US backs Chevron in dispute with Cyprus

According to Reuters, Washington has weighed into a dispute between Cyprus and international companies led by Chevron over how to develop a giant offshore gas field, backing the US Company’s plan to link it to neighbouring Egypt.

The Chevron-led consortium proposed connecting the Aphrodite gas field via a subsea pipeline and existing infrastructure to Egypt, where the gas can be sold in the domestic market or liquefied and shipped to Europe, which has largely been cut off from Russian supplies.

Cypriot Energy Minister George Papanastasiou confirmed that the government had rejected the latest plan, which omitted a previous proposal to build a floating gas processing plant at the field which lies 160 kilometers (100 miles) southeast of Cyprus.

"The modification has been rejected. The expectation of the Republic of Cyprus is that the consortium honours what was mutually agreed by the parties in 2019," Papanastasiou told Reuters.

The partners have engaged in a new round of talks with the Cypriot government, Israel's NewMed, which is a partner in the Aphrodite field, said earlier this week.

The United States is backing Chevron's plans, which it believes will help to get gas to the market faster and with a lower carbon footprint as it does not involve building large infrastructure.

"Connecting Aphrodite to Egypt will help them with peak domestic consumption in the summer, add stability and reduce tensions in the region, and allow exports for Europe," the US source said.

The Biden administration is making the distinction between expensive and unnecessary infrastructure projects and less work-intensive interconnections that are necessary as economies transition to cleaner forms of energy, the source said.

Aphrodite, discovered more than a decade ago, holds an estimated 124 billion cubic meters of gas. Chevron is a partner in the field with NewMed and Shell.

Its development would give a vital boost to the Eastern Mediterranean gas basin which has attracted huge investment in recent years, particularly in the wake of Russia's invasion of Ukraine as Europe sought to replace Russian fossil fuel.

According to two industry sources, Nicosia objected to Chevron's plans to drill three production wells rather than five and avoid the construction of a floating production unit above the field.

A Chevron spokesperson said the consortium was working to progress the Aphrodite project.

"We have submitted a modified development plan to the Cypriot Government, which we hope will lead to the development of the Aphrodite field and delivery of gas to Egyptian and global markets via existing LNG (liquefied natural gas) plants on the north coast of Egypt."

"We believe it is important that Aphrodite is expeditiously developed for the benefit of Cyprus, the Eastern Mediterranean region and European and other international markets," Chevron said.  

 

 

 

 

Leviathan partners in Israel to invest US$568 million in third gas pipeline

Partners in the Israeli offshore gas project Leviathan said on Sunday they would invest US$568 million to build a third pipeline that will allow increased natural gas production and exports.

The Leviathan consortium includes operator Chevron and Israel's NewMed Energy and Ratio Energies.

Leviathan, a deep-sea field with huge deposits, came online at the end of 2019 and produces 12 billion cubic meters (bcm) of gas per year for sale to Israel, Egypt and Jordan. The idea is to boost capacity to include sizeable volumes for Europe as it seeks to reduce dependence on Russian energy.

The new pipeline will connect the well with a production facility some 10 km off Israel's Mediterranean shore. It is due to come online in the second half of 2025, when production at Leviathan will jump to 14 bcm a year, the companies said.

"Expansion of the production capacity and future liquefaction via a designated liquefaction facility will allow us to supply more natural gas to the local, regional, and very soon also the global market," said NewMed CEO Yossi Abu.

In the longer-term, Leviathan production is expected to reach about 21 bcm a year. The group has announced plans for a floating liquefied natural gas (LNG) terminal off the Israeli coast with an annual LNG capacity of about 4.6 million tons, or 6.5 bcm.

Ratio CEO Yigal Landau said that record demand from last year continued into the first quarter, and that there was room to expand use of the export network in Jordan as well.

"We are currently exploring the option of upgrading transmission infrastructures in Jordan to transport additional gas quantities to markets in Jordan and Egypt," Landau said.

Iran seizes oil tanker in Gulf of Oman

Iran seized a Marshall Islands-flagged oil tanker in the Gulf of Oman in international waters on Thursday, the US Navy said, the latest in a series of seizures or attacks on commercial vessels in sensitive Gulf waters since 2019.

Iran's army said it had seized a Marshall Islands-flagged oil tanker in the Gulf of Oman after it collided with an Iranian boat, injuring several crewmen, Iranian state media reported.

"Two members of the boat's crew are missing and several were injured due to the collision of the ship with the boat," an army statement said.

The US Navy identified the vessel as the Advantage Sweet. According to Refinitiv ship tracking data, it is a Suezmax crude tanker that had been chartered by oil major Chevron and had last docked in Kuwait.

