14
ENERGY NEWS
Europe Energy Review By Tsvetana Paraskova
Oil & Gas Early in June, the EU managed to overcome the Hungarian resistance and announced a ban on seaborne Russian oil imports and a ban on maritime insurance for Russian oil going to third countries. The EU has to phase out imports of seaborne crude oil and petroleum products within eight months, with a special derogation until the end of 2024 for Bulgaria due to its specific geographical exposure. Member States highly dependent on Russian pipeline oil are also temporarily exempted until the Council decides otherwise, but they are not allowed to resell the oil they receive from Russia via pipeline. The ban covers 90% of the EU’s current oil imports from Russia. Analysts believe that the insurance ban will hit Russian oil exports more than the EU ban for imports because most insurers are based either in the EU or the UK, which looks to join the insurance ban on maritime transportation of Russian oil. Russia curbed in the middle of June natural gas deliveries to major EU customers, including the biggest buyers Germany and Italy. EU leaders rejected the Russian “technical reasons” for the lower gas volumes and said the move was politically motivated. The Russian cuts to supply to Europe came just as the continent was sending gas into storage to have it at least 80% full by the start of the winter. EU members fear gas injection into storage would slow and
www.ogv.energy I July 2022
June was an eventful month in European energy. The European Union finally decided to impose a ban on seaborne imports of Russian oil, Russia slashed gas deliveries to the EU, Norway restarted its LNG export facility after nearly two years, the UK government met offshore wind operators looking to advance the industry, and many companies announced clean energy investments in the UK and the rest of Europe.
Russia would use the regular two-week maintenance on the Nord Stream pipeline in July as an excuse to further slash supply. Reduced gas deliveries from Russia prompted Germany to trigger the second phase of a three-stage emergency gas plan and to appeal to consumers to conserve gas and energy. Many other countries in Europe have also asked people to conserve energy this summer. The EU agreed increased supply from Norway, Western Europe’s top oil and gas producer, as it seeks to replace Russian gas and secure more supply. “European Commission Executive VicePresident Frans Timmermans, Commissioner for Energy, Kadri Simson and Norwegian Minister of Petroleum and Energy Terje Aasland therefore agreed to step up cooperation in order to ensure additional short-term and long-term gas supplies from Norway, to address the issue of high energy prices, and to develop long-term cooperation on offshore renewable energy, hydrogen, carbon capture and storage, and energy research and development with a view to developing an even deeper long-term energy partnership,” Norway said. Norway’s Equinor also agreed to deliver additional gas supplies to the UK by raising the annual supply to UK’s Centrica, the owner of British Gas. Equinor every year typically supplies 20-22 bcm of natural gas to the UK which covers over 25% of UK gas demand. Equinor also resumed production at the Hammerfest LNG after a fire shut down the facility
in September 2020. Hammerfest LNG accounts for more than 5% of Norwegian gas exports. “With the start-up of Hammerfest LNG, we add further volume to the already substantial gas deliveries from Norway. This is of great significance in a period when predictable and reliable supplies are highly important to many countries and customers,” said Irene Rummelhoff, Equinor’s executive vice president, Marketing, Midstream and Processing. In exploration and production, Equinor has awarded Transocean Spitsbergen a firm drilling programme consisting of nine wells and options for another two. The rig is scheduled to start the drilling campaign in the autumn of 2023 for three production wells for the Haltenbanken West Unit, part of the Kristin South area in the Norwegian Sea. Subsequently, six production wells are planned for Halten East, which will be tied-in to the Åsgard field in the Norwegian Sea, before considering another two wells on Kristin South. Equinor announced in early June it had made another oil and gas discovery in Skavl Stø near the Johan Castberg field in the Barents Sea. The size of the discovery is preliminarily estimated at between 5-10 million barrels of recoverable oil equivalent. Together with the other licensees, Vår Energi and Petoro, Equinor will consider tying the discovery into the Johan Castberg field. Italian energy engineering firm Saipem signed a binding agreement with KCA Deutag to sell its Drilling Onshore operations in exchange for a cash consideration of $550 million plus a 10% stake in KCAD after its acquisition of the Saipem’s Drilling Onshore.
