Australia

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 […]

As Coal Prices Fall, Miners Cut Output

3 Jun 2015   Australia, Coal

China’s appetite for coal used in steelmaking is faltering, deepening a market downturn miners say is the worst in recent memory. The price of steelmaking coal shipped from Australia, the world’s biggest exporter, has fallen 23% this year to roughly $86 a metric ton, its lowest level in nearly a decade. The slide extends a decline begun in 2011, during which the fuel’s value has slumped by around three-quarters. But analysts caution that prices will recover only if more cuts are made. The consultancy Wood Mackenzie doesn’t expect the oversupply of steelmaking coal, or coking coal, to clear up until about 2022. China, whose breakneck economic growth has been the engine for most global commodity markets, won’t need as much steelmaking coal in future, analysts now project. That leaves miners who rushed to open new pits in the boom years to struggle. Chinese sectors such as heavy industry and […]

BHP plans deeper cost cuts to battle commodity rout

13 May 2015   Australia

BHP Billiton said on Tuesday it would slash its iron ore production cost further and cut spending to better withstand a downturn in commodity prices that is testing even mining industry heavyweights. Giant iron ore producer BHP, the world’s largest mining company, and rival Rio Tinto are locked in a battle to become the lowest cost iron producer. At the same time, they are increasing production of the steel ingredient, hoping to squeeze out competitors and gain market share. BHP Billiton Chief Executive Andrew Mackenzie dismissed criticism that such a strategy was fuelling the sharp slump in iron ore prices. “We operate in highly competitive and cyclical markets, where earnings outperformance through the cycle depends on being the most efficient supplier, not supply restraint,” Mackenzie said, speaking at an investor conference in Barcelona. “In this environment we are well prepared for the possibility of an extended period of […]

Apache to Exit Australian Energy With $2.1 Billion Sale

9 Apr 2015   Australia

Apache Corp. will exit Australia’s energy sector, selling its assets there to a group of private equity funds managed by Macquarie Capital Group Ltd. and Brookfield Asset Management Inc. for $2.1 billion in cash. The assets produced the equivalent of about 49,000 barrels of oil a day in March. The company is keeping a 49 percent stake in fertilizer producer Yara Pilbara Holdings Pty. “Following the sale of our Australian assets, approximately 70% of Apache’s production will come from North America onshore,” John J. Christmann, chief executive officer of Apache, said in a statement Wednesday. Link to Statement:Link

Buying BG Gives Shell Solution to Stranded Australian Gas Assets

8 Apr 2015   Australia

Royal Dutch Shell Plc is seeking an outlet for its natural gas reserves in Australia’s Queensland state. Its $70 billion purchase of BG Group Plc provides a solution. Shell and its partner PetroChina Co. have been looking at alternatives for their Arrow gas project after shelving plans to build an export terminal this year due to cost blowouts and slumping energy prices. Arrow is in the same state as plants run by Santos Ltd. and ConocoPhillips — as well as BG’s $20 billion Queensland Curtis LNG development. “The Arrow assets are stranded at the moment, so it’s highly probable that if Shell’s purchase of BG went through, that gas would be monetized through QCLNG,” Neil Beveridge, an analyst at Sanford C. Bernstein in Hong Kong, said Wednesday before the agreement was announced. “That’s definitely a source of value for this deal.” The combined company will have double the market […]

Chevron’s Exit Signals Delays in Unlocking Australia’s Shale

1 Apr 2015   Australia

Chevron Corp.’s decision to pull out of a natural gas project in Australia after a plunge in oil prices is a signal it’s going to take even longer for the nation to realize its shale ambitions. Tapping Australia’s shale oil and gas was already challenging due to high drilling costs and the remote locations of its fields, with significant production forecast to be at least several years away. An almost 50 percent drop in the price of crude over the past year makes it harder. “The pace will be considerably slower than anyone would have forecast 18 months to two years ago,” Geoffrey Cann, Australian director of oil and gas for Deloitte LLP in Brisbane, said in a phone interview. The languishing oil prices are stalling efforts to replicate the U.S. shale boom globally. Big producers ConocoPhillips, Hess Corp. and Statoil ASA have already beaten Chevron out […]

