Colombia/Ecuador

Gran Tierra Energy operations and financial update

12 Jul 2022

1. Achieved Total Average Production of 30,607 BOPD During Second Quarter 2022, The Highest Since 2019
2. Second Quarter 2022 Total Average Production Up 4% from First Quarter 2022 and 25% from Second Quarter 2021
3. Ecuador and Colombia 2022 Exploration Programs Remain On-Track
4. As of June 30, 2022, Cash on Balance Sheet of $109 Million and Credit Facility Fully Repaid

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: Gran Tierra Energy has announced an operations and financial update. All dollar amounts are in United States dollars, and production amounts are on an average working interest before royalties basis unless otherwise indicated. Per barrel and bbl per day amounts are based on WI sales before royalties.

‘Gran Tierra remains on track and on budget with our development and exploration drilling programs for 2022. The positive results from our Acordionero and Costayaco infill development well programs have been key to our ability to steadily increase oil production during 2022.

At the same time, we have achieved a major milestone for the Company by completely paying off our credit. We have significantly strengthened our balance sheet by steadily reducing our credit facility balance from $207 million as of June 30, 2020, to $0 as of June 2, 2022. Gran Tierra has a strong balance sheet with cash of $109 million as of June 30, 2022. We have also terminated our current credit facility and plan to replace it with a smaller facility which aligns with our current business objectives. The material strengthening of Gran Tierra’s balance sheet over the past two years is a testament to the Company’s commitment to capital discipline, high quality oil and low-cost oil assets and higher commodity prices.

After a two-year pause during the low and volatile oil price environment of 2020 and 2021, we are excited to once again be drilling high-impact exploration wells. In Ecuador, we remain on-track to spud our first planned exploration well in that country on the Chanangue Block during third quarter 2022. In Colombia, we are progressing our exploration activities and we look forward to the planned drilling during second half 2022 of the Rose exploration well in the Putumayo Basin and the Gaitas exploration well in the Middle Magdalena Valley Basin.

We believe Gran Tierra is well positioned to optimize value from each of our assets through continued development and enhanced oil recovery activities in 2022. Our waterflood programs across all our assets continue to perform well, as demonstrated by our second quarter 2022 total average production of 30,607 BOPD, up 25% from second quarter 2021.’

Operations Update:

Production:
Gran Tierra’s total average production during second quarter 2022 was 30,607 BOPD, which was in-line with management expectations, and up 4% from first quarter 2022 and up 33% from second quarter 2021. This was the Company’s highest quarterly total average production since fourth quarter 2019.
Gran Tierra was able to consistently increase production during second quarter 2022 despite the temporary impact of brief intermittent farmers’ blockades in the southern Putumayo Basin. The Company believes that these blockades, since resolved, reduced the Company’s second quarter 2022 total average production by approximately 1,100 BOPD or 3.5%.

Acordionero:

• During first half 2022, Gran Tierra successfully drilled 16 wells (10 oil producers and 6 water injectors) in the Acordionero field.
• The successful results of the 10 new oil wells contributed to the Company’s ability to steadily increase oil production during first half 2022.
• The Company continues to make progress with its planned polymer flood pilot project in this field, with polymer injection planned to begin in the newly drilled AC-95i injection well during third quarter 2022.

Costayaco and Moqueta:

• All 5 of the 2022 planned Costayaco infill development oil wells have been drilled and are on production.
• The Moqueta work program of 3 infill development wells is expected to begin in fourth quarter 2022 and is planned to continue into 2023.

Exploration:
Ecuador

• Gran Tierra is in the final stages of wellsite construction for the planned Bocachico-1 exploration well in the Chanangue Block and expects to start drilling this well during third quarter 2022.
• The Company has also started construction of the Charapa-B drilling pad in the Charapa Block.
• Environmental licenses are in place for Gran Tierra’s multi-well exploration program in both the Chanangue and Charapa Blocks.
• Significant progress has also been made with Gran Tierra’s environmental licensing for exploration drilling in the Iguana Block with approval expected during second half 2022.

Colombia

Gran Tierra plans to spud the Gaitas exploration well in the Middle Magdalena Valley Basin, which is designed to target the Lisama Formation, which is the producing formation at the Acordionero oil field. The Gaitas location is approximately 7 kilometers south-southwest of Acordionero’s Southwest Pad and is expected spud in late July 2022.

In the Putumayo Basin, Gran Tierra continues progressing its exploration activities. The wellsite construction has started for the planned Rose-1 exploration well in the ALEA-1848A Block, which has a planned spud date in third quarter 2022.

Gran Tierra spud the Churuco exploration well in the Chaza Block on June 2, 2022, which targeted a potential, separate reservoir located between the Company’s Costayaco and Moqueta oil fields. While Churuco found the target reservoir, well log evaluation indicated that the reservoir was water-bearing. The Company plans to plug and abandon the well in accordance with government regulations.

Financial Update:

As previously announced, Gran Tierra had completely paid off its bank-syndicated credit facility as of June 2, 2022.

As part of a focus on significant debt reduction, the Company steadily reduced its credit facility balance from $207 million as of June 30, 2020, to $0 as of June 2, 2022.

Over the same time period, the Company built its cash position from $17 million as of June 30, 2020, to $109 million as of June 30, 2022.

Gran Tierra has terminated its current credit facility and plans to replace it with a new, smaller credit facility once all securities pledges against the current facility are released.

At present, the Company has no oil price hedges in place for second half 2022. Therefore, all of Gran Tierra’s oil production is receiving the full benefit of the Brent oil price which is currently above $100 per bbl.

Corporate Presentation:

Gran Tierra’s Corporate Presentation has been updated and is available on the Company website at www.grantierra.com.

Source: Gran Tierra Energy

 

 

GeoPark Q2 2022 operational update

21 Jul 2022

• SHORT-CYCLE PROJECTS DRIVING PRODUCTION GROWTH
• HIGH-IMPACT EXPLORATION DRILLING UNDERWAY IN THE LLANOS BASIN IN COLOMBIA
• DELIVERING ON EMISSIONS REDUCTION TARGETS
• ACCELERATING DELEVERAGING & SHAREHOLDER RETURNS

Accelerating Production Growth

GeoPark, a leading independent Latin American oil and gas explorer, operator and consolidator announced its operational update for the three-month period ended June 30, 2022 (‘2Q2022’). All figures are expressed in US Dollars. Growth comparisons refer to the same period of the prior year, except when otherwise specified.

