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Rystad: in the first half of 2023, explorers found 2.6 billion barrels of oil equivalent.
The exploration and production (E&P) industry is in a transitionary period, with many companies exercising increased caution and shifting their strategies to target more profitable and geologically better-understood regions.
In the hunt for new resources, exploration companies are prioritizing the offshore sector.

Spending on conventional oil and gas exploration is rebounding and expected to top $50 billion this year, the highest since 2019, but operators are still waiting for the results they had hoped for. Rystad Energy research shows that despite the rising investments, discovered volumes are falling to new lows.

Our estimates show that in the first half of 2023, explorers found 2.6 billion barrels of oil equivalent (boe), 42% lower than the first half of 2022 total of 4.5 billion boe. Fifty-five discoveries have been made, compared to 80 in the first six months of last year. This means discoveries in 2023 have averaged 47 million boe, lower than the 56 million boe per discovery for the same period in 2022.

The exploration and production (E&P) industry is in a transitionary period, with many companies exercising increased caution and shifting their strategies to target more profitable and geologically better-understood regions. This strategic shift and the failure of several critical high-potential wells are contributing to the precipitous drop.

In the hunt for new resources, exploration companies are prioritizing the offshore sector, trying to capitalize on underexplored or frontier areas to unlock new volumes through high-risk, higher-cost offshore developments. The offshore industry accounted for about 95% of exploration spending this year to date but only about two-thirds of discovered volumes.

“Upstream companies are facing a period of uncertainty. They are eager to capitalize on the increased demand for fossil fuels and find additional resources, but recent results have been lackluster…

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Desertification: An Existential Crisis For Iran

August 2, 2023

Desertification: An Existential Crisis For Iran

Iran is grappling with severe desertification and water scarcity, leading to potentially uninhabitable territories, contributing to internal migration and posing a threat of mass exodus.
Tehran’s attempts to mitigate water scarcity have led to dam-building and water-intensive irrigation projects that have contributed to the drying up of rivers and underground water reservoirs, exacerbating the desertification problem.
Iran, one of the most water-stressed nations globally, faces potential conflict due to water scarcity, both internally and with neighboring states such as Afghanistan, adding to its socio-political challenges.

Temperatures in Iran are hitting record highs, rivers and lakes are drying up, and prolonged droughts are becoming the norm, highlighting a water crisis that is turning much of the country’s territory to dust.

The desertification of Iran is occurring at a staggering pace, with officials last month warning that more than 1 million hectares of the country’s territory — roughly equivalent to the size of Qom Province or Lebanon — is essentially becoming uninhabitable every year.

The situation has Tehran scrambling to gain control of the situation in a country where up to 90 percent of the land is arid or semi-arid. But the clock is ticking to stave off what even officials have acknowledged could lead to an existential crisis and the mass exodus of civilians.

The warning signs were on full display this month. Temperatures in southwestern Iran hit a staggering 66.7 degrees Celsius (152 degrees Fahrenheit), higher than what is considered tolerable for human life.

Iranian scientists warned that the water levels of Lake Urmia, which is in severe danger of drying up, are the lowest recorded in 60 years. And in what has become routine, advisories were issued about the threat of suffocating dust storms.

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China Snaps Up Record-High Volumes Of Russian Crude In The First Half Of 2023

July 21, 2023

China Snaps Up Record-High Volumes Of Russian Crude In The First Half Of 2023

In the first half of 2023, China imported 2.13 million barrels per day of Russian crude oil, making Russia its single biggest supplier.
In June, China once again imported record-breaking levels of Russian crude, a 44% increase compared to the same month in 2022.
Total Chinese oil imports are also soaring, with the country importing the second-highest monthly import figure on record in June.

Despite an apparent weakness in its economy, China is importing record volumes of oil and is buying record amounts of Russian crude to add to stockpiles.

