Tag: Brent Crude

U.S. pipeline operator ONEOK said on Wednesday that it struck two deals worth $5.9 billion with infrastructure investor GIP to boost its presence in the Permian Basin as well as mid-continent, North Texas and Louisiana regions.

In the first, ONEOK will buy GIP’s 43% stake in EnLink Midstream for $14.90 per unit and GIP’s full interest in EnLink’s managing member for a total of about $3.3 billion in cash.

The price per unit is a 12.8% premium to EnLink’s closing market price on Aug. 27.

In the second deal, ONEOK will buy GIP’s equity interests in Medallion Midstream, a crude gathering and transportation system in the Permian’s Midland Basin, for $2.6 billion in cash.

“We are particularly excited to meaningfully increase our company’s presence in the Permian Basin, which is expected to continue driving the majority of U.S. oil and gas growth,” ONEOK CEO Pierce Norton II said.

The deals, coming a year after ONEOK bought rival Magellan Midstream Partners for $18.8 billion, will boost the Tulsa, Oklahoma-based company amid plunging U.S. natural gas prices due to mild weather and high storage levels. Higher volumes helped bolster its profit in the latest quarter.

ONEOK said it expects the two deals to immediately add to its earnings and free cash flow, bolstering its ability to execute its planned $2 billion share repurchase program.

The company also expects synergies between $250 million and $450 million over the next three years as a result of these acquisitions, it said in a statement.

ONEOK has secured financing commitments worth up to $6 billion from JPMorgan Chase and Goldman Sachs to fund the deals, which it expects to close early in the fourth quarter.

By: Reuters, August 29, 2024.

Trafigura Group could switch more of its crude-oil tankers to carry refined products if sluggish market conditions persist.

About 12% of Trafigura’s fleet of very-large crude carriers (VLCCs) and 20% of its Suezmaxes can carry those fuels on top of shipping denser crude, the trading house’s global head of wet freight, Andrea Olivi, said in an interview. “From what we see in the market today, I would expect this number to potentially increase,” he said.

The conversion, which began in recent months, was prompted by low crude-oil tanker rates amid weaker oil demand from China, Olivi said. He added that production cuts from the Organization of the Petroleum Exporting Countries also meant there was less oil that needed to be transported on tankers.

At the same time, attacks by Houthi militants on merchant vessels in the Red Sea have forced ships to take a longer route to reach Europe from Asia. That’s boosted charter rates for smaller ships that transport fuels like gasoline and diesel as they now need to sail around Africa, adding thousands of miles to their journeys.

VLCCs, with their large sizes and ability to sail longer distances, allow for greater economies of scale, said Olivi. “VLCCs have become the bellwether of the market, they are extremely flexible in adapting,” he said.

By: Weilun Soon / Trasfigura , September 11, 2024 

Sinopec, one of China’s largest state-owned oil and gas companies, has been awarded a significant contract to develop a tank farm in Saudi Arabia, marking a major expansion of its presence in the Middle East.

This development represents a key strategic move for Sinopec, which aims to strengthen its foothold in one of the world’s leading oil markets.
 

The project involves the construction of a state-of-the-art storage facility designed to handle a substantial volume of crude oil and refined products. The tank farm is expected to enhance Saudi Arabia’s capacity to manage and distribute its vast oil resources more efficiently, boosting its operational capabilities.

The deal comes at a time when the global oil industry is undergoing significant changes, with major players seeking to optimize their logistics and storage infrastructures. Sinopec’s involvement underscores the growing trend of increased collaboration between Chinese and Middle Eastern energy sectors. The company’s advanced technology and expertise in large-scale industrial projects were key factors in securing this contract.

This tank farm will feature advanced storage and management systems, designed to ensure high efficiency and safety standards. The facility’s strategic location within Saudi Arabia will facilitate better logistical coordination and support the country’s goal of increasing its oil export capabilities.

The project is expected to have substantial economic benefits for both Sinopec and Saudi Arabia. For Sinopec, it offers a substantial revenue stream and a chance to further integrate its operations within the region’s oil supply chain. For Saudi Arabia, it provides a critical infrastructure upgrade that will support its long-term energy strategy and economic diversification efforts.

As part of the agreement, Sinopec will work closely with local partners to ensure the project’s successful execution, adhering to Saudi Arabia’s regulatory standards and environmental guidelines. This collaborative approach is likely to foster stronger business relationships and open up further opportunities for Sinopec in the region.

The tank farm’s development is also expected to create numerous job opportunities, contributing to the local economy and supporting Saudi Arabia’s Vision 2030 initiative, which aims to diversify the economy and reduce its dependency on oil.

Overall, this contract signifies a pivotal moment in Sinopec’s international expansion strategy and highlights the strengthening ties between China and Saudi Arabia in the energy sector. The successful completion of this project could pave the way for additional partnerships and investments in the region’s growing energy market.

