Tag: gas

IEA, UNEP, and EDF announce comprehensive metrics to report action and measure progress by oil and gas companies on methane commitments

Post By Oil and Gas , , , , , , ,

Despite years of public pledges by oil and gas companies, methane emissions and flaring from the industry’s operations remain at near record levels. To support efforts to address this problem, the International Energy Agency, the UN Environment Programme’s International Methane Emissions Observatory and the Environmental Defense Fund today unveiled a comprehensive new framework to support and report progress made by oil and gas companies around the world toward urgently needed emissions reductions consistent with targets set out in the Oil and Gas Decarbonization Charter (OGDC).

The OGDC is a flagship program launched at last year’s UN climate talks (COP28) in the United Arab Emirates. With 54 companies now signed on, the OGDC is well-positioned to help the industry as a whole accelerate its efforts to tackle climate change. The independent methane accountability initiative was created by the IEA, IMEO and EDF to provide oversight of efforts being made by the whole industry, track progress and help ensure companies deliver on their promises.

“To achieve steep cuts in methane pollution, producers must make changes now. These investments take years to implement,” said Fred Krupp, President of Environmental Defense Fund. “This accountability framework will help assure that oil and gas companies deliver the necessary reductions in time. No one can wait until 2030 and wave a magic wand. We need to see progress every year, with companies showing their work along the way.”

Methane is a powerful driver of climate change. Emissions from fossil fuel operations and other sources are responsible for at least 30% of today’s unprecedented global warming. If achieved in full and on time, the OGDC commitments would cut upstream methane emissions around 15% by 2030. If all of the top 100 producing companies including the OGDC signatories were to do the same, upstream oil and gas methane emissions would be cut globally in half by 2030.

“Recent commitments, such as the OGDC, represent a tangible step forward for oil and gas companies looking to align their operations with the Paris Agreement. Now, companies must quickly transform their promises into action,” said IEA Executive Director Fatih Birol. “Methane emissions from fossil fuel operations are a major contributor to global warming, and tackling them is one of the fastest and lowest-cost ways to keep climate change in check. This new initiative will ensure accountability and transparency across the entire oil and gas industry and help deliver meaningful progress soon.”

The IEA estimates that oil and gas operations resulted in close to 80 million t of methane emissions in 2023 (equivalent to around 120 billion m3 of natural gas). Methane emissions have remained near these levels for over a decade. In addition, nearly 150 billion m3 of natural gas was flared worldwide in 2023.

Reducing methane emissions and flaring is a critical test of the oil and gas industry’s commitment to climate action because mitigation opportunities are large, fixes are cost-effective and controlling leaks improves operational efficiency. This makes it even more important for the OGDC to fulfil its potential to accelerate efforts from the whole oil and gas industry to help tackle climate change.

“The warming climate is harming human health, food systems and natural habitats, bringing enormous cost to societies. Cutting methane emissions is a crucial way to reduce these impacts as the clean energy transition continues,” said Inger Andersen, Under-Secretary-General of the United Nations and Executive Director of UNEP. “Progress on these commitments in this decade must be a top priority.”

The new framework looks at the detailed plans of oil and gas companies. This includes an emphasis on year-over-year improvement in planning and execution, providing much-needed transparency for financial institutions, government ministries, commercial gas buyers, NGOs, and the public. It says company reporting should follow protocols in the Oil & Gas Methane Partnership. Created by UNEP in 2014 and enhanced in 2020, OGMP 2.0 is the only comprehensive measurement-based international reporting framework for the sector.

Together, the IEA, IMEO and EDF will publish an independent assessment annually covering OGDC signatories and other producers around the world, tracking progress against the new metrics. The first of these scorecards is planned for next year and it will assess whether companies have the necessary targets, plans and reporting processes in place.

Subsequent scorecards will quantitively assess the levels of each criterion, whether specific targets are in line with the OGDC and the need to limit warming to 1.5°C, and track progress towards established goals.

Transparency on the emissions levels and actions being taken to address them will be crucial for the industry to assure stakeholders of the progress being made. This includes reporting empirical methane emissions data using robust measurement standards and protocols, such as those established by the OGMP 2.0. These data, combined with the increasing capacity of monitoring emissions through new remote sensing instruments, such as EDF’s MethaneSAT and Carbon Mapper’s Tanager Satellite, will help ensure the accountability of commitments.

A total of 25 metrics will provide a comprehensive and transparent snapshot of the oil and gas sector’s progress in meeting its commitments. They cover emissions reductions and investments in clean energy, methods for achieving these targets, and the evaluation of how companies publicly disclose and report information relevant to achieving their OGDC commitments.

The new framework is the first product of an independent methane accountability initiative launched last year at COP28. By combining transparency and accountability with cutting-edge data, it aims to make methane emissions from the oil and gas sector visible and quantifiable, engage emerging and developing economies to address methane leakage in domestic oil and gas production, and push for stronger government policies and regulations on methane purchase and trade policies worldwide.

Read the article online at: https://www.oilfieldtechnology.com/special-reports/23092024/iea-unep-and-edf-announce-comprehensive-metrics-to-report-action-and-measure-progress-by-oil-and-gas-companies-on-methane-commitments/



Source link

#IEA #UNEP #EDF #announce #comprehensive #metrics #report #action #measure #progress #oil #gas #companies #methane #commitments

AccuWeather: Hurricane Francine causes US$9 billion damage and economic loss

Post By Oil and Gas , , , , , , , , , ,

AccuWeather’s preliminary estimate of the total damage and economic loss from Hurricane Francine in the United States is US$9 billion.

This is a preliminary estimate, as the storm effects are continuing to be felt and some areas have not yet reported complete information about damage, injuries and other impacts.???

“Francine is the third hurricane to hit the Gulf coast this year, but this is the first hurricane to cause widespread disruptions to the offshore oil and gas industry in years. Our preliminary estimate factors in the cost of offshore platform evacuations and operation interruptions,” said AccuWeather Chief Meteorologist Jon Porter.

“Francine was a short-duration but extremely impactful hurricane hit to New Orleans. Persistent downpours turned streets into rivers. Wind gusts of 80 mph caused damage and knocked out power to hundreds of thousands of families. It was an extremely dangerous and scary evening for millions of people along the Gulf coast.”

AccuWeather exclusively issued the first track and related impacts of the storm 24 hours before the National Hurricane Centre and any other known source, giving valuable additional life-saving notice to those in Francine’s path across the central Gulf Coast. AccuWeather also was first to warn that Francine would reach Category 2 hurricane status on the Saffir-Simpson Hurricane Wind Scale before making landfall in Louisiana, and also that it would bring hurricane conditions to the city of New Orleans, where significant and life-threatening flooding was experienced from 4 – 8 in. of rain as well as 60 – 80 mph winds.

While the National Hurricane Centre and some other sources flip-flopped repeatedly by lowering their wind intensity forecast to a Category 1 hurricane, AccuWeather meteorologists correctly maintained their forecast of Francine reaching Category 2 intensity prior to landfall.

“AccuWeather was the only source to consistently and clearly forecast the threat of Francine intensifying into a Category 2 hurricane before landfall, since Monday afternoon. AccuWeather expert meteorologists were confident that conditions would be conducive for intensification in the final hours before landfall. We take our mission to save lives and protect property seriously. While other sources flip-flopped between Category 1 and Category 2 hurricane intensity forecasts, AccuWeather was consistent in our warnings to help families and businesses better prepare for impacts from a Category 2 hurricane,” said Porter.

Francine then made its way northward through Alabama Thursday, bringing heavy rain and strong winds and resulting in hundreds of thousands of people being without power from the Gulf Coast northward. It will take days to restore power to some areas.

