UAE Seals $4bn Pipeline Infrastructure Deal
Abu Dhabi National Oil Company (ADNOC) has sealed a $4 billion midstream pipeline infrastructure deal with U.S. investment firms KKR and BlackRock, the government-owned company said. ADNOC has been expanding through strategic partnerships since 2017. Last month it won a combined $5.8 billion investment from Italy’s Eni and Austria’s OMV for a stake in its refining business to establish a new trading operation owned by the three partners. The latest deal follows ADNOC’s capital markets debut with its Abu Dhabi Crude Oil Pipeline bond, the IPO of ADNOC Distribution and other initiatives. A new entity called ADNOC Oil Pipelines will lease the oil company’s interest in 18 pipelines, transporting crude oil and condensates across ADNOC’s upstream concessions for a 23-year period, ADNOC said in a statement. The 18 pipelines have a total length of over 750 km and capacity of 13 million barrels per day. Funds managed by KKR and BlackRock will form a consortium to hold a 40 percent stake in the entity, with ADNOC owning the rest. ADNOC will have sovereignty over the pipelines and management of pipeline operations. The deal, expected to close in the third quarter of 2019, will result in upfront proceeds of some $4 billion to ADNOC. The statement cited Sultan al-Jaber, ADNOC group CEO, as saying the deal validated ADNOC’s approach of “unlocking value from its portfolio of assets while retaining control over their ownership and operation”.BlackRock is investing through its Global Energy & Power Infrastructure Fund series while KKR’s investment is through its third Global Infrastructure Investors Fund, the statement said.Shell plans to enter Britain’s offshore wind market by acquiring seabed leases or taking stakes in existing projects, despite the country’s impending departure from the European Union, the head of the company’s New Energies division said.Oil firms are increasingly building portfolios of clean energy projects to satisfy investor demands that they reduce their carbon footprint. Shell previously said it would spend $1 billion to $2 billion a year on green technology. “We absolutely would like to get a position in the UK offshore (wind) market,” Mark Gainsborough, executive vice president at New Energies, told Reuters in an interview.Many international firms, such as automakers and nuclear plant developers, have shied away from fresh UK investment with Brexit creating uncertainty over the future of the country’s economy. But Gainsborough said Britain’s plans to leave the EU next month would not dampen the company’s interest in its offshore wind industry.“The thing that is more important is there continue to be supportive government policies,” he said. Britain is the world’s biggest offshore wind market, hosting almost 40 percent of all globally installed wind capacity, and the government is this year expected to outline planned support for the offshore wind industry. Gainsborough said the company could seek to buy a stake in or acquire an existing British offshore wind project and that it planned to take an “active role” in bidding for a British seabed offshore wind lease expected to be tendered this year. Shell has been successful in similar seabed lease sales in the United States.
Shell, PetroChina Row Holds Up Gas Project
Royal Dutch Shell and PetroChina are at loggerheads over gas sales pricing at their Arrow Energy joint venture, holding up development of Australia’s biggest coal seam gas resource, three industry sources said.Shell and PetroChina acquired the Surat gas resource in a A$3.5 billion ($2.5 billion) takeover of Arrow in 2010, and had expected to reach a final investment decision in 2018, with first production around 2020.That was after the Arrow Energy venture signed a 27-year deal in December 2017 to supply natural gas from Surat to the Queensland Curtis LNG plant (QCLNG), which is operated by Shell.
Norway Oil Sector Lowers 2019 Investment ForecastOil
and gas companies working in Norway have lowered their investment forecasts for 2019 to 172.7 billion crowns ($20.1 billion) from 175.3 billion crowns seen in November, a survey by the country’s statistics agency (SSB) showed. In 2020 investments are expected to fall to 158.5 billion crowns, according to initial forecasts, though the forecasts could be revised upwards in the months to come, it added. “Several plans for development and operation are expected to be submitted to the government in both 2019 and 2020,” the agency said in a statement. “If the schedules for these plans are realised, the accumulated investment costs in 2020 from these projects will increase the investment in field development compared to the present estimate.
”India Overhauls Oil/Gas Exploration Rules
India revamped rules for future exploration and production of oil and gas blocks in its efforts to attract private investment and increase domestic production. India imports four out of every five barrels of crude oil it consumes and is likely to shell out more than $100 billion on oil purchases in 2018/19. “The emphasis of the new rules is for raising hydrocarbon production,” Dharmendra Pradhan, India’s oil minister said in New Delhi.Under the new rules, producers will be given pricing and marketing freedom that is currently non-existent in natural gas blocks in India. Explorers will also be given financial incentives for early production from their blocks, Pradhan said.
Mexico’s Pemex Crude Output Lowest Since Records Began
Mexico’s Pemex produced 1.62 million barrels of crude per day in January, less than any month in almost three decades, the state-owned oil company said, underscoring the challenges facing a government that vows to pump far more in a few years. The company’s crude output for the month was the lowest since at least 1990, when Pemex’s publicly available records begin.The firm’s crude oil output has declined for 14 consecutive years since hitting a peak of 3.4 million bpd in 2004, as Mexico’s most prolific fields have dried up and new ones to replace them have not been discovered.