• Consolidated oil and gas production up 14% to 38,940 boepd (up 2% vs 1Q2022)(1)
• Production in Colombia up 16% to 34,253 boepd (up 2% vs 1Q2022)
• CPO-5 block (GeoPark non-operated, 30% WI) gross production up 77% to 20,300 boepd (up 34% vs 1Q2022)
• Tigana and Jacana fields in the Llanos 34 block (GeoPark operated, 45% WI) and Indico field in the CPO-5 block, rank among the top 10 highest oil-producing fields in Colombia(2)
• Ten rigs in operation in July 2022, increasing to 12-13 (including 8-9 drilling rigs) in 2H2022
• On track to reach 2022 full-year guidance of 38,500-40,500 boepd
• Llanos Basin: Exploration Drilling Underway in High-Potential Prospects

In the Llanos 34 block:

Adding a third drilling rig, expected to start spudding wells in early August 2022

In the CPO-5 block:

1. Drilling the Cante Flamenco 1 exploration well, located 4 km west of the Urraca 1 well, looking for hydrocarbon potential in the Ubaque and Mirador formations, with
2. Guadalupe as a secondary target
3. 2H2022 work program targets drilling of 1-2 development wells to further accelerate production growth in the Indico field, to be followed by 3-5 high-potential exploration wells (1-2 wells next to Llanos 34 to test the extension of the Jacana field and 2-3 wells in the southeastern part of the block)
4. In the Llanos 87 block (GeoPark operated, 50% WI):

Obtained environmental license, allowing exploration and delineation drilling plus related infrastructure
Civil works and other pre-drilling activities underway to spud the Tororoi exploration prospect in 3Q2022, to be followed by 1-2 exploration wells in 4Q2022

Oriente Basin: Three Drilling Successes in 1H2022

In the Perico block (GeoPark non-operated, 50% WI):

1. Drilled and put on production the Yin 1 exploration well, currently producing approximately 2,000 bopd gross with a 1% water cut
2. Jandaya, Tui and Yin oil fields are currently producing 3,000 bopd gross

In the Espejo block (GeoPark operated, 50% WI):

1. Completed the acquisition of 60 sq km of 3D seismic
2. Obtained environmental license, allowing exploration and delineation drilling plus related infrastructure
3. Civil works currently underway targeting to spud the Pashuri 1 exploration well in September 2022

Putumayo Basin: Drilling Attractive Short-Cycle Prospects

In the Platanillo block (GeoPark operated, 100% WI):

1. Initiated drilling of the Alea NW 1 exploration well, to be followed by the Platanillo Norte 1 exploration well in 3Q2022
2. Production and operations affected for 15 days in May 2022 due to local community blockades against the Government
3. Fast, Immediate and Aggressive Actions to Minimize Emissions

Main fields in Llanos 34 block interconnected to Colombia’s national power grid fully operational

1. Tua and Jacana fields interconnected in May/June 2022
2. Tigana field interconnected in July 2022
3. Tua, Jacana and Tigana fields represent approximately 80% of the Llanos 34 block’s production
4. The interconnection of Llanos 34 to Colombia’s national power grid (~70% hydroelectric(3)) is a decisive catalyst to reduce carbon emissions and improve overall operational reliability
5. Solar photovoltaic plant in the Llanos 34 block to be fully operational by early August-2022

2022 Work Program: Strong Cash Flow Generation

1. Self-funded 2022 capital expenditures program of $200-220 million targets the drilling of 50-55 gross wells, including 18-22 gross exploration/appraisal wells
2. Using a $95-100 per bbl Brent base case, GeoPark expects to generate a free cash flow of $250-280(4) million, equivalent to a 35-40% free cash flow yield(5)
3. Free cash flow funding incremental capital projects, debt reduction, increased shareholder returns and other corporate purposes

Debt Reduction and Balance Sheet Strengthening

1. Repurchased $50.3 million principal of the 2024 Notes since January 1, 2022
2. Redeemed $45.0 million principal of the 2024 Notes in May 2022
3. Reduced gross debt by $200 million since April 2021, with additional deleveraging expected in 2H2022 at current market conditions
4. Cash in hand of $122(6) million as of June 30, 2022 ($114.1 million as of March 31, 2022)

Returning More Value to Shareholders

1. Quarterly Dividend of $0.082 per share, or $5.0 million, paid on June 10, 2022, representing a 2.9% dividend yield(7)
2. Accelerating discretionary buyback program, having acquired 1,045,940 shares, or 1.7% of total shares outstanding for $13.6 million(8) since January 1, 2022, while executing self-funded and flexible work programs, and paying down debt
3. Obtained consent from 2027 bondholders to reset and rebuild restricted payments baskets, adding significant flexibility to GeoPark’s long-term shareholder return strategy

Strengthened Corporate Governance and Expertise

1. Shareholders voted for all five Directors standing for reelection and elected four new Directors at the AGM held on July 15, 2022. Every Director received at least 77% of the votes, with a total of 65% of shares represented by proxies at the meeting. The two new Independent Directors and the two new Executive Directors were each elected with a 99% majority of the votes cast
2. World-class, well-known oil and gas finders and developers, Brian Maxted and Carlos Macellari join the Board as Independent Directors jointly with two experienced Executive Directors, Andrés Ocampo and Marcela Vaca, bringing significant expertise to GeoPark’s Board
3. GeoPark’s Board is now composed of six Independent Directors, representing 66.7% of the Board. The key Nomination and Corporate Governance, Audit, and Compensation committees continue to be composed exclusively of Independent Directors

1 Percentages are calculated adjusting for divestments in Argentina in 2Q2021 and 1Q2022, respectively.
2 Based on latest available information on Colombia’s oil production per field during May 2022, as published by the ANH.
3 Colombian Ministry of Energy and Mines, Report to Congress, p. 14.
4 Free cash flow is used here as Adjusted EBITDA less income tax, capital expenditures and mandatory interest payments.
5 Calculated using GeoPark’s average market capitalization from July 1 to July 19, 2022.
6 Unaudited.
7 Annualized and calculated using GeoPark’s market capitalization from July 1 to July 19, 2022.
8 $3.0 million acquired in 1Q2022 and $10.6 million acquired from April 1, 2022, to July 19, 2022.

Source: GeoPark

 

Opportunities in Cuba

–as Caribbean Airlines Cargo connects the region

July 8, 2022

CARIBBEAN Airlines announced expansion of its cargo network to/from Cuba effective June 28, 2022.

Through a partnership with General Handling Agent Aerovaradero, the airline will offer air cargo services twice weekly into Havana on its scheduled passenger flights. From there, the handling agent will distribute the cargo upon request to the respective provinces and districts of Cuba.

Customers will have the option to transport general cargo, pharmaceuticals, live animals and perishable goods in the belly-hold of the aircraft. In addition to moving shipments between Cuba and Port-of-Spain, Trinidad, cargo connectivity will be available via the airline’s Port-of-Spain hub to the wider Caribbean, including Guyana, Jamaica, and Barbados and other destinations.

ExporTT supported Caribbean Airlines in the start-up of its Cuban operations by providing key linkages and facilitating training. With an office in Havana, exporTT provides hundreds of Caribbean Community (CARICOM) products access to the Cuban market in which Caribbean Airlines Cargo will be the primary carrier.

Marklan Moseley, General Manager Cargo and New Business Development, stated: “Caribbean Airlines Cargo has supported the movement of goods between [sic] Cuba, Guyana and Trinidad via chartered flights in the last couple of years. However, this expansion to offer full cargo services via our passenger flights, is a welcome and exciting development. It will improve connectivity and increase opportunities for trade and the seamless movement of cargo between Cuba, and the region.

