A new central North Sea sidetrack well has come up trumps for Malaysian firm Hibiscus Petroleum and its partner.
Hibiscus said the sidetrack on the Guillemot A field was completed in September and was making a “positive contribution”.
It is capable of flowing at 3,697 barrels of oil per day and could yield 1.5 million barrels in total.
Guillemot A is part of the Anasuria cluster, 110 miles east of Aberdeen.
The cluster is operated by a joint venture between Hibiscus and Ping Petroleum, who bought the assets from Shell and ExxonMobil in 2016 for close to £70m.
The package also included the wholly-owned interests in the Anasuria vessel, the Teal and Teal South fields, and 38.6% of Cook, which is operated by Ithaca Energy.
Hibiscus said the sidetrack well was its first major capital expenditure programme on the cluster and was expected to cost £17.9m in total.
Partners on Cook intend to drill a water injection well on the field and install a subsea pipeline next year.
It is hoped that by pumping water into the well, reservoir pressure will increase, resulting in higher production.
Hibiscus said its “total capital commitment” was likely to be around £11.5m.
The company unveiled the plans in its results for the three months to September 30, which showed pre-tax profits of £30.9m, a huge increase on a surplus of £1.8m in the same period last year.
Total revenues came to £67.2m in the quarter, up from £10.9m a year ago.
Two crude off-takes were completed from Anasuria during the quarter, in which 524,000 barrels were sold at an average oil price of $73.88 per barrel.
Hibiscus managing director Kenneth Pereira said the company managed to remain profitable through the recent oil price convulsions thanks to its ability to keep a lid on unit production costs at Anasuria and its North Sabah assets off Malaysia.
Mr Pereira said: “The careful management of costs to maintain low operational expenditure and the delivery of production enhancement projects are key towards achieving low unit production costs. This remains an area of focus for the group.”
The company recently added to its North Sea portfolio, with the £28.5m acquisition of 50% stakes in blocks 15/13a and 15/13b from London-registered Caldera Petroleum.
Caldera is a wholly-owned subsidiary of Aban Singapore, whose parent company is India-headquartered Aban Offshore.
The blocks are contained within licence P198, 155 miles north-east of Aberdeen, and are thought to contain 60 million barrels of oil.
TAIPEI, TAIWAN — A maritime energy exploration agreement is being seen by some as an attempt to continue improving relations between China and the Philippines, countries once so opposed that their rift over maritime sovereignty went to a world arbitration court.Philippine and Chinese officials inked a memorandum of understanding Nov. 20 to look together for oil or gas under the South China Sea. The two countries contest sovereignty over parts of the sea, leading the Philippines to file for arbitration and win its case against China in 2016.
Over the past two years, China has extended economic aid to the relatively poor Philippines. Philippine President Rodrigo Duterte in turn set aside the sovereignty dispute, saying there’s no way his country could win a war with China.
But the Philippine government says it will accept no less than 60 percent of any joint fossil fuel discoveries, and China is expected to comply as a way of building stronger ties with a still skeptical Philippine public.
“Joint exploration demonstrates at least superficially on the Chinese side that they are trying to engage in diplomacy and to build bilateral relations through various kinds of joint activities, so I think that’s a win for China diplomatically,” said Stephen Nagy, senior associate politics and international studies professor at International Christian University in Tokyo.
Students burn a Chinese flag as they protest against the visit of Chinese President Xi Jinping during a demonstration outside the Presidential Palace in Manila, Philippines, Nov. 20, 2018.
Memorandum of understanding
The two countries inked their exploration pact as one of 29 agreements signed during a state visit to the Philippines by Chinese President Xi Jinping. It calls for establishing a joint steering committee as well as at least one working group with representatives from each side’s major oil drillers. The committee will negotiate more precise deals on where to look for fuel.
The memorandum does not specify where the two sides would explore — some locations are more sensitive than others — or who would take how much of any fuel discovered.
“Nothing has been really set in stone with respect to the respective oil and gas joint development at this point,” said Jay Batongbacal, a University of the Philippines international maritime affairs professor. “The agreement literally is merely a framework for the two countries to continue negotiating specific agreements on oil and gas exploration, so actually the substantial part of it is probably going to come much later.”
