Energy Club

Northern Territory

News

  • 26 Mar 2020 4:19 PM | Sonia Harvey (Administrator)

    COVID-19 is already damaging our economy and now more than ever it is crucial to support local industry. We can start by promoting available business opportunities.

    Energy Club NT is working with ICN NT and the Northern Territory Government to support business to business growth, promote local opportunities and the further localisation of supply chains during the COVID-19 crisis.

    Through ICN’s online Gateway platform, a portal has been established to connect local Territory businesses to opportunities of all sizes.

    We encourage our members to submit any business opportunities or problem statements to ICN for promotion to the local business community. We further encourage our members to express interest against the ‘Any opportunities’ package of work, to be notified of opportunities and also to promote these opportunities to the broader business community.

    To list an opportunity on the portal businesses will need to:

    • Download and complete the ‘Opportunity Listing Template’ available in the Project Documents on the page
    • Email the completed form to ntopportunities@icnnt.org.au

    Once assessed, your opportunity will be listed on the page and open for expressions of interest and/or direct business contact.

    ICN NT is running this initiative free of charge to support local businesses during these challenging times.

    Visit the Northern Territory Opportunites portal here:  ntopportunities.icn.org.au

    "We are here to support our wide demographic of energy industry members and the local business community wherever we can. Please don't hesitate to reach out if there is anything I can do to assist you and your organisation."

    Sonia Harvey

    CEO - Energy Club NT

    Media Contact: Kevin Peters  |  ICN NT  |  08 8922 9422


  • 26 Mar 2020 10:15 AM | Sonia Harvey (Administrator)

    The Northern Territory’s resource sector

    As part of measures for controlling the transmission of COVID-19, the Northern Territory Government has implemented border controls,  effective from 4pm on Tuesday 24 March 2020.

    These controls, applied to all access points by road, rail, air and sea, apply to all people entering and leaving the Northern Territory (NT), including employers and employees operating across the NT’s resource sectors. These controls seek to protect the health of Territorians in reducing the spread of COVID-19.

    What you need to know:

    • Resource industry operations in the NT are considered ‘critical industries’.
      Specialists critical to maintenance of competitive operations of critical industries are considered ‘essential travellers’ and fall into exemption categories if they:
      • are essential to operations
      • must undertake time-critical work
      • must be physically present, and
      • cannot be temporarily replaced with workers sourced from within the NT.
        .
    • Cross-border transit to work sites:
      • Interstate employees and contractors will be assessed at border control points and should carry photo identification such as a drivers’ licence.
      • Employers should provide transiting employees an authorisation letter stating their name, working dates, transit path and work location to show to border control staff.
      • Workers who live in the NT and work interstate must satisfy the requirements of their destination jurisdiction.
        .
    • Transport and freight:
      • Non-residential transport and freight services are exempt from the border control arrangements and will continue to come in and out of the NT. This will not impact the delivery of essential goods and services.
        .
    • Application for continued operations:
      Resource companies should submit an application for exemption to self-quarantine to the NT Chief Health Officer for merit assessment on the grounds that this class of persons, is governed by a COVID-19 management plan, imposed by the employer of the person or class of persons, to prevent the transmission of COVID-19 to the public. Applications should include: 
      • company transmission prevention control measures in accordance with NT Department of Health advice and the Minerals Council of Australia/Australian Petroleum Production & Exploration Association Resources Sector National COVID-19 Response Protocols
      • evidence of strategies to reduce staff movement to essential staff only
      • evidence of measures to support isolation and contact tracing in the event it is necessary.

    Applications for exemption should be submitted to doh.pcc@nt.gov.au which are being reviewed with priority.


    Alister Trier
    Chief Executive


  • 26 Mar 2020 10:08 AM | Sonia Harvey (Administrator)

    THIS week S&P Global Ratings said Santos has a “solid buffer” to withstand the low oil price thanks to its good work building the balance sheet these past three years while it also put Woodside Petroleum on a watchlist for a possible ratings downgrade.

    Santos closed higher than its peers yesterday on the ASX, seeing a 20% rise in its share price compared to an overall energy sector rise of around 5%, helped along by S&P's afternoon release. 

    "The company's recently announced measures to preserve cash should support the key ratio of funds from operations (FFO) to debt at between 20% and 25%" by the year's end," S&P said. 

    That forecast takes in its price assumptions of $30/bbl oil for the rest of 2020, $50/bbl oil next year and $55/bbl oil in 2022. 

    After the 2015-2016 price slump that sent the oiler into the red it "emerged with a more resilient business model," it said. 