Guyana an important bilateral partner for EU

 July 12, 2022

Brian Glynn, European Union Managing Director of the Americas, visiting Guyana following the Caribbean Community (CARICOM) meeting in Suriname. revealed that Guyana is an important bilateral partner.

At a reception held at the residence of the European Union’s envoy, the high-level representative of the Union engaged the media, lauding the 50 years of partnership between the EU and Guyana, saying that it is an indication that the former will be here for a long time.

“I think I’ve come to Guyana at an exciting time for your country, where there is a lot of new wealth that has to be distributed and redistributed over the next few years,” Glynn said, adding that based on his interactions with government members, he is optimistic that this is on the agenda and believes that the government is undoubtedly planning well for this.

Glynn, whose role is to foster bilateral relationships between the EU and all countries within the Western Hemisphere, stated that Guyana has become more on the Union’s radar as an important bilateral partner over the years.

Noting that the country is part of the solution when looking for answers to serious issues like climate change and food insecurity, Glynn said:
“I think there are a lot of things that a Guyana that is open to the world is offering solutions and we at the European Union are very interested in partnering with Guyana, politically, to ensure that we can do these things together.”

While they haven’t sent a high-level delegation here for quite some time now, even though the COVID-19 travel restrictions have been lifted, the EU regards Guyana as one of the places to pay such a visit. He noted that being long-time partners and hoping to continue the partnership, he is encouraging the government to visit countries within the EU, so more people could know more about Guyana.

“With what the government is proposing to do, Guyana is selling itself as a good international citizen, and we’d very much like to help to support Guyana on that.”

 

Electromagnetic Geoservices to work in the Caribbean

JULY 4, 2022, BY NADJA SKOPLJAK

Norwegian Electromagnetic Geoservices (EMGS) has secured a contract with an “international oil company” to deliver a survey in the Caribbean.

Under the contract, EMGS is in charge of delivering a Controlled Source Electromagnetic (CSEM) survey for the undisclosed client. The company plans the survey to start late in the third quarter or the beginning of the fourth quarter of this year, with an approximate acquisition duration of 60 days. The final acquisition scope under the contract, which has a maximum value of approximately $11 million, has not yet been determined.

 

Venezuela

Venezuelan leader Nicolás Maduro said Argentina’s President would represent all those countries excluded from the Summit of the Americas in Los Angeles, California.

“Alberto Fernández will be the voice of Venezuela at the Summit of the Americas,” said Maduro, who added the Celac pro tempore president will also be representing Cuba and Nicaragua, who were not invited due to the antidemocratic tint of their governments.

During a radio interview on Argentina’s National University of Avellaneda (UNDAV) broadcasting service, Maduro thanked Fernández for his gesture at the meeting to be held from June 6 to 10.

”I think it is very good that he is bringing the voice of Latin America and the Caribbean to the meeting of the Americas (…) we are going to be well represented in the voice of President Alberto Fernandez. President Fernandez is a brave man, who defends what he believes in; and he is against exclusion.”

With US President Joseph Biden’s decision, Maduro insisted Venezuela’s voice would be in the American conclave, ”whatever the host says. Whatever they do in Washington, the voice of Venezuela, the voice of Cuba, and the voice of Nicaragua will arrive in Los Angeles in the great protests of the people and our voice will be in that room (…) we will be there with our truth,“ Maduro had warned on May 24 in Caracas.

In his radio appearance, Maduro joined the Presidents of Mexico and Bolivia saying that a Summit with exclusions was merely a meeting. ”It is a contradiction!“ Maduro said. ”That is not a summit; it is a meeting.“

On the state-run Venezolana de Televisión, Maduro had said he had his ”tricks“ for his country to be represented in California, but released no other details. ”We have our tricks, I am not going to reveal any secret, but we will be there, we will be there“, said Maduro, while insisting that there will be ”surprises”.

While heads of state from Bolivia, Honduras, and Guatemala have announced they would not be attending the event. Mexico’s Andrés Manuel López Obrador (AMLO) has left a door open.

 

Halliburton expansion

David Wethe 7/20/2022 (Bloomberg)

Halliburton Co. is gearing up for years of oilfield expansion despite warning signs of a looming global recession.
The world’s biggest provider of fracing services is banking on a “multi-year upcycle” outside of its North American base, according to a statement Tuesday. Many of the world’s most significant oil provinces are in regions controlled by state-owned oil explorers that are immune to shareholder pressure and profit thresholds that steer publicly traded companies.

Halliburton rose 1.3% to $29.22 at 9:30 a.m. in New York.

Despite concerns about a potential economic slowdown, “oil- and gas-market fundamentals still strongly support the multi-year energy upcycle,” Chief Executive Officer Jeff Miller told analysts during a conference call. “Post-pandemic economic expansion, energy-security requirements and population growth will continue to drive demand.”

Halliburton posted its biggest quarterly profit in almost four years as the growing isolation of oil powerhouse Russia spurs fracing in other crude-rich regions.

The Houston-based oilfield contractor is almost sold out of gear in the North American market that includes the world’s most prolific shale fields, according to the statement.

Halliburton also recorded a $344 million pre-tax charge during the second quarter related to winding down its business in Russia amid international sanctions.  Sales in the US and Canada, where Halliburton dominates the oilfield-services market, jumped 26% from the first three months of this year to $2.4 billion. Miller called North America an extremely busy sector.

Halliburton kicked off quarterly earnings season for the sector, with larger rivals Baker Hughes Co. and Schlumberger scheduled to disclose results later this week. Supply-chain snarls are translating into cost inflation as high as 20%.

Halliburton reported second-quarter earnings of 49 cents a share, excluding certain items, that surpassed analysts’ expectations, according to the statement. It was the best three-month period of adjusted earnings since the third quarter of 2018.

 

 

Tullow

New 750 million barrel oil project in deep-water Ghana
TEN enhancement plan will likely see new subsea wells tied back to the Professor John Evans Atta Mills FPSO

14 July 2022
By Iain Esau in London

Tullow Oil is finalising a development concept for its Tweneboa-Enyenra-Ntomme (TEN) field offshore Ghana that aims to tap some 750 million barrels of oil.

Known as the TEN Enhancement Plan (TENEP), the development is expected to boost output at the field beyond the operator’s current production target for 2025 of some 50,000 barrels per day.

TEN has been a problematic field which has not performed as expected — particularly the Enyenra structure — leaving plenty of spare capacity in the Professor John Evans Atta Mills floating production, storage and offloading vessel.

 

 

Exxon barred from selling Nigeria assets to Seplat Energy

William Clowes 7/11/2022 (Bloomberg)

Nigeria’s SOC won a court decision temporarily blocking Exxon Mobil Corp. from selling assets in the country to Seplat Energy Plc.  A judge in Abuja granted the Nigerian National Petroleum Co. an “order of interim injunction” on July 6 barring Exxon “from completing any divestment” in a unit that ultimately operates four licenses, Seplat said. The Lagos-based producer agreed to acquire the US oil major’s subsidiary for at least $1.28 billion in February.