Specific agreements may be hard to reach, he said, because the Philippine constitution and other laws limit joint work in certain tracts of sea. Some Filipinos worry that a more detailed deal could concede Philippine sovereignty to China.
Brunei, Malaysia, Taiwan and Vietnam also claim all or parts of the sea. All claimants prize the waterway for its fisheries, marine shipping lanes and the prospect of energy under the seabed. Some have explored jointly for oil before in the contested tracts.
In 2012 Chinese vessels pushed Filipino fishing boats out of the tiny South China Sea islet of Scarborough Shoal, which is west of the Philippine island Luzon. The incident led to world court arbitration case.
FILE – A Chinese Coast Guard boat approaches a Filipino fishing vessel off Scarborough Shoal in the South China Sea, Sept. 23, 2015.
Something for both sides
The Philippine foreign minister was quoted saying earlier this year that China was willing to take a minority stake in any joint oil or gas discoveries.
Even if later deals are hard to reach or no one finds fuel, the 60-40 concession would help Beijing deepen its friendship with the Philippines, analysts say.
“I think this is one way of signaling that China is willing to be a different kind of aid giver,” said Alan Chong, associate professor at the S. Rajaratnam School of International Studies in Singapore.
Today many Filipinos — more accustomed to strong Manila-Washington relations — remain leery of tie-ups with a country that disputes sovereignty with their own. Some wonder too whether Beijing’s billions of dollars in of economic aid pledges over the past two years will materialize or, conversely, leave their country indebted to China.
Oil exploration has been “politicized,” said Christian de Guzman, vice president and senior credit officer with Moody’s in Singapore. But he expects state-to-state ties will improve anyway through Duterte’s term into 2022.
“It is quite clear that for the duration of the Duterte administration that the tensions vis-a-vis China have eased,” he said.
FILE – Protesters display placards during a rally at the Chinese Consulate to protest China’s artificial island-building at the disputed islands, reefs and shoals off South China Sea, June 12, 2017 at the financial district of Makati city, east of Manila, Philippines.
The Philippines also seeks new sources of oil and gas to avoid paying the rising prices of imported fuel, a contributor to inflation since August. Both China and the Philippines are looking for fuel elsewhere in the sea, but the Philippines leans heavily on foreign contracts to cover gaps in funding and expertise.
China will probably kick in most of the money and expertise for joint projects, given its wealth of experience, experts expect.
The joint effort would give Beijing access to valuable data on sea currents and underwater topography, Nagy said. It can use that data, he said, to develop submarine warfare.
Over the past decade, China has riled the other maritime claimants, including the Philippines, by landfilling tiny islets throughout the sea and militarizing some.
The bad news is that oil prices have gone up after years of low prices. The good news is that this will drive green energy up to its highest levels in the next decade or sooner.
It is good to note that the rising prices of oil have prompted tidal moves towards renewable energy development, which surged in 2017, with around two-thirds — or 165 gigawatts — of net new capacity coming from clean sources. (1)
“The fact that South-East Asian countries are not on this bandwagon is a pity. This region is probably the most appropriate for the development of nature-sourced and nature-driven energy, whether solar, wind, ocean, river, rain or geothermal energy.”
Crispin Maslog
Renewable energy sources include mainly biomass, waste to energy technology, wind, solar, run-of-river, impounding hydropower sources, ocean, geothermal and hybrid systems.
The current renewable energy surge is due largely to booming solar panel deployment in China and throughout the world. It grew by 50 per cent to around 74 gigawatts, according to the International Energy Agency (IEA).
The IEA Renewables 2017 report said that “sharp cost reductions and improved policy support are paving the way for continued growth in the renewables sector”.
“Record performance in 2016 ‘forms the bedrock’ of the IEA’s electricity forecast, which predicts renewable energy capacity will expand by 43 per cent — or more than 920 gigawatts — by 2022…Solar power will continue to dominate the renewables market, generating far more electricity in the next four years than wind and hydropower,” the report added.
