Booming thermal coal price on China demand cheers miners

17 Aug 2017   China, Coal

Australian thermal coal prices for spot cargoes above $100 a tonne, lifted by reports of strikes and strong Chinese demand, are providing a boost in earnings and share prices for miners like Glencore and Whitehaven Coal. A crackdown on illegal mining and pollution in China has curbed domestic supplies, just as a heat wave and lower hydro power output have boosted demand for coal for power generation, forcing up prices. A similar squeeze in 2016 pushed prices to $114 a tonne and miners are again eyeing windfall profits, despite warning that the market is volatile. “Coal demand remains strong, especially in Asia,” said Paul Flynn, managing director of Whitehaven Coal. “Imports of thermal coal into China have been higher than anticipated, and when combined with weather related constraints on supply from Indonesia and some production issues in Australia, have pushed up the price of seaborne thermal […]

Prominent China debt bear warns of $6.8tn in hidden losses

17 Aug 2017   China

One of the most influential analysts of China’s financial system believes that bad debt is $6.8tn above official figures and warns that the government’s ability to enforce stability has allowed underlying problems to go unchecked. Charlene Chu built her reputation as China banking analyst at credit rating agency Fitch, where she was among the earliest to warn of risks from rising debt, especially in the country’s shadow banking system. Today many of her original views — such as concern about Chinese banks concealing risky credit in off balance sheet vehicles — have become consensus among analysts. “Everyone knows there’s a credit problem in China, but I find that people often forget about the scale. It’s important in global terms,” Ms Chu said in an interview by phone from New York. Ms Chu left Fitch in 2014 to help launch the Asia operation for Autonomous Research, which specialises in analysis of financial institutions. In her latest report, Ms Chu estimates that bad debt in China’s financial system will reach as much as Rmb51tn ($7.6tn) by the end of this year, more than five times the value of bank loans officially classified as either non-performing or one notch above. That estimate implies a bad-debt ratio of 34 per cent, well above the official 5.3 per cent ratio for those two categories at the end of June. Charlene Chu was one the first analysts to warn of risks from China’s rising debt

China’s energy demand to peak in 2040 as transportation demand grows: CNPC

16 Aug 2017   China

China’s energy demand will peak by 2040, later than the previous forecast of 2035, as transportation fuel consumption continues to rise through the middle of this century, state-owned oil major China National Petroleum Corp (CNPC) said on Wednesday. Energy consumption in China, the world’s second-largest economy, will peak then at 4.06 billion tonnes of oil equivalent, up from the previous forecast of 3.75 billion tonnes five years prior, CNPC said in its annual long-term energy outlook. CNPC raised its forecast because it predicts transportation demand will rise through to 2050, twenty years longer than previously estimated. China’s oil demand will reach a ceiling of 690 million tonnes a year, equivalent to 13.8 million barrels per day (bpd), by 2030, CNPC said. The country is the […]

Oil Prices Slip As Chinese Crude Demand Loses Momentum

15 Aug 2017   China, Prices

Slowly but surely, what we have claimed for the past year – that it is the demand side of the oil equation, not the supply, and especially the “Chinese wildcard” that is the critical factor in setting prices – is starting to emerge and be factored in by markets. And so, just days after we posted ” Another Red Flag For Oil? China’s Crude Imports Slump To 7-Month Low ” arguably catalyzed by the increasingly full Chinese Strategic Petroleum Reserve, overnight we got another major red flag – once again out of China – when Bloomberg reported that China’s oil refining dropped the most in three years for the month of July, while crude output retreated from the highest this year, “as the world’s largest consumer showed signs of losing momentum.” According to Bloomberg calculations based on NBS data released on Monday, as shown in the chart below oil […]

Whatever Happened to Indonesia’s Mighty Oil and Gas Industry?

15 Aug 2017   Indonesia

Former OPEC member suffers as investment, exploration dry up Volatile prices and onerous bureaucracy deter oil companies Start your day with what’s moving markets in Asia. Sign up here to receive our newsletter. Once a cornerstone of the economy, Indonesia’s oil and gas sector is in a slump, even as the country’s appetite for energy soars. Hit by a drop in global prices, changing regulations and competition from neighbors that are proving more attractive to international energy companies, Southeast Asia’s biggest economy is facing a decline in oil revenue and steadily rising fuel imports. With an economy growing at a 5 percent clip and the government embarking on a vast infrastructure roll out, the oil and gas industry is sounding alarm bells over the decline of a sector that five years ago accounted for almost 6 percent of Indonesia’s gross domestic product and last year contributed only 3 percent. […]

China’s Refineries Run Rates At 10-Month Low

15 Aug 2017   China

At 10.71 million bpd, China’s crude refineries saw in July their lowest daily throughput rate since September last year as state firms and independent refineries, both swimming in inventory, continue to duke it out with price as their weapon. According to data released by China’s National Bureau of Statistics (NBS) on Monday, reported by Reuters , China processed 10.71 million bpd of crude in July—500,000 bpd lower than the throughput in June. But between January and July, Chinese refinery production increased by 2.9 percent annually to 320.7 million tons, equal to a rate of 11.04 million bpd, Reuters reports, as per official statistics data. In June, Chinese refineries had processed 11.21 million bpd of crude oil, up by 2.3 percent on the year and the second-highest daily processing rate on record. The highest daily rate was hit last December, when refineries processed 11.26 million bpd. However, state refiners have […]

