Oil And Gas News

(World Oil) – The Biden administration advanced a plan to limit oil drilling and infrastructure across more of Alaska’s National Petroleum Reserve, a bid to lock in land protections and conservation requirements days before President-elect Donald Trump takes office.

The Interior Department move Thursday represents the latest step by outgoing President Joe Biden to enshrine protections that could complicate Trump plans to rapidly expand oil and gas development across US federal lands and waters. In recent weeks, Biden also has designated new national monuments and ruled out the sale of drilling rights in more than 625 million acres of U.S. coastal waters.

In the latest action, the Interior Department is proposing new “special area” designations that would restrict drilling and other activities across more than 3 million acres of the Indiana-sized reserve in northwest Alaska. The move comes on top of an existing policy, finalized last year, that barred drilling across nearly half of the NPR-A.

The rugged terrain once earmarked for energy development contains an estimated 8.7 billion barrels of recoverable oil, but it’s also an important habitat for caribou, grizzly bears and migratory birds. And it’s a prized resource for Alaska Natives who have long relied on the land for subsistence hunting and fishing.

The Interior Department immediately imposed measures meant to avoid damage to those areas even while they’re being considered for protection, effectively raising hurdles for building roads and other infrastructure across the tracts. 

Although Trump could cast aside his predecessor’s proposed special areas and ignore the interim safeguards imposed in the meantime, the action could be challenged in federal court. The report and memo unveiled Thursday bolsters the government record for those safeguards, providing potential fodder for any future legal battle.

(Investing) – LONDON – Companies transporting their products around the world are not ready to return to the Red Sea trade route in the wake of a Gaza ceasefire deal because of uncertainty over whether Yemen’s Houthis will continue to attack shipping, industry executives said.

The leader of Yemen’s Houthis said on Thursday that the Iran-aligned group would monitor the implementation of a ceasefire deal between Israel and Hamas aimed at ending the war in Gaza and continue its attacks on vessels or Israel if it is breached.

The Houthi militia has carried out more than 100 attacks on ships since November 2023 and has sunk two vessels, seized another and killed at least four seafarers in what they say is solidarity with Palestinians in Gaza.

The intensity of the attacks has disrupted global shipping and prompted route changes.

Executives from shipping, insurance and retail industries told Reuters the risks remained too high to resume voyages through the Bab al-Mandab strait in the Red Sea through which exports to Western markets from the Gulf and Asia must pass before entering the Suez Canal.

“There is no way I’m putting any of my merchandise on a boat that’s going to go through the Red Sea for some time to come,” said Jay Foreman, CEO of U.S.-based Basic Fun, which supplies toys to major U.S. retailers like Walmart (NYSE:WMT) and Amazon.com (NASDAQ:AMZN).

“I’ll spend the extra money, and I’ll send everything around the tip of Africa… It’s just not worth taking a chance.”

TRIAL RUNS

Matt Castle, vice president of global forwarding with logistics group C.H. Robinson, said: “It’s not likely the industry will see a large shift back to the Suez Canal in the short term.”

He said this was due to the challenges related to securing cargo insurance given perceived high risks and time constraints, as it would take weeks or months to implement a new ocean shipping plan.

If the Houthis do halt the attacks, retailers may have to wait until the second quarter for shipping lines to fully shift their routes, said Craig Poole, managing director at Cardinal Global Logistics, whose clients include B&M Retail and Pets At Home.

“It’ll definitely be a case of trialing the route, making sure that the ceasefire is genuine.”

Maritime security sources said companies would treat any pledge by the Houthis to halt attacks with caution and would opt for test voyages to assess the risk environment.

For larger ships, such as tankers carrying liquefied natural gas, any resumption would take longer due to bigger risks if such a ship carrying a flammable cargo was hit.

Norwegian shipper Wallenius Wilhelmsen, which transports vehicles by ship, said it would not resume sailing through the Red Sea “until it is safe”.

Swedish fashion retailer H&M (ST:HMb), which uses sea freight to transport most of its products from factories in Asia to Europe, said it was monitoring the situation.

Tailwind Shipping Lines, a shipping firm owned by German supermarket chain Lidl, said the security of crew, ships and cargo was a top priority.

The European Union’s naval force in the Red Sea said its “threat assessment remains unchanged”.

WAR RISK

Higher war risk insurance premiums, paid when vessels sail through the Red Sea, have meant additional costs of hundreds of thousands of dollars for a seven-day voyage for any ships still sailing through the area.

Insurance sources said on Friday that additional war risk premiums were quoted between 0.6% and up to 2% of the value of the vessel if a ship had any links to Israel or the U.S. and were broadly unchanged in recent months.

