Archive for category: News

TEHRAN- The value of trade between Iran and the members of the Shanghai Cooperation Organization (SCO) hit $23.165 billion in the first 11 months of the current Iranian calendar year (March 20, 2020 – February 18, 2021), the spokesman of the Islamic Republic of Iran Customs Administration (IRICA) announced.

Ruhollah Latifi put the weight of commodities traded between the two sides at over 41.747 million tons, IRNA reported.

Iran has cross-border trade with 11 key member states and observer states of the Shanghai Agreement, including China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Mongolia, Pakistan, India, Afghanistan and Belarus, among them the largest volume of trade is with China which is $15.518 billion, the IRICA spokesman stated.

He put Iran’s export to the SCO members at 33.339 million tons valued at $11.173 billion during the mentioned 11-month period, and said the highest amount of export has been to China, which was $6.724 billion, and the lowest was to Mongolia, which was $412,809.

Iran’s imports from the mentioned countries stood at 8.408 million tons worth $11.991 billion in the said time span, Latifi said, adding the highest amount of imports was from China ($8.793 billion), and the lowest was from Mongolia ($2.448 million).

The Shanghai Cooperation Organization (SCO), or Shanghai Pact, is a Eurasian political, economic, and security alliance, the creation of which was announced on June 15, 2001 in Shanghai, China by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan; the Shanghai Cooperation Organization Charter, formally establishing the organization, was signed in June 2002 and entered into force on September 19, 2003.

Source: https://www.tehrantimes.com/news/459147/Trade-between-Iran-SCO-members-exceeds-23b-in-11-months

(Bloomberg) –Cairn Energy Plc reshuffled its portfolio, selling $460 million of assets in the U.K. North Sea and buying projects in Egypt’s Western Desert from Royal Dutch Shell Plc.

Both deals, announced Tuesday and seen completing in the second half of 2021, follow a pickup in oil and gas acquisitions after 2020’s pandemic-driven slump. Cairn’s retreat from the North Sea comes after several other international producers have withdrawn from the aging region. Meanwhile its purchase in Egypt enables Shell to chalk up proceeds in an ongoing divestment program.

“Cairn needed to rejuvenate its investment case, and this move does that,” Al Stanton, an analyst at RBC Capital Markets, said in a note. “However, shareholders are faced with a steep learning curve” and Egyptian assets typically provide “limited oil-price leverage.”

Cairn tumbled as much as 7.4% in London trading, and was down 4.2% at 190.3 pence as of 11:07 a.m. local time.

The deal in Egypt, back on after delays last year, consists of Shell’s interest in 13 onshore concessions and in Badr El-Din Petroleum Co. The U.K.’s Cairn, together with Cairo-based Cheiron Petroleum Corp., will buy the assets for $646 million and make additional payments of as much as $280 million by 2024, “contingent on the oil price and the results of further exploration,” Shell said in a statement.

The deal “will enable Shell to concentrate on its offshore exploration and integrated value chain in Egypt, including seven new blocks in the Nile Delta, West Mediterranean and Red Sea,” the Anglo-Dutch oil major said.

Cairn, in turn, is selling its stakes in the U.K.’s Catcher and Kraken fields to Waldorf Production U.K. Ltd. for $460 million with a further uncapped contingent consideration dependent on oil-price and production performance. The fields are moving “into decline phase,” the company said.

Cairn will keep some exploration operations in the North Sea, including the Nelson project in partnership with Shell.

Waldorf, which made its first investment in the region just over a year ago, said Tuesday the North Sea is “uniquely suited” for smaller players. In addition to Cairn’s assets it’s also buying stakes in exploration blocks from Delek Group Ltd.’s Ithaca unit, including the Fotla prospect.

Source: https://www.worldoil.com/news/2021/3/9/shell-signs-926mm-deal-to-sell-egyptian-onshore-assets-to-cairn-energy

Chabahr, March 10, IRNA – Managing Director of Ports and Maritime Organization of Sistan and Baluchestan province, in the south east of Iran, said that the second part of India’s $85m commitment for developing Chabahar port would be unveiled soon.

LONDON (Bloomberg) — Saudi Arabia and its OPEC+ allies shocked the oil market with a decision to keep supply in check, sending prices surging and adding inflationary pressure to the global economy as it emerges from the pandemic.

One year on from the outbreak of a bitter price war that sent crude below zero, the kingdom showed that its priority is preserving the hard-won oil recovery rather than worrying about tightening the market too much.

Saudi energy minister Abdulaziz bin Salman

“I don’t think it will overheat,” Saudi Energy Minister Prince Abdulaziz bin Salman told reporters after Thursday’s meeting. Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

The Organization of Petroleum Exporting Countries and its allies had been debating whether to restore as much as 1.5 million barrels a day of output in April. From trading houses in Geneva to Wall Street banks, much of the oil world was in agreement that global markets could use some more barrels to temper a rapid run-up in prices.

But after being urged to “keep our powder dry” by Prince Abdulaziz, OPEC+ members agreed to hold steady at current levels — with the exception of modest increases granted to Russia and Kazakhstan. Saudi minister went one step further, saying the additional 1 million barrel-a-day voluntary production cut the kingdom introduced last month was now open ended.

