Energy News

On this page the ARD presents Australian, Russian, and sometimes international news from the energy sector to stimulate interest of Australian and Russian petroleum companies in various projects and investment opportunities that may be mutually beneficial.

 

Russia, Saudis may go beyond their oil alliance with LNG deal

By Vivian Nereim, Wael Mahdi and Elena Mazneva on 2/14/2018

RIYADH, KUWAIT and MOSCOW (Bloomberg) — Russia and Saudi Arabia are seeking ways to amplify the success they’ve had working together to manage the oil market by reaching new energy agreements, including one on liquefied natural gas.

The two energy giants, which orchestrated an oil-cuts agreement that helped crude prices recover to a three-year high, may announce an LNG pact later on Wednesday, Saudi Arabian Energy Minister Khalid Al-Falih told reporters in Riyadh before a planned meeting with his Russian counterpart. It would be “a big announcement” from Saudi Aramco on a partnership in the super-chilled fuel, Kirill Dmitriev, chief executive officer of the state-run Russian Direct Investment Fund, said in the Saudi capital. Neither gave further details.

Russian President Vladimir Putin made a priority of expanding the nation’s LNG industry last year, and the country is seeking new partners in projects to overtake the fuel’s biggest producers, including Qatar and Australia. Saudi Arabia is looking from Russia to East Africa and the U.S. for natural gas assets as state-owned Aramco, known formally as Saudi Arabian Oil Co., hunts for ways to meet soaring domestic demand.

The Saudis target doubling their own gas production in the next decade, Al-Falih said Wednesday in Riyadh. Russia last year offered the kingdom an opportunity to join a planned $20 billion LNG project in northern Siberia called Arctic LNG-2 which may start in 2022 or 2023. No decisions on such a partnership have been announced. Al-Falih didn’t rule out buying LNG from Russia, in an interview in December, though he said at the time it wasn’t the most economical option.

Russian companies are interested in building regasification terminals in Saudi Arabia because the kingdom will need these projects if it decides to import LNG, Russian Energy Minister Alexander Novak said earlier this month. Novak is holding meetings today in the Saudi capital.

http://www.worldoil.com/news/2018/2/14/russia-saudis-may-go-beyond-their-oil-alliance-with-lng-deal

Woodside raising $2.5b for LNG expansion

Woodside Petroleum is raising $2.5 billion from shareholders to fund its purchase of an additional stake in Western Australia’s Scarborough gas field and expansion of other gas projects.

Woodside will take majority control of the gas field, located off the coast of WA about 220 kilometres north west of Exmouth, by acquiring ExxonMobil’s 50 per cent stake for $US444 million, plus a future payment of $US300 million contingent on a final investment decision to develop the field. The energy giant already holds a 25 per cent stake in Scarborough after snapping up half of BHP Billiton’s interest in 2016.

The deal was announced as Woodside reported an 18 per cent increase in its full year net profit to $US1.02 billion ($A1.3 billion), due to improved market conditions and higher oil prices. Revenue for the year to December 31 declined 4.1 per cent as volumes dropped, and Woodside’s final dividend remains unchanged. Chief executive Peter Coleman said the Scarborough deal would allow the company to develop new supply that is likely to materially add value.

“The acquisition of the additional interest in Scarborough provides greater alignment, control and certainty over a low-cost, high value opportunity ahead of a global LNG supply gap,” he said. The deal takes Woodside closer to a plan to pipe gas from the Scarborough field to its Pluto liquefied natural gas plant at the onshore Burrup Hub in WA.

“Our Burrup Hub concept is advanced by our announcement today,” Mr Coleman said.

Woodside said it will raise $2.5 billion to help fund the acquisition and early development of Scarborough by offering about 94 million new shares in an entitlement offer to shareholders. The offer will also provide funding for a second production unit at the Pluto LNG plant near Karratha, progress on its plan to pipe gas from the Browse field to the North West Shelf LNG plant in WA, and first-stage development of the SNE oilfield in Senegal. RBC Capital Markets analyst Ben Wilson said the large equity raising appeared to be designed to head off future requirements for funds, but questioned the nature of the Scarborough acquisition.

“We have remaining questions as to why Woodside is deepening its portfolio of longer-dated undeveloped contingent resources when a liquids acquisition would better balance its portfolio,” he said.

The institutional portion of the equity raising is expected to be completed on Thursday, and Woodside shares are expected to remain in a trading halt until February 19.

http://www.news.com.au/finance/business/breaking-news/woodside-raising-25b-for-lng-expansion/news-story/400559ba83302781b9d00be3e937a76a

 

LNG exports soar but local prices contained

The Austrtalian, 12:00AM January 10, 2018East coast gas exports are at record levels as Queensland’s three big liquefied natural gas plants run hard to meet growing Chinese demand that has sent spot prices soaring and pushed east coast domestic gas prices higher.

But the higher domestic prices have been contained, indicating that Malcolm Turnbull’s moves to ensure the three big gas exporters, Origin Energy, Shell and Santos, did not leave domestic markets short have worked so far in a hot summer.

 lng_exports_aus_2018_1

Further evidence of this is the fact that the big Bass Strait gas fields owned by ExxonMobil and BHP Billiton — which have been running at record rates this year to supply extra demand driven by the LNG plants — last month started a production pullback without a big rise in spot prices.

Gladstone port statistics show LNG exports jumped 17 per cent from the previous month to 1.99 million tonnes. The move eclipsed the previous record of 1.75 million tonnes set the previous December. The three plants built at Gladstone for a cost of $70 billion, which have rapidly tripled east coast gas demand, are now able to run at full capacity. The plants have opened domestic markets to international prices, meaning contract prices have risen from $3 to $4 per gigajoule to $8 to $10 or more, spurring warnings of looming job cuts and increased power prices. 

Citi analysts said spot gas prices in Australia’s southeastern states averaged $7.40 per gigajoule in December, up 9 per cent from the previous month. “Higher domestic gas prices seem to be a function of both higher LNG export prices as well as increased use in electricity generation during the summer,” Citi analyst Dale Koenders said.  “LNG producers continue prioritising exports over domestic markets … while power demand rose in the southern states in a hotter than usual December, net contributions to the domestic markets remain low with producers leaning on exports on the strength of high spot LNG prices.” 

