US President Joe Biden will likely leave the Middle East this week with no announcements on increasing oil supply. Biden said he decided to make the trip to advance US interests and try and curb soaring gasoline prices, which have hurt him politically ahead of mid-term elections. Biden heads to Saudi Arabia from Israel later on Friday, where he’ll meet with King Salman bin Abdulaziz and his son, Crown Prince Mohammed Bin Salman, the nation’s de-facto ruler. He will meet other leaders from the oil-exporting Persian Gulf on Saturday. According to US national security advisor Sullivan, the US president was confident he would make progress with Saudi and other Gulf leaders on guaranteeing a “sustainable” level of energy production from the region. He hasn’t promised immediate results, however. OPEC+ next meeting to discuss its production policy for the fall is scheduled for Aug. 3.
The oil sector plunged into chaos when the Government of National Unity put a new head in charge of the National Oil Corporation (NOC) and the current head in office, Mustafa Sanalla, questioned his authority. The situation outside the NOC headquarters was tense, with armed groups on the spot. NOC personnel launched a call to arms to Libyans to protect the building as a “national duty”.
Sanalla left HQ, which remains under NOC control, and the GUN claimed that the new appointed chief, Farhat Ben Gudara, took over. In a TV speech before his departure, Sanalla denounced the legitimacy of the GUN, one of the two governments of Libya: “You do not have the ability to make decisions,” said Sanalla addressing GUN leader Abdelhamid Dbeibeh directly. “The mandate of your government is over. It is a provisional government since October 2021 and the parliament has approved a vote of no confidence”. Sanalla has accused the GUN of disrupting the oil markets and of negotiating agreements with the United Arab Emirates, which in the past supported the Libyan national army insurgent against Tripoli and the NOC.
Snam and Singapore-based shipping giant BW LNG have signed a for $400 million contract for the acquisition of the floating storage and regasification unit (FSRU) BW Singapore as its sole asset. Built in 2015, BW Singapore has a maximum storage capacity of approximately 170,000 cubic meters of liquefied natural gas and a nominal continuous regasification capacity of about 5 billion cubic meters per year. It is expected that the FSRU, currently bound by a charter contract with third parties until November 2023, can be located in the Upper Adriatic, near the coast of Ravenna, and begin its activities in the third quarter of 2024. Stefano Venier, Snam’s Chief Executive Officer has commented that “With this operation, we assure Italy the second new floating regasification plant, which will make a decisive contribution to the security and energy diversification of the country: the two FSRU purchased by Snam during the last month will alone contribute to 13% of national gas needs, bringing regasification capacity to over 30% of demand, as soon as we have the authorization to place them and connect them to the national transport network”.
A geophysical and environmental survey is set to soon commence at the Salamander floating offshore wind project off the coast of Scotland in the North Sea. The survey is expected to run until 30 September at the latest. The geophysical scope of work will be divided into three main areas, including the offshore wind farm array area, offshore section of the export cable route, and nearshore section of the export cable route. Its aim is to also provide the necessary data to feed into the Environmental Impact Assessment (EIA) process. The 100 MW Salamander project is being developed by Simply Blue Energy Scotland (SBES). It is located approximately 35 kilometers east of Peterhead in the Northeast of Scotland, in an outline area of interest of approximately 67 square kilometers with water depths up to 115 meters.
Brussels is studying oil&gas alternatives within the EU Repower, the Community Executive’s roadmap, to alleviate the energy crisis. For the first time the European Commission has considered the construction of a gas pipeline between Spain and Italy under the Mediterranean Sea, of about 700 kilometers. This project would require an investment of between EUR 2.5 billion and EUR 3 billion, and its construction would take between one and two years. The gas pipeline between Barcelona and Livorno is considered a second alternative to be able to supply both Italy and the countries of central and northern Europe. This project would give a certain economic return to Spain and could make France reconsider also the resumption of the construction of the Midcat.
The G7 countries intend to put a large-scale end to coal-fired energy production gradually but with a commitment to and a large part of the decarbonization of their energy sectors by 2035. The seven major industrialized countries have committed themselves to strengthening their climate protection measures. The transport sector should be as CO2-free as possible by 2030. In addition, the development and production of hydrogen must be promoted. Fossil fuel subsidies will be abolished by 2025. A report on greater transparency is expected to be published next year. The G7 organization recognizes for the first time that countries particularly affected need more support in addressing climate damage. The volume of funding for projects in developing countries will be doubled by 2025. Japan is also committed to ending international fossil fuel funding by the end of this year.
Romanian prime minister Nicoale Ciucă and sheik Mohamed Bin Zayed Al Nahyan, president of the United Arab Emirates, recently met to discuss the diversification of the European oil and natural gas supply. The main topics of interest during the meeting were projects in the field of energy, port infrastructure, agriculture, and IT. The officials tackled the tense situation in the Black Sea, where the Russian blockade has stymied international trade. Investment opportunities in Romania in the field of renewable energy, both offshore and on-shore, were also approached. Last month, the Emirati government decided to send oil cargoes to the EU. The shipment followed a two-year gap in oil deliveries from the UAE to Europe and was the result of the attempts from the latter to find a replacement for Russian oil imports.
OPEC, together with allied producing countries (including Russia) will probably stick to a plan for accelerated oil output increases in August, hoping to ease surging oil prices and inflation pressure as U.S. President Joe Biden plans to visit Saudi Arabia and the Middle East. During the meeting on June 2, OPEC+ agreed to boost output by 648,000 barrels per day in July – or 0.7% of global demand – and by the same amount in August, up from the initial plan to add 432,000 bpd a month over three months until September. The move followed months of pressure from the West to address global energy shortages worsened by Western sanctions on Russia over its invasion of Ukraine, and was welcomed by Washington. OPEC+ holds its next meeting on June 30, when it will most likely focus on August output policies.
Global energy consumption increased by 5.8% in 2021, surpassing pre-pandemia levels while the strong growth of renewable energy has reduced the use of fossil fuels. This is what the latest BP Statistic Review states. Last year’s demand for oil was 3.7 million barrels per day below 2019 levels, driven mainly by the weakness of the aviation sector, 33% below pre-pandemia levels, BP said in its report. However, the rapid economic recovery has also led to a 5.7% increase in greenhouse gas emissions due to energy consumption, more or less similar to 2019 levels. “The pronounced drop in carbon emissions in 2020 was only temporary,” said BP chief economist Spencer Dale in the report. Global demand for natural gas grew by 5.3% in 2021, recovering above the 2019 pre-pandemia levels and surpassing the 4 trillion cubic meter threshold for the first time. Its share in primary energy in 2021 remained unchanged from the previous year at 24%.
The global Employees around the world are receiving conflicting information about job prospects in the oil and gas sector as some experts believe that the current geopolitical situation will increase employment data, while we are also witnessing job cuts. With a possible green transition that seems inevitable, many are concerned about their work, but as OPEC and other countries increase their oil production, will we see growth in the oil and gas labor market before any decline? The pandemic has led to the reduction of hundreds of thousands of jobs in the oil and gas sector worldwide, because the demand for crude oil has collapsed and many energy companies have failed. With demand returning to pre-pandemia levels and the huge investments made in the oil and gas sector, before a green transition, the labor market should improve. A Rystad Energy report predicts that oil and gas employment in the United States in 2022 will increase by 12.5%, adding between 100,000 and 125,000 jobs across the industry. With American energy companies increasing production to meet the growing global demand, especially in response to Russian oil sanctions, the need for engineers and other skilled oil workers is clear. Although the rise in inflation will somehow limit the growth of the labor market.