The International Energy Agency (IEA) has released its oil market report, projecting a significant increase in global oil supply, which is expected to reach a new peak of 103.5 million barrels per day (mb/d) in 2024. This surge is primarily driven by unprecedented production levels in the United States, Brazil, Guyana, and Canada.

The growth in oil supply is predominantly attributed to non OPEC+ countries, contributing nearly 1.5 mb/d to the overall increase. In contrast, OPEC+ production is anticipated to remain relatively stable compared to the previous year, assuming the gradual phasing out of additional voluntary cuts initiated in the second quarter of 2024. The report also highlights a narrowing gap in regional refinery profitability, with margins in the Atlantic Basin showing a decline while those in Singapore experience a boost. Refinery crude throughputs are forecasted to average 83.3 mb/d in 2024, surpassing the previous record of 82.5 mb/d set in 2018.

However, a growing disparity is expected between OECD and non-OECD refinery runs, fueled by new capacity coming online in the Middle East, Africa, and China. Russian oil exports witnessed a significant increase, reaching a nine-month high of 7.8 mb/d in December. As 2024 begins, the risk of disruptions in global oil supply due to conflicts in the Middle East remains high, especially concerning oil flows through the Red Sea and the critical Suez Canal. In 2023, approximately 10% of the world’s seaborne oil trade, equating to around 7.2 mb/d of crude and oil products, and 8% of the global LNG trade passed through this vital trade route. The alternative shipping route around Africa’s Cape of Good Hope, which extends voyages by up to two weeks, continues to exert additional pressure on global supply chains, increasing freight and insurance costs.

Van Oord has secured a contract from FSRU Wilhelmshaven, a joint venture between ENGIE and TES (Tree Energy Solution), to build a Floating Storage and Regasification Unit (FSRU) jetty in Wilhelmshaven, Germany. The project’s operational responsibility rests with the state-owned Deutsche Energy Terminal GmbH (DET), which, in collaboration with TES and Engie, is executing one of the priority projects under Germany’s LNG Acceleration law, enacted in May 2022. This legislation is a strategic move to address the supply gap and strengthen Germany’s energy security.

Van Oord’s approach to this project is distinctive, leveraging its extensive array of marine services to offer a comprehensive solution. The construction process is being expedited through the use of monopiles as the foundation for the jetty. Van Oord is tasked with installing a total of 10 monopiles, complete with scour protection. These foundations will be outfitted with platforms, catwalks, and furniture. Additionally, a trailing suction hopper dredger is being utilized to dredge the berth pocket and turning basin, essential for the operational functionality of the FSRU jetty.

INPEX, through its subsidiary INPEX Idemitsu Norge AS (IIN), has been granted five production licenses in Norway as a part of the Awards in Predefined Areas (APA) 2023 licensing round. These licenses include PL 1217 in the northern North Sea, PL 1219 in the southern Norwegian Sea, and PL 1233, PL 1231, and PL 1194 B (an extension of PL 1194) in the northern Norwegian Sea.

The APA’s annual licensing rounds are designed to encourage further exploration of oil and gas in areas that have been previously explored, allowing for applications in predefined areas where production licenses are either unassigned or have been relinquished. IIN holds interests in a number of licenses across the northern Norwegian Sea, northern North Sea, and the Barents Sea. The company maintains stable production at the Fram and Snorre oil fields in the northern North Sea, alongside its active exploration efforts. The acquisition of these five new licenses is anticipated to significantly enhance INPEX’s business portfolio, marking a strategic expansion in its oil and gas operations.

Equinor has significantly expanded its exploration portfolio by acquiring 39 new production licenses distributed across key maritime areas: 18 in the North Sea, 13 in the Norwegian Sea, and 8 in the Barents Sea. Demonstrating its leadership in the sector, Equinor will operate 14 of these licenses while participating as a partner in the remaining 25. A strategic aspect of these licenses is their location; approximately 80% are situated near existing infrastructure and within well-understood geological areas. This proximity is crucial for efficient exploration and development. In Norway, Equinor’s operational prowess is evident through its management of 35 offshore platforms.

These platforms are notable for their low production emissions and are supported by processing and export infrastructures, which have largely amortized their costs. This established infrastructure enables the rapid and cost-effective development of new discoveries, further minimizing greenhouse gas emissions during both production and transportation phases. Reflecting a growing emphasis on exploration, the Norwegian authorities have expanded this year’s award round by adding 92 blocks, focusing on the northwest regions of the Norwegian Sea and the western areas of the Barents Sea. This expansion underscores the region’s potential for future energy development and Equinor’s pivotal role in harnessing these resources.

Shell UK has made a decisive move by taking the final investment decision (FID) on the Victory gas field, located about 47 km northwest of the Shetland Islands in the UK North Sea. This strategic decision is set to enhance the supply of domestically produced gas for Britain, supporting homes, businesses, and power generation across the country.

The Victory field development plan includes a solitary subsea well, which will be integrated into the existing infrastructure of the Greater Laggan Area system through a new 16 km pipeline. This initiative comes at a crucial time, as reported by the North Sea Transition Authority, with only 38% of the UK’s gas needs in 2022 being met by domestic production, leaving the majority to be covered by imports. Projected to be operational by mid-decade, the Victory field is expected to reach a peak production capacity sufficient to heat nearly 900,000 homes annually. This translates to about 150 million standard cubic feet of gas per day, or roughly 25,000 barrels of oil equivalent per day.