The Asia Pacific Urban Energy Association (APUEA), which referred to this upward renewable energy trend as the “Fourth Wave of Environmental Innovation”, said this “Fourth Wave” seems to be reaching the shores of most parts of the world except South-East Asia with its 640 million people. (2)
ASEAN lags
The fact that South-East Asian countries are not on this bandwagon is a pity. This region is probably the most appropriate for the development of nature-sourced and nature-driven energy, whether solar, wind, ocean, river, rain or geothermal energy.
After all, we have sunshine most days of the year. Here is one statistic: Singapore has 200 hours of sunshine per month on the average. Then we have the string of 17,000 islands in the open seas between the Philippines, Indonesia and Malaysia which provide ocean currents, ebbs, tides and waves waiting to be harnessed.
Furthermore, Indonesia and the Philippines sit astride the Pacific Ring of Fire, with numerous volcanoes that can provide geothermal energy. Typhoons visit the region at least a dozen times each year, bringing rain that can be caught in dams to run turbines for industry.
Unfortunately, we meet nature only in their violent moods and have not been able to harness its power. ASEAN governments need the proverbial political will to catch up and jump onto the bandwagon of renewable energy.
“Singapore — the only first-world country in the region and one that should be leading by example — remains disappointingly in denial of the potential of solar power and electric vehicles with hardly any deployment at all,” APUEA complained.
Indonesia — a nation with solar and wind power across its 10,000 islands — continues to use petroleum and diesel rather than seek clean energy. (1) Why? Perhaps because it has plenty of oil underground and has a thriving petroleum industry.
It is interesting to note that Malaysia has the distinction of being the “only country where the number of solar panel installations has actually declined in recent years”, APUEA claimed. (2)
In the meantime, Malaysia’s neighbour, Thailand, has stopped expansion of renewable energy, while Vietnam talks solar even as it pushes coal, which is cheaper.
In sum, APUEA castigates ASEAN as a region lagging in renewable energy development and transport sector electrification.
One notable ASEAN exception is the Philippines. This country is going big into solar energy production and has introduced this year renewable portfolio standards that will make a difference if enforced.
The National Renewable Energy Board of the Philippines has endorsed rules on renewable portfolio standards to the country’s Department of Energy. A renewable portfolio standard requires the increased production of energy from renewable energy sources and relies on the private market for its implementation.
Once implemented, this will require distribution utilities to get a portion of their power supply from eligible renewable energy sources. The goal is to bring the renewable energy share of the national energy mix to at least 35 per cent by 2030.
In the case of BMW Group, the primary battery pack production site is in Dingolfing, Germany, but step-by-step the company is launching also other smaller sites around the world to localize battery assembly.
There is already a BMW battery facility in Spartanburg, U.S. as well as in Shenyang, China (operated by the BMW-Brilliance Automotive joint venture).
Now, the fourth place scheduled for battery production turns out to be Thailand, where also Daimler wants to produce battery packs.
BMW intends to produce battery packs in Thailand in collaboration with the Dräxlmaier Group. The packs will be used in iPerformance plug-in hybrids like the 5-series, 7-series and X5 produced in Rayong.
The workforce has been in training at the Dingolfing plant since September and production should begin in 2019.
Mr. Christian Wiedmann, President, BMW Group Thailand said:
“We are very excited to be taking another big step forward in our electro-mobility strategy. The start of local battery production will enable us to better respond to growing demands for electrified vehicles across ASEAN markets. Furthermore, this new capability adds to the strengths of Plant Rayong, which has already been serving as an automotive production hub in the region. With four BMW plug-in hybrid models already rolling out from our assembly lines at Plant Rayong, local battery production will certainly complement our production of plug in-hybrids,”.
The German Embassy on Thursday announced its first loan to the Kingdom of Cambodia of €30 million ($34.06 million), which will be used to upgrade its rural energy grid.
The embassy said in a statement after a meeting with Electricite du Cambodge (EDC – Electricity Authority of Cambodia) that by investing in rural energy efficiency, the EDC can reduce power losses significantly, improve access in remote areas and increase the reliability of power supply.
The improved access to power grids in rural Cambodia also contributes to Cambodia’s ambitious targets to reduce greenhouse gas emissions, the statement said.
