Norway approves more than USD18 bn in oil, gas investments

MRC) -- Norway's government said on Wednesday it has given approval for oil companies to develop 19 oil and gas fields with investments exceeding 200 billion Norwegian crowns (USD18.51 bn), part of the country's strategy to extend production for decades to come, said Reuters.

Norway's parliament in 2020 introduced temporary tax incentives to encourage petroleum investment at a time of low activity, triggering a rush of applications from energy companies. Among the field developments receiving final approval on Wednesday were nine operated by Aker BP, three by Equinor and several by Wintershall Dea and OMV.

"These are projects that will contribute to a continued high and stable output from Norway's continental shelf as well as employment and value creation," Minister of Petroleum and Energy Terje Aasland told a news conference.

Norway's petroleum production is fiercely opposed by environmentalists and others concerned that carbon emissions from the burning of oil and gas contributes to climate change. The government says Norway's oil and gas resources are essential to Europe's energy security and will be needed for decades to come.

Norway last year overtook Russia as Europe's biggest gas supplier after Moscow cut supplies amid the war in Ukraine.

We remind, ORLEN Group's PGNiG Upstream Norway has bought interests in two fields on the Norwegian Continental Shelf. The deal is consistent with the Group's strategic goal of raising its own gas production volumes to improve Poland's energy independence and security. Under an agreement with Sval Energi AS, PGNiG Upstream Norway has purchased a 10% interest in licence PL211 CS, covering the Sabina and Adriana fields.

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Malaysia's state energy firm Petronas sees its domestic oil and gas production peaking at about 2 million barrels of oil equivalent per day (boepd) by 2024, as per Reuters.

About 60-70% of its production is natural gas and will remain so going forward, Adif Zulkifli, executive vice president & CEO upstream, said at the Energy Asia conference. "We continue to look for more gas portfolio, but of course, there is commitment in Malaysia, I think we need to continue to do some oil exploration to fill up our refineries," he added.

Petronas also aims to expand its overseas portfolio to 700,000 boepd by 2030 as it ramps up output from its Canada LNG joint venture, said Adif and Mohamed Firouz Asnan, senior vice president, Malaysia petroleum management, upstream business.

Mohamed Firouz said the 2 million boepd of domestic production is expected to be maintained until 2030. Petronas recorded an average production of 2.4 million boepd in 2022, including domestic and overseas output, it said in its fourth-quarter earnings announcement.

The company owns 25% of the 14 million metric tons per year LNG Canada project in Kitimat, British Columbia, led by Shell.

We remind, Petronas in collaboration with ASEAN energy operators, governmental agencies, and international organisations, launched the ASEAN Energy Sector Methane Leadership Program (MLP) and announced methane abatement flagship projects in collaboration with Japan Organization for Metals and Energy Security.

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ExxonMobil Catalysts and Licensing LLC and Axens have signed an exclusive licensing alliance agreement allowing Axens to include ExxonMobil’s MTBE Decomposition Technology for high purity isobutylene in its portfolio. Used in the production of high-reactivity polyisobutylene and butyl rubber, this technology enables Axens’ customers to better address the growing demand for petrochemical intermediates over the next decade, said Hydrocarbonprocessing.

Under the agreement, Axens is granted a worldwide right to market, license and provide engineering work and technical support for the design, construction and start-up of new MTBE Decomposition units. This alliance builds on collective expertise to provide customers with isobutylene purity of at least 99.99 wt% via an integrated unit with MTBE and MTBE Decomposition technologies or through a standalone unit using MTBE Decomposition technology.

Luc Wolff, Vice president Petrochemical product line at Axens, said “ExxonMobil MTBE Decomposition technology is a commercially proven, cost-effective, continuous fixed bed process that catalytically cracks MTBE into isobutylene and methanol. Adding this technology to Axens’ portfolio completes Axens’ offer and strengthens our long-term partnership with ExxonMobil Catalysts and Licensing LLC”.

“We are excited to expand our partnership with Axens and provide this proven technology to the industry. Our partnership with Axens in other technologies has demonstrated how well the two companies work together. It was consequently quite natural to propose this technology to Axens knowing their capability to deliver technology to the market.” said Louis Burns, Market Development Manager for ExxonMobil Corporation.

