Oil & Energy
Conflict In Gaza Threatens US Middle East Strategy
The starting point for all sound intelligence analysis of a particular action is to identify who gains from it and what it is that they gain. As the new titfortat conflict between Israel and Palestine continues to escalate such analysis reveals the following: overall Palestine will gain nothing except sympathy from already sympathetic supporters, Israel will gain nothing although it may bolster the flagging domestic support for Prime Minister Benjamin Netanyahu, but those countries that want to destroy the nascent U.S. Israeli led ‘relationship normalisation’ strategy stand to gain precisely what they want.
Top of this list of beneficiaries is obviously Iran, which has the motive, means, and opportunity to stoke the ever simmering conflict between Palestine and Israel to such a point that Arab states that have long seen the Palestine conflict as a reason not to join the new U.S. Israeli led initiative (most notably, Saudi Arabia and its King Salman) have been vindicated. Fracturing the relationship between the U.S., Israel and those countries that have already signed up to the normalisation deals notably the UAE and Bahrain is also a possibility as evidenced last week.
Up until just two weeks ago, for example, the UAE’s key sovereign wealth vehicle – Mubadala – was intent on formally ratifying an in-principle agreement to buy from Israel’s Delek Drilling its 22 percent stake in the Tamar natural gas field operated by U.S. oil and gas giant, Chevron. Given the size of the deal – at least US$1.1 billion – and the fact that each of the countries behind the U.S.-Israel-UAE normalisation deal signed last August are significantly involved in it the deal was rightly regarded as being one of the most significant material developments since Israel and the UAE agreed to normalise ties last year.
For Israel, over and above the financial value of the deal is the strategic significance of the Tamar gas field that lies in the eastern mediterranean as it is one of the country’s primary energy sources, able to produce 11 billion cubic metres of gas each year. This is sufficient not just to cover much of the Israeli gas energy market but also to lay the basis for the strategically important roll out of gas exports to Egypt and Jordan. Underlining this, last month saw a comment from Delek Drilling’s chief executive officer, Yossi Abu, that the deal potentially marked: “A strategic alignment in the Middle East, whereby natural gas becomes a source of collaboration in the region.” The deal was to have been finalised this month, which in turn would have opened up the way for further co-operation between Mubadala and Delek Drilling in the nearby – and even larger – Leviathan gas field. Last week, though, Tamar field operator Chevron shut down the offshore Tamar gas platform Israel amid an escalation of violence between Israel and Palestine.
Should this trend of increasing violence between Palestine and Israel continue then this may not be the only commercial deal under threat as the very basis of the relationship normalisation strategy between Israel and Arab States comes into question. This deal between Israel and the UAE announced on 13 August came at around the same time as Israel’s Netanyahu announced that he was suspending plans to annex more areas of the West Bank that it seized during the 1967 Six Dar War. At that time, the UAE had two principal aims in signing such an agreement. One was that it wanted to put itself firmly in the U.S.’s most-favoured allies group for receiving future business and financing deals, as it had suffered a big hit from the Saudi-led oil price war that had just ended. The other was that it wanted to be included in the U.S. Israel intelligence and security network to protect itself from the growing influence of Iran. For Iran, the potential danger that this new U.S. Israel power axis posed is huge. Partly this is a result of increased security threats (via a massively expanded Israeli-led intelligence operation) coming from the UAE in its south and south-western provinces and partly this is due to the likelihood that when the current ruler leader of its deadliest regional enemy, Saudi Arabia dies (and King Salman is in very poor health), his successor, Crown Prince Mohammed bin Salman (MbS), may join the relationship normalisation grouping.
Although King Salman told the organisation of Islamic Cooperation just last year that the Palestinian cause remained a core issue and that the kingdom “refuses any measures that touch the historical and legal position of East Jerusalem,” MbS is believed to be far more sympathetic to the agreement. Even Saudi’s Foreign Minister, Prince Faisal bin Farhan, cautiously welcomed the Israel UAE agreement, saying: “It could be viewed as positive.” It is also apposite to note that back in 2002 not that long ago in global geopolitical terms – it was the Saudis who launched the ‘Crown Prince Abdullah Peace Plan’ at the Beirut Arab summit, offering Israel full recognition in exchange for a return to its pre-1967 borders. That Iran should seek to leverage this perennial and deep-seated issue of Palestine at this point is entirely unsurprising, as Iran has nothing to lose and everything to gain if it plays the situation correctly. On the one hand, the longer the current violence between Palestine and Israel continues and even better for Iran if Israel launches a ground invasion, the less likely it is that any other Arab state will join the US-led relationship normalisation deal strategy in the region, including Saudi Arabia. On the other hand, given that the key power in Palestine Hamas is extremely closely tied to Iran (along with Hezbollah in nearby Lebanon), Iran might eventually be called upon through diplomatic back-channels to broker some sort of peace with Palestine. In such an event, Iran would undoubtedly seek a dropping of Washington’s hardline clauses for the new draft of the nuclear deal that it is currently on and off negotiating with the U.S.