China’s appetite for crude oil may become less voracious:

15 Aug 2017   China

The sharp slowdown in China’s refinery processing in July may be another warning sign that the robust growth in crude oil demand this year in the world’s top importer is poised to moderate. Refinery throughput was 45.5 million tonnes of crude in July, or about 10.71 million barrels per day (bpd), the lowest operating rate since September last year, and a drop of 500,000 bpd from June. For the first seven months of the year, refinery runs were 11.04 million bpd, up 2.9 percent from the same period last year. While this is still a reasonable year-on-year growth rate, it does contrast with the strong 13.6 percent increase in imports of crude in the first seven months of this year, compared […]

Cheniere Energy sets up China office to expand sales: sources

15 Aug 2017   China, LNG

U.S. natural gas exporter Cheniere Energy Inc is setting up an office in Beijing to help it clinch long-term supply deals with Chinese buyers, four industry sources said. Cheniere, which held extensive talks with China earlier this year, will be the first operator of a U.S. liquefied natural gas (LNG) export facility to establish a presence in the country. The move follows an agreement in May between the U.S and China to boost trade under the so-called 100-day trade talks that will allow Chinese buyers to purchase long-term supplies from the U.S. directly. World LNG demand is expected to double to about 71 billion cubic feet per day (bcfd) (544 million tonnes a year) by 2040, up from around 32 bcfd in 2015, the U.S. Energy Department estimates, driven by the rapidly growing economies of Asia, particularly China and India. Cheniere is currently the only company […]

Drilling ship leaves Vietnam oil block after China row

14 Aug 2017   China, Vietnam

The drilling ship at the center of a row between Vietnam and China over oil prospecting in disputed waters in the South China Sea has arrived in waters off the Malaysian port of Labuan, shipping data in Thomson Reuters Eikon showed on Monday. Drilling by the Deepsea Metro I ship was suspended in Vietnam’s Block 136/3 last month after pressure from China, which says the concession operated by Spain’s Repsol overlaps the vast majority of the waterway that it claims as its own. The ship, used by Norway’s Odfjell Drilling Ltd., was reported to be in Labuan at 9.17 a.m. (0117 GMT), according to shipping data in Thomson Reuters Eikon. It was last recorded at the drilling site on July 30. Odfjell Drilling did not respond immediately to a request for comment. The row over the drilling inflamed tensions between Vietnam and China, whose claims in […]

China approves plan to promote unified nuclear reactor brand

14 Aug 2017   China, Nuclear

China has approved a plan from its two state nuclear developers to promote a single integrated nuclear reactor brand that will help speed up construction and strengthen their ability to compete in markets overseas. China is in the middle of an ambitious nuclear program that could bring total capacity to as much as 200 GW by 2030, and it also aims to win more projects abroad. But approvals have been slow with a variety of new advanced reactors subject to repeated delays. The China National Nuclear Corporation (CNNC) and the China General Nuclear Project Corporation (CGN) have been jointly developing an advanced model known as the “Hualong One”, but despite government pressure, they have continued to work separately on their own designs. In a plan approved by regulators last week, the two companies agreed to use integrated technical standards when building Hualong reactors. They will also […]

Japan pursuing tight oil at home, may seek it abroad too

14 Aug 2017   Japan

Japanese upstream companies are looking to tight oil to supplement dwindling domestic output and may seek to use the experience gained to become involved in similar projects abroad. Japan Petroleum Exploration intends to seek out further prospects by the end of March 2020 over three years since the drilling of Japan’s first horizontal exploration well in the Onnagawa tight formation at its onshore oil field in northwestern Akita province. “While we cannot commit ourselves yet, we will look into the opportunities while monitoring oil prices during the current medium-term business plan,” Satoru Yokoi, geologist and technical fellow of Japex’s Japan-Onnagawa shale oil project team said in an interview with S&P Global Platts. Japex, which earlier this year concluded a pilot test involving multi-stage fracturing from a horizontal well, successfully fractured mostly as intended in the Onnagawa formation, Yokoi, one of Japan’s shale pioneers, said. After drilling and fracturing from […]

Indian Oil Obtains Govt Approval To Import U.S. Oil Every Month

11 Aug 2017   India

India’s biggest refiner, Indian Oil Corp, has secured government permission to import one very large crude carrier (VCCC) of U.S. crude oil every month this year, as Indian firms started buying American crude for the first time. India allows oil imports only on Indian carriers, but U.S. crude transportation needs VLCCs, which can be done by foreign shipping companies. India’s shipping ministry has allowed Indian Oil to import one cargo from the U.S. every month in foreign carriers, Indian media report, quoting a senior official at the oil ministry. Last month, Indian Oil became the first Indian company to buy U.S. crude oil, purchasing 1.6 million barrels of Mars crude. A week later, Bharat Petroleum became the second Indian refiner to start buying U.S. crude oil, after Bharat purchased 500,000 bpd each of Mars and Poseidon crude, to be delivered between late September and early October. Just a few […]

