Rabat banks on renewables for European power exports

Morocco is taking a lead in the promotion of renewable energy in North Africa, aiming to develop wind and solar to meet both domestic electricity demand and export power to Europe. Interconnectors to Spain and Portugal are under consideration.

Morocco has a considerable geographic advantage when it come to exporting power to Europe; the Strait of Gibraltar, which separates it from Spain, is only 14 km wide at its narrowest point, and already hosts a 700 MW interconnector, the only existing North Africa-Europe power link.

Morocco’s lack of commercial oil and gas production mean that fossil fuel imports have long placed a huge strain on the country’s foreign currency reserves.

Renewables offer an easy way to relieve that burden. Yet the government’s targets are a little odd and recent gas discoveries could pose a threat to the country’s renewable ambitions.

Rabat has set a goal of renewables, including large hydro, accounting for 42% of total power production by 2020.

According to the Ministry of Energy, wind, solar power and hydro provided 30% of power production in 2016, so while ambitious, the 42% goal is achievable given the number of projects under development.

But if the 2020 target is achieved, it makes the 2030 target of 52% seem distinctly less challenging. Almost all other governments would stack the growth in renewables in favor of the later date.

It seems likely that Rabat is concerned about missing the 2020 target and has announced the later goal as a backstop.

Perhaps because of its location in a region with plentiful oil and gas reserves, Morocco has never really accepted its apparent hydrocarbon misfortune.

It has consistently encouraged exploration by foreign companies, both on its own territory and that of the disputed Western Sahara.

A study funded by the US Energy Information Administration suggested that the latter holds 20 Tcf and 200 million barrels of technically recoverable shale gas and oil reserves.

Most recently, UK firm SDX Energy has announced a string of gas discoveries in the Gharb Basin and Sebou as part of a nine-well drilling campaign.

If proved commercial, the reserves could test Rabat’s policy of favoring renewables over gas-fired power plants.

Under current government policy, renewables including large hydro are to account for 75% of all new generating capacity completed between 2016 and 2030.


By far the biggest contribution to achieving the country’s renewables’ goals will come from the Noor Concentrated Solar Power (CSP) scheme near the city of Ouarzazate. Noor I provided 160 MW, with Noor II adding another 200 MW in January.

Spanish firm SENER’s Noor III is scheduled to add another 150 MW by October, with its solar tower already in place.

It will be only the second ever CSP tower to utilize molten salts. About 90% of the 5 GW of CSP capacity installed across the world to date uses parabolic troughs.

The government hopes that its focus on CSP technology will create R&D and possibly also manufacturing jobs, if CSP become more widespread globally.

CSP’s ability to make solar power dispatchable certainly holds out promise, but costs need to fall further.

The project will provide residential peak load electricity in the evening. Phases I, II and III offer energy storage of three, six and seven and a half hours respectively.

Noor III has a long-term power purchase agreement for $150/MWh, but it is hoped that future phases will be able to offer cheaper electricity as the technology develops.

The government hopes to oversee the development of 2 GW of solar power generating capacity at Noor, spread across PV and CSP. The location offers more than 330 days of sunshine a year.


Apart from transforming the domestic power sector, Rabat is also keen to start large-scale electricity exports to Europe and is currently trying to firm up its previous vague export aspirations.

A feasibility study for the construction of a 200 km, 1 GW subsea transmission line to Portugal is nearing completion. It would run from Tangier to the Algarve.

Portuguese officials have suggested that construction could begin this year, although this seems unlikely given that the financing arrangements and development consortium have not been agreed.

Construction costs are estimated at Eur600 million ($739 million).

Electricity would pass in both directions, but Rabat is hopeful that it will mainly be deployed as an export line for Moroccan power, with Portugal able to sell electricity onwards.

An agreement enabling this was signed by the governments of Morocco, Portugal, Spain, France and Germany last year.

The construction of a similarly high capacity link with Spain is also under discussion.

Morocco currently imports about 20% of its power needs from Spain, but hopes to make this more of a two-way trade in the medium term, with the focus again on exports in the future.

The Moroccan Agency for Sustainable Energy (Masen) calculates that the country will have 887 MW of solar power capacity by the end of this year, up from just 180 MW at the close of 2017; plus 1,207 MW of wind power, in comparison with 887 MW at the end of last year.

Morocco also has an often underreported 1,770 MW of hydro capacity, which contributes a large slice of its installed generating capacity of just over 9 GW.

In December, a joint venture of Vinci Construction and Andritz Hydro won a Eur284 million contract to build the 350 MW Abdelmoumen pumped storage plant to help balance out supply and demand. This would also facilitate the management of power exports to Europe.

The post Rabat banks on renewables for European power exports appeared first on The Barrel Blog.