The NNPC wishes to block the transaction and to take over the permits itself. The SOC sued Mobil Producing Nigeria Unlimited on July 5, asking the State High Court either to order that a dispute had occurred between the parties over preemption rights, or to order them to take the matter to arbitration. Seplat, which is not party to the lawsuit, said its deal with Exxon is “still valid” and the company “remains confident that the matter will be brought to a proper conclusion in accordance with the law.”

The acquisition would give Seplat additional production of about 95,000 barrels of oil equivalent a day from shallow-water assets that Exxon operates in a joint venture with the NNPC. For over a decade, international oil companies have been offloading large parts of their portfolio in Nigeria to domestic players, a trend that has recently accelerated. A Nigerian court forced Shell Plc to pause plans to sell its remaining onshore permits.

 

Shell adds $1 billion profit from record fuel prices

Laura Hurst 7/7/2022(Bloomberg)

International energy company Shell Plc said soaring margins from fuel production added over $1 billion to earnings of its refining business last quarter, when gasoline prices broke records in several countries. The trading update from the London-based IEC is the first indicator of just how much cash was flowing into the coffers of major oil companies due to the inflationary surge in the price of gasoline, which exceeded $5 a gallon in the US for the first time.

While the rising cost of energy is strengthening the oil majors after several tough years, it risks a political backlash. US President Joe Biden urged fuel retailers to cut prices and companies are facing windfall taxes in some countries.

Shell’s indicative refining margin jumped to $28.04 a barrel in the second quarter from $10.23 in the first three months of the year. That’s expected to have a positive impact of $800 million to $1.2 billion on the results of its products division, compared with the prior period.

Shell shares advanced s 2.5%, and traded up 1.2% at 1,997.2 pence as of 9:36 a.m. in London.

Analysts regard the update as “neutral,” citing uncertainty around the “magnitude of working capital outflows.” In May, Shell warned it would be hit by $7.4 billion of working capital movements.

Oil prices soared 30% this year as Ukraine woes stoke supply concerns. Having ramped up its long-term price assumptions, Shell now expects to reverse previous writedowns on asset values by $3.5 billion to $4.5 billion. The company took a $3.9 billion impairment in the first quarter, from its planned exit from ventures in Russia. It will take an additional hit of $350 million from the loss of LNG volumes from the Russian Sakhalin-2 project.

Trading and optimization results from Shell’s sprawling integrated gas unit fell from the previous quarter, when the business benefited from “exceptional” trading opportunities. The renewables and energy solutions division is expected to report adjusted earnings of $400 million to $900 million for the second quarter amid an “exceptional market environment.”

Shell completed $8.5 billion of repurchases in the first half of the year. The company has previously signaled an acceleration in returns, saying that shareholder distributions would be in excess of 30% of operating cash flow.

 

 

Shell to start construction of Europe’s largest green hydrogen plant

Jul. 06, 2022 Carl Surran, SA News Editor

Shell made a final investment decision to build Europe’s largest renewable hydrogen plant in the Netherlands. The Holland Hydrogen I project at the port of Rotterdam will include 200 MW of electrolyzers, 10x the size of the largest existing green hydrogen facility in Europe. Upon anticipated completion of the project in 2025, Shell plans to use the daily production of 60K kg of green hydrogen to supply the Shell Energy and Chemicals Park Rotterdam, which currently uses hydrogen produced using fossil fuels to run its operations. The renewable power for the electrolyzer will come from the Hollandse Kust offshore wind farm, which is partly owned by Shell (SHEL).

“Renewable hydrogen will play a pivotal role in the energy system of the future, and this project is an important step in helping hydrogen fulfill that potential.”

Shell shares -3% to a six-month low as crude oil prices plunge on recession fears.

 

 

 

UK parliament approves windfall tax on petroleum producers

July 11 Reuters

The House of Commons approved a 25% windfall tax on oil and gas producers in the U.K. North Sea , overcoming criticism from oil and gas companies that said the tax would hurt investment and domestic production. The government claims the tax will raise £5B (~$5.95B) in one year to help people pay soaring energy costs. It adjusted the bill to include a firm end date in 2025 and to allow companies to offset against the tax the cost of decommissioning old fields and investing in electrification of producing fields.

U.K. utilities stocks including Centrica, Drax and SSE rose in London trading after the government said it had no plans to extend the waterfall tax to electricity firms. Major oil companies gained record profits from high prices for oil products: Shell expects its refining profits to nearly triple and add $1B to net income. BP reported its largest quarterly profit in a decade.

 

Oil and Gas Lobby Group vexed as energy profits levy becomes Law

Bloomberg July 14, 2022

Offshore Energies UK warned the tax could starve the industry of billions of pounds.
The main UK lobby group for the oil and gas industry urged ministers to work with the sector to minimize the impact of a new windfall tax on profits. The energy-profits levy, which was passed into law risks starving the North Sea of tens of billions of pounds of investment. The Conservative government announced the tax on oil and gas profits in May as a way to fund support for Britons hit by soaring inflation and energy bills. The levy, which is expected to raise £5 billion ($5.9 billion) of additional taxes, increases taxation to 65% from 40% previously.

“Exploring for oil and gas and then bringing it to shore is inherently a risky and expensive business, so our members need the UK’s fiscal rules and other regulations to be stable and predictable before they consider investing the hundreds of millions of pounds needed for such projects,” OEUK head Deirdre Michie said.

Sunak Stands Firm on UK Oil Windfall Tax in Industry Talks

The tax has drawn the ire of independent oil and gas producers who say it disproportionately affects smaller firms compared with major producers such as BP Plc and Shell Plc. Even larger firms have shown their discontent, with BP saying it will review the impact of its £18 billion spending plans in the UK because of the tax. Speaking at a conference , Shell Chief Executive Officer Ben van Beurden said it was “inevitable” that the industry would invest less in oil and gas because of the tax.

 

 

Energy Security Bill

UK to stop ‘undesirable’ owners entering Oil & Gas and CCS sectors
Energy Security Bill contains 26 measures to reform energy system and pave way for lower carbon technologies

6 July 2022
By Rob Watts in London

New UK legislation is set to address the country’s energy security with measures that include increasing powers to prevent “undesirable” owners from taking control of oil and gas and carbon, capture and storage (CCS) licences.

The Energy Security Bill was introduced to Parliament with 26 measures to reform the energy system and reduce its dependence on fossil fuels and exposure to gas price volatility.

The Conservative government hopes the bill will help drive £100 billion ($120 billion) of private-sector investment by 2030, supporting hundreds of thousands of lower-carbon energy jobs in sectors linked to offshore wind, hydrogen and other sources of clean energy.

The most significant piece of energy legislation in a decade will

“ ensure we are no longer held hostage by rogue states and volatile markets.. we must accelerate plans to build a truly clean, affordable, home-grown energy system in Britain. This is the biggest reform of our energy system in a decade. We’re going to slash red tape, get investment into the UK, and grab as much global market share as possible in new technologies to make this plan a reality. The measures in the Energy Security Bill will allow us to stand on our own two feet again, reindustrialize our economy and protect the British people from eye-watering fossil fuel prices into the future.”