Chevron to divest 50% stake in Caltex Australia

27 Mar 2015   Australia

Chevron’s executive vice-president of Downstream and Chemicals Michael Wirth said in a statement that the divestment is aligned with its previously announced asset sales commitment and is part of its desire to regularly review its portfolio and generate cash to support long term priorities. “Chevron will continue to ensure a reliable, high-quality supply of product is available to Caltex to supply to its retail and reseller franchise network. Chevron is also committed to seeking long-term relationship opportunities with Caltex.” Caltex has a 109,000 b/d refinery at Lytton in Brisbane, which operated at 88.6% utilization last year. The company shut its 135,000 b/d refinery at Kurnell in Sydney in October 2014. The facility is currently being converted into an import terminal. The fall in crude prices resulted in a dramatic drop in Caltex’s profit to just A$20 million ($15.7 million) last year, down from A$530 million in 2013. Meanwhile, Chevron […]

Woodside to Pay $2.75 Billion for Apache Project Stakes

Australia’s Woodside Petroleum Ltd. (WPL) agreed to pay Apache Corp. (APA) $2.75 billion for stakes in two liquefied natural gas projects, while delaying approval for its own $35 billion-development off the nation’s northwest coast. The Apache transaction will give Woodside interests in the Wheatstone LNG and Balnaves oil projects in Australia as well as Canada ’s Kitimat LNG development. The projects are among dozens under construction or consideration worldwide as companies seek to feed Asian markets hungry for gas. Woodside has been seeking acquisitions after its $2.7 billion plan to buy back shares from Royal Dutch Shell Plc was blocked by investors. Apache, facing pressure from activist hedge fund Jana Partners LLC to cut spending and focus on the U.S., said in July it was seeking to exit the proposed Canadian project and the facility under construction in Australia. The Apache deal “adds production growth in a period when […]

Apache dumps Australian, Canadian LNG assets

16 Dec 2014   Australia

“I am proud of Apache’s legacy in advancing the Wheatstone and Kitimat liquefied natural gas projects, and I am confident that Woodside’s participation will have a positive impact in seeing these world-class LNG facilities through to first production,” G. Steven Farris, the top executive at Apache, said in a statement. Apache sold its interests, which include oil and natural gas reserves, to Australian energy company Woodside Petroleum. Apache under the terms of the deal is also reimbursed around $1 billion for net expenses on the two LNG projects. The first phase of the Wheatstone project envisions deliveries of up to 8.9 million tons of LNG per year from third-party gas projects in Australia. The proposed Kitimat project in British Columbia has a planned capacity of 5 million […]

Floating LNG Plants May Be Solution for Australia

2 Dec 2014   Australia

Australia is expected to become the world’s largest supplier of liquefied natural gas by the end of the decade, but significant cost overruns and delays in building new LNG projects are threatening its future competitiveness as companies move forward with major projects in the U.S. and Canada. The solution for Australia may be floating LNG plants, because they can be built overseas, where the costs of labor and materials are generally lower, Australian Industry Minister Ian Macfarlane said. “If any new LNG project comes to pass [from scratch], it’d be FLNG,” Mr. Macfarlane said […]

China Trade Pact Set to Deliver Relief for Australian Coal Mines

17 Nov 2014   Australia, China

Print Back to story A free trade agreement with China, the world’s biggest coal consumer, is set to bring some relief to struggling producers in Australia . China is expected to exempt the miners from import tariffs as part of the new trade accord, according to HSBC Holdings Plc. Chinese President Xi Jinping is scheduled to address Australia’s parliament in Canberra today when the agreement is scheduled to be announced. The removal of the tariffs, designed to protect struggling Chinese mines, will help bolster margins of producers in Australia, the biggest coal exporting nation. A global glut and slowing demand growth have depressed prices, forcing companies from BHP Billiton Ltd. (BHP) to Glencore Plc to cut costs. “For the coal space, there’s a good chance it will mean that the tariffs recently announced by the Chinese won’t apply to Australian exports of thermal coal,” Paul Bloxham, chief Australia economist […]

Australia, China deepen ties with landmark free trade deal

17 Nov 2014   Australia, China

China and Australia on Monday sealed a landmark free trade agreement more than a decade in the making, significantly expanding ties between the world’s second largest economy and one of Washington’s closest allies in Asia. The deal, which Australia called the best ever between Beijing and a Western country, will open up Chinese markets to Australian farm exporters and the services sector while easing curbs on Chinese investment in resource-rich Australia. Australian Prime Minister Tony Abbott and Chinese President Xi Jinping signed a memorandum of understanding clinching the agreement during a ceremony in parliament in Canberra. “This has been a 10-year journey, but we have finally made it,” Abbott said. Xi praised the deal in an address to parliament, pledging to deepen cooperation with Australia while reaffirming China’s willingness to resolve territorial disputes with its neighbors through diplomatic means. “As long as we have our long-term […]