Energy News Digest, Oil and Gas, 12th Jan. 2022. OPEC daily basket price stood at $84.72/b Thursday, 13 January 2022

EIA forecasts crude oil prices will decline through 2023

Global oil consumption outpaced oil production for the six consecutive quarters ending with the fourth quarter of 2021 (4Q21), which has led to persistent withdrawals from global oil inventories and significant increases in crude oil prices. Crude oil production remained restrained as a result of curtailments by OPEC+ members, investment restraint from U.S. oil producers, and other supply disruptions.

Global growth is expected to decelerate from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023, reflecting continued COVID-19 flare-ups, diminished fiscal support, and lingering supply bottlenecks.
• A number of headwinds weigh on the recovery in emerging market and developing economies (EMDEs) vis-à-vis advanced economies, including lower vaccination rates, tighter fiscal and monetary policies, and more persistent scarring from the pandemic.
• Consequently, while output and investment in advanced economies are projected to return to pre-pandemic trends next year, they will remain markedly below in EMDEs.

• The global outlook faces significant downside risks, including further Omicron-driven economic disruptions, additional supply bottlenecks, a de-anchoring of inflation expectations, and financial stress.
• Given limited policy space in EMDEs to support activity if needed, these downside risks increase the possibility of a hard landing Read More

The Azerbaijani Ministry of Energy and ACWA Power held a groundbreaking ceremony for the 240 MW wind power plant with an investment value of SAR 1.125 billion (US$300 million), following the signing of power purchase, investment and transfer agreements according to an independent power generation project model. The ceremony was attended by His Excellency President Ilham Aliyev, President of the Republic of Azerbaijan, His Royal Highness Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, Minister of Energy of Saudi Arabia, His Excellency Mr. Parviz Shahbazov, Minister of Energy of the Republic of Azerbaijan, Mr. Balababa Rzayev, President of “Azerishiq OJSC” and Mr. Mohammad Abunayyan, Chairman of ACWA Power, along with senior executives.

The project represents the first and largest foreign investment made in Azerbaijan’s renewable energy sector to date and contributes to the country’s target to generate 30 percent of its energy through renewables. By Q4 2023, the project will contribute an estimated 3.7 percent of energy to Azerbaijan’s total national grid capacity, powering 300,000 households while offsetting 400,000 tonnes of emissions. Read More

Sustainable Omega-3 producer AlgaeCytes (comprising of UK based AlgaeCytes Ltd and its wholly owned subsidiary AlgaeCytes Germany GmbH) has today announced a €5m funding round with German private equity provider, IBG Risikokapitalfonds III GmbH & Co. KG (IBG), alongside an €11m commitment from the German Federal Ministry for Economic Affairs and Energy’s GRW investment programme.

IBG’s funding reflects their single largest investment in a growth project within the German province of Saxony-Anhalt.

The agreed funding will be used by AlgaeCytes Germany to build, in Dessau, Saxony-Anhalt, one of Europe’s largest bioreactors facility; producing vegan, non GMO, and plant based Omega 3 Eicosapentaenoic Acid (EPA) oils for the food and biopharmaceutical markets.

This €60m project has secured the rights to a 100,000 square meter property, currently owned and managed by the city of Dessau, which is expected to be operational in early 2023.

Zybra Capital is providing project management support to AlgaeCytes Germany. AlgaeCytes Limited has to date been funded by venture capital specialists, Deepbridge Capital, via the UK’s Enterprise Investment Scheme, and Kent County Council. Read More

Thierry Pflimlin is appointed new President Marketing & Services, member of the Executive Committee of TotalEnergies Read More

Aker Solutions has appointed Kari Ertresvåg as senior vice president for communications. The company is growing rapidly within low-carbon solutions for oil and gas production and renewable energy. Ertresvåg brings with her extensive experience and will be central in communicating the business opportunities in the energy transformation to stakeholders globally. Read More

Commodity PricesUnitsPrice $change
Crude Oil (WTI)USD/bbl$83.22Up
Crude Oil (Brent)USD/bbl$85.69Up
Bonny LightUSD/bbl$85.59Up
Natural GasUSD/MMBtu$4.18Down
OPEC basket 13/01/22USD/bbl$84.72Up
At press time 14th January 2022

The price effects of the economic slowdown following the COVID-19 pandemic contributed to reductions in U.S. petroleum and natural gas reserves in 2020. Proved reserves of crude oil and lease condensate decreased by 9 billion barrels in 2020, a decline of 19%, and proved reserves of natural gas decreased by just over 22 trillion cubic feet (Tcf), a decline of 4% Read More

During 2021, the Brent price reached its highest monthly average, $84/b, in October and then fell to an average of $74/b in December. The price decline largely reflected concerns about how the Omicron variant and potential mitigation efforts may affect near-term oil demand. However, crude oil prices ended December at $77/b as concerns eased that Omicron would lead to significant declines in oil consumption. In addition, 0.3 million barrels per day (b/d) of crude oil production went offline in Libya, contributing to the increasing oil price.

We expect the Brent crude oil spot price will average $75/b in 2022. We forecast the Brent price will remain near current levels in 1Q22, averaging $79/b for the quarter. Oil markets are essentially balanced in 1Q22 in our forecast, and inventories decline slightly. Read More

The price effects of the economic slowdown following the COVID-19 pandemic contributed to reductions in U.S. petroleum and natural gas reserves in 2020. Proved reserves of crude oil and lease condensate decreased by 9 billion barrels in 2020, a decline of 19%, and proved reserves of natural gas decreased by just over 22 trillion cubic feet (Tcf), a decline of 4% Read More

RegionPeriodNo. of RigsChange from Prior Count
U.S.A7th January 2022588+2
Canada7th January 2022141+51
InternationalDecember 2021834+17
Baker Hughes Rig Counts

The latest IEA’s Monthly Electricity Statistics report including October 2021 data shows that for Total OECD:
Total net electricity production was 855.2 TWh in October 2021, down by 0.9% compared to September 2021 and up by 1.6% compared to October 2020. From January to October 2021, total net electricity power production was 8891.7 TWh, up by 3.1% compared to the same period in 2020. Total renewable electricity production was 268.4 TWh in October 2021, up by 8.6% compared to September 2021 and up by 1.8% compared to October 2020. The share of total renewable electricity in the electricity mix was 31.4% in October 2021. The increase in renewable production was driven by higher wind power output, at 90.6 TWh in October 2021, 39.5% higher than in September 2021 and 6.5% higher than in October 2020.
Combustible fuel power production was 463.6 TWh, 5.2% lower than in September 2021 and 1.0% higher than in October 2020. Coal power production was mainly responsible for that decrease compared to September 2021, with an output of 163.4 TWh in October 2021, down by 10.3% compared to September 2021. Read More

OilandGasPress Energy Newsbites and Analysis Roundup |Compiled by: OGP Staff, Segun Cole @oilandgaspress.

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