    "We believe Santos' production portfolio will outperform peers in a lower oil price environment, given that about 30% of Santos' production is domestic gas linked to the consumer price index."  

    In addition, about 15% of the company's oil-linked liquefied natural gas portfolio will benefit from hedging at oil prices of below US$54/bbl over the next nine months." 

    It helps that the company's LNG through 2020 is 95% contracted largely to South Korea and Malaysia. 

    S&P also likes that the Adelaide company will reduce free-cash flow breakeven price to $25/bbl this year, part of a suite of moves announced by Santos Monday to survive low oil demand and even lower prices. It also committed to reducing capex by 38% this year. 

    "In addition, some LNG price structures provide relief against a significant oil price drop, given the existence of LNG 'S' price curves, whereby oil price-linkage flattens at currently depressed prices," S&P said. 

    While many contracts are up for price reviews the "scope for change is limited by contract terms," Santos chief Kevin Gallagher said some months ago. 

    Santos also committed to delaying sanction for development of its Barossa gas field, which S&P sees as prudent. 

    "We believe growth projects sanctioned in the current environment would indicate a heightened risk appetite, and would likely be negative for the company's credit profile," it said.  

    Meanwhile this week it placed Woodside Petroleum on CreditWatch Negative suggesting "under our current oil price assumptions, including US$30 per barrel oil in 2020, we forecast that forecast funds from operation to debt could materially breach 30% in 2020 and thereafter, should the Scarborough-Pluto integrated project proceed. 

    "We may lower the rating by at least one notch if Woodside is unwilling to take effective and timely actions to preserve its financial profile amid the significantly depressed oil and LNG markets and funding requirements associated with the Scarborough-Pluto LNG project."

    Source: Energy News Bulletin

    Read more here

  • 26 Mar 2020 9:54 AM | Sonia Harvey (Administrator)

    CENTRAL Petroleum has been racing to reach a final investment decision for its Range project in the Queensland Surat Basin, but with the market suddenly sidelined by the outbreak of COVID-19 and the global and domestic economy struggling to stay afloat, has had to shelve its project for the time being.

    Business growth has been the company's priority for the last year and has seen it accumulate a portfolio or operating assets and exploration tenements. 

    However, the company told the share market today while there was no direct material impact to its current production from a low oil price and volatile market, it expected logistical challenges to hinder its growth projects. 

    Central and its 50% joint venture partner, fertiliser manufacturer Incitec Pivot, had been targeting an FID for the Range coal seam gas project in Queensland for early 2021. Incitec had been progressing Range as a way to shore up much-needed domestic supply. 

    Pre-FID activities and planning for a three-well appraisal pilot project were well under way. But now, due to a crashing market the venture has abruptly stopped work. Neither partner has a time frame for when work may recommence. 

    Incitec told shareholders it "remained committed" to the domestic gas project, which has a 2C contingent gas resource of about 130 petajoules, and hoped to restart activities "as soon as possible." 

    Central insisted it too was committed to the project and would accelerate operations "as soon as business conditions permit." 

    The company had a cash balance at the end of February of $27.2 million and has no major exposure to the low oil price as about 90% of its production is gas, not oil. 

    It also recently extended its debt facilities to September 2021 and only has a $5 million repayment due in the next 12 months, positioning the company in a relatively stable position. 

    Other exploration and development projects, including Central's Northern Territory Amadeus Basin project has been put aside as they are "no longer feasible given the logistical constraints" imposed by travel and infrastructure restrictions imposed by the Territory government to isolate vulnerable remote communities from the virus. 

    The company said it would revise its exploration schedule after market conditions stabilised. Again, there is no time frame on when this could occur. 

    Source: Energy News Bulletin

    Read more here

  • 26 Mar 2020 9:48 AM | Sonia Harvey (Administrator)

    INPEX is just the latest major oiler to flag deep cuts to its operations and capital expenditure, today announcing at its annual general meeting it was reviewing investment and seeking cost saving measures.

    Inpex today confirmed to shareholders it was considering its options and is looking to make cuts following a growing trend of other international oil and gas producers. No specific details were given however. 

    Over the last fortnight, as the oil price plunged below $30 a barrel and fears of a global recession ramped up, international oil and gas companies have taken the axe to capital expenditure and operational expenditure budgets. 

    Shell plans to lop US$9 billion from its spending plans as it seeks to weather out the collapse in oil prices, cutting operating costs by $3 billion and capex by $5 billion. 

    Shell has also suspended its buy-back share program, saying its "decisive action" would protect cash flow and guarantee dividends. 

    French oil producer Total said it would slash operating costs by $500 million and suspend its $2 billion buyback program having already repurchased about $550 million of shares.  