Australian Energy Market Operator data shows that the Longford gas plant that processes gas from Bass Strait has pulled back from about 1100 terajoules of production per day from June to September, to about 900 terajoules in December. That this has not resulted in a spot price surge indicates domestic markets remain well supplied for now. Spot LNG has more than doubled in the past six months as China has accelerated a shift from coal-fired power and heating to gas to tackle air pollution. Asian spot prices are now at $US10.86 per million British thermal units, or $14.60 per gigajoule. 

The increased LNG demand and spot price rise, combined with a hike in international oil prices that contract LNG sales are linked to, has sent Santos shares to a two-year high of $5.60, nearly doubling from $3 at the start of June. Origin Energy, which operates the Australia Pacific LNG plant with ConocoPhillips, is also at a two-year high, having risen 40 per cent in the past three months to $9.75. The surging LNG prices and Chinese demand, if contained, are refuting the argument that Australian businesses are paying more for wholesale gas than their Asian counterparts. 

Not that this is good news for local users. If the increase is long-term, it could spell the end of AGL Energy’s plans for a $250 million LNG import plant in Victoria to increase competition in the southern states by making imports uneconomic. In August, AGL said it could import gas to Victoria at a price of between $8 and $10 per gigajoule. This was when spot LNG prices were still below $US6, indicating any LNG that was imported to Victoria at current prices would cost well over $10 per gigajoule. Still, at an investor briefing in early December, when prices had climbed to $US9, AGL said it was “reasonably confident” of the economics of the terminal, which would be built at Crib Point.

City said it did not expect surging Chinese demand to keep LNG markets tight for long. “Policy-accelerated gas demand growth in China has occurred faster than the infrastructure and domestic gas supply can keep up, in turn placing greater reliance on China LNG imports,” Citi analysts said. “However, we expect China’s domestic gas markets will respond with increased production and storage, prior to Russian pipeline supply late 2019, mitigating the ongoing impact.”

http://www.theaustralian.com.au/business/mining-energy/lng-exports-soar-but-local-prices-contained/news-story/dd605935aa8a42bb779959cc14ec38b7

 

Yamal LNG Shipped First LNG

Moscow, 11 December 2017. PAO NOVATEK announced today that Yamal LNG has shipped the first LNG cargo containing 170 thousand cubic meters. The first cargo was sold to PETRONAS LNG UK Limited (PLUK). LNG sales according to the long-term contracts will commence in April 2018. All LNG sales prior to that date will be sold by Yamal LNG shareholders on a spot basis.

During the official loading ceremony in Sabetta on the 8th December, Russian President Vladimir Putin gave the formal command to start loading LNG onto the Arc7 ice-class tanker “Christophe de Margerie”.

According to NOVATEK’s Chairman of the Management Board, Leonid Mikhelson, “NOVATEK officially enters the global gas markets by shipping the first tanker loaded with LNG from our flagship Yamal LNG project. This event begins the process of developing and liquefying our massive natural gas resources on the Yamal and Gydan peninsulas into more than 70 million tons of LNG. This potential gives our country an opportunity to become one of the biggest global LNG exporters.”

For further information, please visit www.novatek.ru or contact:

Press Service: +7 (495) 721 2207, press@novatek.ru

 

During the visit to the Yamal LNG plant President Putin held a meeting on the development of liquefied natural gas production projects.

December 8, 2017 , Sabetta

putin_yamal_lng

President of Russia Vladimir Putin: Good afternoon, colleagues!

Today, we will discuss plans to develop liquefied natural gas production in our country. As you know, there is a reason that we gathered here, on Yamal. NOVATEK has built the largest LNG plant in Russia on the Yamal Peninsula. As you saw, we have just attended the shipment of the first batch of liquefied natural gas. This grand project required huge investment, $27 billion; it is also multi-profile, as other sectors of the Russian economy are involved in its implementation.

In this sense, we can certainly describe it as a megaproject. It is of great importance for the country as a whole, and is yet another confirmation of Russia’s status as one of the world’s leading energy powers.

Yamal LNG opens new horizons for the gas industry’s development, for the entire national economy; it creates high-tech jobs, including in Russia’s North and Far East, where the transhipment terminal will be located. Mr Mikhelson [Chairman of the Management Board of NOVATEK] also talked about this today. This in itself is a separate interesting project, providing work to related enterprises; it lays the groundwork for the effective and balanced development of the Arctic and the Northern Sea Route. It is also important that this project contributes to strengthening economic cooperation with the countries of the Asia-Pacific region, primarily, our key partners in this region, including Chinese companies. We have established successful international cooperation with France, Italy, Germany, and a number of other European states.

Of course, the number of such promising projects needs to be increased. According to experts, global demand for gas will increase by over 40 percent by 2040. It is particularly important that supplies of liquefied gas will be growing faster than any other. Here, growth can reach about 70 percent. Russia can and should occupy a decent niche on this market. Today, as you may be aware, it remains fairly modest. In addition to Yamal LNG, we have a large gas liquefaction centre on Sakhalin, but, to reiterate, this is clearly not enough. Our fuel and energy complex is faced with the key task of increasing capacities and volumes of LNG production. In this regard, I would like to emphasise a few points.

First, the production and export of LNG should not lead to weakening of existing positions on the pipeline gas market. Moreover, they need to be retained and, of course, strengthened. The work should be constructed in such a way that the LNG projects do not compete with our pipeline gas. On the contrary, it is necessary to create conditions for balanced, complementary areas of business in order to maximise the return.

Second, the demand for liquefied gas needs to be actively promoted within our country as well. Its use can be expanded, including through supplying it to remotely located customers without pipeline gas and moving public transport to cleaner and more environmentally friendly natural gas engines. In this sphere, we already have good special programmes.

I hope we will have the chance to talk more about measures to support the consumption of liquefied gas on the domestic market during our today’s meeting.

Third, I would like to emphasise that such projects as Yamal LNG create the foundation for the sustainable development of territories. Here in Sabetta alone it created 32,000 jobs. As Mr Mikhelson said, now the workforce is smaller but there are still tens of thousands of jobs. There is a new port, aviation and railway infrastructure, housing and social facilities. In other words, this is not the predatory, mindless mining of resources but comprehensive development of the territory, accompanied by the implementation of many programmes, including environmental ones. This is exactly the approach that should be used in future LNG projects.

It is also important that Yamal LNG is accompanied by navigation along the Northern Sea Route, the formation of logistics routes, and a build-up of the tanker and icebreaker fleet. I am sure that this will give us unique advantages in the economy, trade and power engineering.

