In shadow of OPEC’s noisy oil cuts, Asia’s miners quietly tightened coal supplies

22 Nov 2017   Australia, Coal, Indonesia

Australian and Indonesian miners have quietly done in the last two years what OPEC has been shouting about: tighten coal markets and prop up prices. The informal coal output reductions, unlike the official cuts in place since January led by the Organization of the Petroleum Exporting Countries (OPEC), are culminating right as Asia enters the Northern Hemisphere winter when heating demand peaks in January. Additionally, there are warnings a La Nina pattern that typically brings colder-than-normal weather to the Northern Hemisphere might occur. In 2015, at the peak of the coal glut, Glencore, the world’s biggest thermal coal exporting firm, said […]

Australian major Oil Search puts Alaska oil in its portfolio

2 Nov 2017   Arctic, Australia, USA

In what was described as its most groundbreaking acquisition, Australian energy company Oil Search Ltd. said it was taking a big step into Alaskan oil. “We’re ready to walk you through one of the most exciting acquisitions we’ve done,” Managing Director Peter Botten said in a conference call with reporters. The company said Wednesday it took on oil assets that Botten said were “particularly attractive” for $400 million in a buy that gives Oil Search a way to balance its core portfolio in Papua New Guinea. The company will take on the role of operator in June 2018, after buying assets in the North Slope from Armstrong Energy LLC and GMT Exploration Co. The Australian company said the North Slope was […]

Chevron ditches plans to drill off Australia’s south coast

13 Oct 2017   Australia

U.S. oil major Chevron Corp has abandoned plans to explore the deep water off Australia’s south coast, long seen as a promising prospect, as weak oil prices are making the work hard to justify, the company said on Friday.

 Chevron’s move follows a decision by BP Plc a year ago to walk away from the waters known as the Great Australian Bight, which industry consultants Wood Mackenzie have estimated could hold 1.9 billion barrels of oil equivalent. “While the Great Australian Bight is one of Australia’s most prospective frontier hydrocarbon regions, in the current low oil price environment it was not able to compete for capital in Chevron’s global portfolio,” Chevron said in a statement. The decision came a week after Chevron acquired […]

Protesters set to rally against Australia’s biggest coal project

18 Sep 2017   Australia

Environmental activists are due to start a week of protests on Sunday against a major coal mining project they say will damage Australia’s Great Barrier Reef and contribute to global warming. The A$16.5 billion ($13.20 billion) project has been delayed for more than five years by court challenges from environmentalists and indigenous groups concerned about reef damage, climate change, and the impact on native land and water supply. The challenges failed and a workers’ camp opened in August to begin building the project’s $3.2 billion first stage. The “Frontline Action on Coal” and the “Reef Defenders” groups are to start their protests at Bowen, in the Whitsunday region of Queensland where the reef is situated. Paul Jukes, a Whitsunday farmer and tourism operator, told Reuters by telephone that the demonstrations would start with a march but could extend to direct action such as activists locking themselves […]

Strong overseas demand for Australia coal deprives local utilities of fuel

12 Sep 2017   Australia, China, Coal

Strong Asian demand for coal from Australia is depriving domestic power generators of fuel and driving electricity prices higher, energy providers and mining sources said. Local power companies are typically unable or unwilling to match the price premiums some Australian coal has been fetching in Asian markets, where less-polluting high energy, low emissions (HELE) plants are being introduced at a rapid rate, said three coal mining sources. Australian Newcastle thermal coal cargo prices, a benchmark for Asia, have jumped by more than 20 percent since July to over $100 per tonne on strong demand from overseas buyers. The shortage in one of the world’s top producers of the commodity comes as the nation battles to avoid blackouts that have become more frequent following a decade of uncertainty over carbon policy. The shortfall in coal is most acute in New South Wales, the nation’s most populous state, […]

BHP misses on profit, dividend; focuses on paying down debt

22 Aug 2017   Australia

BHP tripled its final dividend to $0.43 a share, also below expectations, but pleased shareholders with a focus on reducing net debt, which was cut by nearly $10 billion. “Net debt looks very impressive.. so the cash looks like it was applied to deleveraging versus extra dividends,” Shaw and Partners analyst Peter O’Connor said. Analysts had expected underlying earnings of around $7.4 billion, based on a Thomson Reuters I/B/E/S. Bowing to pressure from some shareholders to consider spinning off its underperforming U.S. shale oil and gas business in the United States, BHP said it had deemed the business “non-core” and was “actively pursuing options to exit”. Fund managers including Elliott Management and […]

