Norway’s petroleum and energy ministry has announced that the country, which is Western Europe’s biggest oil and gas producer, is offering up to 92 new blocks for hydrocarbon exploration in the new round of licensing in mature areas.

The proposal, made public yesterday [Tuesday], adds 92 new oil and gas exploration blocks in the Norwegian Sea and the Barents Sea to the best-known areas for exploration.

Reports said the announcement for the licensing round will take place in the third quarter of this year, with the award of blocks expected to be announced in January 2024. 

“We constantly need new discoveries to further develop the Norwegian continental shelf,” petroleum and energy minister, Terje Aasland said in a statement.

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The so-called Allocation in predefined areas (APA) round was introduced in 2003 to facilitate timely exploration of the most geologically known parts of the shelf.

In the most recent licensing round, APA 2022, the ministry awarded earlier this month 47 new production licenses in the predefined areas to a wide variety of companies.

“Further exploration activity and new discoveries are important to maintain the production of oil and gas over time, both for Norway and Europe,” Aasland said.

Norway will continue to pump the current high volumes of natural gas for at least another five years as operators have pledged $30.3 billion (300 billion Norwegian crowns) to develop new fields and extend the lifetimes of producing fields, the Norwegian petroleum directorate said earlier this month.

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“Only rarely have we seen so much oil and gas produced on the Norwegian shelf as was the case last year – and only rarely have we seen such significant investment decisions,” the NPD said in its yearly overview of the production and investment activity on the Norwegian Continental Shelf.

“These are remarkable investments for the future. This will help ensure that Norway can continue to be a reliable supplier of energy to Europe”, said NPD director general, Torgeir Stordal

Oil prices were reportedly steady during morning trade yesterday [Monday] amid hopes of a fuel demand recovery in the world’s top crude importer, China.

Brent, the benchmark for two thirds of the world’s oil, was 0.63 per cent higher at $88.18 a barrel at 4.00pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 0.51 per cent at $82.02 a barrel.

Brent settled 1.71 per cent higher at $87.63 a barrel on Friday, while WTI was up 1.28 per cent at $81.64. Futures have gained for two straight weeks on optimism about an improving economic outlook in China.
“Positivity around China’s demand recovery, along with the International Energy Agency’s warning that even record oil supplies wouldn’t be enough to meet demand this year should help to underpin further gains in oil futures,” Jeanne Walters, senior economist at Emirates NBD, was quoted

Global oil demand will surge to a “record” this year following the end of coronavirus restrictions in China, the IEA said in a report last week.

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Oil demand will rise by 1.9 million barrels per day to 101.7 million bpd in 2023, said the IEA, which had previously estimated a growth of 1.7 million bpd.

Nearly half the gain in crude demand will come from China, which has reopened its borders for the first time in three years, triggering a sharp rise in airline bookings.

Futures have also been responding to further sanctions on Russian crude exports. The Group of Seven advanced economies have agreed to review the price cap on Russian exports in March — later than originally planned — to assess the market after an EU embargo on Russian crude products takes effect on February 5, media reports said, citing comments from US Treasury officials.

Investment bank Goldman Sachs, which expects Brent to rise to $105 a barrel by the fourth quarter, has said that only a combination of “bearish shocks” would affect its forecast, such as flat China demand in the first quarter and no Russian supply disruption.

Despite bearish forecasts from the International Monetary Fund and the World Bank on the global economy, Goldman Sachs has said the US, the world’s biggest economy, may avoid a recession. It also expects the global economy to have a soft landing.

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China’s economy, which grew 3 per cent in 2022, is set to improve and is highly likely to reach a normal growth rate in 2023, Liu He, a Vice Premier, told the World Economic Forum in Davos last week.
To meet growing demand, the Opec+ group is likely unwind its production cuts of 2 million bpd for the second half of this year, according to analysts.

The group of 23 oil producing countries is maintaining a “wait and see” attitude to oil market fundamentals, consultancy Energy Aspects said in a report last week.

“The group is unlikely to make changes to current quota policy until the impact of tighter Western sanctions on Russian oil supply and China’s reopening on demand become clearer.”

By Ken Okoye [with agency reports]

...It’s Kuwait’s 6th cabinet in 3yrs. The 3rd formed by PM, Al-Ahmed Al-Sabah since he took office in August last year.

