Industry News

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

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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

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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

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OIL and gas operators are facing uncertainty on all fronts today, as the coronavirus takes a stranglehold of the market and the government introduces harsh new travel restrictions.

This morning, unions released a statement attacking gas giant Woodside Petroleum for standing down 400 workers without pay from its Western Australian operations.

Over 400 contractor employees from Woodside's Goodwyn and North Rankin platforms, along with Woodside floating production storage and offloading units, have been summarily stood down, according to the Australian Workers Union.

The AWU condemned Woodside, dubbing the move "a brutal act of industrial bastardry." 

"Today's decision by Woodside is maybe the most heartless corporate response we've seen to the COVID-19 crisis to date," said Offshore Alliance spokesperson and Australian Workers' Union national secretary Daniel Walton said.

The 400-worker figure has been challenged by a second source however, who said the worker count was much less.

Energy News understands Woodside is meeting with contractors this afternoon.  

Energy News has approached Woodside for comment.

According to the unions, Shell, Inpex and Jadestone have come to arrangements with employees and are providing employees with flexibility and special payments.

"Shell, INPEX, even Jadestone — all have proven that it's possible to balance a response to coronavirus with basic decency to your workforce. For Woodside, an Australian in the market, to fall so short is hugely disappointing," Walton said.

Source: Energy News Bulletin

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MINING giant BHP has joined with Anglo American, Fortescue and Hatch to form a Green Hydrogen Consortium aimed at finding ways to use green hydrogen to accelerate.

The main aim of the consortium is to collectively help to eliminate the obstacles to the adoption of green hydrogen technologies.  

The goal is to identify opportunities to develop green hydrogen technologies for the resources sector and other heavy industries, and provide a mechanism for suppliers and operators to contribute to and engage with these development activities.  

Some of the proposed activities include undertaking research, technology and supply chain development, and piloting green hydrogen technologies to seek to de-risk and accelerate the technologies.  

Ontario-based engineering firm Hatch has been appointed as the project management and governance facilitator of the new consortium.   

The consortium will work collaboratively with customers and suppliers to find solutions for the emissions associated with the use of their products and in their supply chains.  

Western Australia minster for regional development Alannah MacTiernan said the collaboration would cement the state's place on the world stage as a green hydrogen innovator and producer. 

"Green hydrogen provides a real opportunity to reduce diesel consumption and decarbonise mine site operations, with potential for fuel cells to power fixed and mobile plants, mining vehicles and feedstock," she said. 

In late 2018, FMG formed a A$20 million research hydrogen research partnership with CSIRO, while Anglo has been looking into hydrogen fuel cell mining trucks.

Source: Energy News Bulletin

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BOTH the listed Gas2Grid and the private Timor Resources, a subsidiary of engineering firm Nepean, have reported drilling delays as equipment is stuck in limbo due to coronavirus COVID19 outbreaks. 

Timor Resources, which plans the spud Timor-Leste's first onshore wells in four decades, has had to push back the date from May 1 to somewhere between May 22 and June1.  

Managing director Suellen Osborne told Energy News via email yesterday that as factories in China were closed for 21 days the ports have a backlog of cargo to move.  

"Covid19 has caused havoc on supply chains. We have purchased our wellheads and casings from Petroil in Tianjin and this was purchased in September 2018. 

"We have struggled to secure trucks and now we have seen two vessels cancelled as they are not travelling to Dili. The majority of our long leads items are ex-China," she told Energy News.  

"We have again booked our cargo, casing and well heads on the next ship, our rig comes onshore Timor in the next four days."  

She said all equipment had been sent on breakbulk cargo to Kupang and will be trans-shipped to a private barge then sent to Suai on the south coast close to where Timor Resources plans its ten-well campaign.  

Well casing is currently sitting at a port in Tianjin waiting for a ship.  

Timor is hunting for oil on the south coast, home to several historic wells and some oil seeps and plans an eventual 1-well campaign , with five wells this year in one permit it operates under a production sharing contract arrangement with the Dili government and five more in its other permit in early 2021.  

