Daily Digest: March 18th 2020
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OUTLOOK FOR OIL GROWS EVER MORE BEARISH
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Oil prices slumped for the third session in a row on March 18, amid growing demand losses as the coronavirus (Covid-19) crisis escalates.
The Big Picture:
- Goldman Sachs slashed its forecast for US WTI to $20/barrel for the second quarter – its second cut in guidance in under two weeks, according to US media – citing "unprecedented" demand losses.
- Oslo-based Rystad is projecting a 2.8% fall in the world's oil consumption this year to 97.1mn barrels/day, which would mark a bigger decline than was seen in 2009 in the aftermath of the global financial crisis.
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INOX INDIA, SHELL PARTNER ON LNG DISTRIBUTION IN INDIA
Inox India has signed a MoU with Anglo-Dutch major Shell to develop a market for LNG supply by road from the Shell-operated Hazira terminal in Gujarat, it said.
The Big Picture:
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“This will help in increasing the penetration and consumption of clean, reliable and cost-efficient LNG to commercial and industrial users all over the country."
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The government is targeting to increase the share of gas in the energy mix from 6% at present to 15% by 2030. It expects the city gas sector to be a major demand driver.
NOVATEK APPLIES FOR CHINESE GAS JV
The European Commission (EC) said on March 17 it had received an application from Russian firms Novatek and Gazprombank, as well as China's Sinopec, to form a gas trading joint venture (JV) in China.
The Big Picture:
- The JV, known as Sinova Natural Gas, will engage in "the import and export, as well as purchase and sale, of natural gas (including pipeline gas and LNG) and investment in natural gas-related projects in China," an EC notice read.
- The gas producer signed a heads of agreement with Gazprombank and Sinopec on establishing the new JV in June last year.
OIL SEARCH CUTS CAPEX BY 38% AMID MARKET TURMOIL
Oil Search has cut its investments in 2020 by 38% in response to the steep decline in oil prices this month and the continuing spread of the Covid-19 pandemic.
The Big Picture:
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Oil Search has a 29% stake in the $13bn PNG LNG expansion project operated by ExxonMobil and also involving France's Total.
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The Sydney-listed operator has also decided to suspend the sale of a 15% interest in its Alaskan assets, although discussions continue with several potential buyers.
Hungary's MOL said it had found more oil and gas at its operated licence 820S in the Norwegian North Sea.
The Big Picture:
- MOL operates 820S with a 40% stake, while Sweden's Lundin Petroleum also has 40%, and Germany's Wintershall Dea and Norway's Pandion Energy each have 10%.
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HESS CUTS 2020 SPEND BY $800MN
Hess Corporation announced a revised $2.2bn capital and exploratory budget for 2020, an $800mn reduction from the previous budget of $3bn. The company also announced a new $1bn three-year term loan agreement.
The Big Picture:
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“Our focus is on preserving cash and protecting our world class investment opportunity in Guyana.”
For Professionals who want to know what is happening in the market and seek in-depth understanding of current developments.
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