India’s refiners bet big on petrochemicals as industry reshapes

11 Aug 2017   India

India’s state oil refiners – long focused on churning out transport and cooking fuels – are planning a $35 billion push into petrochemicals to meet an expected surge in demand for goods ranging from plastics to paints and adhesives. The drive comes as the government seeks to promote durable, cheaper materials in industries such as farming and food packaging, while refiners eye long-term threats to their business from renewable energy and a shift to electric vehicles. India’s per capita consumption of synthetic polymers, for instance, used to make various grades of plastics, is just 10 kg (22 lbs) a year, compared with a global average of about 32 kg. “India is one of the fastest growing economies globally, but our petrochemical use is one-fourth the world average. We import half of our petchem consumption,” said S. Mitra, executive member at trade body, the Chemical and […]

China Prepares For A Natural Gas Import Boom

11 Aug 2017   China

Last month, the International Energy Agency said that China will account for 40 percent of the global annual growth in natural gas demand over the next five years. Imports of the bridge fuel in Asia’s second-largest economy are running at record rates as Beijing pushes on with its cleaner energy agenda that should see the country satisfy 10 percent of its energy needs with gas in 2020, from 5.9 percent in 2015. This shift to gas is now creating new opportunities for independent energy companies at the expense of state-owned giants. Energy independents are building a string of LNG import facilities, Bloomberg reported earlier this week, stimulated by the government’s efforts to promote gas and encourage competition, and by the attractive prices on the spot market. Having your own import and distribution infrastructure is essential for these independents, according to one Sanford C. Bernstein analyst, if they want to […]

China’s smog crackdown roils niche commodities markets

10 Aug 2017   China, Climate

China’s push for blue skies is roiling supplies and boosting prices of key raw materials from soymeal to ferroalloys as the government ramps up smog checks and forces some factories in the world’s top commodities market to close or suspend operations. With soymeal and gasoline prices surging, Shandong, China’s industrial and agricultural heartland, offered a snapshot into the impact in the market as environmental inspectors started to crisscross the eastern province. Shandong is one of eight provinces and regions now facing a fourth round of inspections by China’s Ministry of Environmental Protection. Soymeal at Rizhao, in Shandong,, has risen almost 3 percent this week, hitting a three-week high of 2,840 yuan ($424.32) per tonne on Wednesday even as a […]

Profits for Chinese coal producers soar

9 Aug 2017   China

Profits for Chinese coal producers have been impressive so far this year, even though the government is sidelining capacity, state media reported. The official Xinhua News Agency reported that, of the 37 coal producers listed in the Shenzhen Stock Exchange, more than half estimated that profits during the first half of 2017 at least doubled from last year. The nation’s largest coal miner, China Shenhua Energy Co., reported profits for the first half of the year at $3.6 billion, a 147 percent improvement over last year. Xinhua attributed the gains to higher coal prices, but noted the nation’s economy is moving away from the resource. “About 111 million tons of capacity was forced out of the market in the first half of this […]

Chinese refiners receive 5%-10% Saudi crude oil allocation cuts for Sep

9 Aug 2017   China, Saudi Arabia

Various Northeast Asian end-users saw their crude oil term allocations from Saudi Arabia slashed for September, with two South Korean refining companies receiving around 10% cuts in monthly contract volumes for light and medium sour grades, market sources said Tuesday.  South Korea’s two biggest refiners SK Energy and GS Caltex have received around 10% September allocation cuts from Saudi Aramco, but Hyundai Oilbank is expected to be given full term volume that it had requested for the month, South Korean trade sources with direct knowledge of the matter told S&P Global Platts.  The sources indicated that the reduction in crude allocations for September affected various sour grades including Saudi Arab Extra Light, Arab Light and Arab Medium.  “Luckily, [Hyundai Oilbank] did not see any notable cuts in September Saudi crude allocation because [the company] only nominated [relatively] smaller amount for the month,” a company source said.

Australia’s North Queensland Jul coal exports rise 9% on year to 12.24 mil mt: NQBP

9 Aug 2017   Australia, Coal

Exports of coal from the metallurgical coal dominant region of North Queensland, Australia, totaled 12.24 million mt in July, up 9% year on year but down 4% from June, North Queensland Bulk Ports Corporation data showed Tuesday. The exports come via the 85 million mt/year capacity Dalrymple Bay Coal Terminal, the 55 million mt/year Hay Point Coal Terminal and the 50 million mt/year Abbot Point Coal Terminal. Total exports in July from the three terminals translate to an annualized rate of 144.16 million mt, which leaves 45.84 million mt of latent capacity across the three terminals with a combined capacity of 190 million mt/year. The biggest of the three, DBCT, which is a Queensland State Government-owned common user facility, shipped 5.82 million mt during the month, which is up 8% year on year but down 10% from a six-month high of 6.44 million mt in June, the figures showed. […]

