Shawcor to Provide Pipe Coating Services for Guyana Deepwater Projects

(Shawcor Ltd. 4.Oct.2018) — Shawcor Ltd. (SCL) announced that its pipe coating division has been assigned work from Saipem valued at approximately C$110 million to provide thermal insulation and anticorrosion coating services for the Liza I and II deepwater development projects located offshore Guyana.

Coating work under the Liza I project commenced in March 2018 at Shawcor’s Channelview, Texas facility and additional work will be completed at Shawcor’s Veracruz, Mexico facility. Work on Liza 1 is expected to be completed during the first quarter of 2019. Coating work under the larger Liza II project, which is conditional on a Final Investment Decision, or “FID”, by the pipeline operator, is expected to be executed at the Veracruz and Channelview facilities.

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Citgo, Valero Drive Up U.S. Purchases of Venezuelan Oil in September

(Reuters, Marianna Parraga, 4.Oct.2018) — Venezuela’s September crude sales to the United States rose to their highest in over a year, boosted by purchases by Citgo Petroleum, the U.S. refining arm of Venezuela’s state-run PDVSA, and Valero Energy, according to Refinitiv Eikon trade flows data.

A collision in August at a dock of Venezuela’s main oil port of Jose has limited exports in large vessels to Asia, spurring loading of more medium-size tankers including those typically covering routes to the United States.

Venezuela’s overall crude exports fell 14 percent in September to 1.105 million bpd due to declining oil output and dock woes at Jose terminal. The OPEC-member country’s crude production fell for third time in a row to 1.448 million bpd in August, according to official figures.

The United States imported 601,505 barrels per day (bpd) of Venezuelan crude last month, a 28-percent increase versus August and the highest monthly average since August 2017, according to the Refinitiv Eikon data.

Valero and Citgo bought over 250,000 bpd each of Venezuelan crude last month compared with an average of 170,000 bpd earlier this year, according to the data.

A total of 38 cargoes were purchased by U.S. customers from PDVSA and its joint ventures in September. At least three of those shipments were co-loaded in different Venezuelan ports to avoid problems at Jose, where repairs are expected to take at least one more month to be completed.

PDVSA’s exports last month included more light and medium crudes, generally produced at very low levels in Venezuela and leaving less of these grades for PDVSA’s domestic refineries to produce fuels.

In September, PDVSA sold Citgo and Valero some 84,000 bpd of Santa Barbara, Mesa and Leona crudes, which are typically processed at Venezuelan refineries.

PDVSA regularly imports gasoline, diesel, liquefied petroleum gas and refining feedstock to offset low production at its refineries.

(Reporting by Marianna Parraga; Editing by Cynthia Osterman)

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AMLO Sees EOR, Pemex Farm-Outs As Key To Boosting Mexican Oil, Gas Output

(S&P Global Platts, Daniel Rodriguez, 4.Oct.2018) — Mexico’s President-elect Andres Manuel Lopez Obrador will allow Pemex to continue farming out projects to boost oil and natural gas production from mature and aging fields, according to a senior adviser to the incoming administration.

The incoming administration, in its oil production forecast for 2024, expects new secondary oil production will produce 380,000 b/d, or 15% of that year’s 2.48 million b/d expected output.

Lopez Obrador is going to be a pragmatist and will evaluate all options available for boosting oil and gas output, Abel Hibert, an economic adviser on the president-elect’s transition team, said at an event Wednesday.

“Pemex can’t do it all alone, from a financial point of view firstly and secondly from a technical know-how” perspective, Hibert said.

When asked by S&P Global Platts if a projected increase in secondary oil and gas was a clear message that Pemex farm-outs would continue under the incoming administration, Hibert responded: “Yes, definitely.”

In a meeting last week, Lopez Obrador sought the support of private operators to continue Pemex’s farm-outs to enhance recovery from mature fields, he added.

“Under Lopez Obrador’s administration, Pemex will be open to continuing farm-outs to exploit mature fields and raise output,” Hibert said.

Pemex is responsible for 80% of Mexico’s proven and probable reserves. In some cases, the company has not been able to produce oil or gas from these resources due to technical limitations or lack of funds, he added.

“The president-elect has described the decrease in oil production as an emergency, so Pemex requires all the support it can get to boost output,” Hibert said.

Pemex’s executive team under the outgoing administration of President Enrique Pena Nieto has an ambitious farm-out program in place that seeks partners for all its deepwater and most of its onshore projects.

In 2017, Pemex said it was looking to farm out as many as 74 clusters composed of 155 prospective production areas and 66 exploration areas, which would represent more than 55% of all its production and 65% of its exploration portfolio.

The company is currently tendering farm-outs for seven onshore clusters in southern Mexico. The auction will be held in February.

Due to a lack of resources, Pemex has been investing the minimum necessary to maintain operations in these areas. If the situation continues, their production will decrease to 14,100 b/d and 90 MMcf/d by 2020, data from Mexico’s National Hydrocarbon Commission show.

However, if Pemex can attract companies to come in and operate these areas, it expects to invest close to $4.65 billion over the life of the areas alongside its potential partners.

With greater resources, Pemex believes production in these areas could be raised to a combined 47,630 b/d and more-than 525 MMcf/d in the medium term.

According to CNH data, the seven clusters held a total of 191.3 million barrels of oil and 951.3 Bcf of gas of proven, probable and possible reserves in January 2017. Also, four of the seven areas have close to 450 million barrels of equivalent oil in prospective resources.

Pemex is also looking in the short term to farm out its Ayin-Batsil shallow water and Maximino-Nobilis deepwater projects. Their combined potential production peak is 280,000 b/d. The company tried unsuccessfully to auction both projects last year.

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Bolivian, German Companies Form JV Entity to Produce Lithium-ion Batteries

(Energy Analytics Institute, Ian Silverman, 4.Oct.2018) — Yacimientos del Litio Bolivianos (YLB), a Bolivian company, and ACI Systems of Germany signed a deal for the constitution of a joint venture entity between both companies.

The entity will be oriented to the industrialization and production of large-scale lithium-ion batteries using resources contained in Salar de Uyuni, the world’s longest continuous salt desert.

The entity, in the first instance, will install a Lithium Hydroxide Plant in Uyuni to produce cathodes and, later, lithium-ion batteries, in about three years, reported the daily Bolivian newspaper La Razón, citing comments from Bolivia’s Vice President Álvaro García Linera made during a speech at a special ceremony in La Paz.

YLB will hold a 51% interest in the entity, while ACI Systemes will hold the remaining 49%, according to García.

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