    BP has said it is "making interventions" and has flexibility to cut its spending by 20%. BP is yet to make any specific spending figure for 2020 public. 

    Equinor said just this week it would follow suit reducing capex by US$3 billion to ride out the oil price and COVID-19 pandemic. It had already suspended a $5 billion share buyback program. 

    Equinor is postponing all its US shale drilling and expects to be cash flow neutral at an average oil price of $25/bbl.

    Overnight Eni, joined its fellow European-based multinationals, revising its planned activities and reducing its capex by around US$3 billion. This equates to 35% of its planned capex. 

    Chevron has also made big cuts this week in the face of oil price woes too, outlining measures which include cutting capex by US$4 billion, or 20% and also suspending its annual share repurchase program. 

    Chevron's biggest cut will target upstream unconventionals, primarily in the US Permian Basin, where the company will slash more than $2 billion in spending. 

    A further $1.2 billion will be hacked from upstream projects and exploration both across its US assets and internationally. 

    Around $800 million will be shaved from its downstream and chemicals business. 

    ConocoPhillips has committed to US$2.2 billion worth of spending cuts. 

    The Houston-based oil business released a statement last week saying it would reduce its forecast operational capex by $700 million, or 10% and cancelling $500 million worth of planned 2020 share repurchases. 

    On a combined basis, the capital and share repurchase cuts represent a reduction in 2020 cash uses of $2.2 billion, according to the company. 

    "Our industry is clearly experiencing an unprecedented event brought about by simultaneous supply and demand shocks," ConocoPhillips CEO Ryan Lance said. 

    Source: Energy News Bulletin

    Read more here


  • 24 Mar 2020 1:14 PM | Sonia Harvey (Administrator)

    Protecting our health is imperative and should be everyone's priority... Maintaining livelihood for business is next. Stay safe everyone and support each other through trying times!

    UPDATE: Factsheets now available to assist industry

    Fact sheets are now available from the Northern Territory government in regard to how industry might apply for exemptions to support their operations and workforce requirements.

    Northern Territory border restrictions 

    The Chief Health Officer has granted further directions under the Public and Environmental Health Act 2011 which allow Police to exercise their ability to control the entry of persons into the Territory to minimise the risk of spreading coronavirus and keep Territorians safe.

    The NT has secured its borders by introducing a two-week quarantine period for anyone arriving in the Territory, with an exception for those providing goods and essential services during the coronavirus pandemic.

    This will not affect lawful trade or commerce, essential activities will not be impacted, and we will continue the supply chain.

    From 4:00 pm Tuesday 24 March, all non-essential travellers arriving at the Territory borders will be required to go through a police control checkpoint to verify their medical status and purpose of their travel into the Territory.

    They will also be required to self-isolate for 14 days upon arrival, with penalties for those who do not comply.

    All arrivals including Territory residents will be screened and, if deemed a non-essential visitor, would be told to quarantine themselves. Territory Police and the Public Health Unit will ensure compliance and help people access support where needed.

    This includes directing people to self-isolate for 14-days once they arrive. 

    Complete up to date information: https://coronavirus.nt.gov.au/ 


  • 24 Mar 2020 9:58 AM | Sonia Harvey (Administrator)

    Source: NT News

    THE NT’s borders will close at 4pm today, Tuesday March 24, meaning everyone who arrives in the Territory must be quarantined for 14 days to prevent the spread of coronavirus, unless for special exemptions.

    Q1: What if I see someone out who I know is supposed to be self-isolating after just arriving from interstate? What should I do?

    Call the NT Public Health hotline on 1800 008 002 and report them.

    Q2. What if someone gets caught failing to follow the self-isolation rules? What will happen to them?

    The self-isolation rules are enforceable by law, and a fine of up to $62,800 applies.

    Q3. Further to Q2, what will happen to someone caught failing to self-isolate who then turns out to be coronavirus positive? Will extra action be taken against them?

    As above, you can be fined $62,800. There are no specific actions for people who turn out to have the virus at this stage.

    Q4: I’m a FIFO worker working in the Territory but who lives interstate? Do I have to self-isolate for 14 days every time I return to my job in the Territory after I go home from my swing?

    The NT Government held industry meetings on Monday to consult on implementation and exemptions. There will be an exemption that FIFOs can apply for. Those who get exemptions will still be required to follow certain protocols, i.e. social distancing. More information and the application process will be published today.

    Q5: I’m a Territorian and have a home here. But I mainly work interstate because that’s where my job takes me. How will these changes affect me?

