Manup Industry Roundup - W1623: NEWSL -01
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Achieving final investment decision (FID) on oil and gas projects is harder than it used to be. Despite a continued uptick in activity since the pandemic nadir of 2020, fewer major projects were sanctioned in 2022 than was expected at the start of the year.
In 2023, Wood Mackenzie believes more than 30 of the 40+ viable major projects are likely to reach FID. However, several could be delayed and re-evaluated due to ongoing cost inflation; most operators will remain very disciplined.
Below are the oil and gas stories and news that made headlines this week carefully curated by Manup.
Summary of the news
Workforce Watch
Upstream Oil And Gas FIDs Will Likely Increase In 2023
With up to US$185 billion of investment committed to developing 27 billion barrels of equivalent (boe), upstream oil and gas financial investment decisions (FID) will likely increase this year, according to a new analysis from Wood Mackenzie.
In a recent Wood Mackenzie report,- Class of 2023: benchmarking this year’s upstream FIDs - Fraser McKay, Vice President and Head of Upstream Analysis for Wood Mackenzie cited that achieving FID on oil and gas projects is harder than it used to be.
However, with fewer sanctioned in 2022 than was expected, Wood Mackenzie believes that there will be a slight uptick in activity this year, with over 30 of the 40 most viable projects likely to reach this milestone.
Most operators will remain disciplined and carbon mitigation will remain a key part of many FID projects the report stated.
NOCs will dominate project sanctions in 2023
According to the report, National oil companies (NOCs) will control the largest investment opportunities this year, taking advantage of huge, discovered resources, while boasting the lowest unit costs.
The average unit development cost of US$7/boe in 2023 is down slightly from 2022.
McKay continued: “International oil companies (IOCs) will be focusing largely on higher-cost but higher-return deepwater developments.
“All will be acutely aware of how oil and gas project sanctions are playing out in the public domain and the scrutiny to which their associated emissions will be subject.”
Robust economics and carbon mitigation will be key for most projects
In 2023 projects will require an average of US$49/barrel of crude (bbl) to generate a breakeven 15% internal rate of return (IRR).
However, a weighted average IRR of 19%, at US$60/bbl, would be the lowest level since 2018.
Rapid paybacks will be a key economic indicator as well, with the average for this year’s projects at nine years.
Greg Roddick, Principal Analyst of Upstream Research at Wood Mackenzie, said: “Short-cycle and small-scale offshore projects will outperform in terms of both paybacks and returns.
“Long-life liquified natural gas (LNG) projects are compromised when it comes to IRRs, but their attractive and stable future cash flows will be strategically important.”
The class of 2023 emissions intensity of 19 kgCO2 boe is only just below the global onstream average of 22 kgCO2 boe, but similar to that of the Class of 2022.
Roddick added: “Advantaged deepwater oil and shelf projects will outperform on emissions, but LNG, sour gas, and some onshore projects require mitigation measures.”
IRENA 2022 Renewable Capacity Highlights
At the end of 2022, global renewable generation capacity amounted to 3 372 GW.
Renewable hydropower accounted for the largest share of the global total, with a capacity of 1 256 GW.*
Solar and wind energy accounted for most of the remainder, with total capacities of 1 053 GW and 899 GW respectively.
Other renewable capacities included 149 GW of bioenergy and 15 GW of geothermal, plus 524 MW of marine energy.
Renewable generation capacity increased by 295 GW (+9.6%) in 2022. Solar energy continued to lead capacity expansion, with a massive increase of 192 GW (+22%), followed by wind energy with 75 GW (+9%). Renewable hydropower capacity increased by 21 GW (+2%) and bioenergy by 8 GW (+5%).
Geothermal energy increased by a very modest 181 MW. Solar and wind energy continued to dominate renewable capacity expansion, jointly accounting for 90% of all net renewable additions in 2022.
This growth in wind and solar led to the highest annual increase in renewable generating capacity and the second highest growth on record in percentage terms.
Asia accounted again for about 60% of new capacity in 2022, increasing its renewable capacity by 174.9 GW to reach 1.63 TW (48% of the global total).
A huge part of this increase occurred in China (+141 GW). Capacity in Europe and North America expanded by 57.3 GW (+8.8%) and 29.1 GW (+6.3%) respectively.
Africa continued to expand steadily with an increase of 2.7 GW (+4.8%), slightly above last year.
Oceania continued its double-digit growth with an expansion of 5.2 GW (+10.6%), largely due to expansion in Australia, and South America continued on an upward trend, with a capacity expansion of 18.2 GW (+7.4%). The Middle East also recorded its highest expansion on record, with 3.2 GW of new capacity commissioned in 2022 (+12.8%)
Renewable share of annual power capacity expansion In 2022, renewable generating capacity expansion increased compared to 2021 and stayed well above the
long-term trend. As in previous years, most of this expansion occurred in China and, to a lesser extent, the United States.
However, a broad range of other?countries also increased their expansion of renewable capacity in 2022 compared to 2021.
The share of renewables in total capacity expansion reached 83% in 2022, compared to the figure of 78% in 2021.
The renewable share of total generation capacity also rose by almost two percentage points from 38.3% in 2021 to 40.2% in 2022.
