Global energy news

• China and the State of Alaska are to deepen cooperation in areas including oil, gas, mineral resources, fisheries as well as tourism, the Chinese state news agency Xinhua reported on April 7, citing a meeting between President Xi Jinping and Alaska Gov. Bill Walker.
• Conflict between Iran and India’s state-owned oil refiners continues, as Iran plans to cut some benefits on crude purchases after India decided to reduce the amount of oil it buys from Iran. The National Iranian Oil Co. will cut the credit period on crude oil sales to 60 days from 90 days for refiners such as Mangalore Refinery & Petrochemicals and Indian Oil Corp., Bloomberg reported on April 7, citing people with knowledge of the matter. Iran will also reduce the discounts it offers on the shipping of crude to 60 percent from 80 percent, they added. India is Iran’s second-biggest customer and the emerging center of global oil demand. India, in turn, is using the supply glut to put pressure on Tehran over securing development rights to the Farzad-B gas field in the Arabian Gulf, which was discovered by an Indian consortium led by ONGC Videsh about a decade ago. Iran and India were aiming to conclude an agreement on developing the field by February.
• China’s state-owned PetroChina Co. said first-quarter earnings swung to a profit as China’s biggest oil and gas explorer benefited from higher crude prices and lower costs. Net income jumped to as much as 6 billion yuan ($870 million) from a loss of 13.8 billion yuan during the same period last year, it said in a filing to the Shanghai stock exchange on April 7, citing Chinese accounting standards. Last year’s result was the first time the country posted a quarterly loss since it was listed in 2000.
• Indonesia’s state-owned oil company Pertamina has started the procedure to pick an overseas refinery to process its Basrah crude, according to Daniel Purba, senior vice president in the integrated supply chain department. The new partner will process 7 million barrels of Iraqi oil in the second half of this year and the company expects to complete the deal in May to start loading in July, Purba told reporters in Jakarta on April 7. The company plans to import 4.5 percent more crude this year from 134 million barrels in 2016, Purba said. It also plans to import 36 million barrels of 92-RON gasoline vs. 25 million barrels a year ago, he said.
• India expects to complete integration of state-owned oil and gas companies in the 2018 fiscal year, and to create multiple entities via the integration, Dharmendra Pradhan, the country’s oil minister, said in New Delhi on April 6. India is also in talks with global oil companies to partner on a new refinery on its west coast. Talks are reportedly ongoing with Saudi Aramco and the UAE’s state-owned company ADNOC to invest in Indian projects.
• The Chinese independent refineries, known as “teapot” refiners, who are responsible for the surge in the country’s oil imports, saw a decline in crude use last week. The operating rate at independent refineries was down to 60.86 percent in the week ending April 7, according to data provided by industry researcher Sci99. The rate fell from a record of 61.13 percent of capacity the previous week. The refiners’ run rates reached a record high of 68.13 percent on Dec. 9.
North America
• Oil companies are expanding in the Permian Basin straddling West Texas and New Mexico, with drilling activity rising to the highest level in more than two years. The total number of rigs targeting energy resources in the nation’s biggest field rose by 12 to 331 this week, according to Baker Hughes Inc. Nationwide, the total oil and gas rig count climbed by 15 to 839, the highest since September 2015.
• US crude stocks unexpectedly rose to a fresh record high, while gasoline and distillate inventories fell less than expected, the Energy Information Administration (EIA) said on April 5. Crude inventories rose 1.6 million barrels in the week ending March 31, compared with expectations for a decrease of 435,000 barrels. Stocks, which have been steadily building to record highs this year, once again were at a peak, reaching 535.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub for WTI, rose by 1.4 million barrels to a record at 69.1 million barrels. US Gulf Coast inventories also jumped, by 2.7 million barrels, to a peak of 280.9 million barrels, the EIA said.
• China became the biggest buyer of US crude oil in February, surpassing Canada, at a time when OPEC is cutting back output. China imported 8.08 million barrels of US light crude, nearly quadrupling its January purchases, according to data released by the US Census Bureau on April 4. That helped boost US exports to a record 31.2 million barrels during the month. Canada, the US’s largest trade partner, imported 6.84 million, down 20 percent from a month earlier, the data showed.

Source: Arab News