Energy top stories to 27/7/22. OPEC daily basket price stood at $109.35/bl, 26 July 2022
Renewable energy company Drax Group is expanding its operations into Japan as part of its ambitions to increase sustainable biomass sales to support energy security and decarbonisation in Asia.As a supplier of sustainable biomass pellets to customers in Asia and Europe, and with more than a decade of experience in converting the UK’s biggest coal-fired power station to use sustainable biomass, Drax is uniquely placed to support Japan as it further decarbonises its economy and energy system. Read More
Drax Half year results for the six months ended 30 June 2022
Adjusted EBITDA £225 million up 21% (H1 2021: £186 million)
Strong liquidity and balance sheet – £539 million of cash and committed facilities at 30 June 2022
Expect to be significantly below 2 times Net Debt to Adjusted EBITDA by the end of 2022
Sustainable and growing dividend – expected full year dividend up 11.7% to 21.0 p/share (2021: 18.8 p/share)
Interim dividend of 8.4 p/share (H1 2021: 7.5 p/share) – 40% of full year expectation. Total operating profit from continuing operations of £207 million (H1 2021: £84 million), including £130 million mark-to-market gain on derivative contracts and £27 million of exceptional costs
Total profit after tax from continuing operations of £148 million includes an £8 million non-cash charge from revaluing deferred tax balances following confirmation of UK corporation tax rate increases from 2023 (H1 2021: £6 million loss including a £48 million non-cash charge from revaluing deferred tax balances) Read More–>
On May 24, the 220kV Chunan Line and Chuwan Line were successfully connected and The 100MW/400MWh Redox Flow Battery Storage Demonstration Project was successfully connected to the Dalian grid. This marks that the demonstration project is officially online and connected after 6 years of planning, construction, and commissioning. The project is located in Shahekou District, Dalian City, Liaoning Province, with a total capacity of 200MW/800MWh and a total investment of about 3.8 billion yuan. The capacity of the first-phase project is 100 MW/400MWh, and it costs about 1.9 billion yuan (4.75 yuan/Wh). The battery system is provided by Dalian Rongke Energy Storage Technology Development Co., Ltd., and the project is constructed and operated by Dalian Constant Current Energy Storage Power Station Co., Ltd, the technology used is developed by Dalian Institute of Chemical Physics, Chinese Academy of Sciences. Read More
Glencore plc announces the appointment of Liz Hewitt as an Independent Non-Executive Director of the Company with immediate effect.
Liz Hewitt has over 30 years’ business experience in executive and non-executive positions. She began her career as a qualified chartered accountant with Arthur Andersen & Co. She held various executive positions in private equity companies including 3i Group plc, Gartmore Investment Management Limited and Citicorp Venture Capital Ltd. At 3i Group plc, she was a private equity investor and then director of corporate affairs. She also worked for Smith & Nephew plc as group director of corporate affairs.
Liz Hewitt is currently a non-executive director of National Grid plc (LON: NG). She was previously non-executive director of Melrose Industries plc (2013 – 2022), Novo Nordisk (2012 – 2021), Savills plc (2014 – 2019) and Synergy Health plc (2011 – 2014). Read More
Deltic Energy PLC on Tuesday said it has made a positive well investment decision to drill the Selene gas prospect in the UK North Sea with Shell UK Ltd, part of Shell PLC.
Shares in Deltic were up 3.9% to 2.91 pence each in London on Tuesday around midday, meanwhile Shell shares were up 1.7% to 2,103.50p each.
Deltic, a London-based natural resources investing company, said Shell UK is its joint venture partner on Licence P2347, with Deltic owning a 50% interest in the well.
Together, they have made the decision to drill the high impact Selene gas prospect, situated in the UK southern North Sea off the north east coast of England.
Deltic said that the timing of the drilling is not yet confirmed, but it is currently designing and planning the drilling operation.