During the first half of 2023, Chinese imports of Russian crude oil averaged 2.13 million barrels per day (bpd), which helped Russia oust its OPEC+ partner Saudi Arabia from the top spot as the single biggest supplier to the world’s top crude importer so far this year, per Financial Times estimates based on Chinese customs data. Imports from the world’s top crude oil exporter, Saudi Arabia, averaged 1.88 million bpd between January and June, according to FT’s calculations.

In June alone, China broke – for yet another month – the record for importing Russian crude oil, per data from the Chinese General Administration of Customs cited by Reuters. Chinese imports from Russia averaged 2.56 million bpd last month, a surge of 44% compared to the same month in 2022, the Chinese customs data showed.

The previous record, of 2.29 million bpd, was set in May as Chinese refiners continued to buy discounted Russian oil. The discounts for Russia’s crude narrowed relative to the benchmarks in June, but this didn’t stop China from boosting imports and breaking in June the record from May.

China’s imports from Saudi Arabia also rose in June, compared to May and June last year. But at 1.93 million bpd in June 2023, those imports still trailed behind the record-breaking Chinese crude oil imports from Russia.

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UK Looks To Boost Energy Security With Small Modular Nuclear Reactors

July 20, 2023

UK Looks To Boost Energy Security With Small Modular Nuclear Reactors

The UK has launched a competition for small modular reactor technology and created a new nuclear body.
The focus on small nuclear reactors is part of the country’s efforts to produce more zero-emission energy domestically.
As well as backing SMRs, the UK remains committed to traditional nuclear projects including Hinkley Point C and Sizewell C.

The UK launched on Tuesday a competition for small modular reactor (SMR) technology and created a new nuclear body, Great British Nuclear, in a bid to provide more zero-emission energy from locally-developed sources.

Great British Nuclear (GBN) is expected to drive the rapid expansion of new nuclear power plants in the UK, to boost UK energy security, reduce dependence on fossil fuel imports, create more affordable power, and grow the economy.

The nuclear industry is estimated to generate around $7.9 billion (£6 billion) for the UK economy, the government says.

As of today, companies can register their interest with GBN to participate in a competition to secure funding support to develop their SMR technology, which could result in billions of pounds of public and private sector investment in small modular reactor projects in the UK.

SMRs are considered to be the future of nuclear power technology because they are smaller than conventional reactors and can be manufactured in factories, making nuclear power stations cheaper and faster to build.

In the UK, Rolls-Royce has been developing SMR technology, which, the company says, can deliver cost-competitive and scalable net-zero power for multiple applications – from grid and industrial electricity production to hydrogen and synthetic fuel manufacturing.

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Exxon CEO Warns Overemphasis On Renewables Could Backfire

June 9, 2023

Exxon CEO Warns Overemphasis On Renewables Could Backfire

Exxon Mobil Corp. (NYSE:XOM) CEO Darren Woods has urged companies to stop focusing on certain energy sources, such as renewable energy, to save the climate, warning that it would be a “huge mistake to be picking winners and losers and focusing on specific technologies”.

Instead, “we need to look more broadly and let the markets figure out which solutions deliver the most emissions reductions at the lowest cost,” Woods told Nicolai Tangen, the CEO of Norway’s Wealth Fund,one of the largest mutual funds in the world, on his podcast.

An attempt to move away from oil and gas immediately, with unchanged global demand, could be disastrous for clean energy, Woods suggested, adding that if we produce less LNG, for example, something else–like coal–would have to step in to fill the demand gap.

According to Woods, Europe should follow the U.S. approach to climate policy, arguing that the continent risks driving companies away by regulating too hard. Woods told Bloomberg that one of the most important things the Americans (and ExxonMobil) are doing is developing technologies to capture and store carbon.

Back in April, Woods caused quite a stir when he touted the company’s burgeoning Low Carbon business, saying it has the potential to outperform its legacy oil and gas business and generate hundreds of billions in revenues. According to Woods, the business has the potential to generate tens of billions of dollars in revenue after the initial 10-year ramp-up.

“This business is going to look quite a bit different from the base business of Exxon Mobil. It is going to have a much more stable, or less cyclical, profile,” Dan Ammann, president of Exxon’s two-year-old Low Carbon Business Solutions unit, has vowed.