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. […]

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 […]

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 […]

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 […]

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 […]

BP ships diesel from the U.S. to Australia in unusual move

13 Jul 2017   Australia, USA

Oil major BP Plc is shipping diesel from the United States to Australia in an unusual shipping flow, several industry sources told Reuters on Thursday. The Jupiter Express carrying about 35,000 tonnes of diesel loaded from BP’s Cherry Point, Washington refinery on June 29 and is currently headed to Botany Bay, New South Wales in Australia, shipping data on Thomson Reuters Eikon showed. BP declined to comment. Australia imports most of its diesel requirements from Singapore, South Korea and Japan but several refineries undergoing maintenance and prompt demand from India has tightened supply of the fuel in Asia, traders said. “The decision was (likely) made due to far east premium strength, Singapore (cash premium) strength versus bringing a vessel down,” a trader with a North Asian […]

How Energy-Rich Australia Exported Its Way Into an Energy Crisis

11 Jul 2017   Australia

On a sweltering night this February, the world’s No. 2 exporter of liquefied natural gas didn’t have enough energy left to keep its own citizens cool. A nationwide heat wave in Australia drove temperatures above 105 degrees Fahrenheit around the city of Adelaide on the southern coast. As air-conditioning demand soared, regulators called on Pelican Point, a local gas-fueled power station running at half capacity, to crank up. …

Tesla to Build World’s Biggest Lithium-Battery Project in 100 Days—or It’s Free

7 Jul 2017   Australia

MELBOURNE, Australia—Tesla Inc.’s Elon Musk has agreed to build the world’s largest lithium-ion battery system in Australia, an ambitious project that he hopes will show how the technology can help solve energy problems. The plan is to build a 100-megawatt storage system in the state of South Australia—which has been hit by a string of blackouts over the past year—that will collect power generated by a wind farm built by French…

Is Australia The Next Big Thing In Shale?

25 Apr 2017   Australia

As natural gas prices have seen a bit of a correction, it’s easy to forget that natural gas is actually a pretty good play right now — at least in certain parts of the world. As the chart below shows, North American natgas prices have been uninspiring recently. With rates at the Henry Hub slipping back to near $3/mcf — trading at $3.16 as I write. (Click to enlarge) North American natural gas prices have been subdued over the past year (source: Energy Information Administration) That gives little to get excited about for traders. A far cry from the end of 2014, when a surge to over $5/mcf suddenly (and briefly) brought the natgas market back to life. But natural gas markets are very different elsewhere in the world — as news this week from Australia and Argentina shows. Unlike oil, natgas prices show big regional variations. A consequence […]

The Oil Giant Hidden in the World’s Biggest Mining Outfit

11 Apr 2017   Australia, Shale Oil

Mining group runs global oil business from Texas to Australia Oil and gas account for about 20% of BHP’s underlying profits The usual suspects have planted their flags along the dusty byways of the Permian Basin, declaring where they’ve staked claims. There are names like Royal Dutch Shell Plc, Anadarko Petroleum Corp., Pioneer Natural Resources Co. And, on signs fronting a barbed-wire fence, BHP Billiton Ltd. For the world’s largest mining company, the heart of the U.S. shale boom in West Texas might seem to be strange territory, a very long way from the iron-ore deposits of Australia or the copper mines of Chile’s Atacama desert. But BHP actually has been in the oil business for years, with operations stretching from Texas to the North Sea. Its U.S. assets alone are so valuable that activist investor Paul Singer urged the company to spin them off — a suggestion BHP […]

Chevron makes LNG headway

30 Mar 2017   Australia, LNG

The third production facility at the Gorgon liquefied natural gas facility off the Australian coast is now in service, the regional subsidiary of Chevron said. “This is a key milestone for the Gorgon joint venture participants, our workforce, customers, government and all those associated with the project over its lifetime should be extremely proud,” Nigel Hearne, Chevron’s regional managing director, said in a statement . “We are committed to being a safe and reliable supplier and look forward to supplying cleaner-burning natural gas for decades to come.” Bringing the third production facility, or train, online means Chevron’s flagship LNG project in Australia is in full service. The first shipments of LNG left Gorgon in March 2016. The project will eventually produce 15.6 million tons of LNG […]