    It depends on what your job is. Unless you fall into one of the categories described in question 12, you will have to self-isolate each time you return home to the Territory.

    Q6: I live in the Territory but travel interstate regularly for medical treatment. How will these changes affect me?

    You can apply for an exemption to the self-isolation rules to the Chief Health Officer if you are travelling interstate for essential medical treatment.

    Q7: I live in the NT just inside the border with WA. I go into Kununurra every couple of days for supplies. How will these changes affect me?

    South Australia’s Premier Steven Marshall yesterday assured people who lived in border communities they would still be allowed to cross into South Australia, so long as there were no outbreaks of coronavirus in those towns.

    The NT is planning to make similar exemptions for border communities here and the people who will be able to apply for exemptions if they go to school or shop over the border (for example).

    More information on who can apply for exemptions will be available in the coming days.

    Q8: What if someone returns to Darwin from interstate after today and goes back to living with their family or housemates? Are the others able to come and go although they have had contact with someone who has been interstate and is now in isolation? Or do all household members now need to self-quarantine as well?

    According to advice from the Australian Government, your housemates or other family members should live somewhere else if possible. If it’s not possible, the person who is in isolation should have their own bedroom and bathroom and wear a mask when home with other people.

    The NT Government has also opened a drive-through testing clinic at the Manigurr-Ma Village in Howard Springs, and Territorians who aren’t sick but need to self-isolate can stay there if they need to.

    Q9: What about the remote border points, such as the Tanami Highway? How will they be policed?

    Police and Australian Defence Force personnel will be deployed at checkpoints on the major roads into the NT from 4pm today.

    NT Police Commissioner Jamie Chalker warned people on Saturday that for anyone attempting to sneak into the Territory using more remote roads, that NT Police would also be using technology to monitor travellers’ comings and goings.

    Q10: Is there a hotline I can call to get more information on how these changes will affect my circumstances?

    Yes, you can call the NT hotline on 1800 008 002 or the national hotline on 1800 020 080.

    Q11: How long will the NT’s new border restrictions apply for?

    According to the Chief Minister and Police Commissioner, at least six months.

    Q12: Who is exempt from having to self-isolate?

    1. People involved in national and state security and governance.
    2. Active military personnel required to be on duty in the Territory while in the Territory.
    3. A member of the Commonwealth parliament who is ordinarily resident in the Territory.
    4. Health service providers and personnel.
    5. Some transport, freight and logistics workers.
    6. Specialist skills critical to maintaining key industries or businesses or infrastructure.
    7. Emergency services.
    8. Other individuals or groups will be able to apply for an exemption to the Chief Health Officer, for instance visiting a terminally ill relative, or medical grounds, or interstate travel for essential medical treatment.

    Q13. It sounds like there are going to be many people who will be exempt from the new restrictions. Will they all be checked for any signs of coronavirus when they enter the Territory though? If not, couldn’t any of them just as easily bring it into our community unknowingly?

    Yes. All arrivals including Territory residents will be screened at the border.

    Q14. What if I have to travel to another state with the same border restrictions for work or other reasons? Say I travel from NT to SA for two days work. It seems I’ll have to self-isolate for 14 days in SA before I spend two days working. When I’m finished do I have to self-isolate for another 14 days when I return home to the NT?

    Unless your job falls into one of the exemption categories, yes you would.

    Source: NT News

  • 23 Mar 2020 5:06 PM | Sonia Harvey (Administrator)

    AS the COVID-19 pandemic slams the economy, analysts fear it may slow down decarbonisation efforts, as coal, relatively unaffected by the oil price crash, could be seen as the fuel source of choice for companies and governments stripped of all financial capacity to invest in renewables.

     In analysis released on Friday, Rystad said coal was already cheap before the economic shockwaves ripped through the energy sector, and the demand for it in China, during its own lockdown, was accompanied by a domestic production cost, balancing the market.

    Now, it believes coal mining capacity is moving quickly back towards full capacity and power generation returning to normal levels, meaning thermal coal import demand into China is likely to total close to the 2019 annual numbers, though reports indicate some ports have already reached their 2020 annual quota limits.

    It also noted the cheap price of oil, which is used as a fuel in coal mining could reduce coal output costs by a few dollars per tonne.

    "With ARA prices already so low, any cost decrease will potentially give struggling producers selling to Europe a little breathing room, rather than allowing prices to move down any further," Rystad's head of global coal research Steve Hulton said.

    The analysis noted a possible outcome of the pandemic could be a shift in public opinion and policy regarding the speed of transition towards a low carbon power generating future, noting coal to be a cheap, but problematic, source of energy to rebuild the economy.