By: 1Arabia , September , 6 , 2024

Oil prices began the month of September with a drop in Asian trade, depressed by another weak reading of China’s official manufacturing activity data and signals from OPEC+ that it could proceed with unwinding some of the production cuts in October, as planned.

Early on Monday morning in Europe, oil prices were down by around 0.5%, with Brent Crude prices falling to $76.54, and the U.S. benchmark, WTI Crude, down by 0.4% to $73.24 per barrel.

Oil prices fell on reports that OPEC+ producers could start easing the ongoing cuts. Weak Chinese manufacturing also added to the downward pressure on crude prices.

Libya’s supply outage and a stronger-than-expected U.S. economy are helping to keep oil prices afloat despite this growing bearish pressure.

This weekend, the official Purchasing Managers’ Index (PMI) from the National Bureau of Statistics showed that China’s manufacturing activity contracted for a fourth consecutive month in August and slumped to the lowest reading in six months.

The PMI data from the National Bureau of Statistics was also below analyst expectations and matched last year’s lowest level. New orders, including export orders, as well as employment, remained in contraction territory in August.

“This month’s PMI data was another data point showing manufacturing strength from the first half of the year is cooling off and that we will need to see other areas of the economy pick up if the 5% GDP growth target is to be achieved,” analysts at ING said in a note on Monday.

Another weak manufacturing dataset from China weighed on the outlook of oil demand in the world’s top crude oil importer.

A private PMI assessment tracking small export companies showed on Monday modest improvement in manufacturing last month.

The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), a private gauge of the manufacturing sector by Caixin Media and S&P Global, showed on Monday the purchasing managers index rising to 50.4 in August, up from 49.8 in July, signaling a slight recovery of the index into expansion territory with the reading of above 50.

Nevertheless, analysts believe that China needs more economic stimulus to turn a corner in its economy.

By Tsvetana Paraskova for Oilprice.com / Sep 06, 2024

The Trans Mountain Expansion Project, now finally completed after years of delays, is expanding access to markets for Canadian oil producers and is set to boost the price of Canada’s heavy crude oil for years to come, top executives at the major energy firms say.

The expanded pipeline is tripling the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.

The expanded pipeline provides increased transportation capacity for Canadian producers to get their oil out of Alberta and into the Pacific Coast and then to the U.S. West Coast or Asian markets.

TMX has reserved 20% of its capacity – or 178,000 bpd – to uncommitted customers, or spot shippers.

As a result of the increased competition from Trans Mountain, other pipeline operators – including Enbridge, operator of North America’s largest crude oil pipeline network, Mainline – are cutting rates to transport crude on their network in September. Enbridge will ask lower tolls from companies to ship heavy crude from Hardisty, Alberta, to Texas on Enbridge’s networks, per company filings cited by Bloomberg.

As a result of TMX entering into service, crude trade flows are expected to shift, Wood Mackenzie’s analysts Lee Williams and Dylan White wrote in July.

“Wood Mackenzie data suggests that increased westbound flows will moderately cut into volumes moving on other routes out of Western Canada, especially crude-by-rail and Enbridge’s Mainline system,” they said.

Since Canadian producers continue to ramp up production, the excess pipeline capacity on the networks carrying crude from Canada to the demand centers in the U.S. should be filled fairly soon, according to analysts.

By: Oilprice / September 06, 2024.

Pointing to the still paltry share of renewable energy in global supply, the head of Saudi Aramco described the current energy transition strategy as a misguided failure on Monday.

“In the real world, the current transition strategy is visibly failing on most fronts,” Saudi Aramco Chief Executive Officer (CEO) Amin Nasser said at the CERAWeek conference in Houston.

Fossil fuels accounted for 82 percent of global consumption last year, according to a report from consultancy KPMG cited by Nasser, who noted that the International Energy Agency has said oil demand could hit a record this year.

“This is hardly the future picture some have been painting,” Nasser said.

“All of this strengthens the view that big oil and gas is unlikely for some time to come out, let alone in 2050,” added Nasser, alluding to a medium-term target that has been seen as a potential phaseout date for crude.

Joining Nasser in speaking skeptically of an imminent energy revolution was ExxonMobil Chief Executive Darren Woods, who said “we’re not on the path” to reaching net-zero emissions by 2050.

“One of the challenges here is that while society wants to see emissions reduced, nobody wants to pay for it,” Woods said.

Nasser called for policies more in tune with the “real world.”

While alternative energy can reduce emissions, “when the world does focus on reducing emission from hydrocarbons, it achieves much better results,” Nasser said.

Last year’s COP28 conference included a call for a transition away from fossil fuels.

But Nasser said the world should “abandon the fantasy of phasing out oil and gas, and instead invest in them adequately reflecting realistic demand assumptions.”