Mazda announces SKYACTIV-X: gasoline Spark Controlled Compression Ignition

9 Aug 2017   Japan

Mazda Motor Corporation announced “Sustainable Zoom-Zoom 2030,” a new long-term vision for technology development that looks ahead to the year 2030. As part of the new technology to achieve this vision, the company disclosed plans to introduce a next-generation gasoline engine called SKYACTIV-X in 2019. SKYACTIV-X—which Mazda believes will be the first commercial gasoline engine to use compression ignition—uses a proprietary combustion method called Spark Controlled Compression Ignition (SPCCI). Mazda says that SCCI overcomes two issues that has impeded commercialization of compression ignition gasoline engines: maximizing the zone in which compression ignition is possible and achieving a seamless transition between compression ignition and spark ignition. This new proprietary combustion engine combines the advantages of gasoline and diesel engines to optimize environmental performance, power and acceleration performance. Compression ignition combined with […]

Mazda announces breakthrough in long-coveted engine technology

9 Aug 2017   Japan

Mazda Motor Corp unveiled plans for the world’s first commercial gasoline engine using compression ignition, placing traditional engines at the center of its strategy days after saying it would develop electric cars with Toyota Motor Corp. Mazda, whose research and development (R&D) budget is a fraction that of Toyota, could be the first automaker to commercialize a technology that many peers including General Motors Co and Daimler AG have been working on for decades. Mazda on Tuesday said it would start selling cars equipped with the new engine from 2019, even as other automakers increasingly turn to on electric vehicles against a landscape of tightening environmental regulation. “We think it is an imperative and fundamental job for us to pursue the ideal internal combustion engine,” said Mazda’s head of R&D Kiyoshi Fujiwara. While “electrification is necessary … the internal combustion engine should come first,” he told […]

Indonesia’s Aug HBA thermal coal price surges 44% on year to $83.97/mt

7 Aug 2017   Indonesia

Indonesia’s Ministry of Energy and Mineral Resources set its August thermal coal reference price, also known as Harga Batubara Acuan or HBA, at a seven-month high of $83.97/mt, up 44% year on year and 6.4% higher from June. The ministry had set the price for July at $78.95/mt, and for August 2016 at $58.37/mt. The HBA is a monthly average price based 25% on the Platts Kalimantan 5,900 kcal/kg GAR assessment ; 25% on the Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR); 25% on the Newcastle Export Index — formerly the Barlow-Jonker index (6,322 kcal/kg GAR) of Energy Publishing — and 25% on the globalCOAL Newcastle (6,000 kcal/kg NAR) index. Article continues below… Webinar: Thermal and Metallurgical Coal Markets Edging into a Brave New World August 23, 2017 | 1-2pm SGT │ Online Join Michael Cooper, senior editor, thermal coal, and Edwin Yeo, senior managing editor, metallurgical coal, as […]

Construction of world’s second largest hydropower station begins

3 Aug 2017   China, Hydro

A ceremony is held at the construction site of Baihetan project, which is located downstream of the Jinsha River, the upper section of the Yangtze, in Ningnan county of southwest China’s Sichuan Province and Qiaojia county of neighboring Yunnan Province, on Aug. 3, 2017. Building work on what will be the world’s second largest hydropower station started Thursday. (Xinhua/Sun Ronggang) Aerial photo taken on July 27, 2017 shows the construction site of Baihetan project, which is located downstream of the Jinsha River, […]

Beijing aims to expand electric bus fleet

3 Aug 2017   China

Beijing aims to vastly increase the amount of electric buses in its fleet by the start of the next decade. The city’s public transportation system has been stressed by massive urbanization projects. File photo by Stephen Shaver/UPI | License Photo Aug. 2 (UPI) — The mass transit fleet of buses in Beijing could expand to roughly 10,000 by the start of the next decade, a director at a public transportation group said Wednesday. Zhong Qianghua, the deputy managing director for the Beijing Public Transport Group, said each new electric bus in Beijing would eliminate about 45 tons of carbon dioxide emissions every year. There are currently 1,000 electric buses utilized in Beijing. “The proportion of buses purely powered by electricity among the total public transport vehicles will increase from the current 10 percent to 60 percent in three years,” he was quoted by the official Xinhua News Agency as […]

Russian oil producer highlights Asian reach

3 Aug 2017   Russia, Vietnam

Russian oil producer Rosneft highlighted its focus on operations offshore Asia by boasting of its future exploration and production plans for Vietnam. The Vietnamese subsidiary said it was marking 15 years of operations offshore Vietnam. Though a dominant player on the global energy stage, and one of the top exporters to the European economy, Russian energy companies have maintained a strong footing in the Asia-Pacific region. “Implementation of Vietnam projects is one of the priorities of Rosneft’s international strategy,” the company stated . The Rosneft division in Vietnam draws mostly natural gas from offshore fields, and steers about a fifth of its production toward power generating facilities in the country. Gazprom, Russia’s main natural gas company, estimates the Moc Tinh and […]

Tighter quotas to limit China’s gasoline, gasoil export growth

2 Aug 2017   China

China’s gasoline and gasoil exports grew strongly in the first half but are unlikely to rise significantly in the second half of 2017 as Beijing is expected to squeeze the volume of quotas in an effort to rein in outflows, sources said. “We have been limiting product exports since July, as the quota allocated is not enough for us to export at the same level as in the previous months,” said a source with PetroChina Guangxi, a major exporting refinery in south China. “Gasoil export in H2 should be flat to slightly positive compared with a year earlier, based on the quotas given to date. Construction sector should remain healthy thereby supporting domestic gasoil demand, which will limit availability for exports,” said an analyst with S&P Global Platts China Oil Analytics . COA expects China to export 225,000 b/d (9.66 million mt) of gasoline in 2017, compared with 9.7 […]