Although the relationship between Iran and Hamas had cooled off in around 2012 when the military-political grouping that essentially runs Palestine decided to back the Syrian opposition against ruling President, Bashar al-Assad contrary to Iran’s wishes financial necessity on Hamas’s part warmed relations back up again around three years ago. In 2018, according to then-Israeli Defence Minister, Avigdor Lieberman, said that most of the US$260 million that Hamas invested in 2017 in making tunnels and weapons came from Tehran.
Last week, Israel’s Channel 12 reported that Iran had agreed to provide US$30 million per month to Hamas in return for information on Israel’s missile capabilities and its missile locations, following a meeting two weeks ago between nine senior members of Hamas’s militant wing and Iran’s Supreme Leader, Ali Khamenei, in Tehran. Even more recently, the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps, Hossein Salami, warned that Israel was vulnerable to one large tactical operation because the country is so small and highlighted the recent firing of an S-200 missile from Syria as an example of how effective a sustained bombardment by short range missiles might be.
Watkins writes for Oilprice.com
Oil & Energy
NPDC, Belema Oil Worst Gas Flaring Offenders In Feb – NNPC
Indigenous company, Belema Oil, Seplat and Nigerian Petroleum Development Company, an arm of the Nigerian National Petroleum Company (NNPC) were the worst offenders in the oil and gas sector in gas flaring in February, 2023.
The three companies flared 100 per cent of their gas output, according to gas utilisation data released by the NNPC.
They were followed by Agip Energy and Natural Resources, which flared 95.93 per cent of its total gas output, and First Exploration and Production Limited, which flared 95 per cent of its total gas output.
The gas utilisation data showed that oil and gas companies operating in Nigeria produced 149.263 billion standard cubic feet (SCF) of gas in February, a 6.72 per cent drop, compared with 160.013 billion SCF produced in January.
A breakdown of the total gas output for February 2023 showed that associated gas stood at 107.702 billion SCF, while non-associated gas output stood at 41.561 billion SCF.
According to the NNPC, 93.52 per cent of the gas produced was utilised, while 6.48 per cent was flared.
Specifically, 139.589 billion SCF of gas was utilised in February 2023, dropping by 7.25 per cent when compared with 150.493 billion SCF of gas utilised in the previous month, while 9.674 billion SCF of gas was flared, up by 1.62 per cent, from 9.520 billion SCF flared in January 2023.
The NNPC stated that 9.084 billion SCF of gas was used as fuel gas; 45.977 billion SCF was allocated to the Nigerian Liquefied Natural Gas, NLNG; while 5.247 billion SCF was allocated to the Escravos Gas to Liquid, EGTL, plant.
In addition, 2.353 billion SCF of gas was used for Natural Gas Liquids/Liquefied Petroleum Gas, LPG; domestic gas sales by the Nigerian Gas Company and others gulped 23.222 billion SCF, while 53.705 billion SCF was used by gas re-injection and gas lift make-up.
In the Joint Venture segment, Mobil Nigeria recorded the highest gas output, with 25.668 billion SCF, followed by Shell with 24.203 billion SCF; TotalEnergies produced 23.481 billion SCF of gas; while Chevron recorded gas output of 20.683 billion SCF.
However, despite producing the highest quantity of gas in the month under review, Mobil flared 6.26 per cent of its total gas output; Shell flared 4.19 per cent of its total output; Total Energies flared 2.37 per cent of its total output, while Chevron flared 9.03 per cent of its gas output.
In the Production Sharing Contract (PSC) segment, Star Deepwater – Agbami Floating Production, Storage and Offloading (FPSO) produced 12.744 billion SCF of gas, out of which 1.06 per cent was flared; while TotalEnergies Upstream Nigeria’s Akpo FPSO produced 11.975 billion SCF of gas and flared 1.22 per cent of the total.
Oil & Energy
STRYDE To Deploy Seismic Receiver Nodes Onshore Nigeria
Seismic acquisition technology and solutions provider, STRYDE, has been awarded a contract worth over $1 million for the supply of 10,000 seismic receiver nodes and its “Nimble” node receiver system for an onshore oil and gas project in Nigeria.
STRYDE’s seismic sensor technology will be utilised on an upcoming 3D seismic survey conducted by Nigerian geoscience solutions provider, ATO Geophysical Limited, as part of an onshore oil and gas exploration project in Nigeria.
