has declared it will no longer finance the Rovuma LNG project in Mozambique and the Papua LNG project in Papua New Guinea. The bank cited its commitments to reduce exposure to the oil and gas industry as the basis for its decision, according to a Reuters report on the news. Rovuma LNG and Papua LNG are two of the largest liquefied natural gas projects in progress, with the companies involved including Exxon, TotalEnergies, Eni, and Australia’s Santos. Environmentalists welcomed the decision, commenting that it would be challenging for the energy companies to find an alternative bank to step in. Exxon, the leader on the Rovuma project was expected to make the final investment decision on the project next year but this could change now. TotalEnergies, which leads the Papua LNG project had also planned on making the FID on the venture next year. Credit Agricole is moving away from LNG just as demand forecasts for the superchilled fuel brighten, with Shell recently forecasting demand will surge by 50% in the next 16 years. Africa has abundant but underdeveloped gas resources that projects such as Rovuma and Papua were going to tap, helping the economies of Mozambique and Papua with a new and potentially huge revenue stream. Credit Agricole, however, announced last December it was going to stop funding new oil and gas ventures in line with its net-zero commitments. The bank also said it would triple the amount of money it invests in transition-related technologies. Plans are to boost its exposure to alternative sources of energy by 80% over this year and next, expanding it to $13.3 billion euro. “We need to massively invest in renewable energy and the energy sobriety in order to decarbonize the economy,” the bank’s chief executive Phillippe Brassac said at the time.
Russia Demands Oil Producers Slash Output for OPEC+
Russia’s government has ordered oil companies to lower their output in the second quarter so that the country can meet its OPEC+ production target of 9 million barrels per day (bpd) by the end of June. Previously, Russian Deputy Prime Minister Alexander Novak announced that Russia would cut oil output and exports by an extra 471,000 barrels per day (bpd) in the second quarter, in tandem with production cuts by other OPEC+ members. The country will then gradually ease the export cuts and focus on only reducing output. Although Novak is yet to provide the targeted level for output, Reuters has calculated that production would drop to almost 9 million bpd in June if the country proceeds with the planned production cut. Private sources not authorized to speak publicly have told Reuters that Moscow has given specific targets to each oil company, an indication of its commitment to keep its OPEC+ pledge in a bid to support international oil prices. Russian oil and gas condensate production fell from an annual peak of 11.7 million bpd in 2019 to around 10.8 million currently due to production cuts. The country has not disclosed production or export data ever since it started the war in Ukraine. Production has also suffered in the current year due to unplanned outages as well as drone attacks by Ukraine. Novak’s statement did not include a six-month ban on Russian gasoline exports that kicked in from March 1. Russian crude oil and fuel trade has been under Western sanctions ever since Russia launched the Ukraine war two years ago, while the United States has imposed more sanctions on Russia’s leading tanker group Sovcomflot. Bloomberg has, however, reported that Russia is experiencing a drilling boom despite concerted efforts by the U.S. and its allies to limit technology transfer. The withdrawal of major Western oil-service companies from Russia has left their local subsidiaries to fill their void, which they have so far done successfully. “Only some 15% of the nation’s domestic drilling market depends on technologies from so-called unfriendly nations,” Daria Melnik, vice-president for exploration and production at Rystad Energy, has revealed.
Russia Delivers Oil to North Korea in Defiance of UN Sanctions
Russia has supplied oil directly to North Korea this year as both regimes are openly defying UN sanctions on sales of petroleum to Pyongyang in response to its nuclear weapons tests, satellite images shared exclusively with the Financial Times have shown. North Korea has been under UN Security Council sanctions since 2017, but Russia is said to have supplied and smuggled oil to the country since then. In August 2018, The Asian Institute for Policy Studies said while most of the sanction-bypassing oil trade with North Korea is thought to be originating from China, oil sales from Russia to Kim Jong-Un’s regime may be much larger than official figures suggest, as shell companies have been set up for illicit oil flows to Pyongyang. With a suspected oil-for-weapons deal with North Korea, Russia appears to have boosted its oil deliveries to Kim Jong-Un in exchange for munitions and other military equipment from North Korea to use in its war in Ukraine. Now the satellite images, which UK think-tank Royal United Services Institute has shared with FT, have shown that in March alone, at least five tankers of North Korea have traveled to load petroleum products from the Vostochny Port, the biggest port in Russia’s Far East. These deliveries are the first documented direct seaborne shipments of oil from Russia to North Korea since the UN sanctions were imposed in 2017, FT notes. “These oil deliveries constitute a full-frontal assault against the sanctions regime, which is now on the brink of collapse,” Hugh Griffiths, a former coordinator of the UN panel monitoring North Korea sanctions, told the British newspaper. The Russian and North Korean regimes have grown closer in recent years and have been exchanging supplies to help each other. Last month, South Korea’s Defense Minister Shin Won-sik said that some factories in North Korea are working full-time to produce weapons for Russia in exchange for food and other supplies. “While North Korea’s arms factories operate at 30 percent capacity due to shortages of raw materials and power, certain factories are operating at full capacity, which primarily produce weapons and shells for Russia,” Shin said at the end of February, as carried by South Korean news agency Yonhap.
ONGC’s Bihar mission to strike oil & gas riches
Oil and Natural Gas Corp (ONGC) is set to drill a well in Bihar this year, aiming to uncover potential oil and gas reservoirs. This venture not only marks Bihar’s entry into India’s oil domain but also heralds exploration across the vast Ganga basin, spanning Bihar, Uttar Pradesh, and Punjab. Sushma Rawat, ONGC’s exploration director, revealed plans for drilling two exploratory wells after acquiring 3D seismic data for 300 sq km in Samastipur, Bihar. With an estimated cost of ₹300-350 million, the first drilling phase aims to pave the way for further exploration in the region. The success of this venture could revolutionize Bihar’s energy landscape and foster local industrial growth, propelling the state towards a brighter, more sustainable future.