Australia’s 100% Renewable Energy Grid

9 Mar 2017   Australia

Australia is posed to build an electricity network with 100 percent renewable energy, that is both affordable and secure, and that utilizes existing technology. The Australian National University has published a study detailing how a zero-emissions grid would work. The grid would rely on wind and solar technology, but the innovation comes from the pumped hydro storage, which would support the network. A move like this would eliminate the need for coal and gas power. As many aging coal-fired power stations close (on which 2/3 of Australia’s electricity relies) demand for new types of energy is spiking. Professor Andrew Blakers at the ANU believes that wind and solar energy could be that replacement. The short-term off-river pumped hydro energy storage (STORES) utilizes reservoirs at different altitudes to both store and generate power. This system would provide Australia with a cheap, stable, zero-emissions network that can support a larger share […]

Australia Gas Firms Locked in Legal Battles After $200 Billion Spree Sours

7 Mar 2017   Australia

After splurging $200 billion building the world’s biggest gas export plants, producers in Australia are now locked in legal battles with contractors over who should shoulder billions of dollars in liabilities sparked by delays and cost blow-outs. Chevron Corp. , owner of the $54 billion Gorgon facility, Australia’s largest resource development, along with Inpex Corp. and Santos Ltd. are among energy heavyweights trying to claw back funds. The number of disputes is growing weekly in a chain reaction of litigation, which extends to small businesses subcontracted to supply materials and services. “There are billions and billions of dollars of claims out there in the market, and claims of hundreds of millions of dollars are not uncommon,” said Matthew Croagh, who handles liquefied natural gas matters as a partner in Melbourne with London-based law firm Norton Rose Fulbright. Croagh wasn’t referring to any specific dispute. After an investment bonanza at […]

Australia’s BHP Billiton Wins Bidding for Stake in Mexico’s Trion Oil Field

6 Dec 2016   Australia, Mexico

Australia’s BHP Billiton won bidding Monday to partner with Mexican state oil company Petróleos Mexicanos in the Trion deep-water oil field in the Gulf of Mexico in an auction in which 10 other deep-water blocks are also being offered. Billiton outbid BP PLC to become Pemex’s first private partner in exploration and production under Mexico’s 2013 opening of the oil industry. Bids for 10 other deep-water blocks up for auction are due to be opened later Monday. For Trion, both Billiton and BP offered additional royalties of 4%, while Billiton offered an additional cash commitment of $624 million compared with $606 million offered by BP. Billiton will have 60% of the project and Pemex 40%. The auction is the fourth under the 2013 opening of the Mexican oil industry, but the first for deep-water reserves and the first to attract the interest of major oil companies. The Trion […]

Chevron’s $54B Gorgon Nat Gas Plant Shut Down Again

Shell LNG Chevron’s $54-billion Gorgon liquefied natural gas plant in Australia was shut down for a third time since it launched in March, with sources telling news agencies that the downtime delayed shipments but did not cause any cancellations. The shutdown was unplanned and caused by work on the facility’s acid removal unit, according to sources cited by Reuters, and was due to be put back online days later. However, with Chevron unresponsive to reporters’ inquiries, it remained unclear at the time of writing whether Gorgon was back up or remained offline. The project’s acid removal unit also made the news in June, when it was thought to have been the cause of a long shutdown following a gas leak. According to traders cited by Reuters, the latest shutdown did not lead to any cancellations of shipments, but has caused delays of five cargoes, which apparently helped to boost […]

BP Quits Plan to Drill in Great Australian Bight

12 Oct 2016   Australia

BP BP -2.43 % PLC on Tuesday abandoned plans to drill deep-water oil-exploration wells off the southern coast of Australia, saying the project’s finances don’t stack up against other opportunities globally. The decision comes after oil and natural-gas regulators last month threw a wrench into BP’s plan to explore for oil in the Great Australian Bight, a remote stretch of ocean that is home to whales, sea lions and other wildlife. The regulators sought more information on how the company intended to manage environmental risks. Environmental groups were quick to claim a victory against a plan they warned threatened a spill on the scale of a 2010 blowout that killed 11 workers and spewed more than three million barrels of oil into the Gulf of Mexico over the course of 87 days. They had […]