领英推荐
Africa Rigs Count Rallies As Shelf, Dolphin Secure Multi-Year Drilling Contracts in Nigeria
Sequel to the recent announcement made by Aquadrill on its new drilling campaign in East Africa, Shelf Drilling has also made a disclosure of the company’s award of a two-year contract for the Shelf Drilling Scepter for drilling operations offshore Nigeria.
The drilling contract which is valued for the firm period, including mobilization revenue, is approximately USD 118 million. The contract also includes a one-year option, and the planned start-up of operations is May 2023.
According to the data obtained from the Organisation of Petroleum Exporting Countries, OPEC February 2023 Monthly Oil Market Report, MOMR, indicated rise in Nigeria’s oil production in the last one year, the country’s rigs count rose markedly from six to 13 between January 2022 and the same period in 2023, while Africa rigs count rose from 81 in February 2022 to 94 in 2023 same period under review new industry data obtained from Baker Hughes, shows.
At a current level of 13, up from 12 the previous month of December and up from 6 one year ago, it marked a significant change of 8.33% from last month and a whopping 116.7% from one year ago.
In January 2023, Dolphin Drilling disclosed that it has entered into a new Letter of Award (LOA) with General Hydrocarbon Limited GHL for the Blackford Dolphin Semisubmersible rig in Nigeria as stated in an update on the rig status.
Blackford Dolphin signed a Letter of Award is for additional work in Nigeria in direct continuation with the previously announced contract with General Hydrocarbon Limited (GHL) in October 2022.
Shelf Drilling in its recent press release did not state in details about the ownership of the contract and the location of the contract. In December 23, 2022, Shelf Drilling, made similar announcement as the company secured a one-year contract for the Trident VIII jack-up rig for operations offshore Nigeria.
The rig which completed a short out-of-service project prior is expected another contract commencement in Q2 2023.
Despite the rise, the report indicated that Nigeria’s rig count was not the highest as Algeria, which topped the list of African nations with 31 while Equatorial Guinea comes last with zero rig count.
U.S. Picks Up The Pace To Boost Offshore Rig Count
Baker Hughes’ weekly rig count report shows that the number of offshore rigs in the United States upped the ante last week by adding three units. However, the total number of rigs operating in the U.S. slipped to 748 from 751 units during the week before.
Following the decrease in the number of offshore rigs working in the U.S. to 17, Baker Hughes revealed on Friday, 14 April 2023, that the number of these units rose to 20 last week. In addition, offshore rigs went up by 8 units on a year-over-year basis.
Furthermore, Baker Hughes’ report points out that the total number of active drilling rigs – including onshore and offshore ones – in the United States fell by 3 units last week, reaching 748, which is higher by 55 rigs than last year’s count of 693 with oil rigs going up by 40 units, gas rigs jumping up by 14 units, and miscellaneous rigs inching up by 1 unit.
When compared to the figures from the week before, oil rigs in the U.S. were down by 2 units to 588 last week while gas rigs slipped by 1 unit to 157 and miscellaneous rigs kept the status quo at 3 units.
On the other hand, the total number of active rigs in Canada took a nosedive, plunging to 111 rigs, which is 16 units less compared to the week before with oil rigs slipping down by 7 units to 45 while gas rigs fell down by 9 units to 66.
Moreover, the company’s report underlines that the total number of rigs in Canada climbed up by 8 units from last year’s count of 103 rigs. While oil rigs decreased by 4 units last week compared to the year before, gas rigs went up by 12 units.
Workforce Watch
U.S. Oilfield Services Employment Highest Since March 2020
Employment in the U.S. oilfield services and equipment sector increased by 2,907 jobs to its highest level since March of 2020 to reach 656,368 in March, according to preliminary data from the Bureau of Labor Statistics (BLS) after adjustments to February numbers and analysis by the Energy Workforce & Technology Council.
February's adjusted number of 653,461 is up slightly from the preliminary number of 652,108. Gains in February were made in four of the seven categories tracked by Energy Workforce.
The March increase continues to bring the sector closer to pre-pandemic numbers of 706,528 in February 2020. Overall, U.S. employers added 236,000 jobs, lower than the 311,000 jobs added in February.
The participation rate remained relatively unchanged with a minimal increase to 62.6% in March, and the overall unemployment rate ticked down to 3.5% from 3.6%. Leisure and hospitality, education and healthcare, government, and business services added workers in March while manufacturing, construction and retail all lost employees.
“This past month, energy workforce job numbers increased to their highest level since March 2020,” said Energy Workforce & Technology Council CEO Leslie Beyer. “This is welcome news as our industry is exceeding expectations by meeting spikes in demand and producing close to pre-pandemic levels all while developing new technology and deploying innovative production processes that are lowering emissions.
The oilfield services sector continues to build its workforce as it works to continue to meet ever growing global demand.”
March State-by-State Breakdown
TX - 319,848
LA - 54,807
OK - 49,950
CO - 26,649
NM - 24,548
CA - 24,023
PA - 23,761
ND - 20,413
WY - 15,228
OH - 10,896
AK - 10,174
WV - 10,042
Other stories we are following…
Cheers!
ingénieur en Mines et Pétrole
1 年Good morning all of you