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The global oil and gas industry requires more than $600 billion of investment annually to keep up with the growing demand for energy even as the world transitions to cleaner forms of energy, according to the managing director and group chief executive of Adnoc.
“After almost a decade of underinvestment in our industry, the world has sleepwalked into a supply crunch. It is time to wake up,” said Dr Sultan Al Jaber, who is also Minister of Industry and Advanced Technology.
Countries cannot afford to “simply unplug” from conventional fuels amid ongoing efforts to transition the world economy away from fossil fuels, he said.
“We cannot just flip a switch,” Dr Sultan told the Abu Dhabi International Petroleum Exhibition and Conference (Adipec).
“As economies bounce back from the Covid-19 pandemic, at the fastest rate in two years, demand has outpaced supply. The oil and gas industry will have to invest over $600bn every year … until 2030 … just to keep up with expected demand,” he said.
The state oil producer plans to significantly increase its investment in hydrocarbons and will raise its output capacity to 5 million barrels per day by 2030.
Oil prices are currently trading at multiyear highs, supported by the rebound in the global economy after extended periods of lockdown due to Covid-19.
The scarcity of gas and coal supplies and rising consumption in India and China have led to a sustained rally in the prices for oil and gas. Oil prices are up about 60 per cent this year.
Brent, the international benchmark under which two thirds of the world’s crude is traded, was down 0.55 per cent to trade at $81.72 a barrel at 11.53am UAE time. West Texas Intermediate, which tracks US crude grades, was down 0.58 per cent at $80.32 a barrel.
Separately, the UAE’s Minister of Energy and Infrastructure Suhail Al Mazrouei dismissed the possibility of crude prices reaching the $100 a barrel due to the possibility of an “oil surplus” in the first quarter of 2022.
The UAE is part of a group of oil producers, commonly known as Opec+, which is bringing additional supply to the markets. The group, led by Saudi Arabia and Russia, will return 2 million bpd by the end of the year.
Dr Al Jaber backed the call for higher oil and gas output.
“At the same time, we are constantly innovating to further reduce our carbon intensity,” he said.
“We were the first company to bring carbon capture and storage to the region, and we are expanding our capacity from 800 thousand tonnes of carbon dioxide per year to 5 million,” he said.
The UAE announced plans to reach net zero emissions by 2050 before Cop26, which was held in Glasgow, Scotland. The country will also become the first Gulf Arab nation to host the Cop summit in 2023.
In line with its initiative to decarbonise, the UAE plans to invest $160bn in clean and renewable energy sources in the next three decades.
“Rewiring the energy system is a multitrillion-dollar business opportunity that is good for the climate, good for humanity and good for economic growth,” Dr Al Jaber told Adipec.
“We need solutions that are both pro-climate and pro-growth. We must invest in the energy that the world needs today while we create the energy system of tomorrow.”
The oil and gas industry should play a pivotal role in supporting this transition, with its “knowledge and skills”, he said.
In October, Adnoc said it would meet up to 100 per cent of its power requirements from solar and nuclear sources after signing an agreement with the Emirates Water and Electricity Company, in line with the UAE’s recent pledge to reach net zero by the middle of the century.
It is set to become the first oil and gas company in the world to completely decarbonise its electric grid at scale.
The supply of clean power to Adnoc will begin in January 2022. The initiative was unveiled by Sheikh Khaled bin Mohamed, a member of the Abu Dhabi Executive Council, chairman of the Abu Dhabi Executive Office and chairman of the executive committee of Adnoc’s board of directors.
The deal will also lock in a long-term renewable electricity off-take agreement for Ewec.
Source: The National
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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