Chinese renewable energy capacity growing rapidly

2 Aug 2017   China

China is on pace to see its solar power capacity more than double by 2020 as component costs move lower, but at perhaps a cost, a sector analysis finds. Beijing issued a white paper last year, which stated the Communist Party of China is “committed to the concept of environment-friendly development.” The paper stated that China has been at the forefront of the effort to infuse environmental protection with state policy, becoming the first country in the world to offer a sustainable development strategy in the 1990s. An analysis of Chinese development on the solar energy front from sector consultant group Wood Mackenzie finds that, when counting all planned and announced projects, solar power capacity will more than double […]

Vice premier urges efforts on air pollution control in north China

1 Aug 2017   China, Climate

Chinese Vice Premier Zhang Gaoli attends a meeting on air pollution control in the Beijing-Tianjin-Hebei region and other nearby areas in north China, in Beijing, capital of China, July 31, 2017. (Xinhua/Wang Ye) BEIJING, July 31 (Xinhua) — Vice Premier Zhang Gaoli Monday urged solid efforts on air pollution control in north China in the coming fall and winter seasons. China has made progress in the fight against air pollution in the first half of this year, but the situation in the Beijing-Tianjin-Hebei region and other nearby areas remains grim and there are still weak links in air pollution control, especially in the fall and winter seasons, Zhang said at a meeting in Beijing. Authorities should take targeted measures to prevent air pollution and tackle key problems, Zhang said.

Panel beaters: Australia utilities branch out as customers shift to solar

1 Aug 2017   Australia

Australia’s power utilities and grid operators, under threat from the world’s fastest take-up of home solar panels, are rushing to come up with ways to stay relevant and protect long-term revenues. Pushing to cash in rather than lose out on the millions of solar panels that glint from the roofs of homes around the country, electricity suppliers and network operators are taking steps such as selling batteries to store solar energy or looking to charge fees for taking excess solar power into the grid. Australians have snapped up solar panels over the past 10 years thanks to government incentives, but what was seen as a luxury has almost become a necessity as energy policy uncertainty has led to the closure of some coal- and gas-fired power plants, sparking blackouts and power price hikes. “Australia has highly innovative customers who are interested in new things and most […]

Renewables Could Overtake Fossil Fuels In South Australia By 2025

31 Jul 2017   Australia

Declining renewables and energy storage costs will increasingly squeeze out gas-fired generation in South Australia as early as 2025, a joint research report conducted by Wood Mackenzie and GTM Research shows. The South Australia experience is noteworthy in a global power mix set to increasingly shift to renewable energy. South Australia retired its last coal plant in 2016 and is projected to have installed renewable energy capacity exceed its peak demand by 2020. By 2025, wind, solar and battery costs will fall by 15 percent, 25 percent and 50 percent respectively. By then, renewables and batteries could offer a lower cost alternative to combined-cycle gas turbine plants, which are commonly used to manage base load power generation in South Australia. Meanwhile by 2035, renewables and batteries will provide a commercial solution for both base loads and peak loads. As a consequence, gas will increasingly be used just for emergency […]

Chinese consortium in talks over Nassiriya deal

28 Jul 2017   China, Iraq

Iraq has entered direct negotiations with a Chinese consortium for the combined Nassiriya refinery and oil field development project. PetroChina and the China National Offshore Oil Corp. (CNOOC), which have a large and well established presence in Iraq, are offering to build a $9 billion refinery, according to two senior Iraqi oil officials involved with the negotiations. The ministry has rejected that proposal as too costly. This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

China diesel demand expected to return to growth as economy improves

28 Jul 2017   China

Chinese demand for diesel will rise again this year after contracting for the first time in over a decade in 2016, buoyed as the world’s No.2 economy shows signs of growth, traders and analysts said. That could cap increases in exports of the fuel from the world’s second-biggest oil consumer, while bolstering benchmark Asian diesel margins already near 8-month highs. Diesel demand in China is expected to grow by up to 0.3 percent in 2017 and by 0.5 percent in 2018 after shrinking by 3.5 percent last year, said Sri Paravaikkarasu, the head of ‘east of Suez oil’ at energy consultancy FGE. “A variety of factors – improvement in mining and industrial activity, commercial vehicle sales and road freight movements – support a gradual revival in China’s (diesel) […]

PetroVietnam’s crude output may fall 60% over 5-7 years on exploration funding difficulties

28 Jul 2017   Vietnam

Vietnam’s national oil and gas company PetroVietnam has said that its crude oil output is likely to go down sharply in the future due to the difficulties it is facing in funding its exploration activities. The company’s crude oil output may fall 60% to 7 million mt/year in the next five-seven years if the situation does not improve, down from 17.23 million mt in 2016, PetroVietnam’s general director Nguyen Vu Truong Son told a working group of the central government on July 19, according to a recording obtained by S&P Global Platts. “If we fail to improve [exploration work], we cannot stop the falling trend [in output],” Son said, adding that PetroVietnam could only finish 30% of the exploration work planned for 2017 as of mid-July due to financing issues. PetroVietnam is also facing oil exploration difficulties in sensitive areas in the South China Sea, due to a territorial […]