UK oil and gas and carbon storage infrastructure will remain in the hands of companies with the best ability to operate it. The North Sea Transition Authority cannot currently prevent undesirable changes of ownership and control of petroleum and carbon storage Licensees before they happen. The Bill will rectify this to allow the NSTA to identify and prevent a potentially undesirable change of control before it happens.

PRC spends $60 billion a year on the Belt and Road initiative, exerting control and coercion over debtors. It invested over £3 billion in Britain and the UK must be wary of CNOOC and CIIC, Chinese state companies with links to PRC and PLA following bans on PRC companies Huawei and CGTN as security risks

CNOOC International is a leading upstream business in the UK North Sea and operator of the Buzzard, Golden Eagle and Scott assets. Buzzard is one of the UK’s highest-producing fields. CNOOC Petroleum Europe Limited, a wholly-owned subsidiary of CNOOC Limited, is the operating partner of Buzzard (43.21%), with Suncor Energy UK Limited (29.89%), Premier Oil UK Limited (21.73%) and ONE-Dyas UK Limited (5.16%) also holding interests in the field and its facilities.

CNOOC Petroleum Europe Limited, is the operating partner of Golden Eagle (36.54%), with EnQuest Heather Limited (26.69%), NEO Energy Production UK Limited (31.56%) and ONE-Dyas UK Limited (5.21%) also holding interests in the field and its facilities.

CNOOC Petroleum Europe Limited,  is the operator of Scott, Telford and Rochelle (41.89%, 80.40% and 79.29% respectively), with Dana Petroleum E&P Limited (20.64% Scott), Energean UK Ltd. (10.47% Scott and 15.65% Telford), NEO Energy Production UK Limited (5.16% Scott and 2.36% Telford) and MOL Operations UK Limited (21.84% Scott, 1.59% Telford and 20.71% Rochelle).

 

 

Neptune Energy

Neptune one of Europe’s largest international independent E&P companies, plans $1 billion investments in UK gas and lower carbon developments

10 May 2022

By Rob Watts in London

Private equity-backed operator Neptune Energy is set to spend more than $1 billion over the next five years to bolster UK energy supplies.

Neptune currently operates around 11% of the UK’s gas supply from fields in the southern North Sea and across the median line in the Norwegian North Sea. Among its investments will be about $1 billion with its partners in the new Seagull development, which Neptune operates with a 35% interest, adding about 50,000 barrels of oil equivalent per day of production from 2023.

Neptune is backed by world-class investors. The company was founded in 2015 with funds controlled by private equity groups Carlyle and CVC Capital Partners. China Investment Corporation became our largest shareholder in February 2018 when Neptune acquired the worldwide upstream assets of ENGIE. In May 2018, a $550 million offering of 6% senior notes widened our investor base to include a range of blue-chip bondholders.

 

China Investment Corporation

Headquartered in Beijing, China Investment Corporation (CIC) was founded in 2007 as a wholly state-owned company, incorporated in accordance with Chinese company law,  with registered capital of $200 billion. CIC focuses on the long-term development of its portfolio companies. It invests in a wide range of financial products globally, including  public equity, fixed income, alternative assets, currencies and commodities.

Neptune in UK
We operate the Cygnus Alpha and Bravo facilities, producing gas from the Cygnus field – the UK’s largest single producing gas field, which is capable of supplying around 6% of UK gas production. Projects Seagull Exploration Isabella Cornerstone is the operated, long life, gas producing Cygnus field, and operated Seagull oil development ‐ Cygnus is an important indigenous gas field ‐

• Seagull development progressing with first oil in 2023
• Material Isabella discovery announced in 2020; appraisal well to be drilled in H2 2022
• Progressing CCS and blue hydrogen DelpHYnus project
• Evaluating potential electrification of Cygnus platform.
• First two wells at Seagull (UK) to be completed in Q2 2022, topside work programmes underway, on track to start-up in H1 2023
• New discovery at the Hamlet prospect offers a potential lower carbon tie-back development to Gjøa (Norway). Further drilling at Ofelia prospect.
• Isabella (UK) appraisal well sanctioned, drilling scheduled to commence in H2 2022

Field facts
Cygnus is the largest single producing gas field in the UK.

• Cygnus connects via the Esmond Transmission System (ETS) pipeline to the Perenco operated terminal at Bacton.
• Cygnus Alpha is made up of three bridge-linked platforms: a wellhead drilling centre, a processing/utilities unit and living quarters/central control room.
• Cygnus Bravo, an unmanned satellite platform, is approximately seven kilometres northwest of Cygnus Alpha.
• Nine wells drilled to date, with two new development wells to be brought onstream in 2022 and 2023. Gas compression is expected to be fully operational in Q2 2022.
• First gas was in 2016, with the field expected to produce into the 2030s.
• Investigating the potential electrification of the Cygnus platform.

 

Norway

July 4, 2022, by Melisa Cavcic

Neptune Energy and OMV Norge – have been granted drilling permits by Norwegian authorities for wildcat wells located in the North Sea which are scheduled to be drilled this month. The Norwegian Petroleum Directorate (NPD) revealed that it has granted Neptune Energy Norge a drilling permit for well 35/6-3 S to test a prospect named Ofelia Agat, located in the North Sea off Norway.

The drilling programme for this well entails the drilling of an exploration well in production licence 929, which was awarded on 2 March 2018 and is valid until 2 September 2025. Neptune obtained safety consent for this well from the Petroleum Safety Authority (PSA) at the end of May. With 40 per cent ownership interest, Neptune Energy is the operator of the licence, while other licensees are Pandion Energy (20 per cent), Wintershall Dea Norge (20 per cent), Lundin Energy Norway (10 per cent), and DNO Norge (10 per cent). The water depth at the site is 344 metres.

Drilling operations are expected to start this month and will be carried out by the Deepsea Yantai semi-submersible rig – former Beacon Atlantic – which is owned by China’s CIMC and managed by the Norwegian drilling contractor, Odfjell Drilling. The rig, which is capable of harsh environment operation and is of a GM4D design, started working for Neptune Energy in November 2019 and two years later, the rig’s contract in Norway was extended to include three additional wells in the Norwegian North Sea in 2022.

NPD has also given a drilling permit to OMV Norge for a wildcat well 30/5-4 S, which is also located in the North Sea. This well will be drilled using the Maersk Drilling-owned Maersk Intrepid rig, which OMV hired in December 2021. The safety consent was secured last month.

The well is located in production licence 1100, which is operated by OMV Norge with a 40 per cent interest. Its partners in the licence are Source Energy, Wintershall Dea Norge, and Longboat Energy Norge with 20 per cent interest each, respectively. The well 30/5-4 S is targeting a prospect named Oswig and drilling operations will be conducted in water depths of 95 metres. This prospect is located close to existing infrastructure with tie-back potential to the Oseberg and Tune fields in the Norwegian North Sea, which are operated by Equinor.

The 2014-built Maersk Intrepid is an ultra-harsh environment CJ70 XLE jack-up rig, designed for year-round operations in the North Sea and featuring hybrid, low-emission upgrades

 

UK North Sea

July 5, 2022, by Melisa Cavcic

Bermuda-based shipping group Teekay Corporation has delivered a floating, production, storage and offloading (FPSO) vessel to an operator of a North Sea project, which anticipates operational deployment by 2025.