That means the cartel will still be withholding about 7 million barrels a day from the market — equivalent to about 7% of global demand — even as fuel consumption recovers in many countries.

“OPEC+ definitely risks over-tightening the oil market,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. in London. Brent crude rose as much as 5.7% in London.

Inflation Risks

Brent has already rallied about 30% this year to almost $68 a barrel. Throughout the first quarter, OPEC+ has kept production below demand in order to drain the glut that built up during the worst of the Covid-19 lockdowns. Without additional supply, that deficit will widen significantly in April, according to the cartel’s internal estimates.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

With the bond market already on edge for signs of inflation, the aggressive move from OPEC+ could become a headache for the U.S. Federal Reserve and the European Central Bank. And it’s not just oil that’s surging. From copper and steel to corn and soybeans, the prices of many commodities are rapidly rising.

Strengthening economies, the rollout of coronavirus vaccines and continued government stimulus are among the reasons financial markets are anticipating an acceleration in price growth, although such forces are countered by weak labor markets.

Russian Deputy Prime Minister Alexander Novak

“We should closely monitor to avoid overheating of the market,” Russian Deputy Prime Minister Alexander Novak said in an interview with state TV Rossiya 24 after the meeting.

U.S. Relations

The decision comes at a tense moment for the Saudi-American alliance, as President Joe Biden seeks to reset the relationship with Riyadh, and particularly with Crown Prince Mohammed bin Salman.

Under former President Donald Trump, the White House may have reacted quickly with a barrage of tweets to the threat of rising gasoline prices, as it did in April 2018. The reaction of the Biden administration is unclear, however, and may not be as straight forward as it balances economic priorities against green policies.

Russia and Kazakhstan secured exemptions from the deal, allowing them to boost output by 130,000 and 20,000 barrels a day in April, respectively, “due to continued seasonal consumption patterns,” according to a statement posted on OPEC’s website. The two nations were granted similar allowances for February and March.

OPEC+ will meet again on April 1 to discuss production levels for May, according to the statement.

Source: https://www.worldoil.com/news/2021/3/4/opec-shocks-oil-markets-with-plan-to-keep-crude-output-constrained

Now that a full year has gone by since the Covid-19 pandemic began to slam the global economy in general, and oil demand in particular, the leaders of Saudi Aramco and Chevron see the market for oil and gas improving this year, with some momentum in the back half. But that outlook is tempered by the fact that the pandemic has forced some changes to the way that business is conducted.

This assessment from Saudi Aramco President and CEO Amin Nasser, and Chevron Chairman and CEO Mike Wirth, occurred during Tuesday morning, Day 2, at the virtual CERAWeek conference, in a plenary session entitled, “Charting an Era of Recovery.” Joining them as moderator was IHS Markit Vice Chairman Daniel Yergin.

The Saudi Aramco perspective. Prompted by Yergin to assess the last 12 months, Saudi Aramco’s Nasser stated that “(Last year), we were faced with the biggest crisis in a century. But our industry is used to challenging situations. We sharpened our focus on resilience, which gave us an agility to respond quickly to a volatile market, and also to arrange changes to address the economic conditions.

As for specific effects from the pandemic, Nasser said that “Covid also accelerated our plan to digitalize operations and deploy and utilize the IoT and Big Data. We can now contact technical inspection from our headquarters, here in Dhahran, and do a lot of things remotely, rather than travel overseas. In project management, where interaction is limited, due to Covid, we are deploying digital twins for major projects…Today, we are seeing a recovery that’s taking place and that’s good. But some jobs are not going to return.”

Chevron’s assessment. Asked by Yergin what the lessons learned have been in terms of the crisis and what has changed for his company, Wirth responded, “I think one of the key lessons here is the essential nature of our industry. We saw a pandemic that created a global recession and an enormous response in policy that created economic slowdowns around the world. And yet, as we went through one of the most significant shocks that we’ve seen to the global economy in decades, demand destruction for oil and gas only averaged something like 9%, despite a crisis in which we were tested like never before. And so, I think it demonstrates how important our industry is to the world economy.

Looking at the operational effects, Wirth continued, “From a company standpoint, it underlined the importance of a strong balance sheet, as we saw financial stress introduced into our business. We were able to maintain our dividend, we were able to execute M&A during that period of time. And you asked about technology. I think this is a really interesting positive side of what we’ve been through. While our digital journey had certainly begun, it was a chance for us to really accelerate our use of some of these digital technologies and the things everybody did—working remotely, we’re certainly familiar with. We had directional drilling going on from people’s homes, which just a couple of years ago, we had to have somebody on a rig that was controlling the drill bit. That had been moved to a drilling support center centralized in Houston, and we were able to quickly move that to individual employees’ homes. We’ve been using augmented reality, instead of flying subject matter experts out to offshore platforms. With headsets and integrated technology, an operator on a platform and a subject matter expert halfway around the world can trouble-shoot problems that previously we would send people physically, to deal with. We’ve done remote inspections and audits using drones.”