BP Quits Frontier Oil Exploration Project Offshore Australia

11 Oct 2016   Australia

Company says move unrelated to environmental approval delays BP was targeting resources in deep water, hostile environment BP Plc has abandoned oil exploration in the offshore Great Australian Bight , five years after it began searching for resources in one of the world’s last frontier regions and before it could drill a single well. The decision to step away from the project off the country’s southern coast follows a review of the company’s upstream strategy and wasn’t influenced by regulatory delays, the London-based energy producer said in a statement Tuesday. The project won’t be able to compete “in the foreseeable future” for capital investment against other upstream opportunities, according to the statement. BP backs out of drilling in the Great Australian Bight “This decision signals the challenges to frontier deepwater exploration in the current price environment,” said Saul Kavonic, a Perth-based analyst at Wood Mackenzie Ltd. “You are now […]

Australian State To Permanently Ban Onshore Gas Fracking

30 Aug 2016   Australia, Shale Gas

The state of Victoria plans to ban shale and coal seam gas fracking in what would be Australia’s first permanent ban on unconventional gas drilling, citing the concerns of farmers and potential health and environment risks. However the government left the door open to allowing onshore conventional gas drilling after 2020. The decision was made despite the fact that most of eastern Australia’s gas supply is produced from coal seam gas and comes as a blow to manufacturers who have been clamouring for more gas supply to help keep prices down. “Our farmers produce some of the world’s cleanest and freshest food. We won’t put that at risk […]

Australia’s gas paradox: supply crunch looms despite rich reserves

15 Aug 2016   Australia

Australia is on track to become the world’s biggest liquefied natural gas (LNG) exporter by 2019 yet faces a looming shortage at home as states restrict new drilling onshore and cash-strapped oil and gas companies cut spending. The paradox has led to urgent calls from everyone from Australia’s energy minister to petroleum giant Royal Dutch Shell and big industrial users like Dow Chemical and fertilizer group Incitec Pivot for action to spur new supply. The issue is set to come to a head this month, with state and federal energy ministers due to meet on Friday and the government in the state of Victoria set to decide whether to lift a ban on onshore gas developments. In a glimpse of the future, gas prices spiked to A$45 a gigajoule in Victoria in July, about six times […]

Australia counting on offshore oil, gas for economy

12 Aug 2016   Australia

The more than two dozen areas opened up to energy explorers off the western coast of Australia could help with global energy ambitions, a minister said. The government opened 28 new areas for exploration of the coast of Western Australia. Matt Canavan, the minister of natural resources for the region, said the areas offer a wide range of options for potential explorers and could boost the prospects for Australia’s energy economy. “Offshore extraction of gas will help Australia become the world’s leading exporter of liquefied natural gas in coming years,” he said in a statement. Energy company Santos leads an $18.5 billion project designed to convert coal seam natural gas to liquefied natural gas for exports to the global market. The Curtis Island LNG project is fed by a 260-mile underground pipeline from the Bowen and Surat basins in Queensland. Chevron, which has […]

Schlumberger in $300 million deal offshore Australia

16 Jul 2016   Australia

More than $300 million in contracts for the upstream side of the energy sector goes toward developing offshore Australia, a division of Schlumberger said. Schlumberger subsidiary OneSubsea secured an engineering contract from Australian company Woodside to help develop the Greater Enfield project off the northwest coast of the country. Woodside said breakthroughs in technology slated for Greater Enfield made investing nearly $2 billion during the weak market for oil justifiable. The Australian energy company is targeting a basin that holds up to 69 million barrels of oil equivalent, which will be developed using an offshore floating production, storage and offloading vessel. The investment plan for Enfield came in at the low end of its expectations, which gave the company […]