Wells Karau, Kumbilli, Laisaipi, Lafaek and Raiketin will be drilled in Permit A this year. 

The company has two onshore permits in the south close to Suai where the nation plans to eventually develop an LNG export terminal to commercialise gas from its Greater Sunrise fields. 

Meanwhile ASX-listed smallcap Gas2Grid warned shareholders late yesterday its activities across the Philippines could face significant delays due to restrictions in movement and equipment availability following outbreaks of the coronavirus COVID-19. 

Source: Energy News Bulletin

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Adrian Richardson been cooking with natural gas to sizzle up some delicious recipes, igniting flavour that will impress your family and friends in Season Two of The Chef’s Secret.

You can now binge all six episodes right here, and check out each of the written recipes at the link next to every episode description!

Check out all the episodes now online!

DRAG QUEEN pop icon, RuPaul, owns 66,000 acres of prosperous land in Wyoming, and leases the mineral rights to oil and gas operators.

In an interview with NPR, RuPaul Andre Charles (RuPaul) revealed she owned a "modern ranch" and had no problem leasing the mineral rights to oil and gas operators.

The interview was conducted by Terry Gross and centred on RuPaul's "recipe" for a successful life. 

RuPaul, who became a household name by creating reality television series RuPaul's Drag Race, noted a major step in her success was owning the ranch along with her Perth-born husband Georges LeBar.

"A modern ranch, 21st-century ranch, is really land management," RuPaul said.

"You lease the mineral rights to oil companies. And you sell water to oil companies. And then you lease the grazing rights to different ranchers."

Social media exploded following RuPaul's transparency that she benefited financially by leasing mineral rights to energy companies.

Thousands of Twitter users accused RuPaul of promoting "dangerous" fraccing.

"Finding out RuPaul fucking fracks is like being slapped across the face after being shoved to the ground by coronavirus and kicked by boomers," one twitter user said.  

Source: Energy News Bulletin

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The Territory Labor Government will deliver a $65 million Jobs Rescue & Recovery Plan to protect Territorians from the deep economic impacts of the coronavirus.

Our plan is all about keeping shops open, cash flowing and Territorians working.

We acted fast by delivering Australia’s first stimulus package last month – a $2 million Tourism Reliance Package to protect tourism businesses and jobs.

Now we are going further to save jobs, protect businesses and keep the Territory’s economy on the road to recovery.

The best way to protect the economy is to save local jobs, not bring in deep cuts.

This is our second package and we are actively considering more options to support local businesses in the short-term and get Territorians spending more locally.

Our plan’s number one focus is jobs – protecting existing jobs and creating new jobs. The experts have told us the best way to do that is to get money into the pockets of Territorians that can be spent in local businesses – so that’s exactly what we are doing.

The Territory Labor Government will keep doing everything it can to protect Territory jobs, but we know we can’t do it alone.

We’ve been working with industry and small business owners to develop this economic package. And we will continue to partner with the private sector and NGOs to protect Territorians as much as possible from the impacts from the coronavirus. 

When times get tough, Territorians need to stick together and work together. That’s what we’ll keep doing.

All measures will begin within approximately two weeks and money is expected to be spent within six months. More information can be found out: business.nt.gov.au/recovery  

 

HELPING TERRITORY BUSINESSES AND FAMILIES

$20 million Business Improvement Scheme

• This is aimed at helping businesses get customers back into premises by undertaking improvements to a Territory business. All eligible businesses will receive $10,000. If the recipient also wants to put in their own $10,000, they will then get an additional $10,000 from the Government. This creates a $30,000 grant (with business pitching in $10,000 of their own money). The upgrades and purchases have to be from another Territory business. This could include buying new equipment, new shop fit-outs and physical changes to attract customers

$5 million Business Structural Adjustment package

• This package will assist businesses who need to physically adjust to the 100 person rule or to establish or upgrade their online presence to adjust to changing behaviours of consumption. The Chief Minister has directed public servants to personally speak with affected local businesses. All businesses can apply, but the Department will be focusing on the hospitality sector first (such as restaurants). Terms and conditions and a hotline will be released soon.

