LNG

Nigeria, the main oil, gas and LNG producer in sub-Saharan Africa, has been chosen to host the newly formed Africa Energy Bank (AEB) to boost investment in the Continent’s under-financed projects.

May 20 (LNGJ) - Saipem, the Italian energy and LNG engineering company specialising in subsea work, has been awarded a new offshore contract by Azule Energy of Angola, a joint venture between Italy’s Eni and UK major BP. The contract, valued at $850 million, is for the development of the Ndungu Field as part of the Agogo Integrated West Hub Project, located 180 kilometres off the coast of Angola.

   Saipem said the scope of work entailed the engineering, fabrication, transportation and installation of around 60km of rigid pipelines and of the subsea facilities at a depth of around 1,100 metres, as well as the transportation and installation of flexible flowlines, jumpers and 17km of umbilicals. “Fabrication activities will be executed at Saipem’s Ambriz yard in Angola,” said Saipem.

Italian energy company Eni has reached an agreement on the combination of substantially all of its upstream assets in the UK with Ithaca Energy to significantly strengthen its presence on the Continental Shelf of the UK, a significant LNG importer.

Eni is one of the most dynamic oil and gas exploration and production companies that has brought transformational energy resources through gas discoveries and development of existing fields offshore nation like Mozambique and Egypt and in others in Asia.

Under the terms of the business combination agreement Eni and Ithaca will combine the Eni UK Business with the existing Ithaca business.

The combination is being funded through the issue to Eni UK of a number of new ordinary shares that represents 38.5 percent of the enlarged issued share capital of Ithaca.

The economic effective date for the combination will be 30 June 2024, with completion expected in the third quarter.

Ithaca is one of the largest independent oil and gas companies on the UKCS, with a substantial resource base and playing a key role in energy supply security in the region, with stakes in six of the 10 largest fields and the top two largest development fields on the UKCS.

Stronger group

“The combination will immediately create an enlarged and stronger group with 2024 production greater than 100,000 barrels of oil equivalent per day and the underlying potential to organically grow to 150,000 boepd by the early 2030s,” said Eni.

“The combination is aimed at replicating the previous successful execution of upstream combinations that Eni has formed using its distinctive Satellite Model including Vår Energi in Norway and Azule Energy in Angola,” the Milan-based company explained.

“The Satellite Model is a strategic response to the challenges and opportunities of energy markets, creating focused and lean companies able to attract new capital to create value through operating and financial synergies and the acceleration of growth,” said Eni.

With this approach Eni said it would thereby strengthen its commitment to the UK after its previous acquisition Neptune Energy.

Eni concluded an agreed acquisition for $4.9 billion of UK-based Neptune in June 2023, gaining key global LNG stakes and gas field assets in Algeria, Indonesia, Norway, the UK, the Netherlands and Australia.

Under the terms of the takeover, Eni purchased Neptune for $2.6Bln and Eni’s Norwegian-listed subsidiary Vår Energi agreed to pay $2.3Bln to acquire Neptune’s operations in Norway.

Changing market

“This agreement represents a further example of Eni adapting to the demands of the changing energy market and in this case deploying our successful Satellite Model,” said Eni Chief Executive Claudio Descalzi.

“It affords the opportunity to build scale, realising efficient upstream growth and maximising value under a dedicated and focused management structure supported by Eni resources and expertise,” Descalzi added.

“We have moved quickly after the acquisition by Eni of Neptune Energy to transform our competitive position in the UK and we see the opportunity for Eni and Ithaca to realise material long-term value in helping to address the key challenges of security, affordability and sustainability of energy supply,” the CEO stated.

Côte d'Ivoire is continuing to benefit from the ramp-up of the Baleine oil and gas field as part of a world-class hub of oil, pipeline natural gas and LNG exports and imports being built out to improve economic prosperity in West Africa from Mauritania in the North to Angola in the South.

French major and leading European LNG sector participant TotalEnergies has signed an agreement to acquire 100 percent of US firm Talos Low Carbon and its carbon-capture and storage projects and has also bought some Texas shale-gas assets.

Hess Corp., the New York-based oil and gas company being acquired by Chevron Corp. in a transaction agreed in October and valued at $53 billion, is trying to re-assure Chevron that one of its main assets in Guyana was safe from any pre-emption purchase offer from the other shareholders in the block.

Chevron Corp., the US major oil and gas company with LNG operations in Australia and Africa, has received a vote of confidence from US investor Warren Buffett whose Berkshire Hathaway has taken its stake to almost 7 percent.

Buffett’s Berkshire Hathaway has increased its stake in San Ramon, California-based Chevron by over 15.84 million shares.

This transaction has brought Berkshire Hathaway's total share count in Chevron to 126.09M shares, representing about 5.96 percent of Buffett’s investment portfolio and 6.81 percent of Chevron's outstanding shares.