Fourth, obviously to increase LNG supplies it is necessary to develop gas liquefaction capacities and create the conditions for localising the production of equipment essential for its production, storage and transportation, and this creates work for domestic industrial enterprises.  I know that such work is being carried out now. Moreover, it should be carried out quicker so that future LNG projects are based on domestic equipment and technology as much as possible.

And one more point. To diversify the defence industry, I suggest considering the potential participation of defence companies in projects on localising and producing high-tech products for gas companies.

And naturally, in conclusion I would like to wish Yamal LNG success in implementing all of its plans – the second, third and the unexpected fourth line. And, of course, I wish you success in implementing the next phase, Yamal LNG-2.

 

Arrow deal is a major boost for gas supply and jobs

APPEA, 8 December, 2017. APPEA welcomes the gas supply deal announced today between Shell Australia joint ventures Arrow Energy and QCLNG.

The 27-year sales agreement will underwrite the development of Arrow’s massive Surat Basin reserves, estimated to be five trillion cubic feet (TCF). “This is great news for Queensland and for Australia,” said APPEA Chief Executive Dr Malcolm Roberts. “The largest undeveloped gas reserve on the east coast has found a way to market, supplying Australia’s domestic and export customers for decades to come.

“This innovative deal has only been possible by the use of existing infrastructure developed to support the LNG industry. “Once again, we are seeing how the development of a world-class gas export industry in Queensland is actually boosting supply to the domestic market.”

Dr Roberts said the creation of 1000 new jobs, including 200 ongoing operational roles, was especially good news for regional communities in the Surat. “While today’s announcement has been driven by industry, there is plenty governments can do to increase gas supply and put downward pressure on prices,” Dr Roberts said.

“The Queensland Government’s own analysis shows regulatory costs account for more than one third of exploration costs and almost one tenth of all costs over a project’s life. “There is no doubt that a concerted effort to reduce regulatory costs will encourage more exploration and development. This must be a priority for all governments.”

Note: Arrow is owned by Shell and PetroChina (50/50).  QCLNG is an unincorporated joint venture between Shell, CNOOC and Tokyo Gas.

https://www.appea.com.au/media_release/arrow-deal-is-a-major-boost-for-gas-supply-and-jobs/

Yamal LNG Commenced LNG Production

Moscow, 5 December 2017. PAO NOVATEK today announced that Yamal LNG has commenced producing liquefied natural gas (LNG) at the first LNG train, with the nameplate capacity of 5.5 million tons per annum.

The first cargo loading is scheduled on 8 December 2017 at the Sabetta port using the first Arc7 ice-class LNG tanker named the “Christophe de Margerie”.

The Chairman of NOVATEK’s Management Board Leonid Mikhelson noted: “This event marks a milestone accomplishment for the Yamal LNG project. The commencement of LNG production begins a new chapter in our corporate history. Many contractors and suppliers from Russia and abroad were involved in this project. We have received great support from the Russian government in implementing this project. We are grateful to all our partners, contractors and shareholders for the joint work on the way to the successful start of this project on time and on budget according to our FID schedule.”

For further information, please visit www.novatek.ru or contact:

Press Service: +7 (495) 721 2207, press@novatek.ru

NOVATEK is strongly interested in LNG market

НОВАТЭК глубоко интересуется рынком сжиженного природного газа в России и за рубежом

21 апреля 2017 г., 17:48Neftegaz.RU2071

НОВАТЭК планирует сохранить полку добычи углеводородов в 2017 г на текущем уровне. Об этом 21 апреля 2017 г сообщил журналистам глава НОВАТЭКаЛ. Михельсон. НОВАТЭК сейчас активно работает надрасширением ресурсной базы для проектаЯмал СПГ, а также в других районах, где уже создана соответствующая инфраструктура, в 1ю очередь, это Уренгой.

Сформировать ресурсную базу НОВАТЭК планирует до конца 2017 г, что позволит поддерживать полку в существующем регионе добычи для сохранения доли на внутреннем рынке газа. По запуску завода по производству сжиженного природного газа (СПГ) Ямал-СПГ до конца 2017 г НОВАТЭК свои планы подтвердил. Но точную дату Л. Михельсон не назвал, пояснив, что идет большой объем работ по отладке и пусконаладке.

Стоимость проекта по строительству Ямал-СПГ оценивается в 27 млрд долл США. Акционерами Ямал СПГ являются НОВАТЭК(50,1%),Total (20%), CNPC (20%), а также Фонд Шелкового пути (9,9%). Законтрактован практически весь объем СПГ – 96% будущего объема производства. НОВАТЭК планирует сохранить полку добычи углеводородов в 2017 г на текущем уровне.

В целом рынок СПГ представляет для НОВАТЭКабольшой интерес.

У компании сформирован хороший портфель продаж газа на внутреннем рынке и дополнить его мог бы гарантированный портфель на СПГ-рынке. Компания заинтересована вбункеровочном бизнесе, бизнесе заправок большегрузного транспорта, причем в мировом масштабе. Напомним, что в декабре 2016 г НОВАТЭК приобрел 100% компании Blue Gaz в Польше за 26 млн руб. Компания закупает сжиженный природный газ в Польше, регазифицирует его на собственной станции и поставляет потребителям внутри страны.

В частности,НОВАТЭК обсуждает инвестиции в СПГ-проекты сКриогазом, кроме того, рассматриваетSaipem и General Electric в качестве партнеров своих СПГ-проектов. С Saipem компания ведет конкретные переговоры.

А вот подписание контракта на стадию FEED поЦентрe строительства крупнотоннажных морских сооружений в с Белокаменка Мурманской областис консорциумом, 50%+1 акция в котором принадлежитНИПИгаз, НОВАТЭК отложил. Кольская верфь для НОВАТЭКа -значимый проект и компания хотелось бы видеть в проектене только инжиниринговую компанию, а полноценного партнерства.

Поэтому НОВАТЭК задерживает окончательноеподписаниевсех документов, поскольку объем партнерства уточняется. Строительство Кольской верфибудет вестись в рамках проекта Арктик СПГ-2 по освоению месторождений Гыдана. Возведение Центра строительства крупнотоннажных морских сооружений планируется завершить к 2020 г.

