A Snapshot of Oil and Gas
The oil and gas sector has taken a lot of criticism in recent years over its efforts or lack of effort to reduce its carbon footprint. The cost of oil and gas also contributed to a rise in energy costs wholesale triggering off the cost of living crisis. This emerged after the Russian invasion of Ukraine in February 2022. Oil does matter as it constitutes the raw material for aviation octane fuel and marine fuel oil. Liquid natural gas now operates as the main fuel for the shipping sector and cruise liners. Gas also forms the raw material for ethylene oxide that the chemicals industry uses in prodigious quantities.
INEOS Energy has completed a business deal by which it has taken full control of the US Gulf oil assets once held by CNOOC Energy Holdings USA Inc. This increases oil output of the company by the equivalent of 90000 barrels of oil per day. This also includes non operated wells built around two Gulf of Mexico platforms, Appomattox and Stampede. INEOS has also signed off on a collaborative venture with Oresundkraft & Varme AB to potentially store up to 210000 tons of CO2. This project will research a safe means of storing carbon in the Greensand storage facility in the North Sea. INEOS is leading development of this offshore storage site. The intent is that CO2 will be received from other nations and inserted into an offshore rock formation. INEOS is leading development of this project along with its partners Harbour Energy and Nordsofonden. INEOS Energy also finalized a long term contract with Covestro to supply LNG for eight years starting in 2027. Covestro uses LNG as both an energy source and a raw material for its manufacturing plants. This is intended to stabilise energy supplies in the medium term whilst Covestro undergoes a transition to more environmentally friendly energy sources. This also maintains a competitive European industrial base for future growth and prosperity.
The Lindsey oil refinery near Immingham has now ended production after its owner Prax Group went into administration. 420 jobs could be lost as a result of this business failure. The Official Receiver is still trying to find a potential buyer for the plant. The leader of North Lincolnshire Council has urged the government to step in and provide a re-development plan for the site. Financial support for supply chain businesses has also been urged by various third parties. The plant’s owner has lost £75 million in three years.
BP may have struck good fortune with an exploratory well in the Bumerangue block off the coast of Brazil with its partner Pre-Bal Petroleo SA. This is located 218 miles from Rio de Janeiro. More onsite analysis will be completed to determine the size of the deposit at a depth of 2372 metres below the surface. This is over 7000 feet down and illustrates the cost which the major players are prepared to take on to find new deposits. This could amount to one of BP’s biggest discoveries in decades.
(see www.ineos.com and www.bp.com)
Mark Sandford - Permission granted to freely distribute this article for non-commercial purposes if attributed to Mark Sandford, unedited and copied in full, including this notice.
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