AccuWeather also had the storm rated as a 2 on the AccuWeather RealImpact™ Scale for Hurricanes. Unlike the Saffir Simpson wind scale, which is what other outlets use to show the strength of a storm, the AccuWeather RealImpact™ Scale includes not only the wind but the extent of flooding rain, storm surge and overall damage and economic impact expected from the storm. This rating of 2 was issued more than two days before landfall, demonstrating the extent of damage expected and highlighting the extent of flooding, both from storm surge and rainfall AccuWeather was expecting from the Gulf Coast of Louisiana and Mississippi northward to the Mississippi and Tennessee River Valleys. Winds gusting as high as 96 mph were measured near where the storm made landfall with gusts of 60 – 80 mph into New Orleans.

Ahead of Francine, storm surge flooding impacted the central Gulf Coast, with the worst being southern Louisiana, where a surge of over 6 ft was measured, and there were surely higher levels not measured or yet reported. The storm also shut down energy platforms over an area with a high density of energy platforms in the central Gulf of Mexico, which will reduce oil output and could lead to higher gas prices for a time. When factoring in all of the impacts of the storm, AccuWeather preliminarily estimates that the total damage and economic loss will be about US$9 billion.

AccuWeather’s estimate largely accounts for damage to homes, businesses, infrastructure, facilities, roadways and vehicles as well as power outages, which results in food spoilage and interruption to medical care and reflects damage that has already occurred as well as expected damage yet to occur through the next couple of days as Tropical Rainstorm Francine moves up into the western Tennessee Valley, bringing flooding rainfall and, north and east of the centre, the risk for severe thunderstorms and tornadoes. For all of the areas impacted by flooding, water damage tends to be particularly costly to repair and may either not be covered by homeowner’s insurance policies or underinsured relative to actual damage sustained for people who do carry additional flood insurance.??

The calculation is based on an analysis incorporating independent methods to evaluate all direct and indirect impacts of the storm, includes both insured and uninsured losses, and is based on a variety of sources, statistics and unique techniques AccuWeather uses to estimate the damage, and includes damage to property, job and wage losses, crops, infrastructure damage, interruption of the supply chain, auxiliary business losses and airport closures as well as flight delays. The estimate also accounts for the costs of evacuations, relocations, emergency management and the government expenses for and cleanup operations and the long-term effects on business logistics, transportation and tourism.???

 

“The exceptionally warm waters off the Gulf and Atlantic coasts have dramatically increased the risk of rapidly intensifying storms, which amplifies the risk of flooding, storm surge and wind damage,” said Porter. “Everyone needs to be prepared for more tropical storms and hurricanes, which could extend well into the month of November.”

To put this event into context, Hurricane Debby was responsible for US$28 billion in total damage and economic loss in August while Hurricane Beryl brought $US28 – 32 billion in total damage and economic loss in July. Last year, Hurricane Idalia, which made landfall into the Big Bend of Florida, caused US$18 – 20 billion in total damage and economic loss. Hurricane Ian, in 2022, caused US$180 – 210 billion.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/16092024/accuweather-hurricane-francine-causes-us9-billion-damage-and-economic-loss/



Source link

#AccuWeather #Hurricane #Francine #US9 #billion #damage #economic #loss

Westwood shares UK and Norway exploration and production outlook for 2024

Post By Oil and Gas , , , , , ,

2023 was a year of recovery in the wake of the Ukraine conflict and subsequent impact on energy prices. Norway continues to play a vital role in contributing to Europe’s energy security and saw a record volume of project approvals and planned investment. In the UK, political uncertainty combined with inflation, price volatility and fiscal stability all added to the mix of challenges for the UK sector in 2023. Despite this, merger and acquisition (M&A) activity was buoyant and some key field developments are moving forwards.

UK E&A activity to be maintained in 2024, with seven planned exploration wells targeting 325 million boe

It was a successful year for exploration and appraisal (E&A) in the UK, with five potentially commercial discoveries from nine exploration well programme completions, with combined resources of c.140 million boe. Over half of the discovered resource was from the largest discovery of the year, at Pensacola in the Southern North Sea (SNS). Drilling was spread across all basins with a return to drilling in the SNS and West of Shetland (WoS), which had seen no activity since 2019. Shell was the most active explorer, participating in three wells and was operator of two of the five commercial discoveries of the year, including Pensacola.

UK E&A activity is expected to be maintained in 2024. There are seven exploration wells currently on Westwood’s list of 2024 wells with pre-drill resources of c.325 million boe (Figure 1), and a further three appraisal wells. All wells are infrastructure-led exploration (ILX), with one well also considered high impact at Skerryvore, targeting pre-drill resources of 155 million boe. There are 13 companies expected to participate in E&A drilling in 2024, with NEO Energy and Harbour Energy being the most active.

Figure 1: Pre-drill resources for prospects currently on Westwood’s list of 2024 exploration drilling candidates in the UK and Norway (note: only high impact wells are labelled where resources are >100 mmboe or targeting a frontier basin). Source: Westwood Atlas and Wildcat.

 

High levels of Norway E&A activity to continue in 2024, with 49 planned exploration wells targeting 2.2 billion boe

2023 was also a successful year for E&A in Norway, with 15 commercial discoveries from 29 exploration well programme completions, with combined resources of c.440 million boe. The largest discoveries recorded were Carmen, Øst Frigg Beta/Epsilon, Norma and Røver Sør, all in the Northern North Sea (NNS). All wells were ILX, with only four also being high impact, highlighting that companies are focusing on adding volumes to existing infrastructure, rather than drilling potentially higher risk wells. The NNS was the most targeted basin with 18 wells and was also the most successful, with c.378 million boe in discovered resource. Only one well was drilled in the Barents Sea, the lowest since 2010. Equinor continues to be the most active explorer, participating in 21 wells and operating seven of the 15 commercial discoveries of the year.

High levels of E&A drilling are expected to be maintained in 2024. There are 49 exploration wells currently on Westwood’s list of planned wells with pre-drill resources of c. 2.2 year for long-stranded UKCS discoveries to move forward for development billion boe (Figure 1), and a further six appraisal wells. The NNS will again see the most drilling, but an increase in Barents Sea activity is expected with five wells, three of which are in the Wisting area. While Equinor is likely to participate in the most wells in 2024, Aker BP and Vår Energi are both also expected to be active across all basins.

2024 could be a key year for long-stranded UKCS discoveries to move forward for development

Following a change to the Energy Profits Levy terms in October 2022, some companies reacted by reducing investment plans. TotalEnergies, Apache and Harbour Energy were particularly outspoken. Despite the backdrop of political and fiscal uncertainty in the UK, there were 20 M&A deals, three fields started production and six fields were sanctioned for development with associated reserves of c.380 million boe, including the long-awaited Rosebank project sanction.

In 2024, four fields are expected to be brought onstream including the much-awaited Penguins Redevelopment, which has experienced delays to the FPSO delivery. Industry uncertainty is slowing the progression of FDP submissions and with the DESNZ review process taking longer, the number of project sanctions in 2024 is unclear (Figure 2). With only one draft FDP submitted in 2023 (for Anning & Somerville), other 2024 sanctions include fields slipping from being sanctioned in 2023 or have been included in earlier Environmental Statement submissions. FDP and Environmental Statement submissions are, however, expected for several long-stranded discoveries where asset acquisitions in 2023 have significantly increased the chance of them being brought forward for development e.g. Buchan Redevelopment, Anning & Somerville and Pilot.

The UK is a buyer’s market with a range of acquisition opportunities but a small pool of potential buyers. Some deals to watch include the conclusion of the Shell and ExxonMobil SNS portfolio sale, TotalEnergies rationalising its UK portfolio (e.g. sale of Laggan Tormore), and farm-out processes for Rosebank and Cambo.