Огромные ресурсы Ямала и Гыдана позволяют НОВАТЭКу рассчитывать на 15% мирового производства СПГ

29 марта 2017 г., 15:53Neftegaz.RU1779

Ресурсы Ямала и Гыдана дают возможность производить более 70 млн т/год сжиженного природного газа (СПГ). Об этом 29 марта 2017 г на форумеАрктика – территория диалогасообщилглаваНОВАТЭКа Л. Михельсон. Ямал и Гыдан обладают огромной ресурсной базой.

Использование этого потенциала позволит создать в регионе СПГ-кластер с долей производства более 15% мирового производства СПГ, заявил Л. Михельсон. В 1ю очередь имеется в виду СПГ-завод Ямал СПГ, которыйсейчас строитсяна берегу Обской губы.

Планируется построить 3 линии (train)мощностью 5,5 млн т/год каждая, таким образоммощность завода Ямал СПГ составит 16,5 млнт/год. Начало производства СПГ на1й линии запланировано на2017 г, а1й танкер с грузомСПГ планируется отправитьдооктября 2017 г. Полученный опыт ляжет в основу новых проектов, таких, как проект Арктик СПГ-2. Этот проект предусматривает сборку линий по производству СПГ на железобетонных платформах гравитационного типа, предназначенных для буксировки к местам добычи газа на месторождениях. Начало строительства СПГ-завода планируетсяна 2018 г. Объем производства СПГ запланирован на уровне 16,5 млн т/год.

 NOVATEK Acquires Severneft-Urengoy

Moscow, 23 November, 2017. PAO NOVATEK announced today the acquisition of Severneft-Urengoy from EuroChem, a leading global fertilizer company.

Severneft-Urengoy holds the hydrocarbon exploration and production license for the West-Yaroyakhinskiy license area located in the Purovsky district of the Yamal-Nenets Autonomous Region in close proximity to our existing infrastructure. The license contains estimated hydrocarbon resources of 918 mmboe according to the Russian resource classification as of 31 December 2016, and produced 816 million cubic meters of natural gas and 93 thousand tons of gas condensate during 2016.

According to NOVATEK’s Chairman of the Management Board, Leonid Mikhelson, “The acquisition of the West-Yaroyakhinskiy license area increases our resource base in close proximity to our producing assets and makes an immediate contribution to our total gas and liquids production. Gas condensate accounts for a significant portion of the area’s reserves, and we expect additional synergies from processing this additional production at our Purovsky plant and our Ust-Luga Complex”.

For further information, please visit www.novatek.ru or contact:

Press Service, +7 (495) 721 2207, press@novatek.ru

Browse development back on Shell’s agenda

The Australian, November 20, 2017. The head of Royal Dutch Shell in Australia has thrown her support behind plans to finally develop the massive Browse gasfields off Western Australia through the North West Shelf, easing fears that the sale of Shell’s stake in Woodside could complicate Browse’s development. In Shell’s first comments since the sale of its remaining 13.3 per cent stake in Woodside for $3.5 billion last week, Shell Australia country chair Zoe Yujnovich told The Australian that the long-stalled Browse project ­remained “a key part” of the oil giant’s Australian portfolio in the wake of the sale.

Ms Yujnovich said the company was supportive of the $US25bn ($33bn) plan to finally develop Browse by connecting the fields to the existing North West Shelf liquefied natural gas plant via a 900km underwater pipeline. “Browse is undoubtedly a key part of that (Australian portfolio) and certainly we see Browse to the North West Shelf as being the most likely profitable pathway,” Ms Yujnovich said. The big Browse gas fields were first discovered more than 40 years ago and have been the subject of a number of unsuccessful development plans.

Project operator Woodside spent years studying a proposed onshore LNG plant at James Price Point north of Broome but abandoned that after the $80bn plan proved too expensive.

For more follow the link:

http://www.theaustralian.com.au/business/mining-energy/browse-development-back-on-shells-agenda/news-story/6bba35ea2e89b396e3ef7996c385e966

Rosneft drills world’s longest well in Sakhalin

MOSCOW,  16/11/2017.  Rosneft, as a member of Sakhalin-1 Consortium, successfully completed drilling of the world’s longest well from Orlan platform at Chaivo field in the Sea of Okhotsk. The length of the well with horizontal completion is 15,000 m, which currently is a world record. This is a supercomplex well with DDI (Directional drilling index) of 8.0 and 14,129-m stepout.

A number of world records have been set in extended reach drilling since the start of drilling at Sakhalin-1 project in 2003. Taking into account the new record long well the Sakhalin-1 Consortium drilled nine out of 10 of the world’s longest wells.

Sakhalin-1 extended reach drilling is among the fastest in the world owing to the advanced and efficient technologies such as “Fast Drill”. This technology combines high quality modeling of physical parameters of drilling with a structured approach to well designing. Extended reach drilling reduces costs of construction of additional offshore structures, pipelines and other field infrastructure facilities and it also mitigates environmental impact due to smaller drilling and production footprint.

Since 2013, the project has set five world records for measured depth of wells. In April 2015 development well О-14 with length of 13,500 m, 13,000 m long Z-40 well was drilled and completed in 2014, wells Z-43 and Z-42 were drilled in April and June 2013 with the length of 12,450 and 12,700 m, respectively.

APPEA welcomes West-East Gas Pipeline study

APPEA, 30 October, 2017. APPEA welcomes the Commonwealth Government’s announcement today that tenderers have been selected to conduct a pre-feasibility study on the West-East Gas Pipeline. The study will be conducted by ACIL Allen, in conjunction with GHD, and is due to report back to government in March 2018. APPEA Chief Executive Dr Malcolm Roberts said the gas industry supported rigorous cost-benefit studies for new pipeline infrastructure. “Provided the business case stacks up, APPEA welcomes more interconnection and further steps towards a larger, more integrated national market,” Dr Roberts said. “But is must be acknowledged that west coast gas is likely to be an expensive solution to east coast supply concerns.

“The reality is local gas will always be cheaper gas.”