Malaysia’s Dagang NeXchange Berhad (DNeX), via its 90 per cent-owned subsidiary Ping Petroleum, revealed last week that it has taken delivery of the FPSO Sevan Hummingbird from Teekay. The company explained that the acquisition of this FPSO is a “critical milestone” in the development of the Avalon project in the Central North Sea off the United Kingdom. After receiving a letter of no objections from the North Sea Transition Authority (NSTA) earlier this year for its proposed Avalon development plans, the firm informed that it continues to progress this project towards a Final Investment Decision (FID), which is anticipated later this year. The UK project has potential to be powered by offshore wind

 

 

Russian gas flows to Europe as Nord Stream 1 restarts

JULY 21, 2022, BY NADJA SKOPLJAK

The Nord Stream 1 pipeline resumed gas transmission from Russia to Europe after ten days of being shut for annual maintenance .

Both lines of the gas pipeline system were shut on 11 July for routine maintenance works, including testing of mechanical elements and automation systems for ensuring reliable and safe pipeline operations.

Nord Stream AG, the company behind the project, said it had completed all maintenance works on the twin gas pipelines within the scheduled period and gas transmission resumed on 21 July. Annual scheduled maintenance activities are planned well in advance as part of the long-term pipeline integrity management strategy, the company said.

According to Klaus Müller, president of the German Federal Network Agency for Digitization, Climate Neutrality and Resilience, the pipeline is only delivering 40% of its capacity.

Nord Stream directly connects Russia’s gas reserves with energy markets in the European Union. The two 1,224-kilometer pipelines run from Vyborg, Russia, to Lubmin near Greifswald, Germany, through the Baltic Sea. The route crosses the Exclusive Economic Zones (EEZ) of Russia, Finland, Sweden, Denmark and Germany, as well as the territorial waters of Russia, Denmark, and Germany.

Transportation of gas through Line 1 began in mid-November 2011, while gas transport through the second line began in October 2012.

Combined, the twin pipelines have the capacity to transport a combined total of 55 billion cubic meters (bcm) of gas per year to the EU for at least 50 years.However, following numerous sanctions on Russia due to its invasion of Ukraine, the world has been facing a global energy crisis as president Vladimir Putin threatens to stop all gas supplies.

To drive home the challenge Europe faces, the International Energy Agency (IEA) announced the scenario in which gas flows through Nord Stream return after 21 July to the low levels they were at before the current halt, but, at the start of the winter heating season on 1 October, Russian gas supplies to Europe get cut off completely.

The agency believes Europe is at the epicenter of the energy market turmoil and coordinated actions across the EU are essential to prevent a major gas crunch, and proposes “five concrete actions” that European leaders need to take for a more coordinated, EU-wide approach to prepare for the coming winter.

The European Union has been actively working on securing its independence from Russian fossil fuels well before 2030, starting with gas. In pursuit of this, the EU moved to phase out all Russian oil imports “in orderly fashion.”

The REPowerEU Plan has been launched as a way forward to come to grips with a double urgency, seeking to reduce the EU’s dependency on Russian fossil fuels and fast forward the green transition. In addition, the EU intends to ban almost 90% of Russian oil imports by the end of the year.

Russia remains largest crude supplier to PRC which imported another 2 million bopd of discounted Russian crude oil in June, keeping Russia as its top supplier.

 

 

Dominican Republic: 2022 Article IV Consultation-
Press Release; and Staff Report

Publication Date: July 8, 2022

Electronic Access: Free Download.

Use the free Adobe Acrobat Reader to view this PDF file

Summary:

As in the past, the Dominican Republic’s dynamic economy continued to show remarkable resilience to shocks, rebounding strongly from the impact of the pandemic. Sound policies, a nimble vaccination campaign and a well-attuned reopening—including international travel—allowed the economy to make the most of the global rebound.

The recovery has been broad based; GDP was about 5 percent above pre-pandemic levels as of end-2021. The country maintained sound market access and benefitted from Fund support through the Rapid Financing Instrument (RFI).

Series:Country Report No. 2022/217

Subject:Commodities Electricity Fiscal policy Fiscal stance Inflation International organization Monetary policyPrices Public debt Public financial management (PFM)

Frequency:regular, ENGLISH
Publication Date:July 8, 2022

ISBN/ISSN:9798400214196/1934-7685Stock No:1DOMEA2022001Pages:104

1. IMF Executive Board Concludes 2022 Article IV Consultation with the Dominican Republic

July 6, 2022

Washington, DC : The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with the Dominican Republic and considered and endorsed the staff appraisal without a meeting [2] .

1. The Dominican Republic continued to show remarkable resilience to global shocks, supported by sound policies, monetary policy support, a nimble COVID vaccination campaign and a well-attuned reopening that allowed the economy to make the most of the global rebound last year. This resilience and strong signals of policy sustainability are placing the Dominican economy in a good position to face emerging global challenges going forward.
2. The economy recovered strongly from the pandemic, despite global factors that created challenges in terms of inflation. Real GDP increased by 12.3 percent in 2021, amid broad sectoral growth—including a notable recovery in tourism, with arrivals exceeding 2019 levels since last fall. By end-2021, output was 5 percent above pre-pandemic levels, consistent with strong employment growth.
3. Inflation convergence is taking longer than envisaged—headline inflation exceeds the target range due primarily to high inflation in the United States, higher global energy and food prices, and supply chain disruptions. The external position was sound, with the current account financed by FDI and a significant accumulation of reserves. The financial system remains resilient and continues to support the economy despite the unwinding of pandemic-related regulatory flexibility.
4. The outlook points to a continued recovery, though global developments pose risks. GDP growth would converge to its potential and inflation would return to the target range by next year as the impact of global shocks recedes, in the context of financial stability and a sound external position. As for risks, the war in Ukraine may have a stronger-than-expected effect on global growth and inflation.
5. The pandemic, while well-contained in the Dominican Republic, may downgrade growth in other regions.
6. And monetary policy tightening in the United States may have a stronger-than-expected impact on capital flows.
7. The authorities have responded with temporary measures while maintaining budget discipline through expenditure control and executing proactive debt-management that reduced financing risks. The central bank has begun a normalization of monetary policy; absorbing liquidity and increasing the monetary policy rate.

Executive Board Assessment

In concluding the 2022 Article IV Consultation with the Dominican Republic, Executive Directors endorsed staff’s appraisal, as follows:

As in the past, the Dominican Republic’s economy showed remarkable resilience. Sound policies that supported stability and maintained good market access, an effective health campaign and well-attuned re-opening—including to tourism—allowed the Dominican Republic to make the most of the global rebound and to limit scarring and the increase in poverty. The strong, broad-based recovery—with GDP at end-2021 about 5 percent above pre-pandemic levels—allowed a front-loaded fiscal consolidation and the normalization of monetary policy to address inflationary pressures.

Strong growth momentum and a well-sequenced policy response continue to help the Dominican Republic face a challenging global environment. Amid abating global tailwinds, growth should converge to its longer-term trend. Supply shocks have driven inflation higher than previously projected, but fiscal measures are easing the impact while the normalization of monetary policy should allow inflation convergence to the target over the policy horizon.