 

Figure 2: Reserves and number of new field developments sanctioned 2014 – 2023 and expected to be sanctioned in 2024 (note: Westwood holds c.320 mmboe over both phase 1 and phase 2, aligned with Equinor Environmental Statement). Source: Westwood Atlas.

 

Following a record year of project sanctions, Norway continues to offer growth opportunities in all aspects of the oil and gas value chain

2023 saw an enormous amount of project activity in Norway, with several field developments being brought onstream ahead of schedule and a record number of project sanctions. 17 PDOs, comprising 22 new field developments and four field extensions, were approved in 2023 (Figure 2), with combined reserves of c.1.6 billion boe, and estimated total development CAPEX of c.US$26 billion. The strength of Norway’s development hopper demonstrates how effective the temporary tax breaks have been in ensuring resources are being progressed to reserves. There is a healthy level of reserves replacement over the coming years with a pipeline of field start-ups through to the latter stages of the decade. Cost management will be key during a period of continued global inflation and supply chain pressures.

Increased development in the Barents Sea has been hampered by a lack of proximity to infrastructure, and development growth will be dependent on an export route. However, there is vast resource potential identified and a desire by the Norwegian Offshore Directorate to seek commercial development solutions for existing discoveries with improved export solutions.

Although the number of M&A deals announced in 2023 was lower than 2022, the total value was significantly higher. Harbour Energy concluded the year announcing an US$11.2 billion deal to acquire Wintershall Dea, expanding its existing UK-focused portfolio and demonstrating its international growth ambitions (note: Norway accounts for c.50% of the acquired portfolio). The outlook for M&A activity in 2024 is expected to remain tight. Norway has a relatively low number of companies in operation on the shelf, with fewer opportunities coming onto the market than other countries in the region, such as the UK where the maturity of the basin and a higher number of players leads to a greater number of opportunities. Some larger players, however, could rationalise their portfolios; Equinor may continue to sell its equity in its higher emission assets, Aker BP could look to reduce its non-core assets, and PGNiG and Sval Energi are likely to continue searching for incremental growth opportunities as they build their Norwegian portfolios.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/29072024/westwood-shares-uk-and-norway-exploration-and-production-outlook-for-2024/



Source link

#Westwood #shares #Norway #exploration #production #outlook

Rystad Energy issues oil macro market update

Post By Oil and Gas , , , , ,

Rystad Energy has issued an oil macro market update, encompassing factors and influences that affect oil price movements driven by fundamentals and non-fundamentals factors.

Global Market Analysis Director, Claudio Galimberti, said: “Against a backdrop of escalating geopolitical tensions, including conflicts in the Middle East and the ongoing war between Russia and Ukraine, Brent surpassing US$85 per barrel could be the start of more upward pressure on prices.”

Rystad Energy predicts another significant crude inventory draw in the US this week, supporting the bullish sentiment thanks to resurgent product demand, increasing refinery runs and flat crude production.

Front-month Brent prices could push into the upper US$80s in the short term, driven by the confluence of increasing geopolitical risk and bullish fundamentals, steepening the market’s backwardation.

Enduring geopolitical risk factors continue to upset the global oil market, pushing prices up

Risk premiums from Russia and the Middle East remain significant despite ongoing efforts towards a lasting ceasefire.

Furthermore, signs of improving oil demand in the past few weeks offers reasons for optimism, on top of bullish crude inventory levels from the world’s largest oil consumer and producer, the US, which decreased by 2.3 million bbl last week.

Rystad Energy’s analysis expects even greater declines this week — potentially up to 4 – 5 million bbl in crude stocks – and an increase in refining runs by nearly 170 000 bpd.

Geopolitical tensions keep the oil market on edge

Geopolitical pressures continue to roil the oil market from multiple fronts. The longstanding Russia-Ukraine conflict remains a dominant factor, with tensions showing no signs of abating.

A recent peace summit in Switzerland garnered support for Ukraine’s territorial integrity and its efforts to end Russia’s incursion.

However, notable absences, including Russia and key nations like India, Brazil and South Africa declining to endorse the summit’s outcome, underscore ongoing divisions.

China, a staunch supporter of Russia, cited Moscow’s exclusion for its non-participation.

Consequently, geopolitical tensions are expected to persist amid failed efforts to broker ceasefires.

Meanwhile, refinery operations in Russia have faced disruptions due to drone attacks on two oil facilities.

Fires broke out at the Platonovskaya oil depot in the Tambov region and in Enem village, Adygea.

These strikes are part of Ukraine’s campaign since January targeting Russian oil infrastructure.

Despite claims that these facilities are legitimate military targets, US officials have cautioned against targeting oil hubs to prevent global market disruptions.

Recent estimates indicate these attacks temporarily affected up to 14% of Russia’s refinery capacity, though operations were swiftly restored, minimising supply chain disruptions.

Elsewhere in the Middle East, tensions add further instability.

Following Iran’s direct attack on Israel in April and subsequent de-escalation efforts, hopes for a ceasefire have faltered in recent weeks.

The Biden Administration has expressed doubts about achieving a comprehensive ceasefire given current conditions.

Key sticking points include Hamas’ demand for a complete Israeli withdrawal from Gaza in later phases of proposed agreements.

Additionally, Iran gears up for presidential elections following President Ebrahim Raisi’s recent death in a helicopter crash.

Front-runners include hardliner Saeed Jalili and pragmatic conservative Mohammad Baqer Qalibaf.

The election unfolds amidst ongoing Gaza conflict and persistent diplomatic strains over Iran’s nuclear ambitions.

Fundamentals

On fundamentals, concerns about oil demand were alleviated by the Energy Information Administration’s (EIA) most recent report published on 20 June.
The data showed a significant decrease in US crude inventories, by 2.5 million bbl and a much larger-than-expected drop in gasoline stocks, which fell by 2.3 million bbl.

This was in part the result of US gasoline demand bouncing back to almost 9.4 million bpd – the highest since November last year – and distillates to almost 4.0 million bpd – the highest since March.

For the week ahead, Rystad Energy’s analysis predicts an even larger crude stocks draw, potentially as large as 4 – 5 million barrels and refining runs increasing by close to 170 000 barrels per day (bpd).

Gasoline demand should stay above 9 million bpd and gasoline stock should draw by 0.7 million bbl.

On global demand, expectations of a summer surge have been buoyed by the continuous expansion in aviation.

This year, jet fuel is anticipated to see a 550 000 bpd year-on-year increase in consumption, following a massive 1.2 million bpd growth last year.

The global aviation active fleet index has rebounded to pre-COVID-19 levels as of February 2024 and has consistently exceeded the levels seen in previous years.

Due to increases in fuel efficiency over the past five years, jet demand will only close the gap to pre-pandemic levels by August.

From there on, it will continue to expand at higher than historical rates until it closes the gap with the pre-pandemic jet demand trajectory, which Rystad Energy expects to occur at 8 million bpd in 2026.

For the time being, this strength in aviation activity signals a positive trend for oil demand, particularly in the context of summer travel, economic recovery and consumer optimism.

Macroeconomic pulls

The one to watch on an industrial front continues to be the Chinese electric vehicles (EVs) industry, which is encountering tougher hurdles in the American and European markets amid escalating tariffs.

Chinese EVs are arguably already more competitive than their Western counterparts, and these hefty tariffs will no doubt decelerate the passenger road transport electrification outside of China.

Rystad Energy has observed a slowdown in the EV market penetration since 2023, which has continued in the first quarter of 2024, and will reflect in a lower-than-expected offset of gasoline demand in 2024 and onwards.