The seismic survey is due to begin in Q2 2023 and will be the first commercial deployment of STRYDE’s Nimble System in the country as it continues its international expansion within the energy sector.
STRYDE, who are the creators of the world’s smallest and lightest seismic node, will enable ATO to deliver high-density seismic data for the exploration of new reservoir locations in the grasslands and marshlands of Nigeria, for a local oil and gas operator.
Until recently, the country has typically relied on bulky, expensive, and complex cabled geophone receiver systems to acquire seismic data, which traditionally incurs significantly high CAPEX and OPEX costs, more exposure to HSE risk, higher technical downtime, and inefficiencies in the seismic acquisition programme.
With the introduction of cable-less receiver technology like STRYDE’s miniature sensor, geophysical providers and operators can now acquire high-quality data much more efficiently and with less cost, risk, and environmental footprint.
The supply of its node management solution will enable further efficiencies on the survey to be unlocked by allowing ATO to rotate up to 2,160 nodes per day, enabled by the system’s unique capability to simultaneously charge and harvest data from 360 nodes in under four hours.
This system is also equipped with STRYDE’s state-of-the-art software for efficient seismic survey field operations, data harvesting, and quality assurance, allowing ATO to produce processing-ready seismic data fast than ever before.
Head of Business Development, MENA, at STRYDE, Sam Moharir, commented on the transition to nodal technology: “ATO Geophysical Limited needed to have access to cost-effective technology that could also overcome challenges associated with the terrain they were due to operate in’’.
“With cabled systems traditionally being more physically challenging to deploy in remote, large, and complex terrain, STRYDE Nodes™ offer a more efficient and practical solution for improving seismic survey efficiencies through the elimination of restrictive and heavy cabled geophones”.
The Managing Director of ATO Geophysical Limited, Thomas Ajewole, said: “As a leading seismic data acquisition expert in Nigeria, we look forward to partnering on our first project with STRYDE and capitalizing on the benefits of its technology by providing our customers with a more efficient and cost-effective solution to onshore seismic data acquisition.
“As we continue to support the exploration of new oil and gas projects in the region, STRYDE Nodes present an exciting opportunity to acquire high-resolution seismic data required to image the subsurface and pinpoint new reservoir development opportunities for our customers”.
STRYDE’s CEO, Mike Popham, said: “STRYDE is excited to be enabling our first seismic surveys in Nigeria with ATO. This builds upon our successful history of seismic projects across Africa, including Zimbabwe, Namibia, and Kenya.
“We’re proud to see our nodes increasingly being utilized around the world for a range of industrial applications, replacing expensive, cumbersome, and impractical alternative systems with our dynamic technology”.
In addition to providing seismic solutions in the oil and gas market, STRYDE also supports new energy industries including Geothermal, CCUS, Hydrogen, and Mining, providing an affordable solution to a typically expensive phase of any exploration project.
Oil & Energy
NNPCL Clears $3.8bn JV Cash-Call Arrears Owed IOCs
The Nigerian National Petroleum Company Limited (NNPCL) says it has cleared the outstanding $3.8 billion joint venture cash-call debts owed to International Oil Companies (IOCs) operating in the country.
NNPCL’s Executive Vice President, Upstream, Adokiye Tombomieye, disclosed this as he lamented that inadequate JV cash call funds was stunting the growth of the oil and gas industry.
Tombomieye made the disclosure while speaking during a panel session on upstream opportunities at the fourth edition of the Nigerian Oil and Gas Opportunity Fair (NOGOF) 2023, organised by the Nigerian Content Development and Monitoring Board (NCDMB) in Yenagoa, Bayelsa State.
Represented by the Chief Upstream Investment Officer, NNPCL, Mr Bala Wunti, he disclosed that the country’s oil production has maintained significant increase following measures to tackle crude oil theft.
Tombomieye warned that the NNPCL would no longer deal with portfolio companies, and urged investors to avoid acting as middlemen.
He disclosed that the company had leveraged its financial autonomy derived from the Petroleum Industry Act (PIA) to work out and execute a payment plan for the cash call debt while balancing its energy security obligations to the nation.
“This, by no small means, re-energised the JVs to recalibrate their focus towards sustaining production and increasing their spending to procure the necessary services required to do so”, the NNPCL Chief said.
Also speaking on the panel, the Managing Director of TotalEnergies EP Nigeria Limited, Mr Mike Sangster, announced that the final investment decision on the company’s upcoming Ubeta gas project would be taken in the first quarter of 2024.
Sangster, represented by the Executive Director, JV Assets, TotalEnergies, Mr. Obi Imemba, said Ubeta was its last discovered but undeveloped well in the Oil Mining Lease, OML, 58.
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