“Reliable and climate-friendly energy access is the engine for the Kingdom’s future development and will boost investment in the country,” said German Ambassador Ingo Karsten.
“It increases energy efficiency, access in remote areas and allows for lower tariffs. Stronger grids are the basis for future investments in solar energy, which has a huge potential in Cambodia.”
The new project marks the first step in development cooperation between Cambodia and Germany and reflects the Kingdom’s advance towards becoming a lower-middle income country.
This loan is funded by the German Ministry for International Development’s Climate Technology Initiative and will be implemented by Germany’s KfW’s development bank.
EDC managing director Keo Rattanak said after the meeting that the loan will benefit people in rural Cambodia.
“This loan will cover a lot of people, especially the poor who need an affordable electricity service,” Rattanak said.
He said it will help boost clean energy, which is good for climate change, local households’ finances, education and health.
“We expect this project to help reduce the use of diesel generators, which pollute more.”
Centre for Policy Studies director Chan Sophal welcomed Germany’s loan, noting that developing electricity in rural areas is vital to developing the economy of rural families and enterprises as well as promoting the growth of the country’s economy.
“This is really great news. Electricity has been scarce, erratic and expensive. It is one of the necessities for the advancement of households and modernisation of rural enterprises.
However, the loan’s signing date is not set and the loan duration and interest will first be negotiated between KfW and the Ministry of Economy and Finance, according to a German Embassy spokesperson.
VEPG Technical Working Groups sharing their recommendations to impvove Vietnam’s renewable energy policy
This was announced by Bruno Angelet, head of the delegation of the European Union to Vietnam at the second high-level meeting of Vietnam Energy Partnership Group (VEPG) with the theme “Joining hands for a sustainable energy future in Vietnam.”
Notably, the meeting discussed the policy recommendations of the VEPG Technical Working Groups, which aim to promote the development of Vietnam’s energy sector in five priority areas including renewable energy, energy efficiency, energy sector reform, energy access, and energy data and statistics. Each Technical Working Group presented and discussed a number of specific policy recommendations, drawn from studies and dialogues among members of the groups during the past year.
Notably, the first technical working group reviewed the current incentive regime for wind and solar energy. At the prime minister’s Decision No.39/2018/QD-TTg on mechanism for provision of assistance in development of wind power projects in Vietnam, the FiT for wind power will be raised to 8.5 cent (onshore) and 9.8 cent (offshore) per kW/h, respectively, for projects implemented before November 1, 2021.
The VEPG was established in June 2017 through an agreement between the government of Vietnam and development partners with the purpose of strengthening mutual partnerships and better aligning and co-ordinating external support to the energy sector in Vietnam.
VEPG’s members mostly agreed that the main reason behind the lack of investment is the fact that the standard power purchase agreement (PPA) does not correspond to international standards by putting major financial risks on RE projects, pointing out several issues that should be revised.
In addition, the existing net metering scheme (Decision No.11/2017/QD-TTg and the related circular) has not yet initiated relevant investment mainly due to a lack of implementation and unsolved taxation questions.
Furthermore, the technical working group mentioned challenges to energy efficiency improvements, saying that there is no national energy efficiency programme in place since 2016. It also noted the lack of mechanisms, tools, and policies to enforce compliance with the legal requirements as well as to encourage investment in energy efficiency technology and innovation. The monitoring and inspection of energy efficiency compliance lacks co-ordination among governmental agencies and local departments.
The third technical working group focused on energy sector reform, the main content of which is the development of the Vietnam Wholesale Electricity Market (VWEM). Especially, for the direct power purchase agreement (DPPA) mechanism to be rolled out, it may be necessary to start with existing laws and gradually improve the legal framework based on outcomes from the pilot mechanism.
Besides, the Technical Working Groups mentioned challenges related to administrative procedures governing Public-Private Partnership (PPP) arrangements and pointed out shortcomings that need to be addressed with concrete action, including the fragmented legal framework and lack of an integrated strategy for energy statistics as well as the lack of a comprehensive data quality assurance framework.