Indonesia May Return To OPEC But Won’t Cut Production

27 Jul 2017   Indonesia

Indonesia is open to rejoining OPEC, but only if it can determine its own production levels, the country’s Energy and Mineral Resources Minister Ignasius Jonan told Reuters in an interview. “We would have to have a concession for not following cuts from time to time, ” Jonan said. Indonesia, which produces some 800,000 bpd , left OPEC last November, right after OPEC agreed to curb production to prop up international prices. That happened less than a year after the cartel’s only East Asian member rejoined its ranks. Per the agreement, OPEC had asked Indonesia to cut 37,000 bpd from its daily output, which, Jonan said at the time, the country would not do. What he agreed to was a 5,000-bpd cut that was stipulated in the 2017 budget. Indonesia is a net importer of crude oil, and a massive one: it imports twice what it produces, as local fields […]

China willing to sacrifice economic growth to control systemic risks: senior party official

27 Jul 2017   China

A Chinese economic official on Thursday indicated that policymakers would be willing to sacrifice some short-term economic growth in order to deal with systemic risks. “(China can’t let smaller risks) eventually lead to large systemic risks that would cause serious harm to China’s economy,” Yang Weimin, a senior economic official for the Communist Party, told reporters. “We would rather sacrifice in some other areas, while also dealing with the relationship between stable growth and risk prevention”, said Yang. China will fine tune monetary policy to offset the impact of changes in market interest rates, said Wang Zhijun, another economic official.

Analysis: China’s record US crude imports to give OPEC more sleepless nights

27 Jul 2017   China

China’s import of US crude oil crossed 1 million mt for the first time in June, an eight-fold rise year on year, as elevated Dubai prices prompted both state and independent refiners to use it as an opportunity to diversify supplies, a trend that could add to the headache of OPEC suppliers. While shipments from the US to China hit 1.09 million mt, or 268,000 barrels/d, in June, imports from Saudi Arabia fell to a six-month low of 940,00 b/d in the same month, a sign that China is more than willing to shed its dependence on OPEC supplies and widen its feedstock sources as much as it can. “China’s imports from the US in H2 is likely to go up because of expectations that the supplying country will lift production, thereby boosting availability,” said S&P Global Platts senior analyst Song Yen Ling. China’s imports from the US have […]

In Australia, Shell signals new era for LNG

26 Jul 2017   Australia

The largest facility of its kind ever built, Shell’s floating Prelude liquefied natural gas facility arrives at its home off the coast of Western Australia. Photo courtesy of Shell Australia. July 25 (UPI) — The arrival of a floating liquefied natural gas facility off the coast of Australia signals a milestone for the region as an energy hub, Royal Dutch Shell said. The company’s Prelude vessel, its first-ever floating platform for LNG, arrived off the coast of Western Australia, after leaving its South Korean shipyard in late June . Large for a floating facility, it’s one-quarter the size of an equivalent inland plant. With LNG emerging in market share because of its diverse deliverability options, Shell said the Prelude FLNG vessel opens up new doors in new countries. For Australia, the company said the vessel will keep 260 local workers on board and create more than 1,500 jobs during […]

China’s crude oil imports to exceed 400 million tonnes this year: Sinopec executive

26 Jul 2017   China

China’s crude oil imports will exceed 400 million tonnes this year, said an executive at a Chinese state oil giant on Tuesday, as continuing low oil prices and declining domestic output sparked increased overseas purchases. China’s crude imports are also expected to grow by double digits in 2018, Zhang Haichao, vice president of Sinopec Group, told Reuters on the sidelines of an industry conference in Beijing on Tuesday. Zhang’s estimates mean Chinese demand for imported crude would grow by around 400,000 barrels per day (bpd) this year, which would likely make China the world’s largest crude oil importer on an annual basis for the first time ever. For the first six months of 2017, China imported 212 million tonnes of crude, or 8.55 million bpd, up nearly 14 percent from the same period in 2016, according to customs data. [O/CHINA1] China’s crude oil imports have grown […]

EnergyQuest: Australia achieves record LNG exports in 2016-17

26 Jul 2017   Australia

Australia exported a record volume of 51.4 million tonnes of LNG during the 2016-17 financial year, according to figures just released by energy consultancy EnergyQuest, Adelaide. It is the first time the country has broken the 50-million-tonne export barrier. The figure also is a 37% increase on the 2015-16 LNG export volume of 37.5 million tonnes. EnergyQuest forecasts higher-still exports in the next financial year, 2017-18, suggesting that the volume will reach 63 million tonnes by midyear 2018 with increases expected from Gorgon and the start of Wheatstone next month, plus Ichthys coming on stream in 2018. Sales for the 2017-18 year have been estimated at $22.3 billion (Aus.), which is a 29% increase on the $16.6 billion for the previous year. EnergyQuest says that production volumes increased in virtually every Australian LNG export project. The exceptions were Darwin LNG, which was down 900,000 tonnes, and BG Group’s Queensland […]