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Labor Leader’s Oil Plans Spark Outrage In Scotland

June 1, 2023

Labor Leader’s Oil Plans Spark Outrage In Scotland

Labour leader Starmer said that his party would end oil and gas investment in the UK North Sea.
Scottish politicians called the plan a ‘job destroyer’.
Energy security could be at risk if the UK actually bans new upstream investment in the North Sea.

In January this year, at the Davos summit, the leader of Britain’s Labour party, Keir Starmer, said that if Labour won the next elections, they would put an end to investments in oil and gas in the North Sea.

This month, Starmer reiterated the promise—or threat, as Scotland saw it. The official announcement that a future Labour government will not approve any new oil and gas licenses for the North Sea is due to be made next month.

“What we’ve said about oil and gas is that there does need to be a transition,” Starmer said back in January, as quoted by Reuters.

“Obviously it will play its part during that transition but not new investment, not new fields up in the North Sea, because we need to go towards net zero, we need to ensure that renewable energy is where we go next.”

This month, a high-ranking labour official and shadow work and pensions secretary told Sky News that the move to wind and solar would create jobs and bring energy bills down—something that new oil and gas exploration in the North Sea will not do, according to Labour.

Yet Scotland begs to differ. Right after Starmer said Labour would ban new oil and gas exploration in the North Sea, former Scottish First Minister Alex Salmond dubbed Starmer the “North Sea job destroyer” and accused Labour of trying to sabotage Scotland’s energy security.

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Europe’s Energy Troubles Continue: Hydro And Nuclear Output Declining

April 23, 2023

Europe’s Energy Troubles Continue: Hydro And Nuclear Output Declining

Europe’s hydro and nuclear output is declining, leading to mopre energy troubles.
Renewables are struggling to fill the gap as wind and solar output increase.
The EU may require increased LNG imports from the US to meet energy demands.

Last year, Europe was on the brink of an energy breakdown as Russian gas flows dried up and most of Europe doubled down on renewable energy.

The renewable energy bet paid off, in a way. Solar and wind electricity generation in Europe hit a record in 2022. In fact, for the first time in history, wind and solar together produced more electricity than natural gas-fired power plants.

There was just one problem with that. Lower hydro and nuclear output more than wiped out the significance of that record output.

Droughts were severe in Europe last year. They threatened major trade routes such as the Rhein in Germany and the Po in Italy. And they also caused severe declines in hydropower electricity output. For example, in Spain, hydropower output dropped by almost half because of the droughts. All this might repeat this year as well.

Meanwhile, nuclear wasn’t doing so swell, either. France suddenly found that years of underinvestment in maintenance would have consequences: emergency reactor shutdowns for repairs and maintenance.

The problems cost EDF a massive annual loss of $19 billion as half of its reactors had to be shut down for maintenance. Most blamed the pandemic, but nuclear experts such as Mark Nelson saw the roots of the problem much further into the past when France decided to bet on renewables over nuclear.

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MIT Study: Nuclear Power Shutdown Could Lead To Increased Deaths

April 23, 2023

MIT Study: Nuclear Power Shutdown Could Lead To Increased Deaths

A new MIT study indicates that retiring U.S. nuclear power plants could lead to an increase in burning fossil fuels to fill the energy gap, resulting in over 5,000 premature deaths due to increased air pollution.
Nearly 20 percent of current electricity in the U.S. comes from nuclear power, with a fleet of 92 reactors scattered around the country.
If more renewable energy sources become available to supply the grid by 2030, air pollution could be curtailed, but there may still be a slight increase in pollution-related deaths.

A Massachusetts Institute of Technology new study shows that if U.S. nuclear power plants are retired, the burning of coal, oil, and natural gas to fill the energy gap could cause more than 5,000 premature deaths.

The MIT team took on the questions in the text following in a new study appearing in Nature Energy.

Nearly 20 percent of today’s electricity in the United States comes from nuclear power. The U.S. has the largest nuclear fleet in the world, with 92 reactors scattered around the country. Many of these power plants have run for more than half a century and are approaching the end of their expected lifetimes.