Due to the dominant role of China in the global battery and EVs supply chain, an increase in trade tensions with the West will result in a further slowdown in the pace of transport electrification, at least until the tension and tariffs persist.

China’s economic performance will come into focus with the release of data from the Purchasing Managers Index (PMI).

In May, it fell short of expectations at 49.5 compared to an anticipated 50.5.

For June, the expectation is for the PMI to be above 50 on the back of recent positive news, which would bode well for the world’s second-largest economy.

The US Core Personal Consumption Expenditures (PCE) is anticipated to stand at 2.7%, representing a decrease from April but still significantly above the Federal Reserve’s 2% target, while the market remains optimistic about the rate cuts in September.

Factoring all these fundamental and non-fundamental elements, Brent prices appear slightly risked to the upside in the coming weeks.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/25062024/rystad-energy-issues-oil-macro-market-update/



Source link

#Rystad #Energy #issues #oil #macro #market #update

Over-reliance on gas delays G7 transition to net-zero power

Post By Politics , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Three years ago, G7, a group of major industrialized countries that includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, committed to decarbonizing their power systems by 2035. It was a historic and hopeful moment, in which the group demonstrated global leadership, and made a first step toward what needs to become an OECD-wide commitment, according to the recommendation made by the International Energy Agency in its 2050 Net Zero Emission Scenario, setting the world on a pathway to keep global warming below 1.5 degrees.

As we approach the 2024 G7 summit, the ability of G7 countries to deliver on their power systems decarbonization commitment, not least to address the still-lingering fossil fuel price and cost-of-living crisis, but also to retain their global energy transition leadership, is put under scrutiny. So far, the G7 countries’ actual progress toward this critical goal is a mixed picture of good, bad, and ugly, as new analysis shows.

via G7 Power Systems Scorecard, May 2024, E3G

Most G7 countries are making steps on policy and regulatory adjustments that will facilitate a managed transition.

Grid modernization and deployment is, for example, finally starting to receive the attention it deserves. Some countries, such as the U.S., are also starting to address the issue of long-duration energy storage, which is crucial for a renewables-based power sector.

Coal is firmly on its way out in all G7 countries, except Japan, which is lagging behind its peers. This is where the challenges begin, as things like Japan’s unhealthy relationship with coal risk undermining credibility of the whole group as world leaders on energy transition.

Despite these efforts, all G7 countries are delaying critical decisions to implement transition pathways delivering a resilient, affordable and secure fossil-free power system where renewables – mostly wind and solar – play the dominant role. A tracker by campaign groups shows that other European countries have already engaged firmly in that direction.

Progress made so far is neither uniform, nor sufficient.

Further gaps vary by country, but overall, more action is needed on energy efficiency, non-thermal flexibility solutions, and restructuring power markets to facilitate higher renewable electricity and storage uptake. The EU’s recently adopted power market reform provides a solid framework for changes in this direction, at least for the EU-based G7 countries, but it remains to be seen how the EU’s new rules are going to be implemented on the national level.

Overall: Progress made so far is neither uniform, nor sufficient. For one, translation of the G7-wide target into a legislated national commitment is lacking in most G7 countries, in Europe and beyond. Moreover, the chance of G7 countries reaching their 2035 target is at risk, along with their global image as leaders on the energy transition, due to the lack of a clear, time-bound and economically-sound national power sector decarbonization roadmaps. Whether 100 percent or overwhelmingly renewables-based by 2035, today’s power systems will need to undergo an unprecedented structural change to get there.

For this change to take off, clear vision on how to decarbonize the ‘last mile’ while providing for a secure, affordable and reliable clean electricity supply, is crucial. Regrettably, today’s G7 long-term vision is betting on one thing: Gas-fired back-up generation. While there are nascent attempts to address the development of long-term storage, grids, flexibility and other balancing solutions, the key focus in most G7 countries is on planning for a massive increase in gas capacity.

Whether 100 percent or overwhelmingly renewables-based by 2035, today’s power systems will need to undergo an unprecedented structural change to get there.

All G7 countries but France have new gas power plants in planning or construction, with the growth shares the biggest in three European countries: Italy’s planning to boost its gas power fleet by 12 percent, the U.K. by 23.5 percent, and Germany by a whopping 28 percent. The US, which consumes one quarter of global gas-in-power demand, has the largest project pipeline in absolute terms – 37.8GW, the fourth largest pipeline in the world.

This gas infrastructure build-out contradicts the real-economy trend: In all European G7 countries gas demand has been dropping at least since the 2021-2022 energy crisis, driven particularly by the power sector decarbonization. Japan’s gas demand peaked in 2007, and Canada’s in 1996 (see IEA gas consumption data). Even G7 governments’ own future energy demand projections show further drop in gas demand by 2030, by one-fifth to one-third of today’s levels in all European G7 countries and Japan, and at least by 6-10 percent in Canada and the U.S.

Maria Pastukhova | Programme Lead – Global Energy Transition, E3G

Most G7 countries argue that this new gas power fleet will be used at a much lower capacity factor as a back-up generation source to balance variable renewables. Some, for example Germany, incentivize new gas power capacity build-out under the label of ‘hydrogen readiness’, assuming that these facilities will run on low-carbon hydrogen starting in 2035. Others, for example Japan or the U.S., are betting on abating gas power generation with carbon capture and storage technologies in the long-term.

Keeping gas power infrastructure in an increasingly renewables-based, decentralized power system using technology that may or may not work in time is a very risky gamble to take given the time left.

G7 countries have got no more than a decade left to act on their commitment to reach net-zero emissions power systems. We have readily-available solutions to deliver the major bulk of the progress needed: Grids, renewables, battery, and other short and mid-duration storage, as well as efficiency improvements. These technologies need to be drastically scaled now, along with additional solutions we will need by 2035, such as long-duration energy storage, digitalization, and educating skilled workers to build and operate those new power systems.

While available and sustainable, these solutions must be deployed now to deliver in time for 2035. Going forward, G7 can’t afford to lose any more time focusing on gas-in-power, which is on the way out anyway and won’t bring the needed structural transformation of the power system.



Source link

#Overreliance #gas #delays #transition #netzero #power

Rystad Energy: Oil demand to grow in the mid-term

Post By Oil and Gas , , , ,

Oil demand will rise further in the medium term, according to Rystad Energy research and modelling, as low-carbon alternatives are not yet sufficiently developed or economically competitive to offset the growing demand for transportation and industrial services. Rystad Energy’s latest Oil Macro Scenarios report explains how the 13 sectors that rely on oil will face a more complex transition than expected just a couple of years ago. These findings underscore the notion that oil demand remains sticky and the process of substituting the capital stock associated with oil consumption will be complex and lengthy due to the competitive advantages of oil in multiple transportation sectors and industrial processes.

The research evaluates the five-year demand trajectory of oil, the technological readiness of each sector to transition and the policy frameworks supporting that shift. Rystad Energy’s analysis sheds light on the impact of crucial breakthroughs, such as the rapid electrification of buses, rail and cars, as well as the challenges faced by the remaining sectors that lack fully developed or competitive alternative technologies.

“As oil demand is likely to stay on an upward trajectory in the medium term, the probability of a fast transition away from oil decreases unless we witness breakthroughs in those low-carbon energy carriers that can technically and economically substitute oil. Our updated mid-term forecast should bring a dose of realism to the oil transition narrative, alongside a renewed sense of urgency to explore and invest even more – wherever it makes economic sense – in clean tech and renewables, to achieve those breakthroughs,” says Claudio Galimberti, global market analysis director at Rystad Energy.

