LNG

GALP Energia, the Portuguese oil and gas company which recently agreed to sell its 10 percent stake in the Mozambique LNG project, posted higher adjusted second-quarter net profits.

ExxonMobil Corp. and Chevron Corp. reported first-quarter declines in profits and revenues on lower natural gas prices while both are advancing with their major takeover transactions amid a pre-emption dispute over key assets in the new South American oil and gas hub of Guyana.

TechnipFMC, the US oil and gas services company, reported increased profit and revenues as well as a rising backlog of contracts covering areas such as South America, the Gulf of Mexico and Europe.

Brazil is seeking more natural gas to meet rising gas-fired power needs and has held talks with Argentina and Bolivia on reversing pipeline flows to transport Argentinian supplies from the Vaca Muerta shale-gas basin.

TotalEnergies, the leading European oil and gas major, has joined with Shell, Brazilian state company Petrobras as well as two Chinese majors to start production from a second development phase of the Mero field offshore Brazil.

China National Offshore Oil Corp. (CNOOC), a leading LNG market participant among Chinese oil and gas majors, reported a more than 8 percent fall in third-quarter profit on lower realised oil and natural gas prices even as production increased.

Baker Hughes, the US liquefied natural gas equipment-maker and energy services company, reported solid profits as revenues increased along with orders with an LNG cycle still forecast to extend for several years.

China National Offshore Oil Company (CNOOC), a leading LNG market participant among Chinese oil and gas majors, has outlined its 2023 strategy with higher spending plans, including the targeting of more natural gas, both offshore and in unconventional onshore developments.

CNOOC said the offshore focus in China was on the South China Sea, including development of the Shenhai-1 gas field to promote efficient exploration and development of adjacent gas discoveries.

“We will also focus on five key projects including multi-stratal exploration around the Baodao 21-1 gas field and the rolling exploration around the Yinggehai gas field,” explained CNOOC.

Around the existing offshore Bohai gas fields, Chinese largest in the northeast, it would concentrate on the Bozhong 19-6 area and the Bozhong Depression.

CNOOC added that it was also pursuing an onshore unconventional natural gas programme to target 100 billion cubic metres of resources.

“We will actively promote the integration of exploration and development to increase resources in the Shenfu area,” explained CNOOC, referring to the onshore oil and gas located in the Shaanxi province of northwest China.

Spending

CNOOC’s net production target is between 650 million and 660M barrels of oil equivalent of which production from China will account for 70 percent and overseas resources would provide 30 percent.

Net production is also forecast to reach 690M to 700M Boe in 2024 and 730M to 740M BOE in 2025.

The company’s total capital expenditure for 2023 is budgeted at between 100 billion Chinese yuan ($14.75Bln) and 110Bln yuan ($16.23Bln), of which, capital expenditures for exploration, development, production will account for 18 percent, 59 percent and 21 percent respectively and 2 percent will go on administration.

Analysts said the robust programme suggested continued expansion of the economy in China through 2023 after the Covid-19 restrictions were lifted.

Nine new projects are planned to be brought on stream in 2023, including the Bozhong 19-6 gas field Phase I development in China and two oil fields at Lufeng 12-3 and Enping 18-6.

Overseas projects coming on stream include three developments in South America, the Payara Project in Guyana and the Buzios 5 and Mero 2 projects in Brazil.

The company said it continued to promote greener, lower-carbon developments and is expanding renewables, including its offshore wind project in Hainan, providing an additional 500 million kilowatt hours per annum to the power grid.

For shareholders, CNOOC said it expected to continue its annual dividend pay-out to investors through 2024 of “no less than” Hong Kong dollars $0.70 (US$0.09).

“In the coming year, CNOOC will continue to seek progress while delivering a stable performance,” said Chief Executive Zhou Xinhuai.

“The company will vigorously implement the three major programs of reserves and production augmentation, technological innovation and the green energy transition,” added Zhou.

ExxonMobil said upstream earnings potential was expected to double by 2027 from three years ago with more than 70 percent of capital investments being deployed in strategic developments in LNG projects around the world and in the US Permian Basin as well as in the South American nations of Guyana and Brazil.

The Irving, Texas-based major said that by 2027, upstream production is expected to grow by 500,000 oil-equivalent barrels per day to 4.2 million oil-equivalent barrels per day with more than 50 percent of the total to come from these key growth areas.

“Around 90 percent of upstream investments that bring on new oil and flowing gas production are expected to have returns greater than 10 percent at prices less than or equal to $35 per barrel, while also reducing upstream operated greenhouse-gas emissions intensity by 40-50 percent through 2030, compared to 2016 levels,” said ExxonMobil.

