Following much media speculation regarding revised (increased) oil production quotas, the 4th OPEC and non-OPEC Ministerial Meeting in Vienna on 23 June 2018 ended with a formal summary and somewhat open-ended official statement which analysts said would, in reality, only lead to increase of around 700,000 barrels per day.
Bloomberg reported that Saudi Aramco ‘is aiming to boost production in July 2018 to about 10.8 million barrels a day which would surpass the previous high of 10.72 million barrels per day (mbpd) in November 2016. Prices rose as US stockpiles fell and exports from Iran and Libya were regarded as ‘at risk’.
OPEC referred to ‘the DOC (Declaration of Cooperation) reached in December 2016’, noting that countries participating in the DOC had exceeded required production cuts (reaching 147% compliance by May 2018). It added: ‘Accordingly, the 4th OPEC and non-OPEC Ministerial Meeting hereby decided that countries will strive to adhere to the overall conformity level, voluntarily adjusted to 100%, as of 1 July 2018 for the remaining duration of the DOC and for the JMMC to monitor the overall conformity level and report back to the OPEC and non-OPEC Ministerial Meeting.’ Oil prices rose following the decision. OPEC’s next meeting is scheduled for 4 December 2018.
UK petrochemical firm Ineos has lost its legal challenge against the Scottish government’s ‘effective ban’ on fracking. Ineos (which owns the Grangemouth refinery) and petrochemical firm Reach launched a legal challenge seeking a judicial review after Energy Minister Paul Wheelhouse announced what he described as an ‘effective ban’ on fracking in October 2017.
A strategic environmental assessment and a business impact assessment are still ongoing. The current moratorium means no local authority can grant planning permission for fracking operations and ministers would defer decision on any planning application presented before the policymaking process is completed.
Oil and gas exploration continues in the Eastern Mediterranean, with Turkey also announcing its intention to drill offshore Cyprus. ExxonMobil and Qatar Petroleum (QP) acquired an exploration concession for block 10 in Cyprus’ EEZ as part of the third licensing round in 2017 and are planning to drill in Q4 2018.
According to industry reports, Exxon Mobil Corp is pushing deeper into energy trading. It previously limited those activities over concerns it would be accused of market manipulation. Exxon reportedly expects to add 1 mbpd of output over the next several years as new oilfields and refinery expansions kick in, providing more assets to trade.
Iran intends to halt gasoline imports from September 2018, in a bid to achieve self-sufficiency. Gasoline production rose by 15 million litres per day in 2017 and it planned an extra 12 million litres per day by the end of March 2018.
New pipelines could be laid to transport Russian gas through North Korea to the South and on to Japan according to South Korean leader, Moon Jae-in. Russia and South Korea agreed to the pipelines in 2008 but the project failed to take off due to tensions over the North’s nuclear weapons programme. Seoul needs to import the majority of its oil and gas. Despite their geographical proximity, Russia is only its sixth largest supplier – providing just 5.5% of total needs.