Two Major Libyan Oilfields Reopen
Two major oilfields in southwestern Libya have reopened after months of a blockade that shut off most of the country’s crude production, costing billions of dollars in lost revenue.
The state-owned National Oil Corporation (NOC) confirmed some production had resumed at the 300,000 barrel per day (bpd) Sharara oilfield, shut for more than four months.
Two engineers at the field told Reuters production was gradually restarting.
El Feel, a field linked to Sharara, reopened, an engineer there told Reuters. There was no immediate confirmation from the NOC regarding the field, which previously produced 70,000 bpd.
The resumptions follow a rapid military retreat by forces loyal to eastern-based commander Khalifa Haftar, whose allies had blockaded oilfields and ports since January, shutting off most of Libya’s production.
NOC said in a statement that production at Sharara had restarted “after lengthy negotiations ... to reopen the Hamada valve, which had been illegally closed last January” but did give further details.
The valve, on the pipeline running from Sharara to the northern oil terminal of Zawiya, was reopened and crude flowing from Sharara reached the terminal, the Petroleum Facilities Guard said.
Production at Sharara will start at 30,000 bpd and output is expected to return to full capacity within 90 days, NOC said.
Sharara is operated by NOC in a joint venture with Spain’s Repsol, France’s Total, Austria’s OMV and Norway’s Equinor. NOC declared force majeure on loadings from the field in January.
US Sanctions on Rosneft Remain Effective
Russia lowering its direct stake in top oil producer Rosneft will not alter its exposure to U.S. sanctions, a U.S. Treasury spokesman told Reuters.
State holding company Rosneftegaz has lowered its 50.33% direct stake to 40.4% with subsidiary RN-NeftKapitalInvest taking 9.6% and Rosneft unit RN-Capital 0.33%.
“The reported change in Rosneft’s ownership does not alter the basis for its inclusion on the SSI List,” a U.S. Treasury spokesman told Reuters.
“The change... does not alter the Treasury Department’s concerns with respect to a broad range of Russian malign activity globally, and we will continue to use our sanctions authorities as appropriate in response to that activity.”
The United States added Rosneft and other Russian entities to its “Sectoral Sanctions Identifications List” (SSI List) in 2014 over Russia’s role in the Ukraine crisis.
Inclusion in the list, overseen by the U.S. Treasury’s Office of Foreign Assets Control, means U.S. persons are barred from engaging with those firms in mid-to-long term new debt or providing assistance for deepwater, Arctic offshore or shale projects.
International shareholders in Rosneft, headed by Igor Sechin, a longstanding ally of Russian President Vladimir Putin, include BP with a 19.75% stake and Qatar with 18.93%.
As the three Rosneftegaz entities combined hold 50.33% of Rosneft and give the state control of the company, Rosneft will still be able to develop offshore blocks at home, said Yaroslav Karnakov, a partner at law firm Nortia GKS.
Gasoline Rises As U.S. Oil Producers Shut Wells
Energy companies evacuated 10% of production platforms and shut nearly 30% of offshore oil output, pushing gasoline prices higher, as Tropical Storm Cristobal entered the U.S. Gulf of Mexico.
Cristobal was located 535 miles (860 km) south of the mouth of the Mississippi River and moving north at 13 miles per hour (21 km per hour), according to the U.S. National Hurricane Center (NHC).
Equinor ASA, BP PLC and Occidental Petroleum Corp halted production and evacuated offshore staff, while Murphy Oil Corp and Royal Dutch Shell PLC evacuated some platforms, the companies said.
Operators evacuated 65 offshore facilities and moved seven drill rigs out of the storm’s path, according to offshore regulator Bureau of Safety and Environmental Enforcement.
Well shut-ins took out 544,814 barrels per day of oil and 601 million cubic feet of natural gas production, BSEE said.
Spot Gulf Coast gasoline prices rose a half a penny as buyers acquired contracts in case the storm disrupts the market, traders said.
The Miami-based National Hurricane Center issued tropical storm and storm surge warnings for areas from Louisiana to Ocean Springs, Mississippi. Winds were 40 miles per hour (64 km per hour) and expected to reach 60 miles per hour (96 km per hour) before landfall, according to NHC forecaster Richard Pasch.
Cristobal was forecast to strike central Louisiana after passing through U.S. offshore oil production areas.
Malaysia Names Petronas New CEO
Malaysia’s prime minister appointed the finance chief at Petroliam Nasional Bhd (Petronas) to take over as chief executive at the state energy company, at a time when lower oil prices and the coronavirus pandemic have hit the firm’s profits.
The government of premier Muhyiddin Yassin has made a series of management changes at state-owned companies and government agencies since coming to power in March following the unexpected resignation of his predecessor, Mahathir Mohamad.
Tengku Muhammad Taufik Tengku Aziz, currently chief financial officer will take over from Wan Zulkiflee Wan Ariffin as Petronas CEO from July 1, the prime minister’s office said.
Wan Zulkiflee, who led Petronas for five years, will join the struggling national carrier Malaysia Airlines as chairman, Muhyiddin’s office said.
The changes at Petronas come as the new coronavirus outbreak has wreaked havoc on energy demand and dampened oil prices, forcing the company to review costs and capital expenditure.
The chief executive’s position at Petronas, which is fully owned by the Malaysian government, is a prime ministerial appointment.
Wan Zul, as he is commonly known, is a Petronas veteran, joining the company in 1983 as a process engineer and working his way up through the ranks.
He took over as CEO in 2015 and led the company through a period of tumultuous oil prices.
Benchmark Brent crude plunged to near 12-year lows soon after he took over, prompting Petronas to cut $12 billion from costs and thousands of jobs for the first time.