Transportation

About a quarter of global oil demand comes from passenger road transportation, so it is no surprise that the adoption of electric vehicles (EVs), which comprise both battery electric vehicles (BEV) and plug-in-hybrid (PHEV), is a key factor to estimate the oil demand impact. EVs have risen since 2018, making up 16% of global sales in 2022. However, last year saw an inflection point – with global EV sales landing only at 19% – due to a combination of lack of mass-market EVs outside of China, poor charging infrastructure, low consumer acceptance in some regions, charging insecurity, and the withdrawal of subsidies in some countries.

Despite these challenges, Rystad Energy still predicts that the electrification of passenger road transport will regain force in the second half of this decade and beyond. Car manufacturers have committed to producing tens of millions of EVs in the coming years, which will bring about economies of scale. Still, it is important to note that some of these plans have recently been scaled back due to poor returns on investment. In the end, one big problem will need to be solved: the ;charging insecurity; in areas where car owners do not own private parking spots. This phenomenon is particularly acute in many non-OECD countries and in quite a few OECD ones as well.

Beyond passenger road transport, the transition to alternative energy sources faces headwinds. In heavy-duty commercial road transport, oil demand is expected to grow in line with the expansion of the global economy, especially in Asia, as alternatives to oil remain limited. As an example, batteries are still too heavy and large to fit in a Class 8 truck and, even if they did, it would take too long to charge them. Battery swapping, a process where batteries with low charge get replaced with fully charged ones at specialised stations, has shown promise in China, but it is still a tiny fraction of the electric truck fleet. Catenary and induction charging – methods of charging electric vehicles while they are in motion – could be a solution, but they are currently too expensive. Granted, Volvo and Tesla have started the production and delivery of electric semitrucks, but the numbers are still small and will continue to be so in the medium term.

The maritime industry shares many of the same challenges as heavy-duty trucks. Shipping large cargo across the seas efficiently and affordably requires a fuel with high energy density, safe storage and transport and a well-established supply chain. While alternatives like ammonia and methanol may satisfy some of these requirements, they are yet to outcompete oil on key metrics like affordability and energy density. Furthermore, the fast aging of the global maritime fleet is set to slow down the fleet turnover.

Sustainable Aviation Fuel (SAF) is an environmentally friendly alternative to traditional jet fuel. Although SAF has the potential to grow significantly in the aviation industry during the 2030s and beyond, it will not significantly impact aviation in the next five years. Despite major commitments from airlines and the International Civil Aviation Organization’s (ICAO) Corsia programme, SAF’s share will be less than 5% of jet fuel demand by the end of this decade. This translates to less than 0.4% of global oil demand.

Buses and rail transportation do not have to wait for alternatives as they are already available and proving to be highly effective. The recent electrification trend in these two sectors in China, India and Europe will continue in the coming years, thanks to government policies. However, even if these two sectors were to be fully electrified in the next 15 years, the maximum reduction in oil demand by 2030 would only be around 0.5 – 0.8 million bpd since they currently represent less than 3% of oil demand.

Stationary sectors

The stationary sectors, which include petrochemical, industry, building, non-energy use, energy own use, power and agriculture, account for 42.3% of global oil demand as of 2024 and are vital components of the energy transition. In the petrochemical sector, demand for plastics is set to surge in the coming years – on the back of an expanding global middle class – and oil and natural gas liquids (NGLs) will be the feedstock used to produce plastic. To reduce demand for virgin feedstock, mechanical and chemical recycling rates must increase. However, higher investment in the recycling supply chain, as well as research and development, are needed to achieve this. It is important to recall that global plastic recycling rates are currently only 8% of total plastic consumption, with scant evidence that they could increase significantly by the end of the decade.

Oil demand in the building sector has proven more resilient than expected just a few years ago. In regions where the natural gas grid is not available and winters are long and frigid, oil – in the form of liquified petroleum gas (LPG), kerosene or gasoil – remains the most efficient energy carrier for space and water heating. Heat-pumps, which are typically very efficient for space heating in milder climates, tend to have a reduced effectiveness in very cold regions. Finally, in countries that still rely on burning biomass for cooking, such as sub-Saharan Africa, LPG could be a cleaner energy carrier, which could result in a 1.5 million bpd uptick in oil consumption.

High energy density is essential in the industry sector to achieve the high temperatures required for operations such as steelmaking, cement production, petrochemicals, and refining subsectors. Although hydrogen is considered the most viable low-carbon energy carrier alternative to oil, it is unlikely to become a strong competitor in the next five years due to high costs and lack of a developed supply chain.

Rystad Energy’s research confirms that oil demand remains sticky and it will take time and resources to switch the capital stock associated with its consumption. It also reminds us of the importance of understanding the whole energy system end-to-end, and not just the oil system. Lowering global emissions is still possible in the medium term if other energy sectors deploy clean technology and renewables at a faster pace. In this context, the rapid deployment of solar PV in power generation, displacing coal, has done just that over the past few years. As a result, a fast reduction in global emissions is still within reach, despite climbing oil demand.

Read the article online at: https://www.oilfieldtechnology.com/special-reports/16052024/rystad-energy-oil-demand-to-grow-in-the-mid-term/



Source link

#Rystad #Energy #Oil #demand #grow #midterm

Future Market Insights shares its overview of the digital oilfield solutions market

Post By Oil and Gas , , , , ,

The global digital oilfield solutions market is projected to attain a valuation of US$39.63 billion in 2023 and is expected to reach US$65.4 billion by 2033, trailing a CAGR of 5.1% during the forecast period.

The rising need to maximise the production capacity from mature wells and the surging return on investment (RoI) in the oil and gas industry is anticipated to propel sales in this market. In addition, the urgent need to lower the capital and operating expenses subject to the utilisation of smart systems and digitalised solutions is likely to drive the market.

Ongoing advancements in data collection, mobility, and analysis platforms are set to improve the overall performance and management of oil and gas platforms. Further, the rapid shift of countries toward devising a robust economic well recovery process, coupled with the declining production of oil and gas from conventional wells, might also affect the market positively.

Future Market Insights predict a comparison and review study for the dynamics and trends of the digital oilfield solutions market, which is primarily impacted by ongoing developments in data collecting, mobility, and analytic platforms. These are further expected to improve the overall performance and management of oil and gas platforms.

The market might benefit from the change in growth rates that occurs in numerous nations affected by the development of a strong economic growth outlook paired with growth impacted by oil and gas output from conventional wells.

According to Future Market Insights analysis, the change in BPS values observed in the market for digital oilfield solutions for the current estimation for the first half of 2023 as compared to the projected one for the same period is expected to be at a 17-unit increase. In comparison to H1-2022, the market is predicted to rise by 40 basis points in H1-2023 as per the current estimates.

The oil and gas sector had a period of tremendous expansion, notably in the field of deep-sea exploration and production technologies, which is one of the main justifications for this change in growth rate. Furthermore, many oil companies are attempting to boost output and enhance recovery. Further use of cutting-edge technologies like AI, ML, IoT, and automation in the oil and gas sector is anticipated to accelerate growth rates.

There are still significant barriers preventing industry expansion, including lengthy execution times, inefficient workflows, and change management at all levels. Additionally, because of continuous geopolitical concerns, changes in the price of crude oil and a shift toward sustainability are the main market restraints.

Why are companies increasing their investments in digital oilfield solutions?

Digital oilfield solutions can enhance the operational performance and decision-making process, thereby improving the RoI. It can also reduce the Total Cost of Ownership (TCO) and downtime, as well as bolster the productivity of operations. Therefore, the oil and gas industry worldwide is expected to develop novel plans to increase their investments in digital technologies to double their cost savings.

