The European Union – New pipelines and production
A new €93 million pipeline linking Ireland to Scotland’s gas network received the green light from regulators this week. The project will be partial funded with €33.7 million of European Union grant aid, reports the Independent. The pipeline will run parallel to existing infrastructure that already connects Ireland to the UK.
Ireland currently gets around 95% of its natural gas from the UK. The new pipeline will strengthen the supply link between the two countries. Last month, Europe’s Energy Commissioner Arias Canete said security of supply was a major issue.
This second pipeline to Scotland is “essential to safeguarding Ireland’s energy security and future economic growth,” a statement from state infrastructure agencies Gaslink and Gas Networks Ireland said.
Total (ticker: TOT) announced that production of gas and condensate began at the onshore Termokarstovoye field, located in Russia, began Wednesday. The field will produce around 233 Mcf/d of gas and 20,000 barrels of condensate per day, according to the company.
The Termokarstovoye field is operated by Terneftegas, a joint venture between Russia’s 2nd biggest natural gas producer Novatek (51%) and Total (49%).
OPEC – Prices rising and likely to continue climb regardless of OPECs next meeting
Venezuela’s weekly oil basket price continued its rise for the eighth straight week, reports the Latin American Herald Tribune.
According to figures released by the Venezuela Ministery of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending May 15 was $57.00, up $0.26 from the previous week’s $56.74.
Iranian Deputy Oil Minister and Managing Director of state-run National Iranian Oil Co. Rokneddin Javadi said that he sees oil prices rising to $80/bbl by late 2016, regardless of whether or not OPEC decides to stay its current course, according to reports from a recent energy conference in Kuala Lumpur.
“From a commercial point of view, today’s prices should be sustained and increase gradually,” he said, “but it depends on the political situation and what’s going on in the Middle East and Arabian countries.”
China – Greater cooperation with BRICS partner and construction set to begin on Power of Siberia
China and Brazil issued a joint statement this week to further facilitate bilateral trade, reports The Hong Kong Standard. The focus of the trade agreement includes many different industries from aviation to food processing, but one of the main focuses will be bilateral investment and cooperation in energy, mining and manufacturing.
China National Petroleum Corp. (CNPC) will begin constructing its leg of the Power of Siberia pipeline in June, said Gazprom Deputy Executive
Manager Vitaly Markelov. In 2014, Gazprom (ticker: OGZPY) and CNPC signed a 30-year contract stipulating the delivery of 38 billion cubic meters of Russian gas annually to China via the Power of Siberia pipeline.
Russia – Russia will not coordinate with OPEC
Lukoil CEO Vagit Alekperov said Russia will not coordinate its oil policy with OPEC during an interview with Reuters. OPEC has said that it will only consider cutting output to defend oil prices if other oil producers outside the group will cut production as well.
“Neither the Soviet Union nor the Russian Federation have ever been OPEC members and the Russian Federation doesn’t plan to join this organization,” Alekperov said. “Therefore…the Russian government does not coordinate its actions with OPEC members.”
Russia’s Energy Minister Alexander Novak is scheduled to attend an OPEC seminar in Vienna June 3 and 4 ahead of the cartel’s policy setting meeting June 5.
India – Changing subsidy rules to attract buyers
India plans to reform rules governing the level of discounts upstream state oil firms including state giant ONGC offer to retailers, a senior finance ministry official told Reuters. The move is hoped to expedite a stake sale in state companies.
India had to defer plans to sell a 5% stake in ONGC last year as investors asked for clarity on subsidy payments used to compensate retailers for losses they incur on selling fuels at government-set rates.
The government hopes to sell shares in ONGC and India Oil Corp. to raise about a third of its budget target for asset sales of $11 billion – and reduce its fiscal deficit to 3.9% of GDP in the 2015/16 fiscal year.
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