We remind, Kent, a leading engineering company in the energy and chemicals industries, has been appointed as the Front-End Engineering Design (FEED) contractor for potential expansion of ExxonMobil’s advanced recycling facilities.

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Russia's energy ministry said it sees no shortage of gasoline in the domestic market, with companies having cut their exports and increased production after gradually completing planned maintenance work, said Reuters.

The ministry also said some refineries have not yet completed repairs, and oil companies are following government recommendations to systematically reduce exports. As a result, in June, gasoline exports fell 30% from May. The ministry continues to recommend that companies adhere to the policy to curb exports.

"The situation on the Russian fuel market is under control," the ministry said in response to a Reuters query. "The energy ministry together with the Federal Antimonopoly Service regularly monitors the situation and holds meetings with oil companies."

In June, exchange wholesale prices for gasoline at the St. Petersburg International Commodity Exchange (SPIMEX) set records due to supply shortages and high seasonal demand. According to the ministry, as of the last week of June, the average daily production of gasoline in Russia was about 121,000 metric tons per day (1.01 million barrels per day), 3.1% higher than in June 2022.

Diesel fuel production at the end of June was 2% higher than in the same period last year, and stocks are at a historical high, the energy ministry added.

We remind, Turkey will again be the top destination for Russian diesel exports in June, while total shipments are set to rise after seasonal refinery maintenance, traders said and Refinitiv Eikon data showed. Russia's estimated offline primary oil refining capacity for June could total 4.029 million tons versus 4.95 million tons in May, Refinitiv data shows. Since the full EU embargo on Russian oil products took effect on Feb. 5, traders have diverted diesel export supplies from Russian ports to Africa, Asia and the Middle East instead of Europe, which was previously the main buyer.

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Motor fuel production from Mexico's state-owned oil company Pemex dipped last month, company data showed, falling short of ambitious government refining targets meant to wean the country off its long-standing dependence on foreign supplies, said Reuters.

The inability to significantly grow its gasoline and diesel volumes marks a fresh setback for President Andres Manuel Lopez Obrador, who over five years in office has prioritized domestic production, arguing that the country's energy sector must be self-sufficient.

In May, crude processing at Pemex's six domestic refineries fell 4% compared to the same month last year. During the month, the state-run facilities only processed about 759,000 barrels per day (bpd), or less than half their 1.6 million bpd capacity. The monthly figure was Pemex's lowest level of oil refining since last June, according to figures published Monday.

Pemex did not respond to a request for comment on the data. Most troubling, according to analysts, is the growing production of highly-contaminating fuel oil, which has seen Pemex's global market sharply reduced in recent years due to environmental concerns but is nonetheless burned to generate electricity at major local power plants.

At nearly 274,000 bpd, fuel oil volumes eclipsed gasoline and diesel output, which during the month reached about 262,000 bpd and 126,000 bpd, respectively. Lopez Obrador, a leftist resource nationalist, has said he wants Pemex to process at least 1 million bpd of crude oil, while slashing fuel imports mostly from U.S.-based refiners.

When he ran for president in 2018, he pledged to end the imports altogether by 2024, a goal seen by analysts as impossible to achieve in his final year in office. The company has blamed the previous administration for failing to upgrade the country's aging, local refineries. Half of them are unable to efficiently process Mexico's increasingly heavy crude oil output because they lack coking units that can squeeze more higher-value gasoline and diesel out of the heavy crude.

The government has pinned its hopes for a rebound on a seventh domestic refinery, the Olmeca facility, which when completed will be Pemex's biggest. Located just off the Gulf Coast port of Dos Bocas, Olmeca is billions of dollars over budget and has yet to produce its first gasoline.

Lopez Obrador also boosted Pemex's refining capacity by fully acquiring the Houston-based Deer Park refinery in 2021, but officials have acknowledged that most of its refined products are purchased by U.S. buyers rather than helping meet demand from Mexican motorists.

We remind, Pemex’s production of aromatics, ethane, propylene, and sulphur fell in the first quarter, year on year, but methane output rose strongly. The rise in production of methane and its derivatives helped overall petrochemicals production to remain mostly flat, with 319,000 tonnes produced during the first quarter, down by 0.62% year on year.

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