By: msn, Agence France-Presse / 31 Julio 2024

According to Reuters, ConocoPhillips received a second information request from the U.S. Federal Trade Commission (FTC) regarding its proposed acquisition of Marathon Oil. Both companies received the requests on July 11 and are collaborating with the FTC to review the merger.

In May, ConocoPhillips announced a $22.5 billion stock deal to acquire Marathon Oil, aiming to enhance oil and gas production and develop U.S. shale fields and liquefied natural gas projects.

The merger follows several other major deals in the industry, including ExxonMobil’s $60 billion acquisition of Pioneer Natural Resources and Chevron’s proposed $53 billion merger with Hess. The FTC has also requested information in the Chevron-Hess deal, potentially delaying the deal until 2025.

The FTC’s additional information request is expected to delay the deal’s closure, initially estimated for the fourth quarter of this year. The merger would result in a combined company producing 2.26 MMbpd, adding 1.32 Bbbl of proved reserves to ConocoPhillips’ existing 6.8 Bbbl.

By: Reuters / July 15, 2024

State-run China National Offshore Oil Co, one of the country’s top importers of Russian oil, has in recent months been pumping shipments of ESPO blend from Russia’s Far East into a newly launched reserve base, according to traders and tanker trackers.

This is the first time stockpiling of Russian ESPO blend crude at CNOOC’s new reserve base has been reported. CNOOC did not have an immediate comment.

The stockbuild, estimated at more than 10 million barrels by tanker tracker Vortexa Analytics, helped lift China’s seaborne imports of the flagship Russian export grade to a record high in March, supporting prices of the ESPO blend despite tepid demand from independent Chinese refiners.

Though less than China’s crude consumption in a day, the stockbuild cements Russia’s position as China’s top oil supplier and comes as sales to India, Moscow’s No.2 oil client since the war in Ukraine, slowed due to western sanctions-driven difficulties over payments and shipping.

CNOOC began pumping the Russian crude last November into the 31.5 million-barrel storage base it has built in east China’s Dongying port, according to trading sources and Vortexa.

“ESPO discharges into Dongying began surging … after the port put into use three new berths able to dock Aframax vessels,” said Emma Li, Vortexa’s senior China oil analyst. Each ESPO cargo is about 100,000 metric tons or 740,000 barrels and the oil is typically carried in Aframax-sized tankers.

Vortexa did not specify whether the 10 million barrels were part of CNOOC’s commercial stockbuild or for China’s strategic petroleum reserve, but two senior traders who closely track ESPO flows said Beijing has been boosting its emergency stockpile.

“This is part of what the government has repeatedly called for, which is to hold the bowl of energy security firmly in our own hands,” one of the traders said on condition of anonymity given the sensitivity of the matter.

China, the world’s largest crude oil buyer, tightly guards information on its emergency government stockpile and private estimates of China’s strategic reserve vary widely.

Vortexa put China’s strategic reserve levels at 280 million barrels, while consultancy Energy Aspects pegged them at 400 million barrels. By comparison, the U.S. Strategic Petroleum Reserve stands at roughly 364 million barrels.

Russian oil arrivals into China, including via pipelines under long-term contracts, rose one quarter last year to a record 2.14 million barrels per day (bpd), making Moscow its top supplier for a second straight year, ahead of former top provider Saudi Arabia’s 1.72 million bpd.

China’s National Food and Strategic Reserves Administration did not respond to a Reuters request for comment.

‘SAFEGUARD NATIONAL ENERGY SECURITY’

Overall, about 29 million barrels of ESPO blend were discharged between November and March into Dongying port, of which 19 million barrels were sold to independent refiners known as teapots while the rest was stockpiled, according to Vortexa.

At 10 million barrels, the stockpile would occupy one-third of the capacity at the CNOOC-built Dongying storage site, which began operation in February 2023. China processes roughly 15 million barrels of crude oil a day.

The 6.4 billion yuan ($885 million) tank farm is a tie-up to “jointly safeguard national energy security”, the Shandong provincial government said last year when the storage site was launched.

The site, situated near CNOOC’s offshore oilfields, also helps CNOOC market its own production to Dongying, home to 32 independent refineries.

Before last November, the Dongying site was used mostly to store offshore crude and fuel oil, Vortexa’s Li said.

China’s overall seaborne ESPO imports hit a record 28.7 million barrels in March, data from analytics firm Kpler showed.

Of that, CNOOC purchased a record 8.5 million barrels in March, of which 7.4 million barrels were imported at Dongying, Kpler data showed. This compares with 5.2 million barrels imported at Dongying each in January and February, 3.7 million barrels in December, and 1.4 million barrels in November when ESPO imports to the site began.

“Lower demand from India prompted more Russian oil sales to China as really there are not many countries that can take Russian oil now,” an ESPO dealer said.

($1 = 7.2330 Chinese yuan)

By  Reuters / Chen Aizhu and Florence Tan , April 15, 2024