Chevron said it is aware of the situation involving the Advantage Sweet and is in contact with the vessel operator with the hope of resolving this situation as soon as possible, a spokesperson said.

The vessel's destination was listed as the US Gulf of Mexico port of Houston, ship tracking data showed.

The Marshall Islands Maritime Administrator said it was aware of the situation and was in communication with the vessel's owner/operator.

"Iran's continued harassment of vessels and interference with navigational rights in regional waters are a threat to maritime security and the global economy," the US Navy said, adding Iran has in the past two years unlawfully seized at least five commercial vessels in the Middle East.

The US Navy added that after sending a P-8 Poseidon maritime patrol aircraft to monitor the situation, "we have since been able to determine the IRIN (Iranian navy) conducted the seizure".

About a fifth of the world's crude oil and oil products passes through the Strait of Hormuz, a narrow choke point between Iran and Oman which the Advantage Sweet had passed through, according to data from analytics firm Vortexa.

Maritime security company, Ambrey said the vessel had been boarded via helicopter. "The vessel did not show any signs of conducting evasive maneuvers prior to the incident," it said.

Munro Anderson, with maritime security company Dryad, said separately that Iran usually detained vessels for "leverage or signalling".

"The working hypothesis at the moment is that it could either be an arbitrary detention of a vessel by Iran in response to the US sailing its first unmanned vessel through the region last week - as a show of force," he said. "Or, it could be in response to the sanctions on the 24th (of April) by the US against personnel in Iran connected to the IRGC (elite Revolutionary Guards)."

Since 2019 there have been a series of attacks on shipping in the strategic Gulf waters at times of tension between the United States and Iran.

Iran last November released two Greek-flagged tankers it seized in the Gulf in May in response to the confiscation of oil by the United States from an Iranian-flagged tanker off the Greek coast.

Indirect talks between Tehran and Washington to revive Iran's 2015 nuclear pact with world powers have stalled since September over a range of issues, including the Islamic Republic's violent crackdown on popular protests, Tehran's sale of drones to Russia and acceleration of its nuclear program.

The US Navy Fifth Fleet is based at the Gulf island state of Bahrain, called on Iran to immediately release the tanker.

The ship issued a distress call during the seizure, the U.S. Navy statement said.

According to the International Maritime Organization shipping database, the Advantage Sweet is owned by a China-registered company called SPDBFL No One Hundred & Eighty-Seven (Tianjin) Ship Leasing Co Ltd.

 

Chevron allowed bringing Venezuelan crude to United States

The US oil refiners that once were regular buyers of Venezuelan crude are jockeying to win access to coming cargoes chartered by Chevron Corp under a newly issued US license, reports Reuters.

The Biden administration last week authorized Chevron to expand operations in Venezuela and resume taking prized heavy crude to the United States. It was first easing in more than three years of a US ban on imports from the South American nation.

A further relaxation may follow if Caracas and opposition leaders agree on terms of a presidential election, Washington has said.

Valero Energy Corp, PBF Energy and Citgo Petroleum have shown interest in getting access to the oil Chevron is expecting in coming weeks.

Venezuelan heavy crude grades, popular among US refiners for producing products from asphalt to motor fuels, had been partially replaced by Russian supplies in the aftermath of sanctions on Venezuela.

Some of these companies began contacting Chevron, shipping agencies and vessel owners to check timetables, the sources added. No Venezuelan oil officially has been allocated to Chevron yet and no chartering contracts have been signed to transport cargoes to the United States, according to Venezuelan export schedules and Refinitiv freight data.

The most recent chartering contracts to transport Venezuelan oil to the US Gulf Coast are from late 2018, right before sanctions, the Refinitiv data showed.

Valero, PBF and other US independent refiners would not need any new authorization to buy Venezuelan oil from Chevron. But Citgo, owned by Venezuela's PDVSA, may require clearance from the US Treasury Department since it operates under a license, analysts and experts said.

Chevron could prioritize its own refineries, especially Pascagoula, Mississippi, and El Segundo, California, which were regular receivers of Venezuela oil in the past.

On Thursday, Chevron CEO Michael Wirth said the company is not likely to add investment to boost Venezuela's output in the next six months as the sanctions framework will take time to be eased. The primary effect will be to allow some Venezuelan oil to flow back to the United States, "which will help the US refining system," Wirth said.

A total lifting of sanctions is unlikely in the near term, said analysts, but Venezuela's former customers, its business partners and creditors are taking steps to collect pending debts in the wake of the Chevron authorization. Washington has not signaled it would authorize other companies to collect on those debts.

Because spring and summer in the United States are the most active seasons for asphalt paving and peak driving, Venezuela's heavy Boscan crude produced by Chevron and PDVSA at their Petroboscan project could be the first exported.