Most of the companies in this industry are likely to look for solutions to reduce non-productive time, aid recovery rates, and cut down the cost-per-barrel for surging returns. In December 2021, for instance, Baker Hughes, CEO Lorenzo Simonelli, stated at the World Petroleum Congress that the oil and gas industry is yet to realise the full potential of digitisation for achieving better efficiency. He also declared that the next generation of productivity is anticipated to come from connected smart equipment featuring digitalisation for reducing non-productive time.

The development of such technologies in the forthcoming years is projected to accelerate growth and open doors to new opportunities for key players.

Country-wise insights

Why is the US digital oilfield solutions market exhibiting exponential growth?

The ongoing upgradation of the existing technological solutions to manage and optimise oil and gas operations is set to spur the market in the United States in the assessment period. As per FMI, North America’s digital oilfield solutions market is expected to account for around 25.6% of the share in 2023. The market in this region is expected to thrive at a CAGR of 5.3% during the forecast period.

The rising domestic production and the increasing number of oilfield discoveries are expected to transform the business landscape in the United States. On the other hand, many companies are refurbishing numerous oil and gas platforms in the offshore sector by integrating machine learning and AI solutions, which might also propel the demand for digital oilfield solutions in this country.

The high demand for energy owing to a paradigm shift toward technologically advanced solutions is estimated to drive the segment. In January 2020, Baker Hughes, one of the world’s largest oil field services companies, for instance, stated that the average rig count in the United States was 804 in December 2019. This number is likely to surge in the upcoming years, thereby bolstering the market.

How is the United Kingdom digital oilfield solutions market faring?

The surging numbers of new field development and exploration activities are projected to create growth opportunities in the United Kingdom over the forecast period. Also, the demand for digital oilfield solutions in the United Kingdom is expected to rise with a CAGR of 4.8% during the forecast period. Western Europe’s digital oilfield solutions market is predicted to account for around 23.2% of the share in 2023, estimates FMI.

According to the United Kingdom government, in 2020, the country’s refineries took receipt of 8.6 million t of crude oil produced from the United Kingdom Continental Shelf (UKCS), which helped in meeting 18% of refinery demand. Hence, the rising production of crude oil in this country is anticipated to drive the demand for digital oilfield solutions in the future.

What is the demand outlook for China’s digital oilfield solutions market?

The ongoing development of smart oil fields to optimise the overall operation and management is likely to propel the market in China. The market in this region is expected to capture a CAGR of 5% during the forecast period. South East Asia (SEA) & Pacific digital oilfield solutions market is projected to generate about 12% of the share in 2023, predicts FMI.

In October 2021, for instance, China National Offshore Oil Corp, one of the largest national oil companies in the country, started operating Qinhuangdao 32-6 smart oilfield. It is going to help to make offshore gas and oil production intelligent and digital through AI, big data, IoT, and cloud computing. At the same time, it could also reduce maintenance costs by 5-10% and raise production efficiency by 30%. Such industry developments by leading players are estimated to push the demand for digital oilfield solutions in China.

Competitive landscape

The market for digital oilfield solutions is characterised by intense competition, as notable industry players are making significant investments to enhance their manufacturing capabilities. The key industry players working in the market are ABB, Emerson Electric Co., Rockwell Automation, Inc., General Electric, Siemens AG, Schneider Electric, Eaton, and Honeywell International, Inc.

Read the article online at: https://www.oilfieldtechnology.com/digital-oilfield/10012024/future-market-insights-shares-its-overview-of-the-digital-oilfield-solutions-market/



Source link

#Future #Market #Insights #shares #overview #digital #oilfield #solutions #market

How Houthi rebels are threatening global trade nexus on Red Sea

Post By Politics , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Press play to listen to this article

Voiced by artificial intelligence.

The U.S. is mustering an international armada to deter Iranian-backed Houthi militias from Yemen from attacking shipping in the Red Sea, one of the world’s most important waterways for global trade, including energy cargos.

The Houthis’ drone and missile attacks are ostensibly a response to the war between Israel and Hamas, but fears are growing that the broader world economy could be disrupted as commercial vessels are forced to reroute.

On Tuesday, U.S. Secretary of Defense Lloyd Austin held a videoconference with 43 countries, the EU and NATO, telling them that “attacks had already impacted the global economy and would continue to threaten commercial shipping if the international community did not come together to address the issue collectively.”

Earlier this week, the U.S. announced an international security effort dubbed Operation Prosperity Guardian that listed the U.K., Bahrain, Canada, France, Italy, the Netherlands, Norway, the Seychelles and Spain as participants. Madrid, however, said it wouldn’t take part. 

The Houthis were quick to respond. 

“Even if America succeeds in mobilizing the entire world, our military operations will not stop unless the genocide crimes in Gaza stop and allow food, medicine, and fuel to enter its besieged population, no matter the sacrifices it costs us,” said Mohammed Al-Bukaiti, a member of the Ansar Allah political bureau, in a post on X. 

Here’s what you need to know about the Red Sea crisis.

1. Who are the Houthis and why are they attacking ships?

International observers have put the blame for the hijackings, missiles and drone attacks on Houthi rebels in Yemen, who have stepped up their attacks since the Israel-Hamas war started. The Shi’ite Islamist group is part of the so-called “axis of resistance” against Israel and is armed by Tehran. Almost certainly due to Iranian support with ballistics, the Houthis have directly targeted Israel since the beginning of the war, firing missiles and drones up the Red Sea toward the resort of Eilat.

The Houthis have been embroiled in Yemen’s long-running civil war and have been locked in combat with an intervention force in the country led by Sunni Saudi Arabia. The Houthis have claimed several major strikes against high-value energy installations in Saudi Arabia over the past years, but many international observers have identified some of their bigger claims as implausible, seeing the Houthis as a smokescreen for direct Iranian action against its arch enemy Riyadh.

After first firing drones and cruise missiles at Israel, the rebels are now targeting commercial vessels it deems linked to Israel. The Houthis have launched about 100 drone and ballistic missile attacks against 10 commercial vessels, the U.S. Department of Defense said on Tuesday. 

As a result, some of the world’s largest shipping companies, including Italian-Swiss MSC, Danish giant Maersk and France’s CMA CGM, were forced to reroute to avoid being targeted. BP also paused shipping through the Red Sea. 

2. Why is the Red Sea so important?

The Bab el-Mandeb (Gate of Lamentation) strait between Djibouti and Yemen where the Houthis have been attacking vessels marks the southern entrance to the Red Sea, which connects to the Suez Canal and is a crucial link between Europe and Asia. 

Estimate are that 12 to 15 percent passes of global trade takes this route, representing 30 percent of global container traffic. Some 7 percent to 10 percent of the world’s oil and 8 percent of liquefied natural gas are also shipped through the same waterway. 

Now that the strait is closed, “alternatives require additional cost, additional delay, and don’t sit with the integrated supply chain that already exists,” said Marco Forgione, director general with the Institute of Export and International Trade.

Diverting ships around Africa adds up to two weeks to journey times, creating additional cost and congestion at ports.

3. What is the West doing about it?

Over the weekend, the American destroyer USS Carney and U.K. destroyer HMS Diamond shot down over a dozen drones. Earlier this month, the French FREMM multi-mission frigate Languedoc also intercepted three drones, including with Aster 15 surface-to-air missiles. 

Now, Washington is seeking to lead an international operation to ramp up efforts against the Iran-backed group, under the umbrella of the Combined Maritime Forces and its Task Force 153. 

“It’s a reinsurance operation for commercial ships,” said Héloïse Fayet, a researcher at the French Institute for International Relations (IFRI), adding it’s still unclear whether the operation is about escorting commercial vessels or pooling air defense capabilities to fight against drones and ballistic missiles. 