“The Australian Consumer and Competition Council (ACCC) recently advised that customers in Victoria and New South Wales were already paying a 25 per cent premium for importing gas south from Queensland. “Transportation charges alone would mean gas travelling across the continent would carry an even greater premium.” Dr Roberts said developing local gas supply was the logical solution to supply concerns in the eastern Australian market. “Victoria and NSW cannot continue to rely on other states to solve their gas supply issues. These states have abundant local onshore resources but would rather import gas from other states or, incredibly, from overseas,” Dr Roberts said. “It’s time the Victorian and NSW governments recognised that the cheapest gas available to homes and businesses in their states is the gas they are standing on. They need to get on and develop it.”

https://www.appea.com.au/media_release/appea-welcomes-west-east-gas-pipeline-study/

Chevron abandons drilling plans on Great Australian Bight, company blames low oil prices

ABC News, 13 October, 2017. Major international energy company Chevron has announced it has joined BP in abandoning plans to drill in the Great Australian Bight on South Australia’s west coast. It said while the Bight had massive potential, low oil prices had forced it to concentrate on other projects. Chevron said the decision to ditch its $400 million plans had nothing to do with government policy, regulatory, community or environmental concerns. In October last year BP announced it would not proceed with exploration drilling in the Bight.

Chevron’s decision has disappointed the Australian Petroleum Production and Exploration Association. The association’s director Matthew Doman said success in the Bight would ease Australia’s reliance on imported oil and deliver much-needed new investment and jobs to South Australia. “Chevron has made clear its view that the resource potential of the Great Australian Bight remains significant, but their decision is a reminder that much-needed investment in developing Australia’s energy resources cannot be taken for granted,” Mr Doman said.

“While several other companies continue to develop exploration plans for the Bight, the international environment for the oil and gas industry is challenging.”

For more follow the link:

http://www.abc.net.au/news/2017-10-13/chevron-abandons-oil-drilling-on-great-australian-bight/9045870

Russia’s Novatek aims topple Qatar from LNG top spot

Yamal project could be completed earlier than expected

* Arctic LNG 2 construction in 2019 subject to final decision

* Both projects could pump 70 mln T vs Qatar’s 77 mln T

* Tighter U.S. sanctions do not impact technology purchases

 By Sabina Zawadzki

https://www.reuters.com/article/lng-novatek/russias-novatek-aims-topple-qatar-from-lng-top-spot-idUSL8N1JK3BK

LONDON, June 23 (Reuters) – Russian gas producer Novatek aims to topple Qatar as the world’s biggest exporter of liquefied natural gas as it gets closer to completing its first LNG project, a top executive said, batting away concerns about U.S. sanctions on the sector.

The country’s largest non-state gas producer is expected to start exporting LNG from the first phase of the Yamal project, situated far above the Arctic circle, towards the end of this year and may bring forward its final stage by six months, CFO Mark Gyetvay said.

But it is the inception of Novatek’s second, and Russia’s third, large-scale LNG project called Arctic LNG 2 that would transform the company, headed by Russia’s richest businessman Leonid Mikhelson, into a top global producer within a decade.

“We have huge ambitions to be just as large as Qatar is as one country, but as one company,” Gyetvay said in London on the sidelines of an energy forum.

Qatar and Russia have long been rivals in global gas markets. Qatar’s supplies came under the spotlight in the past month after Saudi Arabia cut economic and diplomatic ties, in a move ratcheting up a wider violent and diplomatic conflict in the Middle East.

SECOND PHASE

In terms of LNG, Qatar is by far the largest exporter, selling 77.2 million tonnes of the liquefied gas and accounting for just under 30 percent of market share in 2016, according to energy research group IHS and the International Gas Union.

Russia that year was seventh with exports of 10.8 million tonnes and a 4 percent market share. The Yamal project, once all stages are complete, will export an additional 16.5 million tonnes, which would put Russia, already the world’s largest crude oil exporter, in third place just below Australia.

Of progress on Yamal, Gyetvay said the second phase would be ready in the second half of next year while the third could be completed by the first half of 2019, rather than the second, as all facilities were expected to be delivered this year.

“If we do Arctic LNG 2 – we’ll start the process of construction in 2019 if we make that FID (final investment decision) – the plan is to make sure we have the first LNG in the market by 2023,” he said.

Mikhelson said on March 29 production from the two projects on the Yamal and neighbouring Gydan peninsula could produce more than 70 million tonnes annually – within spitting distance of Qatar’s exports. And President Vladimir Putin told Mikhelson a day later Russia not only could but would become the largest LNG exporter should the pace of development continue.

Saudi Energy Minister Khalid al-Falih expressed the Kingdom’s interest in participating in the Arctic LNG 2 project earlier this month although Gyetvay said it was too early to comment on any future foreign investors. Qatar already has a large investment in Russia’s energy industry in the form of the 19.5 percent stake in Russia’s largest oil company, Rosneft, that it bought last year with trading group Glencore.

Western sanctions on Russian companies including Novatek “obviously had an effect” on the Yamal project, Gyetvay said: “We had to revert to the use of Russian and Chinese finance”. But for now, he does not see further impact even as Washington tightened those sanctions because they concern financing rather than technology, which Novatek is free to purchase from anywhere as it needs for its projects.

NOVATEK Signs Cooperation Agreement with Kamchatka Territorial Government

Moscow, 23 October 2017. PAO NOVATEK has signed a Cooperation Agreement with the Kamchatka Territorial Government on building a sea terminal facility for reloading liquefied natural gas (LNG) at Kamchatka. The Cooperation Agreement was signed by the Chairman of NOVATEK’s Management Board Leonid Mikhelson and Kamchatka’s Governor Vladimir Ilukhin.

Novatek_Kamchatka Eng

Woodside Petroleum CEO Peter Coleman says gas industry ‘out to lunch’

Sydney Morning Herald, July 2017. Woodside Petroleum chief executive Peter Coleman has raised the hackles of his rivals, telling the industry it has been ”out to lunch”, taking years to build LNG projects that ran well over budget and only has itself to blame for failing to capture a bigger share of the fossil fuel market. Mr Coleman pointed to the $200 billion figure that is cited for investment in liquefied natural gas over the past 10 years in Australia and said it was nothing to be proud of, given that the original budgeted figure was so much lower.

“Whilst we may wax lyrical about the $200 billion, it actually started as $100 billion,” he told the APPEA oil and gas industry conference in Brisbane on Tuesday. “We didn’t deliver on our promise. We delivered a very expensive energy source,” he said, taking the industry to task for losing discipline in investment, making projects too complex, and losing touch with gas markets.

Some industry executives privately took issue with the criticism, pointing out that Woodside has little recent track record of delivering growth. But others interpreted the comments as a positive call to re-examine established processes and business models, and resolve to do better in future.

