North Sea Spending Boosted by Majors, Asian Demand Pushes Iraqi Crude Prices

Strategic Insights -

Crude demand in North Sea regions is escalating as Shell Expro, a UK upstream joint venture of Shell and ExxonMobil, has announced a 20% increase in investment in the UK North Sea, with a new budget of $1.5 billion, a 50% increase from original 2001 spending plans. This move is expected to help maintain current levels of UK North Sea production, with Shell Expro producing over 400,000 barrels per day (b/d) of crude from the UK last year. The company plans to develop several key fields, including Goldeneye condensate field, Penguins fields, and Mandarin and Goosander fields.

BP is also considering a spending increase in the North Sea region, with a potential increase above its current level of $900 million. The company aims to give the go-ahead for the delayed Clair oil and gas field early next year. North Sea projects are now viable due to better technology, not higher prices, according to Shell Expro's managing director Malcolm Brinded.

Key Takeaways:

  • Shell Expro to increase investment in the UK North Sea by 20% next year, with a new budget of $1.5 billion.
  • BP is considering a spending increase in the North Sea region above its current level of $900 million.
  • Shell Expro plans to develop the Goldeneye condensate field, Penguins fields, Mandarin and Goosander fields.
  • The investment should help maintain current levels of UK North Sea production.
  • North Sea projects are now viable due to better technology, not higher prices.
  • Iraq's crude exports rose to 2.32 million b/d in August, a 430,000 b/d increase from July.
  • Eni's managing director, Vittorio Mincato, believes oil prices will stay high regardless of Opec's decisions.
  • Brent crude is being sold to Asia Pacific customers at an increased rate, with over half of the Brent crude loading in August going to India and China.
  • Russia's fuel oil exports slumped to 2.8 million tons last month, down from a record high of 3.6 million tons in July.
  • South Korea has increased gasoline prices, with domestic demand pushing throughputs to near capacity.
  • Oman has cut its October crude term sales by 2 million barrels due to technical reasons.
  • The affected volumes have been deferred to January, but output was already lower in September, according to traders.

Statistics:

  • $1.5 billion: The new budget for Shell Expro in the UK North Sea region for next year.
  • 20%: The increase in investment for Shell Expro in the UK North Sea region for next year.
  • 50%: The increase in budget from original 2001 spending plans.
  • 400,000 b/d: The amount of crude produced by Shell Expro from the UK last year.
  • 2.32 million b/d: The amount of Iraqi crude exports in August.
  • 430,000 b/d: The increase in Iraqi crude exports from July to August.
  • 2.8 million tons: The amount of Russia's fuel oil exports last month.
  • 3.6 million tons: The record high of Russia's fuel oil exports in July.
  • 2.7 million b/d: The current throughputs of South Korean refiners, near capacity.
  • 29 days: The amount of South Korea's strategic oil reserves, down from 60 days previously.
  • 2 million barrels: The amount of Oman's crude term sales reduced for October.

Sources:

  • "Majors boost North Sea spending" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Eni doesn't share French bullishness" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Iraq exports up" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Brent still going east" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Russia's product exports slide" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "NRGline.com launched" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "South Korea hikes gasoline prices" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Oman cuts October exports" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Gasoil stocks rise" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Sinopec plans to e-trade" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Asia-Pacific takes more Iraqi crude" by Karen Bazley, Oil & Gas Economist, October 2000.
  • "Blockades of French oil refineries" by Karen Bazley, Oil & Gas Economist, October 2000.