Policymakers are debating whether to retire the aging reactors or reinforce their structures to continue producing nuclear energy, which many consider a low-carbon alternative to climate-warming coal, oil, and natural gas.

Now, MIT researchers say there’s another factor to consider in weighing the future of nuclear power: air quality. In addition to being a low carbon-emitting source, nuclear power is relatively clean in terms of the air pollution it generates. Without nuclear power, how would the pattern of air pollution shift, and who would feel its effects?

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EU Members Clash Over Nuclear Energy’s Role In Climate Policy

March 29, 2023

EU Members Clash Over Nuclear Energy’s Role In Climate Policy

The EU is in the process of expanding its renewable energy targets to reduce CO2 emissions.
Countries are divided over whether nuclear energy should be considered a part of renewable energy targets.
France leads the campaign to recognize nuclear energy as a CO2-free contributor, while Germany, Portugal, and others oppose it.

The European Union needs to work on a divide among its member countries regarding the role of nuclear energy in achieving their renewable energy goals. This disagreement may delay the progress of one of the EU’s primary climate policies.

On Wednesday, negotiators from EU countries and the European Parliament will engage in their final round of discussions to establish more ambitious EU objectives to expand renewable energy throughout the next decade. These goals are crucial for Europe’s commitment to reduce CO2 emissions by 2030 and to become independent of Russian fossil fuels. However, the negotiations have become bogged down by a dispute over whether fossil fuels produced using nuclear power should be considered part of the renewable energy targets.

France is spearheading a push to classify “low-carbon hydrogen” – hydrogen produced from nuclear energy – as equal to hydrogen created from renewable electricity. France is joined by countries such as Romania, Poland, Hungary, and the Czech Republic, all of which seek greater acknowledgment of nuclear energy’s CO2-free contribution to climate objectives.

On the other hand, Germany, Spain, Denmark, Portugal, and Luxembourg oppose this view, arguing that including nuclear power in renewable energy targets would divert attention from the urgent need to expand solar and wind energy across Europe significantly.

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Barclays Vows To Stop Financing Oil Sands Projects

February 16, 2023

Barclays Vows To Stop Financing Oil Sands Projects

Barclays on Wednesday said it would no longer provide financing to oil sands companies or oil sands projects and tightened conditions for thermal coal lending in an updated policy, which fell short of announcing overall pledges or targets in funding oil and gas.

In the annual report for 2022 published today, the UK-based banking giant vowed not to provide financing for any oil sands projects, compared to a previous policy which stated that it would only provide financing to oil sands exploration and production clients that had projects to materially reduce their overall emissions intensity.

In coal lending, Barclays now aims to phase out financing to clients engaged in coal-fired power generation in the EU and OECD by 2030, compared to phasing out such lending only to clients in the UK and the EU in the previously announced policy.

Commenting on Barclays’ new targets, Jeanne Martin, Head of Banking Programme at ShareAction, said in a statement, “Disappointingly, despite not having published a new oil and gas policy for the last three years, the bank’s fracking policy remains unchanged and there is no mention of new oil and gas. This means Barclays continues to be out of step with current minimum standards of ambition within the industry.”

Pressured by ESG trends and shareholders, other banks have already started to announce cuts to lending to the oil and gas industry.

At the end of last year, two prominent banks in Europe vowed to significantly cut exposure to the fossil fuels sector. Credit Agricole, the largest retail lender in France, said in early December that it targets to have no new financing granted for oil extraction projects by 2025, and to cut its oil exploration and production exposure by 25% by 2025 compared to 2020.

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OPEC Output Drops As Saudi Production Falls By 156,000 Bpd

February 15, 2023

OPEC Output Drops As Saudi Production Falls By 156,000 Bpd

By Charles Kennedy – Feb 14, 2023, 9:30 AM CST

Crude oil production from all 13 OPEC members slid by 49,000 barrels per day (bpd) in January from December as top producer Saudi Arabia slashed output by 156,000 bpd, OPEC’s latest Monthly Oil Market Report (MOMR) showed on Tuesday.