The field is anticipated to yield most of its recoverable gas by the end of the decade. The gas from the Victory field will undergo processing at the onshore Shetland Gas Plant before being transported to the UK mainland. It will then enter the National Grid at St Fergus, where Shell UK is also actively involved in the development of the Acorn Carbon Capture and Storage project, underscoring its commitment to sustainable energy practices.

Rosatom has successfully installed a 165-ton steel reactor baseplate at the Pilot Demonstration Energy Complex (PDEC) in Seversk, Tomsk Region, marking a significant advancement in the construction of a unique power unit featuring the innovative BREST-OD-300 fast neutron reactor. This milestone includes the placement of the reactor vessel’s lower tier into the reactor shaft. Central to the PDEC, under construction at the Siberian Chemical Combine in Seversk, a TVEL Fuel Company of ROSATOM enterprise, is the 300 MW nuclear power plant (NPP) powered by the leadcooled BREST-OD-300 fast reactor. This reactor is a cornerstone of Rosatom’s strategic “Proryv” (Breakthrough) project, emphasizing natural safety principles.

The PDEC also encompasses facilities for a closed nuclear fuel cycle on-site, including a unit for fabricating uranium-plutonium nitride fuel and another for reprocessing irradiated fuel. The BREST-OD-300 reactor represents a significant innovation in nuclear technology, as it generates its primary energy component, plutonium-239, by transmuting uranium-238, which constitutes over 99% of natural uranium. This contrasts with the current use of uranium-235, which accounts for only about 0.7% of natural uranium in thermal reactors. Implementing such technologies promises to dramatically enhance the efficiency of natural uranium utilization. In the global energy resource landscape, uranium holds approximately an 86% share, starkly overshadowing coal (8%), oil (3%), and gas (3%).

Equinor has reached an agreement to take over Shell’s equity and operatorship in the Linnorm gas discovery located in the Norwegian Sea. As per the agreement, Equinor will acquire a 30% interest in the PL 255 license, which encompasses the Linnorm discovery, contingent on assuming operatorship from A/S Norske Shell. The transaction is anticipated to be finalized in the first quarter of 2024. Discovered in 2005, the Linnorm discovery is the largest undeveloped gas find in the Norwegian Continental Shelf (NCS). It is estimated to hold approximately 25-30 billion cubic meters (bcm) of recoverable gas resources.

To put this into perspective, the volume of gas in Linnorm surpasses the remaining reserves in each of the currently producing fields of Aasta Hansteen, Martin Linge, and Gina Krog. Following the acquisition, Equinor plans to continue exploring options for connecting Linnorm to its existing installations in the region, specifically the Kristin or Åsgard B facilities, which are operated by Equinor.

TotalEnergies has announced the Libra Consortium’s final investment decision to establish a cuttingedge natural gas and CO2 separation and reinjection facility at the Mero field, located in the deep offshore pre-salt region of Brazil.

This pioneering project involves the deployment of a high-pressure subsea separation technology, known as HISEP®, which is designed to separate oil from CO2-rich gas at the ocean’s depths and directly reinject the gas back into the reservoir. This innovative approach is expected to minimize the volume of gas transported to the topside FPSO, thereby reducing greenhouse gas (GHG) emission intensity and enhancing the field’s production capacity. This technological advancement is a key component of the Libra Consortium’s research and development initiatives.

The HISEP® subsea separation pilot unit will be integrated with the Marechal Duque de Caxias FPSO (part of the Mero 3 project), which is currently in the construction phase. The Mero field, a unitized field operated by Petrobras with a 38.6% stake, involves a partnership with TotalEnergies holding 19.3%, Shell Brasil also at 19.3%, CNPC with 9.65%, CNOOC at 9.65%, and Pré-Sal Petróleo S.A (PPSA) owning 3.5%.

Seatrium has been awarded a significant contract by Shell for the construction and integration of the hull, topsides, and living quarters of the Sparta semi-submersible Floating Production Unit (FPU). This comprehensive contract also encompasses the installation of equipment provided by Shell, following the formal Letter of Intent agreed upon by both entities on August 28, 2023.

The Sparta FPU is set to be located in the Garden Banks region of the US Gulf of Mexico, roughly 275 kilometers (171 miles) off the Louisiana coast. It is designed with a unique single topside supported by a fourcolumn, semi-submersible floating hull, capable of producing 90,000 barrels of oil equivalent per day (boe/d). Seatrium, a global leader in engineering solutions for the marine, offshore, and energy sectors, is renowned for its innovative approach in assembling topsides.

This method, known for its safety and efficiency, is conducted at ground level to significantly reduce work-at-height risks for personnel. The Sparta project will feature a two-level topside, which will be integrated and then elevated to the hull using Seatrium’s revolutionary Goliath twin cranes, each with a lifting capacity of up to 30,000 tonnes. The Sparta FPU project is envisioned as a replicable model in the collaboration between Shell and Seatrium, aiming to capitalize on the group’s unique methodology for single lift topside integration. This approach, previously utilized in the Vito and Whale newbuilds, is expected to bring about significant operational synergies.

The United States has overtaken Russia as the leading oil exporter to Europe, with Norway and Saudi Arabia following closely behind. In Italy, Iraq has emerged as the primary oil supplier, witnessing a 15% increase in exports between 2021 and early 2023. Additionally, oil imports from the United States to Italy have seen a significant surge, rising by 140%, which positions the U.S. among the top five oil-exporting countries to Italy.

This information was provided by Guido Cagnani, Managing Director and Vice President of Sicim, a leading company in the construction of facilities for the treatment, transport, and distribution of oil, gas, and water, with a turnover of 1.3 billion euros.