NOVATEK Joins the Society for Gas as a Marine Fuel and the SEA\LNG Association

Moscow, 14 July 2017. Novatek Gas & Power, a wholly owned trading subsidiary of NOVATEK has joined the Society for Gas as a Marine Fuel and the SEA\LNG Association to help promote liquefied natural gas (LNG) as a marine fuel. Both organizations are active in promoting the increased use of cleaner burning LNG for marine transportation.

 novatek_joins_SGMF_2017

NOVATEK Reports Preliminary Operating Data for the First Half 2017

Moscow, 10 July 2017. PAO NOVATEK reported today preliminary operating data for the first half 2017. NOVATEK’s marketable hydrocarbons production totaled 252.3 million barrels of oil equivalent (boe), including 31.04 billion cubic meters (bcm) of natural gas and 5,885 thousand tons of liquids (gas condensate and crude oil), resulting in a decrease in total hydrocarbons production by 21.3 million boe, or by 7.8%, as compared to the first half 2016. Preliminary natural gas sales volumes aggregated 33.13 bcm, which was 4.1% higher compared to the first half 2016. For more see:

http://www.novatek.ru/en/press/releases/index.php?id_4=1744

Shell to shut Curtis Island LNG export plant for maintenance in October

(World LNG News, 14 Jul 2017) The exact timing of the shutdown has not been revealed by QGC, Shell’s unit operating the two two-train LNG export facility. QGC, Australian coal seam gas (CSG) producer became part of Shell when the Anglo-Dutch giant acquired BG Group in a $54 billion deal in February last year. The QCLNG plant located on Curtis Island off Gladstone produces about 8 million tons per year of LNG, enough to load around ten vessels per month. China’s CNOOC holds 50 percent equity in Train 1 while Japan’s Tokyo Gas owns a 2.5 percent stake in Train 2.

Australia trims 2017-18 LNG export forecast by 3.8 mil mt on Ichthys delay

(Sydney, Platts, 7 Jul 2017) The Australian government Friday lowered its forecast for the country’s fiscal 2017-18 (July-June) LNG exports by 3.8 million mt, due mainly to the later-than-expected startup of Inpex’s Ichthys LNG project. The Department of Industry, Innovation and Science revised down its forecast for fiscal 2017-18 LNG exports to 63.8 million mt in its latest quarterly report from 67.6 million mt issued in March. While pointing to the delay from late 2017 to March 2018 of the Northern Territory-based Ichthys LNG project startup, as well as minor revisions to forecasts for other LNG projects, the report also flagged intensifying global competition and federal government LNG export restrictions as casting uncertainty over the outlook.

Two other LNG projects are scheduled to start production in Australia in the current fiscal year: the 8.9 million/year Wheatstone LNG project and 3.6 million mt/year Prelude floating LNG facility.

Australian average wholesale gas prices remain below Asian average  

(APPEA Media Release (extract), 5 July2017).  Average wholesale gas prices in Australia remain lower compared to the average in the Asia‑Pacific region, according to a new report. The International Gas Union’s Wholesale Gas Price Survey 2017 shows that the average wholesale gas price in Australia last year of around $US4.29/MMBTU was around one-third less than the average price for the Asia‑Pacific region. By comparison, Australia’s leading trade partners Japan, South Korea and China all paid average wholesale gas prices between $US7 and well over $US8/MMBTU.  Australia also enjoyed lower wholesale gas prices than its two regional LNG export competitors, Malaysia and Indonesia. Globally, Australia’s average wholesale price ranked 26th in a survey of 52 nations.

https://www.appea.com.au/media_release/australian-average-wholesale-gas-prices-lower-than-asian-average/

Australian LNG benefits cannot be taken for granted

(APPEA Media Release (extract), 6 July2017).  Australia has received a timely reminder of the value to our economy of a growing gas export industry – and a warning that ongoing success cannot be taken for granted. The June 2017 Resources and Energy Quarterly released by the Department of Innovation, Industry and Science confirms liquefied natural gas (LNG) is on track to overtake metallurgical coal as Australia’s second largest export commodity in 2018-19. The report forecasts the value of Australia’s LNG exports will jump from $23 billion to $37 billion in the next two years as new projects in Western Australia and the Northern Territory enter production. APPEA Director Matthew Doman said LNG exports delivered jobs and revenue for Australia as well as energy and reduced emissions for our Asian trading partners.

“While global supply capacity is set to increase from 285 million tonnes to 382 million tonnes by 2019, almost half of this increase will come from the five new export projects under construction in the US. Qatar, the world’s largest LNG producer, has also signalled its intention to massively increase its own export capacity. So, Australia may soon find itself caught between an established LNG giant determined to regain its market share and an emerging challenger, hungry for success. A supportive policy and regulatory framework in Australia is vital to the industry meeting these competitive challenges.” Mr Doman said the risk to Australia’s export industry was exacerbated by threats to export contracts under the Commonwealth’s new Australian Domestic Gas Supply Mechanism and possible tax increases on new gas projects.

“As a nation, we cannot take the industry’s ongoing success for granted. We are facing intense competition from low-cost producers in an already oversupplied global LNG market. Australia can succeed as a high-cost, low-risk country but we cannot succeed as a high-cost, high-risk country”, he said.

Crude tumbles after Russia said to oppose deeper production cuts

(Extracts from HONG KONG, Bloomberg, by Ben Sharples and Grant Smith on 7/5/2017).  Crude oil fell, snapping the longest winning streak this year, as Russia was said to oppose any proposal to deepen OPEC-led production cuts.

Trump to promote U.S. gas exports in Russia’s backyard

(Extracts from Washington, Reuters, by Roberta Rampton and Timothy Gardner on 7/3/2017).  President Donald Trump will use fast-growing supplies of U.S. natural gas as a political tool when he meets in Warsaw on Thursday with leaders of a dozen countries that are captive to Russia for their energy needs. In recent years, Moscow has cut off gas shipments during pricing disputes with neighboring countries in winter months. Exports from the United States would help reduce their dependence on Russia. Trump will tell the group that Washington wants to help allies by making it as easy as possible for U.S. companies to ship more liquefied natural gas (LNG) to central and eastern Europe, the White House said. Trump will attend the “Three Seas” summit – so named because several of its members surround the Adriatic, Baltic and Black Seas – before the Group of 20 leading economies meet in Germany, where he is slated to meet Russian President Vladimir Putin for the first time.

Among the aims of the Three Seas project is to expand regional energy infrastructure, including LNG import terminals and gas pipelines. Members of the initiative include Poland, Austria, Hungary and Russia’s neighbors Latvia and Estonia.