OPEC’s crude oil production in January fell by 49,000 bpd from December to average 28.88 million bpd, according to secondary sources in OPEC’s report.

Saudi Arabia, the biggest producer and de facto leader of the cartel, pumped 10.319 million bpd in January, down by 156,000 bpd month on month, and more than 100,000 bpd below its quota of 10.478 million bpd as part of the OPEC+ agreement, set out at the October meeting and valid from November 2022 through December 2023, or until OPEC+ decides otherwise.

A Bloomberg survey found earlier this month that OPEC’s crude oil production fell in January due to cuts by Saudi Arabia which may have been steeper than the Kingdom’s quota.

Saudi Arabia, however, self-reported to OPEC that its crude oil production averaged 10.453 million bpd in January, up by 17,000 bpd from December.

According to OPEC’s secondary sources, Nigeria and Angola boosted their production the most, by 65,000 bpd and 47,000 bpd, respectively. But these producers are among the biggest laggards in their OPEC+ targets—they continue to pump well below their quotas.

The monthly Reuters survey pegged OPEC’s January production nearly in line with the OPEC figures from secondary sources reported today—production at 28.87 million bpd, down by 50,000 bpd from December.

The 10 OPEC members that are part of the OPEC+ collective target production were estimated to have produced around 920,000 bpd below the January target, per the Reuters survey.

Going forward, OPEC and OPEC+ don’t plan to change the course in oil production targets after Russia announced last week a 500,000 bpd cut in its output for March.

European Natural Gas Prices Surge Ahead Of Cold Spell

February 1, 2023

European Natural Gas Prices Surge Ahead Of Cold Spell

The Dutch TTF benchmark price jumped by 11% on Tuesday morning, recovering from a 17% price slump last week.
An unplanned outage at a Norwegian gas processing plan and short covering combined to add upward pressure to gas prices.
Next week, temperatures could be lower than initially expected, which would boost demand for natural gas after a mild winter so far.

Europe’s benchmark gas prices have rebounded this week as traders closed short positions at the expiry of the front-month contract and some weather forecasts suggested colder weather in northern and central Europe next week than previously expected.

The Dutch TTF benchmark price jumped by 11% at over $65 (60 euros) per megawatt-hour (MWh) at the opening of trade in Amsterdam on Tuesday, extending small gains from Monday and recovering some of the losses from last week, when prices slumped by 17%.

On Monday, the prices were supported by short covering and an unplanned outage at a Norwegian gas processing plant. However, wind power generation is still expected to be strong, which could curb some demand for gas-fired power generation.

But next week, temperatures could be lower than initially expected, which would boost demand for household heating. Colder spells are set to return to northern and central Europe next week, according to weather models by Maxar Technologies Inc, cited by Bloomberg.

Still, the record gas prices in Europe could be behind us, according to ING’s revised outlook on natural gas for this year.

“Mild weather and weak industrial demand have ensured that gas storage has remained strong. The region should get through this winter comfortably and prospects also look better for the 23/24 winter,” Warren Patterson, Head of Commodities Strategy at ING, said on Monday.

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South Africa’s Energy Crisis Could Spark A Political And Economic Disaster

February 1, 2023

South Africa’s Energy Crisis Could Spark A Political And Economic Disaster

Eskom is operating at 50% capacity with rolling blackouts that are causing civil unrest and economic hardship.
An international aid package worth $8.5 billion is being put together by the U.S. and Europe to help fund South Africa’s green energy transition.
The dismal track record of Eskom provides an opportunity for South Africa to revamp its energy industry into green energy with the help of financial support from wealthy nations.

South Africa’s energy crisis is teetering on the edge of a major political and economic crisis. Bogged down by inefficiency, ineptitude, and severe levels of corruption, the country’s power utility Eskom has proven incapable of providing sufficient and reliable energy to the nation’s grid, despite the domestic abundance of coal. Once one of the most reliable utilities in Africa, Eksom now exists in a state of constant emergency which is currently threatening to push the country into civil disarray and economic catastrophe.