China CNOOC exports first Australia-spec diesel cargo

22 Jun 2016   Australia, China

China National Offshore Oil Company (CNOOC) has exported a 35,000-tonne cargo of diesel meeting Australian specifications for the fuel, the first shipment of its kind, a statement by the state assets regulator showed on Wednesday. The cargo left CNOOC’s Huizhou refinery, in southern Guangdong province, on June 17 in a move “to seize the international high-end market of refined oil products”, according to the statement. The cargo meeting Australian specifications is the latest in a flood of Chinese exports to hit Asian markets. Australia requires its diesel to be of high quality, containing sulphur levels lower than that accepted by many other countries. China’s diesel exports rose more than four-fold in May from a year earlier to a record 1.48 million tonnes, customs data showed, reflecting a slowdown in China’s heavy industry which typically uses diesel and continuing growth in throughput at independent refineries. This slowdown has prompted Chinese […]

BP Faces Setback In World’s Largest Unexplored Oil Basin

24 May 2016   Australia

BP Australia Exploration As if the current oil markets weren’t tough enough for producers, companies are increasingly finding that regulators are making it harder to drill new sources of oil. For instance, BP was recently told by regulators that it will need to revise and resubmit its plan to explore for oil off of the Southern Australian coast. This request marks the second time that BP has been told to modify its proposal by Australian regulators. The Southern Australian Bight area off the coast of the country has attracted half a dozen major oil firms who have spent more than a billion dollars hunting for oil. The area is the largest relatively unexplored area in the world with potentially giant reserves of oil. While those deep water reserves are at best marginally profitable at current prices, no one expects prices to stay this low forever. Since a major new […]

New oil discovery in Gulf of Mexico

28 Apr 2016   Australia, USA

 Otto Energy Ltd., a company with headquarters in Australia, said it made an oil discovery in the Gulf of Mexico that was productive enough to keep drilling. The company said it ran through columns of oil at its SM-71 well in the Gulf of Mexico and decided to deepen its drilling activity to ensure the entire targeted region will be evaluated. The cost to drill deeper, the company added, is within the original spending target. Matthew Allen, the company’s managing director, said he was “very encouraged” by the results so far. Otto Energy describes the prospect as part of a regional “low cost, high-chance-of-success” opportunity in […]

Chevron Ships First LNG From Gorgon Project Off Australia

21 Mar 2016   Australia, LNG

Chevron Corp. has shipped its first cargo of liquefied natural gas from its new multibillion-dollar plant off Australia’s west coast to a customer in Japan, the U.S. energy company said Monday. The first export is a significant milestone for the Gorgon project, which has been hit by delays and a jump in costs since construction started, as it begins generating revenue for Chevron and its partners. “Asia…

Australian coal prices under pressure from sagging Chinese demand

9 Mar 2016   Australia, China, Coal

Australian thermal coal prices have fallen since the beginning of the month, pulled down by weak demand from China, and analysts said there was little hope for a rise in prices if China’s imports do not pick up. China, the world’s largest coal buyer and consumer, imported 13.54 million tonnes of coal in February, down 11.1 percent from January, figures from the General Administration of Customs of China showed this week. The ongoing demand and import slowdown in China is a result of its stalling economy, which is growing at its lowest pace in a generation, as well as structural shifts away from an industrialized to a more service-based economy alongside the government’s efforts to rein in rampant pollution. “It will be nearly impossible for coal pricing to recover appreciably in 2016 […]

Australian exploration collapses due to lower crude prices

9 Mar 2016   Australia

Petroleum exploration activity in Australia has collapsed in the wake of the plunge in global oil prices over the last 18 months, a period in which the country’s crude production has fallen to its lowest level in 45 years, according to a report released Wednesday at an industry conference in Sydney. The total number of oil and gas exploration and development wells drilled in Australia almost halved in 2015 to 821 from 1,534 in 2014, the report’s author, EnergyQuest CEO Graeme Bethune, told the Australian Domestic Gas Outlook conference. The number of exploration wells drilled last year dropped to just 54, down from 119 in 2014, he said. The collapsed oil price had its biggest impact on offshore exploration, where activity crashed in 2015 to just three wells, down from 29 offshore wells drilled in 2014. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news […]