(Yahoo Finance) – One of the world’s largest battery storage facilities is being consumed by flames near San Francisco on Friday, and officials say the best solution is to let the factory continue to burn, even as it releases toxic fumes into the air.

Vistra Corp’s 3000-megawatt Moss Landing energy storage facility went up in flames on Thursday, in a blaze that is expected to remain contained to the building. The company’s shares dropped about 6% in premarket activity.

The fire is nowhere near the Los Angeles-area wildfires.

About 40% of the building has been consumed in the fire, whose cause remains under investigation.

“There are no active fire suppression efforts going on, as the best approach, according to fire staff, is to allow the building and batteries to burn,” according to a Monterey Sheriff official.

Both Vistra and the county official said that all site personnel had been evacuated and no injuries were reported. The fire had also prompted evacuation of places nearby.

Vistra has not yet released any statement on potential financial impact from the fire or any timeline on recovery efforts.

Lithium-ion batteries have solidified their position as the technology of choice in the electric vehicle market, and the market for these batteries is projected to keep growing at about 30% annually.

Vistra and other power firms became top S&P 500 performers last year, as demand for clean and sustainable supply of energy from data centers, manufacturers and electric-vehicle makers has been on the rise.

The impact of the ongoing fire on the energy storage sector and the supply chain remains unclear.

An adjacent Tesla battery facility was not affected by the fire, the official added.

California has been on alert since the Los Angeles fires started about 10 days ago and has killed at least 27 people.

(Reporting by Mrinalika Roy, Shubham Kalia, Kanjyik Ghosh and Gursimran Kaur in Bengaluru; Editing by Clarence Fernandez, Sharon Singleton and Leroy Leo)

(World Oil) – ADNOC Gas in partnership with Baker Hughes has successfully installed British climate technology firm Levidian’s patented LOOP technology at the Habshan Gas Processing Plant.

This marks the first-ever deployment of the technology at an operational gas processing site. Carbon will be captured from methane, the main constituent of natural gas, and transformed into graphene, a material set to shape the future of multiple industrial applications.

The LOOP unit is capable of producing more than 1 tonne per annum (tpa) of graphene and 1 tpa of hydrogen, making it a dual-purpose innovation aligned with global energy transition goals. Future industrial-scale installations are expected to deliver 15 tpa.

“The deployment of LOOP technology is a significant milestone for ADNOC Gas,” said Mohamed Al Hashemi, COO of ADNOC Gas. “By transforming methane into valuable graphene and clean hydrogen, we are unlocking new value from natural gas, driving decarbonization and supporting the UAE’s industrial growth and climate ambitions. This project reflects our dedication to shaping a more sustainable energy future while delivering tangible benefits for the industries we serve.”

Data collected during the pilot will be used to refine the ongoing development of AI modelling and digital twins to minimize energy consumption and maximize graphene output from future installations as part of Levidian’s growing fleet of LOOP units.

“This project demonstrates once more how the collaboration between Baker Hughes and ADNOC Gas unlocks the potential of new decarbonization technologies,” said Alessandro Bresciani, senior VP Climate Technology Solutions at Baker Hughes. “Bringing innovation from startups and research labs into the reality of complex industrial sites requires technical skills and the highest level of collaboration and focus on health, safety and environment. We are delighted to have brought Levidian’s technology into ADNOC Gas’ Habshan plant, as part of our company’s long-term focus in bringing to market and scaling up innovative solutions for our customers.”

“We’re seeing huge appetite within the market for our graphene and are excited to be working with Baker Hughes and ADNOC to unlock a new source of this super-material, which will help establish Levidian as one of the world’s largest producers of  graphene  that is less carbon intensive, more affordable and of a consistently higher quality than anything available on the market today,” added John Hartley, CEO of Levidian.

The graphene produced at the Habshan complex will be evaluated and utilized by ADNOC’s Technology team to explore possible applications. Graphene has the potential to be used across industries from enhancing the performance of electric vehicle batteries and solar panels to creating stronger, more durable materials such as concrete, tires, and polymer pipes.

(Oil Price) – Diesel prices in Asia, Europe, and the U.S. jumped this week as the latest U.S. sanctions on Russia’s oil industry added to colder winter weather to boost futures prices and margins amid expectations of reduced diesel and crude supply from Russia.

On January 10, the outgoing U.S. Administration imposed the most aggressive sanctions on Russia’s oil yet, designating two major Russian oil companies, Gazprom Neft and Surgutneftegas, as well as 183 vessels, dozens of oil traders, oilfield service providers, insurance companies, and energy officials.