4. Who is taking part?

On Tuesday, the U.K. announced HMS Diamond would be deployed as part of the U.S.-led operation.

After a video meeting between Austin and Italian Defense Minister Guido Crosetto, Italy also agreed to join and said it would deploy the Virginio Fasan frigate, a 144-meter military vessel equipped with Aster 30 and 15 long-range missiles. The ship was scheduled to begin patrolling the Red Sea as part of the European anti-piracy Atalanta operation by February but is now expected to transit the Suez Canal on December 24.

France didn’t explicitly say whether Paris was in or out, but French Armed Forces Minister Sébastien Lecornu told lawmakers on Tuesday that the U.S. initiative is “interesting” because it allows intelligence sharing.

“France already has a strong presence in the region,” he added, referring to the EU’s Atalanta and Agénor operations.  

However, Spain — despite being listed as a participant by Washington — said it will only take part if NATO or the EU decide to do so, and not “unilaterally,” according to El País, citing the government.

5. Who isn’t?

Lecornu insisted regional powers such as Saudi Arabia should be included in the coalition and said he would address the issue with his Saudi counterpart, Prince Khalid bin Salman Al Saud, in a meeting in Paris on Tuesday evening. 

According to Bradley Bowman, senior director of the Center on Military and Political Power at Washington’s Foundation for Defense of Democracies, a number of Middle Eastern allies appear reluctant to take part.

“Where’s Egypt? Where is Saudi Arabia? Where is the United Arab Emirates?” he asked, warning that via its Houthi allies Iran is seeking to divide the West and its regional allies and worsen tensions around the Israel-Hamas war.

China also has a base in Djibouti where it has warships, although it isn’t in the coalition.

6. What do the Red Sea attacks mean for global trade?

While a fully-fledged economic crisis is not on the horizon yet, what’s happening in the Red Sea could lead to price increases.

“The situation is concerning in every aspect — particularly in terms of energy, oil and gas,” said Fotios Katsoulas, lead tanker analyst at S&P Global Market Intelligence.

“Demand for [maritime] fuel is already expected to increase up to 5 percent,” he said, and “higher fuel prices, higher costs for shipping, higher insurance premiums” ultimately mean higher costs for consumers. “There are even vessels already in the Red Sea that are considering passing back through the Suez Canal to the Mediterranean, even if they’d have to pay half a million dollars to do so.”

John Stawpert, a senior manager at the International Chamber of Shipping, said that while “there will be an impact in terms of the price of commodities at your supermarket checkout” and there may be an impact on oil prices, “there is still shipping that is transiting the Red Sea.” 

This is not “a total disruption” comparable to the days-long blockage of the canal in 2021 by the Ever Given container ship, he argued. 

Forgione, however, said he was “concerned that we may end up with a de facto blockade of the Suez Canal, because the Houthi rebels have a very clear agenda.”

7. Why are drones so hard to fight?

The way the Houthis operate raises challenges for Western naval forces, as they’re fending off cheap drones with ultra-expensive equipment. 

Aster 15 surface-to-air missiles — the ones fired by the French Languedoc frigate — are estimated to cost more than €1 million each while Iran-made Shahed-type drones, likely used by the Houthis, cost barely $20,000. 

“When you kill a Shahed with an Aster, it’s really the Shahed that has killed the Aster,” France’s chief of defense staff, General Thierry Burkhard, said at a conference in Paris earlier this month. 

However, if the Shahed hits a commercial vessel or a warship, the cost would be a lot higher.

“The advantage of forming a coalition is that we can share the threats that could befall boats,” IFRI’s Fayet said. “There’s an awareness now that [the Houthis] are a real threat, and that they’re able to maintain the effort over time.”  

With reporting by Laura Kayali, Antonia Zimmermann, Gabriel Gavin, Tommaso Lecca, Joshua Posaner and Geoffrey Smith.



Source link

#Houthi #rebels #threatening #global #trade #nexus #Red #Sea

Making water the engine for climate action

Post By Politics , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Much progress has been made on water security over recent decades, yet for the first time in human history, our collective actions have pushed the global water cycle out of balance. Water is life: it is essential for health, food, energy, socioeconomic development, nature and livable cities. It is hardly surprising that the climate and biodiversity crises are also a water crisis, where one reinforces the other. Already, a staggering four billion people suffer from water scarcity  for at least one month a year and two billion people lack access to safely-managed drinking water. By 2030, global water demand will exceed availability by 40 percent. By 2050, climate-driven water scarcity could impact the economic growth of some regions by up to 6 percent of their Gross Domestic Product per year.

Meike van Ginneken, Water Envoy of the Kingdom of the Netherlands

Right now, the world’s first Global Stocktake is assessing the progress being made toward the goals of the Paris Agreement and global leaders are convening at COP28 in Dubai to agree on a way forward. We have a critical opportunity to catalyze global ambition and recognize that water is how climate change manifests itself. While wealthier, more resilient nations may be able to manage the devastating impacts of climate change, these same challenges are disastrous for lesser developed, more vulnerable communities.

Rainfall, the source of all freshwater, is becoming more erratic. Changes in precipitation, evaporation and soil moisture are creating severe food insecurity. Droughts trap farmers in poverty, as the majority of cultivated land is rain-fed. Extreme drought reduces growth in developing countries by about 0.85 percentage points. Melting glaciers, sea-level rise and saltwater intrusion jeopardize freshwater supplies. Floods destroy infrastructure, damage homes and disrupt livelihoods. The 2022 Pakistan floods affected 33 million people and more than 1,730 lost their lives, while 2023 saw devastating floods in Libya among other places.  

Now more than ever, it is urgent that we work together to make water the engine of climate action. Already, many countries are investing in technology and climate-resilient water infrastructure. Yet, we need more than technology and engineering to adapt to a changing climate. To advance global water action, we must radically change the way we understand, value and manage water with an emphasis on two necessary measures.

First, we need to make water availability central to our economic planning and decision-making. We need to rethink where and how we grow our food, where we build our cities, and where we plan our industries. We cannot continue to grow thirsty crops in drylands or drain wetlands and cut down forests to raise our cattle. In a changing climate, water availability needs to guide where we undertake economic activity.

In a changing climate, water availability needs to guide where we undertake economic activity.  

Second, we must restore and protect natural freshwater stocks, our buffers against extreme climate events. Natural freshwater storage is how we save water for dry periods and freshwater storage capacity is how we store rainwater to mitigate floods. 99 percent of freshwater storage is in nature. We need to halt the decline of groundwater, wetlands and floodplains. But our challenge is not only about surface and groundwater bodies, or blue water. We also need to preserve and restore our green water stocks, or the water that remains in the soil after rainfall. To reduce the decline of blue water and preserve green water, we need to implement water-friendly crop-management practices and incorporate key stakeholders, such as farmers, into the decision-making process.

Addressing the urgency of the global water crisis goes beyond the water sector. It requires transformative changes at every level of society. National climate plans such as Nationally Determined Contributions (NDCs) and National Adaptation Plans are key instruments to make water an organizing principle to spatial, economic and investment planning. Much like the Netherlands did earlier this year when the Dutch parliament adopted a policy that makes water and soil guiding principles in all our spatial planning decisions. Right now, about 90 percent of all countries’ NDCs prioritize action on water for adaptation. NDCs and National Adaptation Plans are drivers of integrated planning and have the potential to unlock vast investments, yet including targets for water is only a first step.