Chevron’s Gorgon start-up to hurry along Asian spot LNG trade

8 Mar 2016   Australia

Chevron has started up its massive Gorgon LNG project in Australia and will soon be shipping more of the super-chilled fuel into an oversupplied market, eroding producer revenues but also likely hastening the advent of a liquid Asian spot market. The $54 billion project, seen by many as symbolic of the era when high prices funded mega-projects of ever-increasing size, started production this week and may be the last piece required to establish a truly global natural gas market. While producers may struggle to profit from such projects at current low prices, a supply glut is seen as necessary to creating the liquid spot market that Asia still lacks despite being home to 70 percent of global LNG consumption. “LNG producers and buyers are becoming traders and aggregators. That […]

After Chevron’s Mega-Project, Smaller Is Better in Energy

8 Mar 2016   Australia

Chevron Corp.’s Gorgon natural gas project off Australia’s northwest coast boasts the world’s biggest carbon dioxide storage facility, a jetty more than a mile long and enough steel to build the Sydney Harbour Bridge four times. The cost: $54 billion. With Australia’s largest resource development starting to produce liquefied natural gas, industry leaders and analysts say a venture this ambitious won’t be replicated any time soon. Chevron’s Gorgon project on Barrow Island Oil’s worst slump in a generation underscores the risk of investing in mega-projects like Gorgon. Expected to cost $37 billion when construction began more than six years ago, Chevron’s development with partners Royal Dutch Shell Plc and Exxon Mobil Corp. has suffered from cost blowouts, delays and bad timing. Oil and gas producers in the future will look to spread out their investments in phases, according to Australia’s Woodside Petroleum Ltd. “The industry got too caught up […]

As U.S. shale exports begin, Australia readies world’s costliest gas project

27 Feb 2016   Australia, LNG

The timing couldn’t be worse for the first production of natural gas from Australia’s $54 billion Gorgon project – the world’s most expensive. Prices for liquefied natural gas (LNG) have collapsed, global demand is faltering and the first of what is likely to be a wave of competing shipments has just set sail from the unlikeliest of exporters, the United States. But with tens of billions of dollars already invested, the oil majors behind Gorgon and other Australian LNG projects have little choice but to plough on, consigning the market to profit-sapping surplus for the foreseeable future. “Even though LNG prices are depressed, Gorgon and other projects will run,” said Neil Beveridge, senior analyst at Bernstein Research in Hong Kong. “But in terms of paying down that $54 billion capital charge, […]

Australia’s climate commitment questioned

A division of the World Meteorological Organization criticized an Australian move to cut staff from a conservation division as worrisome. The Australian Commonwealth Scientific and Industrial Research Organization, tasked in part with addressing climate issues, announced plans to cut or redeploy around 350 staff members over the next two years. CSIRO said it needed to balance its portfolio in order to focus on where it would provide the greatest service. “No one is saying climate change is not important, but surely mitigation, health, education, sustainable industries, and prosperity of the nation are no less important,” CSIRO Chief Executive Larry Marshall said in a statement. The World Climate Research program, a division within the WMO, said what it characterized as a substantial reduction in headcounts was worrisome […]

AGL to Quit Natural Gas Exploration, Production

4 Feb 2016   Australia

AGL Ltd. (AGL.AU) will quit natural gas exploration and production because of the volatility in energy prices, tightening its focus on commercial and retail gas activities. The Australian energy company said in a stock exchange filing that it had decided exploration and production would no longer be a core business after reviewing its operations. It plans to sell its assets in eastern Queensland state, although the company said that may take some time because of difficult market conditions. In New South Wales state, AGL won’t go ahead with the Gloucester gas project and will cease production at the Camden project in southwest Sydney in 2023, 12 years earlier than previously proposed. An impairment charge of 640 million Australian dollars (US$450.4 million), after tax, will be booked against the carrying value of the gas exploration and production assets for the six months through December 2015, which it said had […]

Chevron’s Costly LNG Project to Start in Shadow of Oil Collapse

21 Jan 2016   Australia

After years of delays, cost overruns and labor unrest, Chevron Corp.’s Gorgon project, one of the world’s most expensive liquefied natural gas ventures, faces another challenge: the weakest energy prices in more than a decade. As Chevron prepares to start exports from the development off northwest Australia, oil prices — which traditionally determine the value of LNG shipments — are languishing near 12-year lows. The project will add to a wave of new supply, including the first deliveries from the U.S., amid weakening demand. Gorgon highlights the challenge of investing in major energy projects amid unpredictable and volatile prices. Brent crude has more than halved since Chevron decided to go ahead with the development in 2009, and its cost has ballooned to $54 billion from $37 billion. While the company says it’s focused on returns over four decades, current market conditions will reduce near-term cash flows. “Falling oil and […]