Risks are mainly associated with the war in Ukraine and the tightening of global financial conditions. The main impact from the war is expected to take place through higher commodity prices—direct trade and financial linkages are limited—while global financial conditions may have a stronger-than-expected impact on capital flows. The front-loaded fiscal consolidation, timely debt issuance and pro-active debt management help reduce vulnerabilities through lower near-term financing needs. Overall, this provides some space to face downside risks.

The external position is broadly in line with fundamentals and desirable policies. Exports and remittances grew robustly, while higher domestic demand and commodity prices increased the current account deficit—which nonetheless remained fully financed by resilient FDI—the external position is assessed as sustainable, with international reserves up strongly, improving reserve adequacy. The real exchange rate appreciated slightly in 2021 and remains broadly in line with fundamentals.

Economic policies—fiscal prudence, temporary commodity price mitigation measures, and monetary policy tightening—remain appropriate. Expenditure rationalization and tax administration efforts will help maintain a gradual fiscal consolidation, putting public debt on a stronger downward trajectory than previously projected while protecting investment and social spending. The use of temporary fiscal measures to contain the impact of commodity price shocks on domestic fuel and food prices is appropriate, as well as continuing with electricity sector reforms and improved targeting of subsidies and social assistance. Ongoing monetary and prudential policy normalization are warranted to maintain inflation expectations anchored and moderate financial risk-taking, respectively.

The exit from the financial regulatory response to the pandemic has been appropriate and the financial system proved its resilience. The exit was well designed and remains based on intensive monitoring and transparency in the assessment of asset quality. Going forward, the system would benefit from implementing higher international standards of supervision and regulation, enhancing the macroprudential and crisis management toolkit, and strengthening the regulatory framework for credit and savings cooperatives financial oversight.

Well-sequenced reform implementation can help strengthen medium-term policies. The authorities continue taking steps to strengthen policy frameworks, in particular by enhancing public financial management and transparency. This will pave the way for the introduction of fiscal responsibility legislation to better anchor medium-term policies and further secure debt sustainability. Together with ongoing reforms in the electricity sector, enhanced policy frameworks can build consensus for future revenue mobilization initiatives that create space for needed investment in infrastructure and human capital. An agreed roadmap for central bank recapitalization can also help by enhancing financial and institutional independence.

Reforms to foster inclusive growth and improved social outcomes remain critical. Ongoing efforts to improving governance, securing stable, competitive, and sustainable energy supply, building climate change resilience, and tackling other productivity bottlenecks—e.g., modernizing the labor code, increasing years and quality of education, and narrowing skills gaps in labor markets—along with enhanced effectiveness of social programs continue to be critical for sustainable and more equitable growth. Further efforts to address social issues—such as reducing regional and gender inequality—would also help making growth more inclusive.

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

World energy consumption exceeded pre-pandemic levels : BP review

The world’s energy consumption rose by 5.8% in 2021 to surpass pre-pandemic levels, which led to a 5.7% increase in greenhouse gas emissions from energy use, BP said in its annual Statistical Review of World Energy.

“Carbon emissions have risen in every year since the Paris goals were agreed,” expect for 2020, BP Chief Economist Spencer Dale said. “The world remains on an unsustainable path.”

Global oil demand in 2021 grew by 5.7M bbl/day to 96.9M bbl/day, according to BP’s report, but was still 3.7M bbl/day below pre-pandemic levels, driven mostly by weakness in the aviation industry, which was one-third below pre-COVID levels. Fossil fuels accounted for 82% of primary energy use last year, compared to 83% in 2019 and 85% five years ago. .

Demand for natural gas rose 5.3% in 2021, topping pre-pandemic 2019 levels and crossing the 4T cm level for the first time. Coal consumption rose by more than 6%, slightly above 2019 levels and its highest level since 2014.

“The pronounced dip in carbon emissions in 2020 was only temporary,” Dale said while also pointing to strong growth in wind and solar, accounting for 13% of total power generation.

Exxon Mobil CEO Darren Woods said that energy markets likely will remain tight for another five years.

 

IEA

PRC dominance leads to imbalances in global solar PV supply chains
Global manufacturing capacity for solar panels has increasingly moved out of Europe, Japan and the US over last decade

8 July 2022
By Xu Yihe in Singapore

The Paris-headquartered International Energy Agency (IEA) has issued a warning about China’s dominance of solar panel supply chains, calling for action to diversify manufacturing locations to ensure a secure transition to net zero.

The IEA in a new special report said that global solar panel supply chains are currently heavily concentrated in China thanks to the industrial and innovative policies focused on expanding solar panel production and markets.

However, this has also led to imbalances in photovoltaic (PV) supply chains, according to the report entitled Solar PV Global Supply Chains.

 

 

Mohammad Sanusi Barkindo 1959-2022
Industry mourns Opec icon

8 July 2022
By Amanda Battersby in Singapore

Tributes have been pouring in following the sudden death of outgoing Opec secretary general Mohammad Sanusi Barkindo, who passed away on 5 July, aged 63 years.

In its obituary to a “genuine Opec icon” the Secretariat said, “He was the much-loved leader of the Opec Secretariat, and his passing is a profound loss to the entire Opec family, the oil industry and the international community. Throughout HE Barkindo’s long career, there have been several central themes that have driven him: an infectious passion for the petroleum industry; an unwavering belief in oil’s poverty eradicating potential; a steadfast commitment to sustainable development; the importance of dialogue and multilateralism; and, most fundamentally of all, treating everyone with respect and kindness.

Despite the attainment of so many heights in his career, HE Barkindo remained a selfless man of great humility and decency, treating everyone, irrespective of rank or office, with dignity and courtesy. A trailblazer widely admired and respected throughout the globe. A dear friend to many.

Born 20 April, 1959 in Adamawa State in Nigeria, Barkindo leaves behind a wife and children. He was buried on 6 July in his hometown of Yola. The cause of Barkindo’s death is not yet known.

His education included a BSc (Honours) in political science from the Ahmadu Bello University in Zaria, Nigeria in 1981, followed seven years later by a postgraduate diploma in petroleum economics from Oxford, UK. He earned an MBA in finance and banking from Washington University in the US.

From 1982 to 1985 Barkindo worked for the Nigerian Mining Corporation. From 1984 to 1986 he was a special assistant to Rilwanu Lukman, Minister of Mines, Power & Steel In 1986 Barkindo first attended Opec ministerial conferences as a Nigerian delegate.

In 1992 he joined the Nigerian National Petroleum Corporation (NNPC) where he held various posts over a 24-year tenure, including president of Duke Oil, chairman of NAPOIL and chief executive of Nigeria LNG.

From 2007 to 2009 he oversaw all Nigerian federal government projects vested in the NNPC as coordinator. Barkindo was a member of the committee that produced the original draft of Nigeria’s Petroleum Industry Bill and led NPCC’s transformation programme as enshrined in the Oil & Gas Industry Reform Implementation Committee report of 2008.