“The EU confirms to support Vietnam to transfer to using clean energy with a suitable selling price. During the past year, the VEPG issued proposals and recommendations in order to support the government to build a complete framework of mechanisms to develop the renewable energy sector. We hope that these proposals will be added to the government’s strategic policy and then be implemented,” said Bruno Angelet.
Vietnam received nearly 40 policy recommendations which are the results of the work of VEPG’s five Technical Working Groups. These policy recommendations are valuable and truly relevant to the policy development of the Vietnamese energy sector.
The VEPG was established in June 2017 through an agreement between the Vietnamese government and development partners with the purpose of strengthening mutual partnerships and better aligning and co-ordinating external support to the energy sector in Vietnam.
JA Solar supplying solar modules to Shanxi Electric PV project in Phu Yen
JA Solar Holdings is to supply solar modules to Shanxi Electric Power Engineering totalling 257MW for a photovoltaic project in Phu Yen, Vietnam.
Shanxi Electric Power Engineering president Jiping Chen said: “JA Solar takes a leading position in the R&D and production of high-performance PV products.
“We are confident that JA’s high-efficiency modules and well-established global sales network will enable project success.
“In addition, we look forward to the opportunity to further strengthen our partnership with JA Solar and cooperate on future projects.”
JA Solar president and chief executive Baofang Jin said: “The cooperation between the two companies demonstrates SEPEC’s recognition of JA’s products and services.
“We look forward to cooperating on more projects in the future, further developing the solar market within the ‘belt and road’ countries, and delivering benefits to more people from solar energy development.”
Hanoi (VNS/VNA) – Vietnam could face power shortages in the early 2020s, heard a workshop in Hanoi on November 29.
Tran Viet Anh, head of Strategic Division under the Electricity of Vietnam (EVN) told the workshop entitled ‘Developing Sustainable Energy and Protecting Environment in Vietnam’ that the shortages are likely to happen from 2020 to 2025.
To meet surging demand for power, the country needs 60,000MW of electricity by 2020; 96,500MW of electricity by 2025 and 129,500MW of electricity by 2030. This means total installed capacity would have to increase by 6,000-7,000MW of electricity per year.
Anh said the total installed capacity of the electricity sector is currently 47,750MW. Thus, he said, raising the capacity to 129,500MW in just 12 years was a big challenge given the slow progress of many power plants.
He said only seven coal-fired power plants with total capacity of 7,860MW were currently under construction. More than 18,000 of 26,000MW of coal thermal power projects are expected to be operational in the next five years, however, construction has not yet started.
Regarding oil and gas, Vu Truong Son, Director General of the Vietnam National Oil and Gas Group (PetroVietnam), said Vietnam would need 10 million tonnes of liquefied natural gas (LNG) by 2020. Therefore, besides exploiting existing oilfields, it was necessary to consider building infrastructure for importing LNG.
A representative from the Vietnam National Coal and Mineral Industries Group (Vinacomin) said it was able to supply only between 42-45 million tonnes of coal per year while the domestic coal demand rose suddenly over the past eight years (from 20 million tonnes in 2009 to 40 million tonnes in 2017). Most of them were for electricity production.
To meet the need for more coal, the corporation has sought to imports.
The amount of coal imported climbed rapidly to more than 14.67 million tonnes last year from three million tonnes in 2014.
It was estimated the amount of coal needed for production of electricity would reach 60 million tonnes by 2020 and 86 million tonnes by 2025. So far this year, the amount of coal providing for thermal plants was 26.9 million tonnes. That figure would rise to 31.9 million in 2019.
The corporation has been suffering difficulties in coal exploitation due to outdated technology and a shortage of funds for infrastructure development, the representative said.
The increase in tax for coal including environment fee and fee for licensing also posed a challenge, he said.
Speaking at the workshop, Tran Viet Ngai, Chairman of the Vietnam Energy Association, said it was necessary to review electricity producing projects to ensure energy security. Obstacles to those projects should be resolved to speed up their progress.
He proposed that a detail strategy be set forth to deal with coal shortage, ensuring that thermal power plants have enough material for normal operation.
Ngai also suggested that special treatment such as loan guarantee be offered to investors so that power projects could be soon built and operated. These projects could not bring high profit so it was difficult to attract foreign investment, he said. — VNS/VNA
