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Archive for the ‘Russia’ Category

Bad litigation, worse timing. China and Russia’s most effective allies?

Posted in climate, energy policy, Russia, Uncategorized, tagged , , , on March 15, 2022| Leave a Comment »

This is what major oil companies are up against. Meanwhile China expands coal production and consumption without having to worry about groups like this.

ClientEarth, a Shell shareholder, notified the energy major on Monday that it would commence legal proceedings against the company’s 13 executive and non-executive directors for what it said was the board’s failure to adopt a strategy that “truly aligns” with the 2015 Paris climate agreement. The not-for-profit group, which has a strong record of winning climate-related cases, wrote to Shell in advance of petitioning the High Court of England and Wales for permission to bring the claim.

Financial Times

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Why we are concerned about declining offshore exploration

Posted in energy policy, Offshore Energy - General, Russia, tagged , , , , , , , on March 11, 2022| Leave a Comment »

Consistent with our concerns about the lack of investment in offshore exploration and production, Aramco CEO Amin Nasser made this comment at CERAWeek in Houston:

“Today, we only have 2% of effective spare capacity, which is an imbalance,” Nasser said. “You need a resilient and strong spare capacity to make sure that you can absorb any supply shocks. Look at what’s happening. Before the Ukraine crisis, the spare capacity was declining fast.”

Oxy CEO Vicki Hollub’s comments further justify our concerns about US over-reliance on shale production. She noted these impediments to production growth in the Permian Basin, the world’s largest shale basin:

  • Severe supply-chain constraints 
  • Labor shortages
  • Few already drilled wells ready to be completed
  • Rig shortages

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Most of Ukraine’s Black Sea oil and gas resources were seized by Russia in 2014

Posted in Offshore Energy - General, Russia, tagged , , , on March 8, 2022| Leave a Comment »

Forbes 2/28/2019

These blurbs from the Atlantic Council and Middle East Institute give you a pretty good overview. No one should be terribly surprised by what is happening now.

The exact volumes of gas currently lying deep underneath the Black Sea are not yet known. Rough estimates predict that the Ukrainian shelf may contain more than two trillion cubic meters of gas. The exact figure is yet to be determined since two-thirds of the country’s maritime area passed to de facto Russian control following Moscow’s illegal annexation of Crimea in 2014. Ukraine’s state energy company Naftogaz is preparing to explore 32 remaining blocks.

Atlantic Council 3/30/2021

Ukraine’s chances for energy autonomy were effectively cancelled with Crimea’s illegal annexation. According to its Energy Ministry, Ukraine lost 80 percent of its Black Sea oil and gas deposits as a result. As of March 2014, the Crimean-based Chornomornaftogaz’s gas estimates totaled 58.6 bcm in an EEZ three times the peninsula’s land mass and potentially worth trillions. Upon annexation, Russia seized all its fields and production facilities; the U.S. imposed sanctions not long after. ExxonMobil withdrew from Ukraine’s EEZ while other hydrocarbon supers similarly retracted.

MEI-12/14/2020

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Disappointing NYT headline

Posted in energy policy, Guyana, Offshore Energy - General, Russia, tagged , , , , on March 4, 2022| 1 Comment »

U.S. Oil Industry Uses Ukraine Invasion to Push for More Drilling at Home

New York Times

Actually, it’s a case of the Ukraine invasion demonstrating the obvious – domestic production is critical to our economy and energy security. Europe and the US have had a wake-up call and responsible leaders now recognize the importance of secure supplies and the need to halt purchases from a tyrant.

The oil industry is doing just fine with $100+ per barrel oil. They will produce oil and gas where the opportunities present themselves: Guyana, Mexico, North Sea, Africa, Brazil, Canada, private lands in supportive US states, and elsewhere. The folly is US policy that unreasonably restricts exploration on Federal lands, including the Outer Continental Shelf. These restrictions penalize the owners of those lands, the people of the United States, not the oil industry and certainly not the Russian tyrant.

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Half-step by Exxon?

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Russia, Uncategorized, tagged , , on March 1, 2022| Leave a Comment »

BP, Equinor, and Shell are exiting Russia, but Exxon’s response seems to be something less. Per Upstream:

US supermajor ExxonMobil is scaling back its operations on its flagship offshore development project in Russia’s Sakhalin Island region in response to the fallout from the crisis in Ukraine, according to the Sakhalin Online news website.

A consortium source cited by the Russian website claimed that foreign managers have been told to leave the project for an initial period of one month.

Upstream

Exxon accepted the political risks associated with lucrative Russian production, and they now have a massive moral and public relations dilemma. Will they try to wait this crisis out or take more permanent actions?

It would be nice to see Exxon return to the Gulf of Mexico where they haven’t drilled a well since 2019. Currently, Exxon’s primary interest in the Gulf is for carbon sequestration purposes. Perhaps they can focus more on the Gulf’s still promising production potential and less on its potential as a disposal site.

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Update: Shell joins the exodus from Russia

Posted in energy, energy policy, Offshore Energy - General, Russia, tagged , , , on February 28, 2022| Leave a Comment »

The Board of Shell plc (“Shell”) today announced its intention to exit its joint ventures with Gazprom and related entities, including its 27.5 percent stake in the Sakhalin-II liquefied natural gas facility, its 50 percent stake in the Salym Petroleum Development and the Gydan energy venture. Shell also intends to end its involvement in the Nord Stream 2 pipeline project.

Shell.com

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