$5 million Immediate Works Grants Package 

• This package reintroduces the Immediate Works Grant for incorporated not-for-profit and community organisations – including clubs - to undertake repairs, renovations and upgrades to their premises/facilities. Applicants can apply for grants of up to $50,000, which will then be matched dollar-for-dollar if the organisation also puts in their own $50,000. Up to $200,000 on a dollar-for-dollar matching basis for amounts above $100,000

Freezing Government Fees and Charges and Electricity Prices

• All Government fees and charges – including electricity, water and car registration will be frozen (no increase due to indexation) until 1 July 2021. Electricity prices for small and medium businesses (those paying regulated tariffs) will be frozen from 1 July 2020 (no increase due to indexation) until 1 July 2021.

 $30 million Home Improvement Scheme

• $6000 grant for Territory homeowners and landlords who also contribute $2000, and a $4000 grant with a $1000 contribution.

SUPPORTING TERRITORY TOURISM

• We are supporting our local tourism, hospitality and retail operators by encouraging Territorians to get out and explore their own backyard, with a dedicated intra-Territory campaign developed by local creatives and rolled out via local media channels.
• The Government will also boost investment into marketing to encourage tourism as an opportunity to help disperse visitors through the Territory over the coming months, motivating Australian’s to take a self-drive trip is a great way to experience our destination.

RESCUE AND RECOVERY PACKAGE PRINCIPLES

In addition to the announced stimulus packages, the Territory Labor Government response to the coronavirus will operate, to the extent possible, under the following action principles:

1. Our focus is on jobs NOT cuts
2. Our approach is to work together with Territorians, the private sector, and Territory organisations - we cannot do this alone
3. Our financial support needs to be spent, not banked
4. Our public service will be responsive and flexible to requests for help
5. Our contracting and procurement decisions need to be fast and fair
6. Our employees will be encouraged to buy locally and holiday in the Territory
7. Our sponsorship of events that have been cancelled or deferred will still be used to support that organisation’s work - as agreed/in negotiation with Government.
8. Our employees will be encouraged to cash out their recreational leave and spend money locally

We will work with the private sector and Territory organisations to encourage their continued contribution to our economic recovery. This includes encouraging:

1. Banks to be more flexible in their dealings with businesses, particularly in regards to loan repayments
2. Landlords to reduce or defer rent payments from businesses
3. The Federal Government to defer or cease FBT on entertainment
4. The private sector to be more flexible in their contract arrangements with each other
5. Local governments to undertake their own stimulus packages
6. Federal Government employees to buy in the NT and holiday in the NT
7. Federal Government employees to cash out their recreational leave and spend money locally

Media Contact: Gerard Richardson 0438 693 898

VICTORIA’s conventional onshore exploration ban will end mid-2021 in a move welcomed by a surprised industry after it introduced two bills to parliament.

One bill will formally end the moratorium, albeit a year after it was due to come off, and the other will ban fraccing permanently.

It is a surprising move from a premier who expanded onshore exploration bans and has pushed hard on a renewable agenda but Andrews said he is following the science and is looking to an "orderly restart" of exploration next year after three years of investigation by the Victorian Gas Program.

The results concluded conventional exploration will not "compromise the state's environmental and agricultural credentials".

The study concluded the state could enjoy a $310 million windfall "for regional economies" and create 6,400 jobs.

Companies will soon be awarded the rights over blocks in waters next to existing sites, it said.

The government said gas "will continue to play an important role in supporting Victoria's transition to a cleaner energy future".

Andrews said his government was "backing the science to create… and support regional communities" and banning facing "to protect farming communities".

The difference between the two was not made clear, though scientific inquiries in many jurisdictions, most recently Western Australia, have repeatedly suggested the practice can be safely conducted when scientific guidelines are adhered to.

Source: Energy News Bulletin

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