It estimates Selene to contain 318 billion cubic feet of prospective gas resources with a geological chance of success of 70%. Read More
UAE economy is set to grow at its fastest pace in years on the back of higher oil production and commitment to expand its manufacturing sector, according to the central bank. The country’s overall real gross domestic product (GDP) rose by 8.2 percent year-on-year during the first quarter of 2022, driven by a sharp rise in oil production and improvement in non-oil GDP, the banking authority said in its latest Quarterly Economic Review.
The economy is on track to post a 5.4 percent growth in 2022, the highest since 2019, and 4.2 percent in 2023. This year’s forecast is higher than the projections issued by the International Monetary Fund (IMF) last April. More
Solarstone, a green tech startup from Estonia, has just secured €10 million in a fresh funding boost. The startup is developing solar solutions that can help generate a shift in energy generation and usage.
As Europeans increasingly turn to renewable and greener energy sources, harnessing the power of the sun is one sustainable way to fuel the continent. Whilst many people and businesses are adding solar panels to existing builds, Solarstone wants to encourage the use of solar from the very beginning. The Estonian startup has developed building-integrated solar solutions and wants to become the standard in residential and infrastructure construction.
To fuel the mission, Solarstone has announced the raise of €10 million in a round led by Biofuel OÜ – the asset management company focusing on environmentally friendly wood refining, and sustainable forest management, with a clear focus on sustainable energy management and production. Read More
Ofgem statement on the Business, Energy and Industrial Strategy Committee’s report on energy pricing.
Responding to the Business, Energy and Industrial Strategy Committee’s report, an Ofgem spokesperson said:
“We welcome the Committee’s scrutiny of energy market regulation following the once-in-a-generation global energy price shock.
“While the unprecedented rise in global gas prices would have resulted in market exits under almost any regulatory system, we have been clear and transparent about the fact that suppliers and Ofgem’s previous financial resilience regime were not robust enough. This contributed to some of the supplier failures since August 2021.
“No regulator can, or should, guarantee companies will not fail in a competitive market but we are working hard to reform the entire market, as well as closely scrutinising and holding individual energy suppliers to account, to further strengthen the regulatory regime. We’re pleased the committee has recognised the major scale and reach of these reforms which are already driving positive change across the market on behalf of customers.
“We commit to working closely with the committee, government and industry to make sure the balance of trade-offs across the board are carefully considered so that customers are prioritised throughout the current crisis and they have access to the government support they’re entitled to. We are also working with all parts of government and industry on the long-term solution to the energy crisis by moving us away from imports of expensive gas towards a more secure, reliable, home-grown energy system.” Read More
Ofgem has told a number of energy suppliers to take immediate and urgent action, after a review found a range of weaknesses or failings in the way they charge customers direct debits.
Out of a total of 17 large suppliers in the market, the majority were found to only have minor issues, but five were found to have ‘moderate or severe’ weaknesses with Ofgem demanding immediate action.
This is an initial snapshot of findings and suppliers affected will now have to submit action plans within two weeks to set out how they will take the required actions, which Ofgem will scrutinise for effectiveness and comprehensiveness.
Although we have not found evidence of unjustifiably high direct debits, as an additional reassurance for consumers, the regulator will require all suppliers that increased their customers’ direct debits by more than 100% (impacting over 500,000 customers) to review them.
Where appropriate, Ofgem also expects suppliers to adjust any miscalculations, including making repayments if needed, and consider whether a goodwill payment is warranted.
The review of domestic energy suppliers found that:
Over 7 million energy consumers on a Standard Variable Tariff (SVT) saw an increase in their direct debit between February and April 2022
On average, direct debit levels for customers on an SVT increased by 62% in this period. Most of this reflects the increased cost of gas*
8% of SVT customers seeing an increase (around 500,000 households) experienced an increase of more than 100% and Ofgem is concerned by this and wants to ensure there is good reason for it (e.g., coming off an SVT, increase in energy use etc)
Evidence that some suppliers’ processes are not as robust as they could be, and that this could lead to inconsistent, incorrect or poor treatment for customers
A lack of formally documented policies and processes within some suppliers, which risks inconsistent and poor consumer outcomes. Read More
| Oil and Gas Blends | Units | Oil Price $ | change |
| Crude Oil (WTI) | USD/bbl | $95.93 | Down |
| Crude Oil (Brent) | USD/bbl | $105.20 | Down |
| Bonny Light | USD/bbl | $118.10 | Up |
| Saharan Blend | USD/bbl | $117.77 | — |
| Natural Gas | USD/MMBtu | $8.95 | Up |
| OPEC basket 26/07/22 | USD/bbl | $109.35 | Up |
Energy ministers from EU countries have reached a deal on an unprecedented energy plan that will introduce a voluntary 15% reduction in gas consumption across the bloc from now until next spring.