The government of Kuwait has resigned its appointment yesterday [Monday] amid a power struggle with the Arab Gulf country’s assembly less than four months after parliamentary elections delivered a mandate for change.

The mass resignation comes barely six months after being appointed, as it tries to out-maneuver lawmakers seeking to pass legislation ministers say would strain state finances

The state-run KUNA news agency confirmed the resignation, which had earlier been reported by local media, without providing further details. It’s the fifth time a Kuwaiti government has resigned in just over two years.

The government, which is appointed by the ruling family, has been in a prolonged power struggle with the elected assembly. They had recently clashed over the assembly’s advancement of populist measures that the government deems too costly, as well as requests to grill two ministers over alleged economic mismanagement, local media reported.

A source said the cabinet’s move to resign is meant to hinder the Assembly’s attempts to push through spending bills that would see the government buying back consumer loans and raising salaries and benefits, among other things.

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Kuwait is credited with the freest and most active assembly in the Persian Gulf, but political power is still concentrated in the hands of the ruling Al Sabah family, which appoints the prime minister and cabinet, and can dissolve the assembly at any time.

Kuwait’s Islamist opposition accuses the government of graft and mismanagement, frequently grilling ministers over their involvement in the misallocation of public funds.

The squabbling has prevented the assembly from passing basic economic reforms, including a public debt law that would allow the government to borrow money, leading to the depletion of its general reserve fund despite its vast oil wealth.

This is the third cabinet formed by Prime Minister Sheikh Ahmed Nawaf al-Ahmed Al-Sabah since he took office in August last year. It is also Kuwait’s sixth government in three years.

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The parliament is led by opposition forces, which view ministers as corrupt and accuse them of mismanaging the country’s oil wealth. The government has been at constant odds with the elected assembly, which is pursuing populist measures.

Kuwait, which borders Saudi Arabia and Iraq, has the world’s sixth-largest known oil reserves and hosts some 13,500 American troops.

While Kuwait boasts of one of the world’s biggest sovereign wealth funds and has very low debt with a surplus of around $23 billion in store and an economy that was set for almost 8% growth in 2022, according to Bloomberg, it’s falling far behind its peers–Saudi Arabia and the UAE in terms of non-oil economic growth.

By Ken Okoye

France’s TotalEnergies has begun gas production from onshore Block 10 in Oman, in line with its growth strategy focusing on fuels contributing to the energy transition.

TotalEnergies has a 26.55% stake in Block 10, with Oman’s state-owned OQ holding a 20% stake and Shell, the operator, having a 53.45% interest.

The total gas output from the Mabrouk North-East field in the onshore Block 10 is expected to reach 500 million standard cubic feet per day by mid-2024, TotalEnergies said in a statement last Friday.

The latest gas production follows the signing of the concession agreement in December 2021. The produced gas will supply the Omani gas network, feeding both local industry and liquefied natural gas export facilities.

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TotalEnergies has also signed an agreement with state-owned Oman LNG for the purchase of 0.8 million metric tonnes of LNG per year over a period of 10 years starting from 2025.

“This new contract will contribute to TotalEnergies’ LNG integrated portfolio and reinforce its flexibility, by allowing it to address both the European and Asian markets,” the company said

LNG is natural gas that turns into a colourless and non-toxic liquid when cooled to about minus 162°C. When it cools it shrinks the volume of the gas, making it easy to ship and store.

LNG produces 40% less carbon dioxide than coal and about 20 per cent less than oil, and is widely seen as a cleaner alternative. It can be used for cooking and heating, as a fuel for commercial vehicles, generating electricity, as well as manufacturing products such as fertilisers, paints and medicines.

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LNG demand is rising globally amid green transition efforts and the Russia-Ukraine war. Russia, Europe’s top natural gas supplier, began reducing its exports to the continent in response to wide-ranging economic sanctions, forcing European countries to look for alternative sources of supply.

“These announcements are consistent with the ambition of TotalEnergies to contribute to the energy transition and reinforce its long-standing partnerships with both Oman LNG and the Omani state”, said Patrick Pouyanne, chairman and chief executive of TotalEnergies.

By Bosco Agba