“In many ways, the LNG exports by the U.S. is the most threatening U.S. policy to Russia,” said Michal Baranowski, director of the Warsaw office of think-tank the German Marshall Fund. The U.S. is expected to become the world’s third-largest exporter of LNG in 2020, just four years after starting up its first export terminal. U.S. exporters have sold most of that gas in long-term contracts, but there are still some volumes on offer, and more export projects on the drawing board.

Cheniere Energy Inc, which opened the first U.S. LNG export terminal in 2016, delivered its first cargo to Poland in June. Five more terminals are expected to be online by 2020. Tellurian Inc has proposed a project with a price tag of as much as $16 billion that it hopes to complete by 2022, in time to compete for long-term contracts to supply Poland that expire the same year and are held by Russian gas giant Gazprom. A global glut in supply may, however, limit U.S. LNG export growth, regardless of Trump’s support. Russia has the advantage in Europe due to its proximity and pipeline connections.

Europeans will be watching to see whether Trump clarifies his administration’s position on a new pipeline to pump Russian gas to Germany, known as Nord Stream 2. The U.S. Senate in June passed a package of sanctions on Russia, including provisions to penalize Western firms involved in the pipeline. The new sanctions have stalled in the House of Representatives. The U.S. State Department has lobbied against the pipeline as a potential supply chokepoint that would make Europe more vulnerable to disruptions. The threat of sanctions adds to tensions between Washington and Berlin. Germany’s government supports the pipeline, and Trump’s position on it is a concern for European diplomats.

Russia’s Rosneft set for global gas tussle with Gazprom

(MOSCOW, Reuters, by Vladimir Soldatkin and Olesya Astakhova on 6/30/2017 ). Russia’s Rosneft, the world’s top listed oil producer, wants to supply gas in parts of Europe where Gazprom is not present – or Moscow risks losing the market to U.S. liquefied natural gas (LNG), a Rosneft executive said. Gazprom, the leading global gas producer, enjoys monopoly rights on gas pipeline exports. It has lost its exclusive rights to ship seaborne LNG overseas to Rosneft and Novatek, Russia’s largest non-state gas producer.

Rosneft has long been vying for pipeline gas exports as it strives to grow globally. It now wants permission to export to the parts of Europe in which Gazprom does not operate. The Russian producer has a memorandum with BP, which owns a 19.75% stake in the Russian company, to trade up to 20 Bcm of gas annually in Europe. Rosneft V.P. Vlada Rusakova, a former Gazprom executive, said the company wants to conduct “an experiment” in supplying gas to new markets “in coordination” with Gazprom. She added that as part of the “experiment”, Rosneft could supply gas to markets where Gazprom is not present and into which U.S. LNG could be imported. Rusakova did not identify any such European countries. “Of course, this should be done in close coordination with Gazprom, in order to avoid competition between Russian gas suppliers.”

Gazprom targets $32-34 billion in revenues from exporting more than 180 Bcm to Europe and Turkey this year. Rosneft produced almost 70 Bcm of gas last year, earning 208 billion roubles ($3.5 billion) in revenues from gas sales at home. Rosneft, like Novatek, is winning some of Gazprom’s clients at home thanks to a more flexible gas pricing policy. But unlike Novatek or Gazprom, Rosneft plans to have an LNG plant only in Russia, as it eyes Russia’s Far East and Asian markets. The company wants to export gas to China, where Gazprom plans to start shipping gas in 2019-2021 via the Power of Siberia pipeline, currently under construction. It also wants access to China’s domestic gas market and end-users via swap deals. “There are significant gas resources in Russia’s East, while no infrastructure has been built. And that’s why we are interested in gaining access to the future Power of Siberia pipeline,” Rusakova said.

Rosneft plans to produce 100 Bcm of gas per year by 2020 and become the world’s third-largest producer of natural gas sometime later, thanks to a number of international projects. Last year, Rosneft agreed to buy a stake of up to 35% in Egypt’s Zohr offshore gas field from Italy’s Eni. The Russian company also plans to expand in gas projects elsewhere, including Mozambique and Venezuela.

Rosneft states that the company may seek to build an LNG plant in the Far East based on its own gas reserves, in addition to its ongoing 20% WI in the Sakhalin project

(MOSCOW, June 29, Reuters). Rosneft VP, Vlada Rusakova, said on Thursday the company was looking at building a liquefied natural gas (LNG) plant in Russia’s Far East using exclusively its own resources and gas reserves. Rosneft and U.S. energy firm Exxon have previously talked about building an LNG plant in Russia’s far east together, using gas from the Sakhalin-1 project in which both firms have a stake.

Rusakova said building a plant with Exxon still featured in Rosneft’s plans, but her suggestion that Rosneft could go it alone reflects the company’s growing ambitions, especially in Asia. Rosneft Chief Executive Igor Sechin, one of the most influential businessmen in Russia, has said his firm plans to become the world’s third-largest producer of gas early next decade. Rosneft has been lobbying for access to a gas pipeline to China being built by Gazprom, which currently has a monopoly on Russian pipeline gas exports. It said on Thursday it was looking at cooperating with Beijing Gas in Russia’s far east and east Siberia in exploration, production of hydrocarbons and gas marketing.

Beijing Gas Group has bought a 20% stake in the Verkhnechonskneftegaz gas field from Rosneft for $1.1 billion

(Rosneft Online, June 30, 2017). As a result of the transaction, the parties are going to create a vertically integrated system of cooperation. The Chinese company acquires a stake in one of the largest producing fields in Eastern Siberia with developed infrastructure and access to the ESPO pipeline while Rosneft gets an opportunity to enter China’s prospective domestic gas market, including end users via swap gas supplies.

Prelude floating LNG facility sails toward Australia

Shell_Prelud_LNG_sailaway

(OGJ Online, June 30, 2017). The Prelude floating LNG (FLNG) facility is en route from its construction site in South Korea to offshore Western Australia, a 5,800-km trip that should take about a month. Led by tugboats, the vessel left the Samsung Heavy Industries shipyard in Geoje, said operator Royal Dutch Shell PLC. It was constructed by Technip Samsung Consortium. It’s the largest offshore floating facility ever built, said partner Inpex Corp. Prelude measures 488 m in length and 74 m in width. Once it arrives at the Prelude natural gas field, the facility will be secured by preinstalled mooring chains lifted from the seabed. The Prelude facility will then undergo hook-up and commissioning, and start producing. The facility will be installed on Block WA-44-L, about 475 km north-northeast of Broome. Prelude FLNG’s peak capacity is 3.6 million tonnes/year of LNG, 400,000 tpy of LPG, and 36,000 b/d of condensate. Shell Australia has 67.5% and Inpex has 17.5%. Other partners are Kogas Prelude Pty. Ltd. with 10% and Overseas Petroleum & Investment Corp. with 5%.