The reduction could become mandatory in case of extreme gas shortages, although many countries would be automatically spared from making painful sacrifices under a long list of agreed-upon exemptions.
The draft plan was unveiled last week by the European Commission in response to Russia’s continued manipulation of gas flows in retaliation for the Western sanctions imposed over the invasion of Ukraine. Dwindling supplies of Russian gas are raising fears of an imminent recession and a winter crisis.
The Czech Republic, which holds the rotating EU Council’s presidency, announced the breakthrough on Tuesday, at exactly 12:00 PM CET, in the midst of a ministerial meeting in Brussels. Read More
Neste, the world’s leading producer of renewable diesel and sustainable aviation fuel produced from waste and residue raw materials, has agreed to acquire 100% of Walco Foods, an Irish trader of animal fats. The transaction is subject to the fulfillment of customary closing conditions and regulatory approval.
“This is another important step for Neste in the execution of our growth strategy. With this acquisition we continue to build a global waste and residue raw material platform and add trading capabilities in Ireland,” says Matti Lehmus, President and CEO of Neste.
Together with the previously announced acquisitions of IH Demeter, Bunge Loders Croklaan and Count Terminal in the Netherlands, and Mahoney Environmental and Agri Trading in the United States, Walco Foods will enhance Neste’s supply of global waste and residue raw materials.
Walco Foods was established in 1996 as a family-run business. The in-depth knowledge and market understanding developed over the years has helped Walco Foods become a leading animal fat and by-products trading company in Ireland. Read More
Hess Corporation (NYSE: HES) today announced two new discoveries at the Seabob-1 and Kiru-Kiru-1 wells on the Stabroek Block offshore Guyana. The discoveries, which are the sixth and seventh this year, will add to the block’s previously announced gross discovered recoverable resource estimate of approximately 11 billion barrels of oil equivalent.
The Seabob-1 well encountered approximately 131 feet (40 meters) of high quality oil bearing sandstone reservoirs. The well was drilled in 4,660 feet (1,421 meters) of water by the Stena Carron and is located approximately 12 miles (19 kilometers) southeast of the Yellowtail Field.
The Kiru-Kiru-1 well encountered approximately 98 feet (30 meters) of high quality hydrocarbon bearing sandstone reservoirs. The well was drilled in 5,760 feet (1,756 meters) of water by the Stena DrillMAX and is located approximately 3 miles (5 kilometers) southeast of the Cataback-1 discovery. Drilling operations at Kiru-Kiru are ongoing.
“We are excited to announce two more discoveries on the Stabroek Block, bringing our total this year to seven,” CEO John Hess said. “These discoveries will add to the discovered recoverable resource estimate for the block of approximately 11 billion barrels of oil equivalent, and we continue to see multibillion barrels of future exploration potential remaining.”
Hess and its co-venture partners currently have four sanctioned developments on the Stabroek Block. Read More
U.S. Rig Count is up 2 from last week to 758 with oil rigs unchanged at 599, gas rigs up 2 to 155 and miscellaneous rigs unchanged at 4. Canada Rig Count is up 4 from last week to 195, with oil rigs down 1 to 124, gas rigs up 5 to 71.
| Region | Period | Rig Count | Change from Prior |
| U.S.A | 22 July 2022 | 758 | +2 |
| Canada | 22 July 2022 | 195 | +4 |
| International | June 2022 | 824 | +7 |
OilandGasPress Energy Newsbites and Analysis Roundup |Compiled by: OGP Staff, Segun Cole @oilandgaspress.
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