China’s Diesel, Gasoline Exports Surge to Ease Domestic Glut

24 Jul 2017   China

China’s diesel and gasoline exports surged in the first half of the year as a domestic supply glut and slowing demand growth prompted refiners to sell more fuel abroad.  Diesel shipments jumped almost 21 percent in the first six months compared to the same period a year ago, averaging about 328,500 barrels a day, according to Bloomberg calculations based on data posted Sunday on the website of the General Administration of Customs. Gasoline exports rose 8.1 percent, averaging nearly 222,000 barrels a day.  China’s state-run fuel makers have sent more fuel overseas to draw down stockpiles that have swollen thanks to a refining capacity glut and higher production from independent refiners, known generally as teapots. Meanwhile, the nation’s gasoline and diesel demand growth has been slowed by alternative transportation such as shared bicycles, as well as gas-fed vehicles and electric cars, according to ICIS China, a Shanghai-based commodity researcher.  “Alternative transportation has taken a notable toll on consumption of traditional fuels this year,” Lin Jiaxin, an analyst with ICIS China, said before the data were released. “With new refining units coming online in the second half of the year, refiners will have to ship even more overseas.”

South Korea To Ease Oil Terminal Rules In Bid To Become Trading Hub

21 Jul 2017   South Korea

South Korea is set to ease restrictions for international oil traders to blend fuels at the country’s oil storage terminals in its attempt to become a trading hub in Northeast Asia, which could potentially pose a challenge to the established oil hub in Singapore. Earlier this year, the government passed legislation that would allow international oil trading companies to blend fuels as per client specifications at the oil storage terminals. So far fuel blending at the terminals was only allowed for domestic refiners. Even though the South Korean government is still tweaking the final guidelines and technical aspects, the country with a vast refining sector relying almost exclusively on crude oil imports is advancing the plan to ease restrictions that has been in the making since 2014. Back then, the Ministry of Trade, Industry, and Energy said that “regulations on blending or other activities will be eased so that […]

Volvo Accelerates Toward Electric Future With China’s Geely

Volvo Car Corp., the Swedish auto maker, and its Chinese parent Zhejiang Geely Holdings on Thursday unveiled plans for wide-ranging collaboration to develop new technology that aims to accelerate Volvo’s transformation into an all-electric auto brand and fuel Geely’s global ambitions. Volvo and Geely Holdings have signed an agreement to create a joint technology venture with headquarters in China that expands their current…

BHP to expand U.S. onshore work, though output falters

20 Jul 2017   Australia, USA

U.S. oil field development extends into 2018 on the back of increased spending, but total petroleum production falters on field maturation, BHP Billiton said. Onshore U.S. production for the Australian energy and mining giant is expected to decline because the development of new activity won’t be enough to offset natural decline from existing assets. Nevertheless, CEO Andrew Mackenzie was bullish about the potential for offshore work and onshore exploration and production. “The recently approved Mad Dog phase 2 project will extend low-risk oil volumes as supply tightens while in the near-term, onshore U.S. development activity is to increase with up to 10 rigs planned for the 2018 financial year,” he said in a statement . The […]

China drafts new rules for oil storage industry

19 Jul 2017   China

Beijing on Wednesday issued a draft of new regulations for China’s growing oil and fuel storage industry, helping loosen the state-owned oil majors’ grip on the sector as the nation pushes to reform its vast energy markets. The government is looking to update storage policies issued in 2006, consolidating regulations for crude oil and rules for oil products under a single framework. The main change in the draft is that it removes requirements for distributors and storage companies to have secure and steady supplies of refined products, a condition that only state majors like Sinopec and China National Petroleum Corp could comply with. Although the clause will still exist for crude. “(The draft) has lowered the threshold for entry to the wholesale and storage industry,” said Dong Xiucheng, a professor at the China Petroleum University. “The new draft emphasizes storage capacity first … As long as […]

China Economic Expansion Exceeds Estimates on Factory Rebound – Bloomberg

19 Jul 2017   China

China’s economy maintained its momentum last quarter, as global trade and domestic demand spurred a pickup at the nation’s factories.

Key Points

  • Gross domestic product increased 6.9 percent in the second quarter from a year earlier, compared with a 6.8 percent median estimate in a Bloomberg survey, matching the pace of expansion in the first quarter
  • Industrial output rose 7.6 percent in June from a year earlier, compared with an estimated 6.5 percent increase
  • Fixed-asset investment climbed 8.6 percent in the first half of this year, versus a median forecast of 8.5 percent gain
  • Retail sales jumped 11 percent from a year earlier in June, compared with a median estimate of 10.6 percent in a Bloomberg survey

Iran Signs Deal With Japan’s Toyo To Boost Output At Offshore Field

18 Jul 2017   Iran, Japan

The National Iranian Oil Company (NIOC) signed on Monday a memorandum of understanding with a consortium that includes Japan’s engineering group Toyo to revamp the facilities and upgrade gas production at the Salman field in the Persian Gulf. Iranian company Petropars is also part of the consortium, Iran’s oil ministry’s news service, Shana, reported. Under the memorandum of understanding, NIOC, Petropars, and Toyo will finance studies for the rehabilitation project, but if they decide to turn the MoU into a deal, it would be an Engineering, Procurement, Construction and Finance (EPCF) contract, with the Japanese firm financing the project, Shana quoted Gholamreza Manouchehri, deputy for development and engineering at NIOC, as saying. According to Oil & Gas Journal , the Salman oil and gas field that straddles the Iranian-UAE maritime border holds 473 million barrels of oil and 5.2 bcm of natural gas. Studies for the fie from the […]