Australia’s North West Shelf LNG facility hit by Karratha plant outage

LONDON, June 28 (Reuters) – Work to restart production at Australia’s Woodside-operated Karratha Gas Plant, which hosts the North West Shelf liquefied natural gas (LNG) export project, is underway following a partial outage on June 24, a spokeswoman said. The spokeswoman declined to comment on whether LNG exports have been affected. Industry sources, however, said the outage had affected LNG exports and was helping to support spot LNG prices in Asia LNG-AS, which have been on a downward trend for months.

Russia cuts oil output in June by 305,000-308,000 bpd in comparison to October

MOSCOW. June 28 (Interfax) – Russia has cut oil output in June by 305,000-308,000 barrels per day (bpd) in comparison to October levels, exceeding its OPEC commitments by around 2%, Russian Energy Minister Alexander Novak told journalists.He added that Russia was not currently discussing making additional oil cuts. “At the moment the issue of [making more oil cuts] is not being discussed. At the July meeting [of the ministerial committee for monitoring the fulfillment of the OPEC+ agreement] we will discuss the situation on the market in whole,” he said.

Rosneft reports cyber attack, oil production unaffected

MOSCOW (Reuters, 28/06/17) – Russia’s top oil producer Rosneft said on Tuesday that its servers had been hit with a large-scale cyber attack, but its oil production was unaffected. “The company’s servers underwent a powerful hacking attack,” the company said on Twitter. “The hacking attack could lead to serious consequences, but the company has moved to a reserve production processing system and neither oil output nor refining have been stopped.”

Gazprom Neft begins exploratory drilling in the Sea of Okhotsk

Gazpromneft Sakhalin (a subsidiary of Gazprom Neft) has begun drilling the first exploratory well at the Ayashsky licence block, located on the continental shelf of the Sea of Okhotsk. Leading Russian and international companies have been engaged in implementing the project, and extensive preliminary activities essential to project completion successfully undertaken. Drilling and well testing in 2017 will be performed by a semisubmersible drilling rig (the HAKURYU-5), delivered to the field in mid-June, its equipment having undergone extensive modernization and further adaptations in line with the climatic conditions of the Sea of Okhotsk in 2016.

Russia’s Mikhail Fridman drops bid for West Texas assets on political concerns

Fridman’s investment company, LetterOne, has pulled out of an U.S. investment to avoid resistance from an unexpected corner — the Trump administration. LetterOne’s L1 Energy unit recently walked away from a deal to buy Texas oil producer ExL Petroleum Management LLC for about $700 million over concerns the plan could be rebuffed by the Committee on Foreign Investment in the U.S., or CFIUS, the government panel that reviews deals for national security risks.

Gazprom smells opportunity as UK’s biggest gas store closes, 26 June, 2017, from ‘World Oil’ (Extract)

Gazprom PJSC is in talks to ramp up natural gas sales in the UK as coal plants are shuttered and the nation’s biggest storage site is closed for good. “We see an appetite from major players in the UK for additional volume of contracted gas,” Deputy CEO Alexander Medvedev said in an interview in Prague on Thursday, declining to provide further details on negotiations. “Our supplies to the UK increased substantially in the course of the last two years.”

The world’s biggest gas producer sees an opportunity to sell more of the fuel after Centrica Plc announced it would close its Rough storage facility in the North Sea and the nation plans to stop using coal-fired plants by the middle of next decade. Medvedev expects Britain to increase imported volumes by 8 billion to 12 billion cubic meters a year by 2025. Extra Russian gas in the UK could drive down prices by boosting competition and may help ease the sting of losing Rough, according to Nick Campbell, an energy risk manager at Inspired Energy in Preston, England.

“Technically it is encouraging,” he said. “Russian pipeline gas would offer greater flexibility than LNG delivery with gas field production being able to flex to meet demand quicker than sending a tanker from the U.S. East Coast and/or Qatar.”

Putin, Gazprom CEO, and Allseas CEO meet on pipelay vessel Pioneering Spirit to begin TurkStream pipeline

The offshore pipeline which will carry Russian gas to Turkey, will consist of four parallel pipelines running through the Black Sea. The pipelines will enter the water near Anapa, on the Russian coast, and come ashore on the Turkish coast some 100 kilometers west of Istanbul, near the village of Kiyikoy.

U.S. concerns rise over Russian intentions in the Arctic, March, 2017, from ‘World Oil’ (Extract)

Back in 2008, the U.S. Geological Survey (USGS) released an assessment of Arctic undiscovered, technically recoverable, conventional oil and natural gas resources. In so doing, the USGS estimated undiscovered resources for 25 Arctic sedimentary provinces. Overall, USGS estimated 412.16 Bboe of resources. Among the world’s undiscovered resources, this represents 13% of the oil, 30% of the gas and 20% of the NGLs.

USGS also said that the West Siberian basin and East Barents basin, both in Russian territory, hold 47% of the undiscovered resources, with 94% being natural gas and NGLs. So, it’s not a surprise that the Russians are leading the way in exploring for, and developing, Arctic hydrocarbons. Back in late 2013, Russia’s Gazprom initiated the world’s first Arctic oil production at Prirazlomnoye field, which continues to produce today. The potential in the Arctic Alaska province, by the way, was estimated at 29.96 Bbbl of oil, 221.40 Tcf of gas and 5.90 Bbbl of NGLs.

Meanwhile, the significance of Arctic potential, coupled with Russian initiatives, led the Norwegians in 2010 to strike a border deal in the Barents Sea with Moscow. Yet, there are credible rumors that the Norwegians remain highly wary of Russian intentions in the Arctic, so much so that they drilled a record 14 wells in the region during 2014, including several “to plant the flag” in the southeastern portion of their jurisdiction, near the border with Russia. And this year, plans call for a record-breaking 16 Norwegian Arctic exploration wells, including one by Statoil at the Korpfjell prospect near the Russian border. Korpfjell may hold up to 10 Bboe of resources.