To drive global action, the Netherlands and the Republic of Tajikistan co-hosted the United Nations 2023 Water Conference, bringing the world together for a bold Water Action Agenda to accelerate change across sectors and deliver on the water actions in the 2030 Agenda for Sustainable Development and the Paris Agreement. To elevate the agenda’s emphasis on accelerating implementation and improved impact, the Netherlands is contributing an additional €5 million to the NDC Partnership to support countries to mitigate the impacts of climate change, reduce water-related climate vulnerability and increase public and private investments targeting water-nexus opportunities. As a global coalition of over 200 countries and international institutions, the NDC Partnership is uniquely positioned to support countries to enhance the integration of water in formulating, updating, financing and implementing countries’ NDCs.

One example showcasing the importance of incorporating water management into national planning comes from former NDC Partnership co-chair and climate leader, Jamaica. Jamaica’s National Water Commission (NWC), one of the largest electricity consumers in the country, mobilized technical assistance to develop an integrated energy efficiency and renewables program to reduce its energy intensity, building up the resilience of the network, while helping reduce the country’s greenhouse gas emissions. With additional support from the Netherlands, the International Renewable Energy Agency (IRENA) and the United Nations Development Programme (UNDP), together with Global Water Partnership (GWP)-Caribbean, the government of Jamaica will ensure the National Water Commission is well equipped for the future. Implementation of climate commitments and the requisite financing to do so are key to ensuring targets like these are met.

Water has the power to connect. The Netherlands is reaching out to the world.

Water has the power to connect. The Netherlands is reaching out to the world. We are committed to providing political leadership and deploying our know-how for a more water-secure world. As we look towards the outcomes of the Global Stocktake and COP28, it is essential that we make water the engine of climate action. 



Source link

#Making #water #engine #climate #action

Energean and Chariot Limited partner on natural gas project offshore Morocco

Post By Oil and Gas , , , , ,

Energean plc has announced it has farmed into Chariot Limited’s acreage offshore Morocco, which includes the 18 Bcm (gross) Anchois gas development and significant exploration prospectivity.

Highlights:

  • New country entry in Energean’s core Mediterranean region with acreage underpinned by an attractive gas development.
  • Farm in to 45% of the Lixus licence, with the option to increase to 55% post drilling results, and 37.5% of the Rissana licence and assumes operatorship of both licences.
  • Includes the commercial 18 Bcm (gross) Anchois development, located near to infrastructure for supply of gas to domestic and international markets.
  • Up front cash consideration of US$10 million.
  • Appraisal well planned for 2024, targeting an additional 11 Bcm of gross unrisked prospective resource to be commercialised through the Anchois development.
  • Energean to carry Chariot for its share of pre-FID costs, which are recoverable from Chariot’s future revenues.
  • Significant additional near-field, near-infrastructure prospectivity that is expected to add attractive, balanced-risk growth potential.

Dr Leila Benali, Minister of Energy Transition and Sustainable Development, commented: “This agreement is pivotal for the wider acreage offshore Morocco, on its Atlantic coast, a key energy asset for the Kingdom. We welcome Energean on these licences as the important investments will contribute
greatly to the monetisation of the country’s resources and to our ambitious energy strategy.”

Mrs Amina Benkhadra, General Director of the National Office of Hydrocarbons and Mines, commented: “I would like to congratulate both parties on signing this agreement. The discovery and extensive work to
date has set an excellent foundation on which the project can be developed and this partnership will now be instrumental in financing and taking it through the next phase. We look forward to working alongside Energean and Chariot in bringing the project to first gas.”

Mathios Rigas, Chief Executive Officer of Energean, commented: “This is an exciting step in the next stage of our development, one that can only enhance our position as the pre-eminent independent natural gas producer listed in London. These assets are particularly attractive as we understand the core geological, commercial and political drivers of the region, we have a track record in developing material gas resources prioritised for the domestic market and they are a complementary fit with our broader portfolio, not least the potential for surplus supply to other markets. We look forward to
working with our partners Chariot and ONHYM, and developing an outstanding resource for the benefit of all parties, including Morocco and its people.”

Adonis Pouroulis, Chief Executive Officer of Chariot, commented: “In Energean, we have secured a partner with a proven track record of rapidly building and delivering this kind of offshore development. Energean also shares our view that Anchois and its surrounding acreage offers significant upside potential and we are aligned with our plans moving forward. The new partnership
is a key step in bringing the development of the Anchois field to reality and we are looking forward to continuing the extensive work undertaken so far to reach final investment decision.”

Assets

Energean has agreed to farm into a 45% working interest in the Lixus offshore licence, which contains the Anchois gas development (Chariot 30%, ONHYM 25%), and a 37.5% working interest in the Rissana licence (Chariot 37.5%, ONHYM 25%). Energean will assume operatorship for both licences.

Farm in terms

As consideration for the interests in the licences, Energean has agreed to the following terms:

  • US$10 million cash consideration on closing of the transaction.
  • Energean agrees to carry Chariot for its share of pre-FID costs, up to a gross expenditure cap of US$85 million, covering:
  1. drilling of the appraisal well, and all other pre-FID costs, and up to US$7 million of seismic expenditure on the Rissana licence.
  • US $15 million in cash, which is contingent on FID being taken on the Anchois Development.

Post appraisal well option to increase working interest from 45% to 55%

Following the drilling of the appraisal well, Energean has the option to increase its working interest in the Lixus licence (which includes the Anchois development) by 10%, to 55%. On exercise of this option, the
amount payable would be:

  • Chariot’s choice between either:
  1. 5-year, US$50 million of convertible loan notes with a £20 strike price and 0% coupon; or 3 million Energean plc shares, issued immediately upon exercise of the option but subject to a lock-up period until the earlier of first gas and 3 years post FID.
  • Energean will pay to Chariot a 7% royalty for every dollar achieved on gas prices (post transportation costs) in excess of a base hurdle.
  • An agreement to carry Chariot’s 20% share of development costs for the Anchois development with the following terms:
  1. A net expenditure cap of US$170 million.
  2. The carry available for development costs is reduced by costs carried in the pre-FID phase.
  3. All carried amounts are recoverable from 50% of Chariot’s future revenues with interest charged at SOFR + 7%.

If the option is not exercised, subject to FID, the partners agree to progress the Anchois development with an ownership structure of Energean 45%, Chariot 30%, ONHYM 25%. All amounts carried by Energean on behalf of Chariot would be recoverable from Chariot’s future revenues under the same terms as above.

The completion of the transaction is subject to government approval.

Lixus licence and Anchois Development

The Lixus Offshore licence covers an area of approximately 1794 km2 with water depths ranging from the coastline to 850 m. The area has extensive data coverage with legacy 3D seismic data covering approximately 1425 km2 and five exploration wells have been drilled historically, including the Anchois-1
and Anchois-2 discovery wells.
Chariot’s latest competent persons report covering the Anchois Field has certified gross 2C contingent resources of 18 Bcm in the discovered gas sands and gross unrisked prospective resources of 21 Bcm in undrilled sands.

Energean and Chariot plan to drill an appraisal well in 2024, with the following objectives:

  • To undertake a drill stem test on the main gas-containing sands.
  • To target an additional 5 Bcm of recoverable gas with a 61% geological chance of success through a sidetrack into the O sands in the Anchois Footwall prospect.
  • To target an additional 6 Bcm of recoverable gas with a 49% geological chance of success through a deepening of the well into previously undrilled sands in the Anchois North Flank prospect.

Once drilled, the well is expected to be retained as a future producer for the Anchois development.

It is anticipated that the licence contains significant additional prospectivity that could allow for further balanced-risk, near-field exploration activity.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/08122023/energean-and-chariot-limited-partner-on-natural-gas-project-offshore-morocco/



Source link

#Energean #Chariot #Limited #partner #natural #gas #project #offshore #Morocco