05/21 Weekly oil & gas update

Total weighs leaving South Pars 11 project amid Iran sanctions

As a result of US sanctions, Total may withdraw from the South Pars 11 project in Iran where it holds a 50.1% stake, unless it receives a project waiver. The company is currently examining waiver possibilities with the French and US authorities. US banks support over 90% of Total’s financing

Repsol will stop growing upstream production of oil and gas

The oil company announced that it will be stopping the pursuit of growth in upstream oil and gas activities—the first of its peers to do so. It plans on keeping its production level at 700-750 Kb/d and maintaining no more than eight years of reserves to production ratio

Equinor (formerly Statoil) awards Troll phase 3 topside modification contract to Aker Solutions

Aker Solutions has secured a contract to complete the engineering, procurement, construction, and installation work for the Troll A platform module. Aker Solutions is also providing its services for the subsea production system for the Troll field

France allows palm oil usage at Total’s La Mède refinery

France allowed a limited use of palm oil at Total’s new La Mède biofuel refinery. A newly granted permit specified that at least 25 percent of the feedstock used to make the biofuel should come from recycled oil, while the rest would come from crude vegetable oils, including palm oil

Trafigura purchases Pampa Energía’s downstream assets in Argentina

Trafigura has completed the purchase of the majority of Pampa Energía’s downstream assets. These assets include more than 250 service stations and the Ricardo Elicabe refinery, which is located in Bahía Blanca

Cameroon FLNG ships its first LNG cargo

Cameroon FLNG, the world’s second ever operational floating liquefied natural gas (FLNG) unit, has shipped its first cargo. The shipment was exported by Gazprom’s subsidiary, which secured the entire output of the unit for the next eight years. Developed off the Cameroonian coast by Golar LNG, Cameroon FLNG has a capacity of 1.2 mtpa

Second stage of Shah Deniz project nears completion

According to BP-Azerbaijan, the Shah Deniz 2 project is complete in terms of engineering, procurement, construction, and commissioning. The project is scheduled to start up this year by shipping Azeri gas to Turkey and from 2020 onward to southern European countries

Chinese city Shenzhen aims for complete electrification of light duty trucks by end of 2018

Shenzhen is requiring all new light-duty trucks (LDTs) to be electric starting May 1, 2018 in order to eliminate 20,000 diesel LDTs by the end of the year. To incentivize the switch, 14,000 charging stations will be installed, and electric LDTs will be allowed on all motorways in Shenzhen

United States House of Representatives approves Yucca Mountain nuclear waste site bill

The US House of Representatives approved a bill to revive operations at the Yucca Mountain nuclear waste disposal site, though opposition is expected in the Senate. Over the past 30 years, the US has amassed over 80,000 tons of spent nuclear fuel, which is in need of permanent disposal

China lowers industrial and commercial power prices by 2.7%

China cut power prices for a second consecutive month due to weaker-than-expected economic growth. The state aims to lower electricity prices by 10% before the end of the year, with the Chinese National Development and Reform Commission (NDRC) reporting a 7% reduction so far. The latest price cut is expected to save Chinese consumers USD3.4 billion

Vestas and Vattenfall collaborate on developing 353 MW of wind power in Sweden

The Danish wind turbine manufacturer and the Swedish utility will collaborate on developing 353 MW of wind power in Sweden with 84 of Vestas’s 4.2-MW turbines for a total cost of EUR350 million. The new development is expected to be commissioned before the end of 2021

Average weekly oil & gas prices

Brent (USD/bbl): 78.75 (2.19)
WTI (USD/bbl): 71.31 (0.71)
Henry Hub (USD/mmbtu): 2.84 (0.07)
TTF (USD/mmbtu): 7.59 (0.31)

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MARPOL 2020: An opportunity for OPEC to reclaim market share

New MARPOL limits on sulfur content in marine fuels could result in 1-1.8MMb/d of additional refinery runs to produce higher volumes of marine gasoil. Such additional crude demand could provide OPEC with an opportunity to reclaim market share.

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