Lower price

According to Berkshire Hathaway data, the Chevron shares were acquired at an average price of $149.16 each and were valued at $18.80 billion.

Buffett is a celebrity figure among America’s small retail investors and is known to his fans as “The Oracle of Omaha”.

Buffett’s other main energy investment is in Houston, Texas-based Occidental Petroleum which forms 4.19 percent of the Berkshire Hathaway portfolio. The Buffett firm also has a huge 50 percent represented by shares in Apple Inc.

Chevron’s shares have recently risen to $154.63 per share, backed by positive earnings and the company’s acquisition agreement signed in October 2023 with US oil and gas company Hess Corp.

The value of the Buffett stake has already risen and at current prices on February 19, 2024, is now worth just short of $20Bln at $19.49Bln.

Chevron recently reported annual net profits of $21.41Bln, down from $35.60Bln in the previous year, though apart from 2022 the Chevron performance was the strongest since 2013.

LNG projects advance

Chevron listed among its highlights as achieving first natural gas production from the Gorgon Stage 2 development in Western Australia where its operates both the Gorgon LNG and Wheatstone LNG export plants.

Chevron also reached a final investment decision with partners to construct a third gathering pipeline that is expected to increase natural gas production capacity at the Leviathan gas field and a future LNG hub in the East Mediterranean offshore Israel.

The company additionally expanded the Bayou Bend carbon-capture and sequestration project on the US Gulf Coast through an acquisition of nearly 100,000 acres.

However, Chevron assets in the Permian Basin in Texas and New Mexico also helped to underpin the earnings.

Chevron posted an increase in its Permian production by 10 percent in 2023 with US quarterly output coming to 1.16 million barrels per day compared with 895,000 barrels per day, helped by the 2023 acquisition of US independent oil and gas company PDC Energy.

Chevron is also paying $53Bln for New York-based Hess, giving it access to major oil discoveries in the South American nation of Guyana as well as more US shale assets in the Bakken Shale Basin of North Dakota.

TotalEnergies reported declines in annual and quarterly net profits as commodity prices plummeted compared with the previous year while the French major sold over 44 million tonnes of liquefied natural gas and opened the Le Havre floating LNG regasification terminal in France while being further boosted by progress in other oil and gas projects.

Chevron Corp., the energy major and liquefied natural gas operator in Western Australia and Angola, and with a small LNG fleet said that the President of Chevron Shipping Company, Mark Ross, was retiring from the company in May “after 33 years of distinguished service”.

The San Ramon, California-based company said that Ross would be succeeded by Barbara Pickering, currently Vice President of Operations at the shipping unit.

Chevron Shipping employs around 2,000 people worldwide and operates a modern fleet of 30 ships and also charters third-party vessels  to transport LNG, crude oil, liquefied petroleum gas, refined petroleum products and chemicals around the world.

The company said that Ross had led Chevron Shipping since 2015 and prior to that, he served as Vice President of Operations of the company for four years.

He joined Chevron in 1990 and has held positions of increasing responsibility in Chevron’s Midstream, Upstream and Downstream organizations.

ABS director

He is also a Director of the American Bureau of Shipping and the UK P&I Club and is a past Chairman of the Oil Companies International Marine Forum (OCIMF) and the Society of International Gas Tanker and Terminal Operators (SIGTTO).

He holds a bachelor’s degree in chemical engineering from the University of California at Berkeley, a master’s degree in chemical engineering from the University of Illinois at Urbana-Champaign, and a Master of Business Administration degree from the University of California at Berkeley.

His successor Barbara Pickering received a bachelor’s degree in Maritime Studies from Liverpool University in the United Kingdom and joined Chevron in 1991 as a ship charterer in London.

She has held positions of increasing responsibility with Chevron in the UK, Australia and the United States. She also currently serves as a Vice Chairman of OCIMF.

“Under Mark’s leadership, Chevron Shipping has delivered exceptional safety and environmental performance and has greatly expanded its marine capabilities,” said Colin Parfitt, President of Chevron Midstream.

“We thank Mark for his many contributions and wish him well in the future,” added Parfitt.

Ross said that it had been an honor and privilege to have worked for Chevron Shipping and to have served as President for the past nine years.

“I take immense pride in what we have accomplished in transforming Chevron Shipping into a world-class marine organization,” Ross explained.

“Words cannot properly express how I feel about our organization and the deep appreciation I have for the people who run it - onboard our ships, at our terminals and ashore. I have known Barbara for 30 years and I am thrilled she will now lead our company,” Ross stated.

Italian major Eni said it had begun to introduce feed gas into the “Tango FLNG” floating production plant ahead of the shipping of the first cargo in a project located offshore the Republic of Congo in West Africa.