    "These factors could potentially lead to a slowing of the rate of the energy transition," Hulton said.

    Separate analysis from Wood Mackenzie noted the cheap price of gasoline could also de-incentivise people from purchasing electric vehicles.

    But it did say the volatility of oil market could lead to energy companies losing their appetite for oil and gas projects and instead invest in renewables, particularly given the ambitious decarbonisation targets some have set for themselves.

    WoodMac analyst Valentina Kretzschmar said solar and wind projects have offered much lower rates of return than oil and gas projects, but now with the oil price through the floor this will no longer be true.

    "Renewables projects suddenly look as attractive as upstream projects at US$35 a barrel," she said. The oil price has since slipped to $26/bbl. 

    International Energy Agency executive director Fatih Birol has urged governments to use their economic rescue packages to support low-carbon energy investment. 

    Source: Energy News Bulletin

    Read more here

  • 23 Mar 2020 2:23 PM | Sonia Harvey (Administrator)

    CHAMBER of Minerals and Energy Western Australia chief executive Paul Everingham has said the new WA government rules that have effectively shut down the state’s border, will see fly-in-fly-out worker flights “massively curtained” with the majority of non-essential staff now sent home. 

    Critical oil and gas facilities will continue to operate Everingham said over the weekend, but worker health and safety in the resources sector is the top priority.  

    All entry to Western Australia will be restricted, by road, rail, air, and sea from 1.30pm AWST on Tuesday.  

    "We're taking extraordinary measures to ensure our workforce and the communities in which we operate are not impacted," Mr Everingham said at a press conference alongside WA state premier Mark McGowan yesterday.   

    "Now is not the time to think about profitability," he added.  

    More than 240,000 people are directly employed across Australia's mining and energy resources industry. Around 100,000 of these work in Western Australia.  

    Under the new rules initiated by the government, some FIFO personnel will still be allowed to enter and depart on dedicated charter aircraft that leave from Perth airport and arrive at specific oil and gas facilities.  

    However, all workers will be required to undergo testing at facilities and checks will need to occur before interstate staff can enter sites.  

    Each oil and gas facility will now be required to have trained medical professionals, including doctors, onsite to manage potential outbreaks of COVID19.  

    Operators will also need to create specific quarantine zones and specialised isolation facilities. 

    Source: Energy News Bulletin

    Read more here

  • 23 Mar 2020 2:18 PM | Sonia Harvey (Administrator)

    SANTOS confirmed the inevitable this morning: Barossa’s sanction has been delayed..

    The Barossa field was due for final investment decision in the next quarter and would be destined as backfill for the Darwin LNG plant as the current Bayu Undan field goes into decline. 

    It has also "re-phased" its planned spend at PNG LNG, the ExxonMobil-operated LNG project that was planning a one train expansion and commercialisation of the P'nyang gas field. Given the joint venture's gas agreement talks with the Papua New Guinea government had already stalled it is no surprise.  

    "Barossa remains an important project for Santos due to its brownfield nature and its low cost of supply," managing director Kevin Gallagher said this morning.  

    It will cut spending by almost 40% making it the second major ASX-listed oiler to revise guidance after Oil Search cut all spend guidance and announced the delay of a farmdown of its Alaska project last week.  

    Santos will lower its capital expenditure this year by $550 million and will cut $50 million from cash production costs and is now targeting a lower breakeven cost of US$25 per barrel.  

    "The reductions in expenditure in the base business are not expected to impact 2020 production guidance," it said.  

    The company said it generated $186 million in free cash flow in the first two months of this year.  

    It has hedged a portion of its oil and has fixed price gas contracts to fall back on - which it said will account for 35% of this year's sales volumes - and recently began a new 12-year domestic gas contract in Western Australia for 120 terajoules a day, which is priced in US dollars.  

    It has 6.2 million barrels of oil hedged this year at a floor price of US$54/bbl. 

    It still expects its acquisition of ConocoPhillips Northern Australia assets to complete next quarter and will then farm down a share of the assets to SK E&S as planned.  

    In October it announced it was taking a larger share of the assets it already shared with the US oiler for a total of $1.4 billion, but would sell down 25%  interest in Bayu-Undan and DLNG to SK for $390 million, giving the latter a larger stake.  

    It said there are still "a number of interested parties" it is talking to regarding selling a stake in Barossa. 

    It expects gearing of around 35% "reduce by year-end based on the current oil price environment and including a dividend based on the free cash flow policy".  

    Its debt covenants are not under threat at current prices for a number of years. 

    Source: Energy News Bulletin

    Read more here

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