THE MONTH IN BRIEF: OPEC cuts but prices fail to rise, Trump acts on pipelines, and BP says goodbye to Sullom Voe
| Published date | 01 February 2017 |
| DOI | http://doi.org/10.1111/oet.12455 |
| Date | 01 February 2017 |
THE MONTH IN BRIEF
is section summarizes downstream developments of the previous month. Exploration & Production are covered in
“Upstream Review”.
OPEC cuts but prices fail to rise, Trump acts on pipelines, and BP says
goodbye to Sullom Voe
Crude oil prices rose early in the month amid reports
that OPEC and its allies had begun to make the reduc-
tions in output promised in late-2016; but the rise was
not sustained and by the second week of January Brent
was down by nearly $3.50/bbl, at $53.64, following fore-
casts of an early rise in the US production and reports
that Iraq’s exports had hit a post-US invasion monthly
record of 3.5 mn bpd. Markets subsequently recovered a
little, but oil supplies weregenerally seen as comfortable
at the month’s end despite generally good levels of com-
pliance by OPEC and its friends.
SaudiArabiaappearedtohavemadeareductionin
excess of its promised cut of 486,000bpd and, in what
might eventually turn out to be an excessof enthusiasm,
the kingdom’s Oil Minister, Khalid al-Falih, declared
that there would be nodeed to extend the output accord
beyond its originally agreed six months as a result of
high-level of compliance by all concerned. Abu Dhabi,
Qatar,andOmanallnotiedtheircustomersofcutsto
exports during January. Kuwait brought forward some
routine eld maintenance in order to meet its pledge
of 131,000 bpd of cuts. Iraq announced it was cutting
itsoutputintwostages,delayingfullcomplianceuntil
February. Russia, which had said from the outset that it
would make its cuts in two stages, was reported to be on
schedule for the rst round of reductions.
e news was somewhat dierent from two of OPEC’s
three non-participants. Libyan output rose by an esti-
mated 65,000 bpd from its year-end level to about
700,000 bpd and the National Oil Company (NOC)
predicted a production total of 1.25 mnbpd by the end
of 2017. Nigeria forecast an increase of 0.3 mnbpd in its
crude and natural gas liquids (NGL) production during
2017. Iran said it would soon be producing 4mn bpd,
which would take it 0.2 mn bpd above its agreed OPEC
ceiling.
US President, Donald Trump, wasted no time in
putting some of his campaign pledges on energy into
practice with the signing of executive orders to speed
up the review process for infrastructure projects, such
as pipelines, which is expected to expedite the approval
of the controversial Keystone XL and Dakota Access
pipelines. Equally contentious was another executive
order to requirepipelines built in the US to maximize the
use of US-made steel. Across the border, Canada’s new
Liberal Party government shocked many of its support-
ers by reversing a policy of opposing new oil pipelines
and approving the expansion of two large ne w projects.
A group calling itself e ArabStrugg le Movement for
the Liberation of Ahwaz threatened to attack oil instal-
lations in Iran. e Niger Delta Avengers announced the
renewal of hostilities in the Delta region aer talks with
the Nigerian government broke down. Turkey’s Energy
Minister, who is also President Erdogan’s son-in-law,
respondedtocriticismoverpowercutsbyclaimingthey
were caused by a US-led cyber-attack. e IEA said
Poland was too dependent on Russia for its oil. e
British government said it would cutg reenenerg y subsi-
dies,whichmanyblamefortheUK’shighenergyprices.
Equatorial Guinea said it wanted to join OPEC. BP
announced it was to relinquish its control of the UK’s
main oil export terminal at Sullom Voe along with that
of the Magnus oileld.
ENI agreed to help in the repair and upgrading of
Nigeria’s Port Harcourt renery. Korea’s Daelim was
awarded a contract to upgrade Iran’s Isfahan renery.
Rosne dispose d of its remaining 12% share in Sardinia’s
SarrochrenerywhileagreeingwithBParestructuring
of Ruhr Öl to give the Russian company control of about
12% of Germany’s rening capacity.
© 2017 John Wiley& Sons Ltd
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