Natural Gas Daily: August 11th, 2020
Impairments Push US Oxy to $8.4bn Loss in Q2
After-tax impairment charges totalling $6.6bn pushed US independent Occidental Petroleum to a net loss of $8.4bn in Q2 2020, the company announced August 10 after market close. Net earnings in the second quarter a year ago were $635mn.
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- Domestic US natural gas production was substantially higher than Q2 2019 gas production. The increase largely reflected new production from the DJ Basin in Colorado, which was acquired as part of Oxy’s $55bn acquisition of Anadarko Petroleum.
- The deal was completed in August 2019 and was partly financed by Warren Buffett's Berkshire Hathaway vehicle, at a high cost to Oxy.
Cameron LNG Train 3 Starts Commercial Operations
McDermott International on August 10 announced the beginning of commercial operation of Train 3 at Cameron LNG, which is jointly owned by Sempra LNG, Total, Mitsui & Co., and Japan LNG Investment, a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha (NYK).
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Cameron LNG partners took a final investment decision on the $10bn project in 2014. The first train entered service in August 2019, while the second train began commercial operations in March this year. The 5mn mt/yr train, the third at the facility, produced its first commissioning LNG in May.
German Uniper Raises 2020 Guidance
German utility Uniper reported positive earnings in Q2 and has raised its mid-point guidance for the year to $900mn following a better-than-expected first half.
- The leading German generator and energy trader is entering a new era as a subsidiary of Fortum where it will set to work on its net-zero carbon strategy.
- Fortum and Uniper are working on their strategic alignment, following the Finnish state concern's acquisition of a large majority stake earlier this year.
Orca's Q2 Gas Sales in Tanzania Drop
Canada’s Orca on August 10 said its additional gas sales – gas it is free to sell on its own account – in Tanzania averaged 50.6mn ft3/day during the three months to June 30 (Q2) compared with 56.6mn ft3/day in the same quarter last year.
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Orca is seeking to export its model elsewhere in Africa: pushing out coal and diesel and creating wealth for shareholders and host governments with equity gas.
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NGW interviewed the company on its operations in July, and the text may be read here.
Petrofac Write-downs Turn Profit to Loss
UK engineering firm Petrofac reported a net loss of $78mn on its first-half 2020 business, down from a profit last year. Impairments and remeasurements of $99mn – including a charge of $64mn (post-tax) for its investment in Block PM304 in Malaysia – dragged the $21mn profit into the red.
- The decline in oil prices led clients to cut costs, resulting in delays in tender awards, the termination of the $1.65bn Dalma contracts with Adnoc and a tighter commercial environment.
China’s natural gas consumption during the first six months of the year was 155.61bn m3, up 4% yr/yr, National Development and Reform Commission said on July 31 in a statement.
- During the January-June period, production was 94bn m3, up 10.3% yr/yr, China’s statistics bureau said last month.
- Chinese gas imports via pipeline and in the form of LNG were up 3.3% yr/yr in the first six months of the year, marking a significant slowdown in growth, caused by the Covid-19 pandemic's impact on demand.