Chevron readies first LNG cargo from Australian mega project

Chevron Corp said on Friday it is on track to export the first cargo of liquefied natural gas (LNG) from its Australian Gorgon project – the world’s most expensive – early this year. Natural gas supplies from the $54 billion project will come to market just as a raft of other Australian projects come on line and the United States is due to export its first cargo from abundant shale gas supplies. Prices for the fuel in Asia have plummeted as slowing economic growth has dented demand growth. Chevron said that in preparation for the project’s start-up it had begun to cool down the LNG storage and loading facilities at the Gorgon plant on Barrow Island off western Australia. In order to cool down the […]

From Cattle to Coffee, Farmers Weather Worst of El Niño

28 Dec 2015   Australia

Two thousand of Troy Setter’s dark-haired cattle have been trekking along centuries-old paths through isolated Australian farmland, chomping on grass and roadside vegetation to fatten up before slaughter. The migration recalls a bygone era, but this is no nostalgic trip. The most severe El Niño in nearly two decades has parched pastures in eastern Australia, leaving cattle short of feed. The company Mr. Setter runs as chief executive, Consolidated Pastoral Company, has embraced an age-old ranching tradition to overcome some of the business disruptions El Niño is causing. Other farmers are benefiting from past preparations for dry spells or simple luck, but broadly crop yields are down, including rice, the region’s staple food. Since May, El Niño has brought high temperatures and lower-than-normal rainfall to eastern Australia, Southeast Asia and India. The drier conditions make it more costly and time-consuming to produce many agricultural products, a factor that […]

Oil Bargain Hunting Remains Elusive Game

24 Oct 2015   Australia

There’s a welcome whiff of oil industry consolidation in the air. But a gap between buyers and sellers shows there’s hardly a consensus that petroleum prices have hit bottom. Most of the recent action has been in Australia. Santos Ltd. SSLTY 2.92 % , one of Australia’s biggest energy companies, said Thursday that Scepter Partners, backed by Brunei’s oil-rich royalty, offered a 27% premium for the company over Wednesday’s price. This comes after Australian major Woodside Petroleum WOPEY -1.00 % bid for compatriot Oil Search, only to be rebuffed for being too cheap . Santos is also rebuffing Scepter, saying the bid is opportunistic. Scepter’s offer puts a debt-adjusted market value of $11.38 billion on Santos, or $9.14 per barrel of its proven and probable reserves. That is cheaper than Woodside’s offer for Oil Search at the time for $22.74 a barrel or Woodside’s own value of $17.38 a […]

BHP Billiton Pares Petroleum Spending Plans

21 Oct 2015   Australia

The Anglo-Australian mining and energy company said Wednesday petroleum capital expenditure was set to total US$2.9 billion for the year through June, a 6% cut from its prior guidance. That came after oil-and-gas production slipped 4% on-year to 64.5 million barrels of oil equivalent in the first quarter to Sept. 30, although BHP stuck with a target of 237 million barrels for the year. Chief Executive Andrew Mackenzie said the company continued to reduce costs in its onshore U.S. and conventional energy operations and would still meet its output targets with US$200 million less capital investment. Still, Mr. Mackenzie said the company had picked up oil acreage in the Beagle basin in Western Australia and in the Western Gulf of Mexico and BHP would continue to invest in the business. Across BHP’s operations, production guidance for the full-year was maintained after another rise in iron-ore output , flat coal […]

Six bears, zero bulls point to lower Asia LNG price: Russell

6 Oct 2015   Australia

Around about now it would be normal for the price of spot liquefied natural gas (LNG) in Asia to start rising ahead of the northern winter, but these are far from normal circumstances. It’s hard to imagine a more bearish set of circumstances facing LNG suppliers, and it’s about to get worse with exports ramping up from Australia’s latest plant and the start of commissioning of the first of a wave of new units in the United States. In previous years, the spot LNG price in Asia has shown clear seasonal movements, even within the broader price trends, generally gaining ahead of the northern winter and summers, before weakening in the spring and autumn. But this year the price has shown no seasonality, remaining within a […]