He was elected secretary general of Opec in 2016, replacing Libya’s Abdullah al-Badri, to serve a six-year term. A decade earlier, he had served a stint as acting secretary general of the Vienna-headquartered oil producers’ group.

Barkindo died after giving a speech at an energy summit in the capital Abuja. Later that day he was welcomed at the State House by Nigerian President Muhammadu Buhari, who called him a “worthy ambassador” of the country.

“Your time in charge of the affairs of Opec has been a very challenging one for the global oil industry. Oil producers were finding it difficult to come together to address challenges that were crippling the oil market. There is no doubt about your efforts in putting together the Declaration of Co-operation, which is the largest co-operative effort in the history of Opec and the global oil industry and also the longest in duration in the history of the organisation. This was a Herculean task,”

Focus on climate issues
Barkindo led Nigeria’s technical delegations to the climate change negotiations that produced the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol to the UNFCCC.

He was elected vice-president of the Conference of the Parties at COP13 in Bali, Indonesia, in 2007. Barkindo was re-elected vice president at COP14 in Poznan, Poland, the following year and again at COP15 in Copenhagen, Denmark, in 2009.

Barkindo was a founder delegate to the formation of the African Petroleum Producers Association (APPA) in 1986 and a delegate to APPA ministerial conferences from 1987 to 2010.

He was also a pioneer member of the International Energy Forum in Riyadh, Saudi Arabia and helped strengthen and consolidate Opec/non-Opec cooperation and dialogue.

He played a crucial role in the Opec deal that saw non-Opec producers collaborate with the cartel to moderate global prices when demand plummeted in the wake of Covid-19 pandemic.

“This is indeed a very sad day for the Opec family,” said Haitham Al-Ghais, the Kuwaiti oil official who was earlier elected to become the next secretary general.

Al-Ghais had an official start date of 1 August but has now taken the helm several weeks early.

“Barkindo has led the organisation during extremely turbulent times for the global oil market, and his remarkable role and valuable contributions, along with our organisation’s long history of dialogue and co-operation, put us in a strong position to continue supporting stability and balance in the global oil market,” Al-Ghais said.

The African Energy Chamber (AEC) confirmed that with a career spanning four decades, he dedicated his life and career to growing the Nigerian, African, and global oil and gas sectors.

NJ Ayuk, Executive Chairman of the AEC, remarked: “H.E. Barkindo was our leader, our role model and our friend. The AEC is devastated at the news of his passing. In Africa, he will always be remembered as a patriot, an instrumental figure who fought for the continent’s right to develop our oil and gas.

“H.E. Barkindo lived a life of loyalty, friendship and perseverance. He will be remembered as the man who united producers, helped create OPEC+, fought for alleviating energy poverty and strengthened Africa’s position as a global energy supplier. He will be greatly missed.”

His kindness was remembered by Yesar Al-Melaki, an analyst at MEES Energy.
“First time I met Mohammad Barkindo I was a nobody, just a fresh energy economics graduate. Talking to him, he put me immediately at ease, asked for my business card — I didn’t have any. He offered his, gave me another one and asked me to write my info on the back.”

Barkindo engaged in charity work and enjoyed reading — one of his favourite scribes was the poet, Jalal ad-Din Muhammad Rumi — and soccer.

 

 

Brazil breaks wheat export records in 2021/22

 June 30th 2022

[Caricom please note good news for regional wheat supply]
Brazil, among the largest wheat importers –mainly from Mercosur associates–, is breaking consecutive export records in 2022. In less than six months, until June 20, Brazil exported more than twice as much wheat as in 2021, that is 2.5 million tons vis-a-vis 1.12 million tons in the whole year.

According to editor of Canal Rural, Giovani Ferreira, the appreciated dollar and the Russian invasion of Ukraine are the main reasons behind such expansion. Together, the two countries are responsible for around 30% of the world wheat export market, some 210 million tons.

“The current market scenario in Brazil is the result of the war in Ukraine, which, as a side effect, increased the price of cereal on the whole planet.”.

With the conflict in Eastern Europe beginning at the end of February, the price of a wheat bushel reached the US$ 12 mark in Chicago. The pre-war level was US$ 8, and, currently, the cereal is priced at US$10.

In the domestic market,according to the exchange rate variable, prices went from R$95 per bag to R$120 per bag, “which helps explain the bullish market and unexpected food prices for chicken and pork farmers.”

However despite the exceptional performance in exports, Brazil is currently the world’s fourth-largest wheat importer, with 6.2 million tons imported in the past. Brazil’s industry consumes on average some 12 million tons annually, and is benefitting from a record wheat crop harvest and yield..

“The crop is still being planted and depends on the weather how it grows. More than 80% of Brazil’s wheat supply is concentrated in the Southern Region, especially in the states of Paraná and Rio Grande do Sul. The expectation is to harvest between 8.5 million and 9 million tonnes. But what if the weather doesn’t help? We may have a supply problem,” said Ferreira who nevertheless believes wheat is rapidly becoming a most valued winter crop by farmers and will eventually harvest sufficient to cover domestic market and have an export surplus. .

 

 

Brazil grains

July 9th 2022

Caricom has no need for fake flour from roots, especially toxic, tasteless cassava. It can easily import corn and wheat from Brazil for the staff of life.  Brazil’s crop estimate of 272.5 million tons is helped by corn and wheat despite a slide in soybeans

Given more optimistic prospects for the supply of corn and wheat, Brazil’s National Supply Company, Conab, increased, slightly, the estimate for the 2021/22 market year grain harvest. Overall this has meant that Brazil is expected to have a crop of 272.5 million tons of grains in the current season, 6.7% greater than the previous season.

The total area planted with grains should grow 5.8%, to 73.8 million hectares, while the average productivity of crops should increase 0.9%, to 3,693 kilograms per hectare. With the second corn crop harvest in progress, Conab raised its production estimate by almost 500,000 tons compared to a month ago, and now forecasts 88.4 million tons.

This volume represents an increase of 45.6% in production compared to the previous market year, driven by the improvement in productivity and the increase in planted area in the state of Paraná, Brazil’s Center-West region.

The cereal crop in 2021/22, including the previously harvested first crop, is now predicted to be 115.7 million tons, a 32.8% increase over the previous crop.

Conab also increased its estimate for the wheat harvest by some 700.000 tons to 9 million tons. Compared with 2020/21, it represents a 17.6% growth driven both by improved productivity (+10.3%) and increase in the sown area (+6.6%).

However for soybeans, flagship of Brazilian agribusiness, the production estimate was readjusted slightly downwards to 124 million tons, following the end of harvests in the states of Rio Grande do Sul, Santa Catarina, and Maranhão. Production dropped 10.2% compared to the previous crop, as La Niña impacted on productivity and yields.

Regarding estimates for rice and black beans, staple food of millions of Brazilians, crop volumes went up. For rice, the projection is now 10.8 million tons, but the forecast increase is still 8.2% lower than in the last farm year..With beans projection is now for over 3.1 million tons or a 7.5% increase.Finally, Conab revised its estimate for the cotton lint harvest, with a crop expected to reach 2.8 million tons, which is still 18.2% higher than in the last farm year.