Daily Digest: March 5th, 2020

SHELL, EQUINOR POOL DIGITAL EFFORTS

 Anglo-Dutch Shell and Equinor have agreed on digital collaboration within areas such as data science, artificial intelligence and 3D printing, the Norwegian company said.

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The Big Picture:

• The collaboration is expected to entail co-innovation across the whole value chain, such as maintenance, production optimisation and supply chain management, it said.

• The two companies are active in exploration in some of the more expensive parts of the world, such as deepwater Brazil. 

EXXONMOBIL ON TRACK WITH GROWTH PLANS

ExxonMobil is pushing ahead with its long-term growth plans, investing throughput the price cycle to capture future gains, its CEO Darren Woods told investors.

The Big Picture:

• "Using the strength of our balance sheet to invest through the cycle is a key element of our strategy. We are taking advantage of a favourable cost environment and investing in advantaged projects – underpinned by the long-term fundamentals of growing demand."

• Unlike some of its rivals, such as BP, Spain's Repsol and Norway's Equinor, ExxonMobil is yet to set out a clear set of targets for reducing its emissions.

OPEC AGREES FURTHER CUTS AS COVID-19 BITES (UPDATE)

Oil exporting countries' group Opec has agreed to extend the December 6 cuts in oil production until the end of the year, it said after an extraordinary meeting in Vienna.

The Big Picture:

• In its statement, Opec said the Covid-19 outbreak "has had a major adverse impact on global economic and oil demand forecasts in 2020, particularly for the first and second quarters."

• Consultancy Wood MacKenzie said that members' compliance with the cuts "probably won't be full, but even moderate adherence should be enough to stabilise the market through the second quarter.”

EQUINOR FINDS SITE FOR CO2 STORAGE

 Norway's Equinor has completed a North Sea well aimed at assessing whether a reservoir is suitable for CO2 storage, the company reported.

The Big Picture:

• The 31/5-7 Eos well was drilled south of the Troll gas field as part of the Northern Lights project involving Equinor, Shell and Total.

• Data suggests that the Cook and Johansen formations are good candidates for CO2 storage, the Norwegian Petroleum Directorate (NPD) noted separately.

•  Northern Lights' goal is to develop a full-scale carbon, capture and storage chain in Norway by 2024.

UPSTREAM GROUP WELCOMES EU CLIMATE LAW

The International Association of Oil & Gas Producers (IOGP) said March 4 that it supports the EU’s objective to reach climate neutrality by 2050, embodied in the draft European Union Climate Law.

The Big Picture:

• The regulation establishes a framework for the irreversible and gradual reduction of greenhouse gas emissions and enhancement of removals from natural or other sinks in the EU.

• It sees natural gas as a cost-effective alternative to coal and enabler of renewable energy integration, but the group's members will also invest more in other low-carbon and renewable energies and services including wind, solar, batteries and biofuels.

PREMIER BUCKS TREND WITH HIGHER PROFITS IN 2019

The UK's Premier Oil increased its after-tax profits by almost a quarter in 2019, bucking a trend that has seen the earnings of many oil and gas producers slide with lower prices.

The Big Picture:

• Revenues were up 13.4% at $1.585bn, thanks to Premium hedging some oil production.

• Production slipped 2.6% to 78,400 barrels of oil equivalent/day, as a result of declines in Indonesia, Pakistan and Vietnam. These losses were partly offset by a 15.8% growth in Premier's UK output to 54,200 boe/day, thanks to increased contributions from the Catcher area in the central North Sea.