BHP Billiton Sees Rocky Outlook for Coal

18 Sep 2015   Australia, Coal

A multiyear downturn in the energy commodity, used to generate electricity and make steel, is worsening as miners continue to produce too much supply and China’s economy slows, said Mike Henry. China’s restrictions on certain types of highly polluting coa l, introduced earlier this year as part of an accelerating campaign to clean up its air, have added to a significant glut in the global market for the fuel, the mining executive said on Friday. “There are no signs of things getting better in the immediate term,” he said during a speech in Brisbane, Australia, according to prepared remarks. Coal prices have been tumbling since 2011 as cooling demand for the fuel was met by rising supplies from new mines planned when the market was booming. Price declines have deepened this year. The value of metallurgical coal, which is burned for steelmaking, is down as much as 30% from […]

Sun-Drenched Miners Look to the Skies to Cut Fuel Costs in Half

27 Aug 2015   Australia, Solar

The DeGrussa copper and gold mine in Australia’s sun-scorched outback is getting a solar farm, the latest example of the industry embracing clean energy. The plant will replace about 5 million liters (1.3 million gallons) of diesel a year, a fifth of the mine’s energy needs. Energy generated by the system may eventually cost about half that of diesel-generated power, according to Sandfire Resources NL, the deposit’s owner. Miners including Rio Tinto Group are installing new solar plants from Chile to South Africa, betting they’ll deliver long-term savings even as tumbling oil prices cut power costs. The global solar-power market for mining companies may grow to about $2 billion a year by 2022 from about $42 million in 2013, according to Navigant Consulting Inc. “Solar-power providers are specifically targeting mines right now and it’s about replacing diesel,” Dexter Gauntlett, a senior research analyst at Navigant said by phone from […]

BHP Billiton hit hard by Chinese economic decline

26 Aug 2015   Australia, China

 An oversupplied crude oil market and a slowing Chinese economy helped drag revenue down for the period ending June 30, Australia’s BHP Billiton said Tuesday. BHP reported revenue from continuing operations down 21.4 percent for the period, total revenue down 22.2 percent, and capital spending down 24 percent for the period compared with last year. The Australian company said it was taking a reigned in approach moving forward, cutting spending next year by 22 percent to $8.5 million and another 17 percent from there to $7 billion in 2017. Profits after tax for the year ending June 30 declined 85 percent to $1.9 billion. Energy companies are struggling to generate cash while lower crude oil prices crimp operating expenses. Crude oil prices are at historic […]

Australia Sets Emissions Goal, but Climate Experts Say It Falls Short

12 Aug 2015   Australia

Prime Minister Tony Abbott on Tuesday announced a greenhouse gas reduction goal for Australia that he said struck “the right balance” between economic concerns and the need to address climate change , but scientists and environmental groups said the plan fell short of what was needed. The goal — reducing carbon emissions at least 26 percent, and possibly 28 percent, from 2005 levels by 2030 — also earned Mr. Abbott a stinging rebuke from the Marshall Islands, the tiny archipelago northeast of Australia that is threatened by rising sea levels. “If the rest of the world followed Australia’s lead, the Great Barrier […]

Woodside Sales Slide 47% as Gas Trades Near Five-Year Low

17 Jul 2015   Australia

Woodside Petroleum Ltd.’s sales fell by almost half in the second quarter amid falling energy prices and lower output of liquefied natural gas. Revenue at Australia’s second-biggest oil and gas producer dropped 47 percent to $898 million, the Perth-based company said Thursday. That compares with Goldman Sachs Group Inc.’s estimate of $924 million. Woodside is among liquefied natural gas producers grappling with prices in Asia that are trading near the lowest in five years. Prices for the fuel have tumbled in the past year as new supply combined with weakened demand in key markets such as Japan, Korea and China. Production last quarter was lower mainly because of maintenance at the Pluto liquefied natural gas project, the company said. “It’s a tough time to be marketing incremental LNG volumes,” Nik Burns, an analyst at UBS Group AG in Melbourne, said by phone. “There is an oversupply at the moment […]