Corporate plan

The details came in ExxonMobil’s just issued corporate plan for the next five years, with a sizeable increase in investments aimed at emission reductions.

ExxonMobil’s priority LNG production areas are at the Golden Pass project in Texas, in the southeast African nation of Mozambique, in Papua New Guinea and in Qatar where its main partner is QatarEnergy.

The corporate plan through 2027 maintains annual capital expenditures at $20 billion to $25 billion, while growing lower-emissions investments to about $17Bln.

ExxonMobil forecast that earnings and cash flow growth was expected to double by 2027 compared with 2019.

There would also be share-repurchase program expanded up to $50Bln through 2024, including $15Bln in 2022.

“Our five-year plan is expected to drive leading business outcomes and is a continuation of the path that has delivered industry-leading results in 2022,” said Darren Woods, Chairman and Chief Executive.

“We view our success as an ‘and’ equation, one in which we can produce the energy and products society needs - and - be a leader in reducing greenhouse-gas emissions from our own operations and also those from other companies,” added Woods.

The corporate plan we’re laying out today reflects that view, and the results we’ve seen to date demonstrate that we’re on the right course.”

The company also remained on track to deliver a total of about $9 billion in structural cost reductions by year-end 2023 versus 2019.

In the Permian, the company said it was on track with its goal to reach net-zero Scope 1 and 2 emissions from its operated unconventional assets by 2030.

“We’re aggressively working to reduce greenhouse gas emissions from our operations, and our 2030 emission-reduction plans are on track to achieve a 40-50 percent reduction in upstream greenhouse-gas intensity, compared to 2016 levels,” added Woods.

“We will continue to advocate for clear and consistent government policies that accelerate progress to a lower-emissions future. At the same time, we’ll continue to work to provide solutions that can help customers in other industries reduce their emissions, especially in higher-emitting sectors of the economy like manufacturing, transportation and power generation,” stated the CEO.

Sembcorp Marine, the Singapore-headquartered global offshore, marine and energy platforms providers, is continuing to build its Brazilian shipyard business by completing its second floating, production, storage and offloading (FPSO) vessel for Brazil’s oil and natural gas rich offshore Santos Basin.

Semmarine's yard is called the Estaleiro Jurong Aracruz (EJA) facility and has been located since 2014 in the Espirito Santo state of southeast Brazil in the municipality of Aracruz.

The yard employs up to 4,500 workers during peak periods of production and in addition to tapping into the revived Brazilian offshore oil and gas industry, the EJA yard is offering field developments services for the in the Atlantic, Gulf of Mexico and West African regions.

The Sembmarine-owned yards “Petrobras P-71” FPSO is the second completed for the Tupi B.V. joint venture, majority-owned by state energy company Petróleo Brasileiro, known as Petrobras.

“The FPSO vessel, P-71, has just sailed away from EJA’s shipyard and will be deployed to the ultra-deepwater Itapu field,” said EJA.

Former LNG plan

Atapu is an oil and natural gas field with a shared deposit, located at a water depth of over 2,000 metres in the Santos Basin pre-salt.

Analysts note that for several years BG Group of the UK had spoken about an LNG production project in Brazil’s Santos Basin before being taken over by Shell in 2016. However, EJA’s the new FPSO is oil focused.

“When launched into operation, P-71 will produce up to 150,000 barrels of oil per day (BOPD). Measuring 316 metres in length and 54 metres in width, ‘P-71’ has a 1.6-million-barrel storage capacity and can accommodate 166 persons,” explained EJA.

EJA’s “P-71” work scope included fabricating six modules, pipe-racks and a flare, and integrating them on the vessel along with other modules and items supplied by the customer.

The yard said it also executed modification works on the FPSO’s topsides and hull to meet Itapu field requirements.

Premier facility

“Despite pandemic-related challenges which affected the project over a period of 20 months, EJA successfully delivered the P-71 FPSO on schedule, cementing its status as a premier facility in Brazil capable of taking on full engineering, procurement, construction and commissioning work for large-scale offshore projects,” said EJA President Thangavelu Guhan.

“We thank Petrobras and its partners for choosing to work with us on the ‘P-68’ and ‘P-71’ FPSO projects. We would also like to recognise our employees, vendors and community leaders whose assistance is important to our continued success,” stated Guhan.

EJA Chairman William Goh said that as a Brazilian shipyard with international expertise and advanced capabilities, the company had also become a major commercial entity and part of the social and economic fabric of Espirito Santo state and its local communities.

“We are committed to growing our business here by providing world-class engineering solutions for the offshore renewables, oil & gas and other clean energy sectors,” declared Goh.