North Korea fuel prices surge after China cuts oil sales

17 Jul 2017   China, North Korea

Gasoline and diesel prices surged in North Korea in the weeks after a Chinese state oil company suspended fuel sales to the reclusive state, according to data reviewed by Reuters and an interview with a North Korean defector. China National Petroleum Corp (CNPC), a state-controlled company, halted diesel and gasoline sales to North Korea “over the last month or two”, amid international pressure on Pyongyang to curb its nuclear and missile programs, Reuters exclusively reported on June 28. Scrutiny of China’s commercial ties with its isolated neighbor intensified further following North Korea’s first test of an intercontinental ballistic missile two weeks ago. The price of gasoline sold by private dealers in Pyongyang and the northern border cities of Sinuiju and Hyesan jumped to $2.18 per kg ($2.92 per liter) as of July 5, up 50 percent from $1.46 per kg on June 21, according to Reuters […]

China June oil refinery throughput close to record

17 Jul 2017   China

China’s oil refineries ramped up throughput in June to the second highest on record, with some independent plants raising output even as state oil majors prepare to take drastic steps to cut production during the peak summer season. Throughput last month reached 46.08 million tonnes, or 11.21 million barrels per day (bpd), a 2.3-percent rise year-on-year and up from May’s 10.98 million bpd, data from the National Bureau of Statistics (NBS) showed on Monday. That was just shy of December’s record volume of 11.26 million bpd. The higher throughput came after another month of strong crude oil imports and as top refineries prepared to cut output in the third quarter. “Refinery runs were impressive considering that refinery maintenance was still heavy,” said Nevyn Nah, analyst at Energy Aspects. Independent refiners, known as ‘teapots’, raised their runs after receiving additional crude import quotas, while oil majors kept […]

China GDP growth beats Beijing target

17 Jul 2017   China

China’s economy expanded at an annual rate of 6.9 per cent in the second quarter, beating the government’s target in a year of political transition as unexpected strength in the property market kept growth humming. With 6.9 per cent growth in the first and second quarters, the Chinese economy is on track for its first year-on-year acceleration since 2010. Growth in gross domestic product was 6.7 per cent last year. In March China’s rubber-stamp parliament approved a full-year growth target of “around 6.5 per cent”. “As China goes, so go emerging markets. Its solid growth reinforces recoveries for commodity exporters and keeps 2017’s pick-up in global growth on track,” Bill Adams, senior international economist at PNC Bank, wrote on Monday. “The retreat of US long-term interest rates since early 2017 and the Fed’s commitment to a gradual pace of interest rate hikes are maintaining supportive monetary conditions for emerging market growth.” In the medium term, however, risks from rising debt and overcapacity in large swaths of the manufacturing sector still loom over the economy. The strong property sector was crucial to the first half’s strong growth, but many experts worry that the market is in a bubble, especially in large cities.

China’s June coal output up 11% on year at 308.35 mil mtChina’s June coal output up 11% on year at 308.35 mil mt

17 Jul 2017   China

China mined 308.35 million mt of crude coal in June, up 10.6% year on year, National Bureau of Statistics data released Monday showed. Over January-June, it mined 1,712.63 million mt of crude coal, up 5% year on year, the data showed. “After two consecutive months of weak coal production, June production surpassed 300 million mt as the government urged domestic mines to ramp up production in the face of strong demand and crackdown on low-rank coal imports,” Citi analysts said in a note. China in June imposed a partial embargo on cargoes of imported thermal coal at about nine ports on its eastern and southern coasts. Article continues below… Platts Coal Trader International is the only daily publication where you can access Platts proprietary price assessments for coal trading in the Atlantic and Pacific markets, including FOB Newcastle 5,500 NAR; CFR South China 5,500 NAR; and FOB Kalimantan 5,900 […]

Fukushima’s Nuclear Waste Will Be Dumped Into the Ocean, Japanese Plant Owner Says

17 Jul 2017   Japan, Nuclear, Water

Toxic waste produced by one of the world’s worst nuclear disasters will be dumped into the sea, according to the head of the Japanese company tasked with cleaning up the radioactive mess, despite protests from local fishermen. Takashi Kawamura, chairman of Tokyo Electric Power Company (TEPCO), told foreign media that nearly 777,000 tons of water tainted with tritium, a byproduct of the nuclear process that is notoriously difficult to filter out of water, will be dumped into the Pacific Ocean as part of a multibillion-dollar recovery effort following the Fukushima nuclear disaster in 2011. That year, an earthquake and tsunami struck Japan, killing more than 15,000 people and leading to a series of meltdowns at the TEPCO-owned Fukushima No. 1, or Daiichi, nuclear power plant, causing it to spew radiation that has plagued the region ever since. While much progress has been made to clean the area, the company […]