To restart those shipments, dredging Maracaibo Lake's navigation channel might be needed to allow Panamax and Aframax tankers reach Venezuela's western oil terminals, shipping sources said.

A glut of Boscan crude in storage earlier this year forced a total shutdown of its processing. Draining those stocks must come first to restart output, PDVSA documents showed.

There are separate stocks of Hamaca oil and diluted crude for immediate export at the nation's largest terminal. But as of November 29, there were only 1.47 million barrels available, enough for only two cargoes, according to the PDVSA documents.

Petropiar's crude upgrader, operated by PDVSA and Chevron, was halted last week over a naphtha leak. It restarted days later to produce about 100,000 barrels per day of Hamaca.

In November, PDVSA sent 1.2 million barrels of Hamaca to its refineries for processing. About 1 million barrels of fuel oil were also shipped from Petropiar to Iran's state firm Naftiran Intertrade Co LTD (NICO) as part of an oil swap, the documents showed.

 

Oil chiefs to testify at congressional hearing

Top executives at ExxonMobil and other oil giants are set to testify at a landmark House hearing today (Thursday) as congressional Democrats investigate what they describe as a decades-long, industry-wide campaign to spread disinformation about the role of fossil fuels in causing global warming.

Top officials at four major oil companies are testifying before the House Oversight Committee, along with leaders of the industry’s top lobbying group and the US Chamber of Commerce. Company officials were expected to renew their commitment to fighting climate change.

The much-anticipated hearing comes after months of public efforts by Democrats to obtain documents and other information on the oil industry’s role in stopping climate action over multiple decades. The appearance of the four oil executives — from ExxonMobil, Chevron, BP America and Shell — has drawn comparisons to a high-profile hearing in the 1990s with tobacco executives who famously testified that they didn’t believe nicotine was addictive.

 “The fossil fuel industry has had scientific evidence about the dangers of climate change since at least 1977. Yet for decades, the industry spread denial and doubt about the harm of its products — undermining the science and preventing meaningful action on climate change even as the global climate crisis became increasingly dire, ″ said Carolyn Maloney and Ro Khanna.

Maloney chairs the Oversight panel, while Khanna leads a subcommittee on the environment.

More recently, Exxon, Chevron and other companies have taken public stances in support of climate actions while privately working to block reforms, Maloney and Khanna charged. Oil companies frequently boast about their efforts to produce clean energy in advertisements and social media posts accompanied by sleek videos or pictures of wind turbines.

The industry “spends billions to promote climate disinformation through branding and lobbying″ that is increasingly outsourced to trade groups, “obscuring their own roles in disinformation efforts,” the lawmakers said.

Democrats have focused particular ire on Exxon, after a senior lobbyist for the company was caught in a secret video bragging that Exxon had fought climate science through “shadow groups” and had targeted influential senators in an effort to weaken President Joe Biden’s climate agenda, including a bipartisan infrastructure bill and a sweeping climate and social policy bill currently moving through Congress.

Keith McCoy, a former Washington-based lobbyist for Exxon, dismissed the company’s public expressions of support for a proposed carbon tax on fossil fuel emissions as a “talking point.”

McCoy’s comments were made public in June by the environmental group Greenpeace UK, which secretly recorded him and another lobbyist in Zoom interviews. McCoy no longer works for the company, an Exxon spokesperson said last month.

Darren Woods, Exxon’s chairman and chief executive, has condemned McCoy’s statements and said the company stands by its commitment to work on finding solutions to climate change.

Woods is among the chief executives set to testify Thursday, along with BP America CEO David Lawler, Chevron CEO Michael Wirth and Shell President Gretchen Watkins.

Casey Norton, an ExxonMobil spokesperson, said the company has cooperated with the Oversight panel, adding: “ExxonMobil has long acknowledged that climate change is real and poses serious risks.″

In addition to substantial investments in “next-generation technologies,” the company also advocates for responsible climate-related policies, Norton said.

“Our public statements about climate change are, and have been, truthful, fact-based, transparent and consistent with the views of the broader, mainstream scientific community at the time, ″ he said.

Maloney and Khanna compared tactics used by the oil industry to those long deployed by the tobacco industry to resist regulation “while selling products that kill hundreds of thousands of Americans.″

The oil industry’s “strategies of obfuscation and distraction span decades and still continue today,″ Khanna and Maloney said in calling the hearing last month. The five largest publicly traded oil and gas companies reportedly spent at least US$ one billion from 2015 to 2018 “to promote climate disinformation through ‘branding’ and lobbying,” the lawmakers said.

Bethany Aronhalt, a spokeswoman for API, said the group’s president, Mike Sommers, welcomes the opportunity to testify and “advance our priorities of pricing carbon, regulating methane and reliably producing American energy.”