In the week following the sanctions, the benchmark diesel contract in Europe deepened the backwardation structure to a 10-month high, according to data by LSEG quoted by Reuters.

The backwardation futures market structure signals tight supplies or market deficit, and in it, prices for front-month contracts are higher than the ones further out in time.

Diesel refining margins hit their highest level in more than five months at $20 per barrel on Thursday.

Margins in Asia also surged by 8% on Monday, the first trading day after the U.S. sanctions were announced last Friday, before giving up some gains by the end of this week.

Diesel futures prices in the United States have also rallied, although cold winter weather was a bigger factor than the sanctions on Russia.

The direct sanctions on Gazprom Neft and Surgutneftegas, which operate refineries in Russia, are expected to disrupt fuel product exports of these two companies.

At least 150,000 barrels per day (bpd) of Russia’s diesel exports, courtesy of these firms, are at risk, according to estimates by consultancy Energy Aspects.

“Diesel [profit margins] are up following news on the sanctions, and we expect meaningful disruptions to Russian diesel exports,” Energy Aspects analyst Natalia Losada told Reuters.

The sanctions are set to increase costs for crude supply to Asia, where refiners’ profits could be constrained by the higher-priced oil, analysts say.

By Tsvetana Paraskova for Oilprice.com

(Investing) – LONDON  -Oil prices moved lower on Friday but remained on course for a fourth consecutive week of gains, as the latest U.S. sanctions on Russian energy trade heightened expectations for oil supply disruptions.

Brent crude futures were down 57 cents, or 0.70%, at $80.72 per barrel by 1433 GMT, having gained 1.15% this week.

U.S. West Texas Intermediate crude futures were down 44 cents, or 0.56%, at $78.24 a barrel, having climbed 2.13% for the week.

“The oil market is in a bit of a wait-and-see mode, to understand if there are any supply disruptions based on the latest U.S. sanctions versus Russia,” UBS analyst Giovanni Staunovo said.

Last week, the Biden administration unveiled broader sanctions targeting Russian oil producers and tankers.

Investors are also assessing potential implications of President-elect Donald Trump’s return to the White House on Monday. Trump’s pick for Treasury secretary said he was ready to impose tougher sanctions on Russian oil.

“While comments from Rubio and Bessent point in a direction of potential further sanctions impacting oil producers, market participants prefer to wait on what the next U.S. president will decide,” Staunovo said, referring to U.S. Senator Marco Rubio, who is Trump’s pick for U.S. secretary of state.

Also weighing on oil prices were expectations of a halt in attacks by Yemen’s Houthi militia on ships in the Red Sea in the wake of a Gaza ceasefire deal.

The Houthis’ attacks have disrupted global shipping, forcing ships to make longer and more expensive journeys around southern Africa for more than a year.

The Israeli cabinet is set to approve a deal with militant group Hamas for a ceasefire in Gaza, Prime Minister Benjamin Netanyahu’s office said on Friday.

Expectations for better demand lent some support to the oil market earlier on Friday. Data this week showed inflation easing in the U.S., the world’s biggest economy, bolstering hopes of interest rate cuts.

Traders are also assessing fresh data from China, the world’s top oil importer. Its economy fulfilled the government’s ambitions for 5% growth last year.

(World Oil) – Talos Energy Inc. (Talos) has announced that the Katmai West #2 well located in the Ewing Bank area of the U.S Gulf of Mexico successfully encountered commercial quantities of oil and natural gas.

“We are proud of our team for achieving these successful drilling results,” said Talos’s Interim Co-President, Executive Vice President and Head of Operations John Spath. “Delivering this high-impact deepwater well, approximately 35% under budget and more than a month ahead of schedule, demonstrates our ability to efficiently execute complex projects while maintaining top safety and environmental standards.

We remain optimistic about the greater Katmai area, as these results align with our pre-drill expectations about its gross resource potential. We look forward to having this well on production and believe it positions us for strong value creation as we move forward into 2025.”

The drillship West Vela began drilling the Katmai West #2 well in late October 2024. Talos plans to case and suspend the well by late January 2025 while the company finalizes completion plans to be executed in the second quarter 2025. Production is expected to start later that same quarter. The well will be connected to the existing subsea infrastructure that flows to the Tarantula facility, which has been expanded to increase capacity to 35 MBoe/d. Talos anticipates the Katmai wells will be rate-constrained under the upgraded capacity, allowing for extended flat-to-low decline production from the facility. Talos, as operator, holds a 50% working interest, with entities managed by Ridgewood Energy Corporation holding the other 50% in Katmai West field. Talos is the 100% owner and operator of the Tarantula facility.