Eksom desperately needs to service its poorly maintained power plants. On any given day, Eksom operates at about 50% capacity. Rolling blackouts, known locally as ‘load shedding’ have become a normal and expected part in day-to-day life in South Africa. “It even has predictable stages,” Forbes reported in a recent excoriation of Eksom operations, “ranging from Stage 1 (reducing power for two hours at a time over a four-day period) through Stage 8 (reducing power for 12 hours out of every 24).”

In the last 12 months, however, these blackouts have gone into overdrive, with the power going out several times a day and up to 12 hours at a time. Adding insult to injury, Eksom has added a steep energy tariff to help bolster their own failing finances. The issue has transformed to a semi-accepted nuisance to a barrier to local livelihoods and the functioning of the national economy…

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Soaring Food Prices Prompt Eurasian Nations To Ban Food Exports

January 28, 2023

Soaring Food Prices Prompt Eurasian Nations To Ban Food Exports

The harshest winter since 2008 is contributing to shortages of staple vegetables across Central Asia and sending prices north in a region still suffering from COVID-induced food inflation.

In Uzbekistan, record frosts have highlighted the shortcomings of the national energy system as even residents of the capital spent days on end without power. But the cold has also hammered the agriculture sector in the region’s most populous country.

On January 20, the Uzbek agriculture minister announced a four-month ban on exports of onions after prices doubled in three weeks.

The title of the ministry’s press release – “there are reserves of onions in Uzbekistan” – hints at panic.

Once among the cheapest onions produced by former Soviet countries, Uzbek onions are now as expensive as onions from countries like Georgia and Moldova, the ministry said, reaching 6,000-8,000 sum (53-71 cents) per kilo.

While the frosts have ruined part of the onion stock in storage, that is not the only source of pressure on prices. Vast energy deficits have strained logistics, with gas stations shut down and roads covered in ice, the ministry said.

In comments to private news website Gazeta.uz, one resident of Bukhara region gave an account of this perfect storm: “Due to the closure of gas stations, there are problems with public transport. On Tuesday we went to the market and did not see a single bus. The only thing left is taxis. Food prices have gone up. They say that goods are not being brought from Tashkent. There are no sellers at the Kholkhozni bazaar because vegetables and fruits have frozen.”

Potatoes have also jumped in price since the start of the year – by 14 percent, reported specialist agriculture news site East Fruit last week.

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Europe’s Energy Crisis Leaves Almost All Of Pakistan Without Power

January 27, 2023

Europe’s Energy Crisis Leaves Almost All Of Pakistan Without Power

Pakistan faced an almost nationwide power outage on Monday.
A significant energy shortage is one of the main drivers of the nation’s current economic crisis.
The energy crisis in Europe has made Pakistan vulnerable to high fuel prices.

The long-awaited winter energy crisis has finally hit…but it wasn’t in Europe after all. On Monday, almost the entirety of Pakistan was left without power when a misguided energy saving strategy by the government backfired. Runaway inflation, a severely weakened currency, and rapidly emptying foreign exchange reserves have left Pakistan on the brink of economic collapse. The country of 230 million people is plagued by overdue energy payments, and was seeking to cut costs by lowering energy use when the plan went off the rails, leaving people across the country without power or water for more than 12 hours.

Pakistani officials had planned to save on energy costs by turning off electricity across the country overnight. Nighttime has the lowest usage hours for energy in Pakistan, where winters are relatively mild. The problem came when technicians tried to reboot the electric system in the morning, and found out that the infrastructure wasn’t capable of booting up the entire nation’s energy grid all at once. Major cities, including the capital city of Islamabad, as well as smaller cities and towns across the country were left in the dark for 15 hours on Monday, lasting into the night.

“As an economic measure, we temporarily shut down our power generation systems” Sunday night, Energy Minister Khurram Dastgir told local media. He went on to explain that when engineers tried to turn the systems back on, a “fluctuation in voltage” occurred, which “forced engineers to shut down the power grid” stations altogether.

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