Market prognosis. In terms of where the market is now, and where the recovery goes, both executives had very positive outlooks. “We have been going from a 20-MMbpd reduction, back in April, to quite an improvement right now,” said Nasser. I see the markets improving. We have seen China and East Asia with strong demand. India is also picking up to almost the same rate as pre-Covid. There is an impact that we see in the West, in the U.S., but with the rapid deployment of vaccines, we are seeing good cause for optimism and recovery in demand. The current demand that we see in the market is about 94 MMbpd, and our expectation by next year is that it will be 99 MMbpd. This is where we started in January 2020. I see demand in the market continuing to improve, especially from the second half of this year.”

Asked if the current market “feels like recovery” to him, Wirth said, “I think we’re feeling recovery underway. As Amin said, different geographies around the world are in different places. And certainly, if you look at it from a products perspective, there’s still some significant variation. Diesel demand is actually at or above where it was, pre-pandemic, pretty much everywhere. A lot of consumer activity is now being supported through door-to-door distribution, for instance, driving demand. Gasoline demand is still a little bit off. Obviously, aviation fuels are the big one, as we’ve seen some travel return within countries or even regions, but longer-haul air transportation is still significantly off…But, I think the recovery is underway.”

Natural gas and LNG have gone through their own ups and downs over the last year, and Yergin asked the two executives whether they felt positive about these commodities. “Well, we’re bullish on natural gas,” replied Wirth emphatically. “And you have to look no further than the addition of our Eastern Mediterranean position last year for evidence of that. It’s been an interesting season for LNG spot prices. Certainly, in Asia, we saw a surge accompanied by a unique set of conditions, with some very cold weather in north Asia, some supply outages and logistics, and constraints on the system. Not a lot of trades done at some of the elevated spot prices, but a big spike that we saw. So, that’s come back to some more-normal levels. Clearly, LNG has a very important role in the lower-carbon economy that we’re all working toward. It may have a role in supporting hydrogen and new opportunities to commercialize gas. We think gas is an important part of the energy future around the world.

Nasser also was quite positive on gas. “If you recall, not that long ago, natural gas was seen as a bridge fuel for a renewable future,” he noted. “But now, sentiment has somehow turned, partly due to concern about fugitive methane emissions. But I also see this as an area that is already receiving attention from our industry. Our view is that gas still has better credentials over other fuels, and it will grow significantly in a number of sectors, especially for power generation, and for industry and commercial use….

“In the Kingdom, and for Saudi Aramco,” continued Nasser, “we are growing our gas substantially, and by 2030, we will have a significant amount of gas, to the point where approximately 50% of the grid in the Kingdom will be on renewables by 2030, and 50% will be on gas. We are using both conventional and unconventional gas resources to grow our volumes.”

Methane practices. Given rampant ESG considerations in the industry these days, methane management is never far from the top minds in many large operators. “We were in discussion with a prominent policymaker (in Washington), who raised some concerns that were just mentioned as a reason to be careful in moving forward with natural gas,” explained Wirth. “I think it’s incumbent on all of us to be sure that we’ve done everything we can to reduce or eliminate methane emissions. The technologies exist for us to do so, and the incentives exist to do so. We need to have robust monitoring and reporting on methane emissions, and ensure   So, I think the industry is making a lot of the right moves. We need to be sure in the United States that we’re working with the new administration, in order to help them understand that, to see what we’re doing and to see the benefit of the voluntary actions that are being taken already.

ESG attitudes. The methane discussion naturally led to comments about ESG practices. “This is an area long-familiar to Chevron,” said Wirth. “I would say, first of all, that ESG may seem new to investors, but ESG is not new to Chevron. It goes to the heart of our company values. From nearly a hundred years ago, I keep a copy of Standard Oil Spirit on my desk, which was published in 1923, and it laid down, at its foundation, a discussion of the relationship between a company and its employees, it talked about the work week, it talked about benefits for employees, about relationships with communities and neighbors. It talked about safety. And things that are very important today have been part of the fabric of our company for more than a century. And so, ESG is integral to our business everywhere we operate. It’s not static, it’s always a work in progress.”

Nasser said that ESG has been on his company’s radar much longer than people might think. “First, I agree with Mike, it is a work in progress,” noted Nasser. “Yet, ESG has always been a big part of Aramco’s corporate strategy. Our focus has always been on stakeholders’ interests. In fact, Aramco’s ESG initiatives and programs started almost half-a-century ago, when the term was not in common use. Our master gas system was built in the Seventies, and by eliminating flaring, the system, alone, has removed some 100 million tons of CO₂ every year since then. The carbon intensity of our oil production is among the lowest, and the same for methane emissions. When we look at ESG, one size honestly does not fit all. There needs to be a framework to take care of all the stakeholders around the world. Today, on a global basis, our customers, 70% to 75%, are in developing and emerging economies. So, we need to develop a common framework, that takes into consideration the whole world.

Source: https://www.worldoil.com/news/2021/3/3/ceraweek-day-2-saudi-aramco-and-chevron-see-better-days-ahead