Source: http://blogs.platts.com/2018/03/20/rabat-banks-on-renewables-eu-power-exports/


#Ulterra’s SplitBlade technology has been featured in DC Magazine. Read the full article to learn how you can drill ahead using this new technology! https://buff.ly/2GKaG0K pic.twitter.com/Z3gdpHuwoY

‘s SplitBlade technology has been featured in DC Magazine. Read the full article to learn how you can drill ahead using this new technology! https://buff.ly/2GKaG0K 

source https://twitter.com/UlterraBits/status/975837489477967874
Source: https://ulterra.blogspot.com/2018/03/ulterras-splitblade-technology-has-been.html

Will PET bottles change tastes of Japan’s aluminum can collectors?

The beverage sector has long favored aluminum cans for being lighter, stronger and more easily recyclable than the alternatives, despite being up to three times more expensive than steel and twice more than PET.

But the economics of the sector are changing, and soda producers such as Coca Cola are increasingly packaging their beverages in PET bottles.

The low carbon aluminum sales pitch is less noticed, due to developments of recyclable PET bottles and improved PET recycling chain. Moreover, capital investment for PET bottles are modest than aluminum cans.

Related blog post — Japan aluminum’s tipple of choice: US bourbon in a can

Most beverage manufacturers are able to make PET bottles in-house, whereas aluminum cans are outsourced. PET allows more flexible bottle shapes and this is helpful as most beverages have short life cycles.

As a result, in Japan, aluminum cans of Coca Cola are becoming highly collectible. Collectors appreciate them as affordable American art, or re-use them for crafts.

2018 aluminum vs PET prices

Will beer cans be next?

Japanese beer drinkers say they are loyal to aluminum because the beer from such cans tastes better than beer from steel, paper or PET containers.

But when aluminum cans were introduced in the 1960s, consumers at the time claimed beer in heavy glass bottles tasted better than in cans.

One beer lover told me he converted to aluminum only after his favorite beer became available only in cans; the contents mattered more than the container, he reasoned.

Now, there are both beer and soda lovers who opt to collect rather than recycle old aluminum cans.

Indeed, some vintage can collectors have been known to pay $50-$100 for a single used beverage can.

Design and nostalgia appear to be the prime motivators of collectors, particularly soda cans that have fewer design restrictions, as alcohol packaging is typically more highly regulated to ensure it does not feature images that appeal to children.

I recently sought out two Japanese can collectors.

One, a musician, claims to be the world’s largest can collector with 20,000 cans, while the other said his life work was preserving the cultural heritage of the 1980s.

I wanted to ask them if they would find the same interest in PET bottles without the metallic shine and luster, but did not have the chance.

Both declined to be identified or interviewed, saying they were already pursued day and night by other collectors seeking to buy their cans and did not want the publicity.

However one, a successful business owner, allowed me to view his baseball beer can and Japanese Ultraman cartoon soda can collections in the company of an employee, who said the collection was a challenge to maintain as the cans dented so easily.

Still, aluminum could well find itself competing with PET for the attention of collectors in years to come: Dydo Drinco last year released a Pokemon soda in PET that appealed to a new generation of collectors.

The post Will PET bottles change tastes of Japan’s aluminum can collectors? appeared first on The Barrel Blog.

Source: http://blogs.platts.com/2018/03/19/japan-aluminum-cans-vs-pet-plastic-bottles/

What cars on blockchain will do to fuel retailing

A German automaker has wrapped up some trials integrating blockchain technology with its sports car line. What lessons does this offer the oil and gas industry? Blockchain comes to your car Did you catch this news story about Porsche and a blockchain trial? This digital development…

The post What cars on blockchain will do to fuel retailing appeared first on Digital Oil and Gas.

Source: http://digitaloilgas.com/what-cars-on-blockchain-will-do-to-fuel-retailing/

Oil’s recovery quells concerns over rising costs

Will rapidly rising oilfield service costs derail efforts by companies to maintain fiscal austerity while hitting their production targets?

That question emerged as a major theme during fourth-quarter earnings calls, and analysts say the answer is an emphatic no. WTI oil prices that have risen from a 2015-2017 average of $48/b to roughly $60/b have buoyed the industry and settled a blanket of confidence over oil company boardrooms.

Low prices had stemmed from a rapid rise in shale oil output, which added nearly 4 million b/d of crude from end-2010 to end-2014. The event caught upstream companies, long used to outspending their incomes, off-guard.

US shale oil productionNow that industry is well into recovery mode, most observers believe the painful recent past has made a deep impression that won’t easily be forgotten.

“I haven’t come across anything that says [producers] won’t continue to operate within cash flows” which was a recurrent oil company management promise in late 2017, Sami Yahya, senior analyst at S&P Global Platts Analytics, said. “They’ve said they don’t want to overspend and my impression is if that seems like it might happen, they may cap activity instead.”

Not only will operators almost universally try to spend within their cash flows, but higher oil prices have now resulted in excess, or free, cash flows for many oil companies. Others will achieve that status this year or in 2019.


While excess cash flows will be spent on mending balance sheets or returning cash to shareholders, rig count additions will likely be “modest” this year, according to a Platts Analytics review of tight oil operators.

Platts Analytics expects 100 more active rigs in the fleet this year than the 650 that stood at year-end 2017. By contrast, E&P operators added 273 rigs last year. Even with relatively few rig adds, many of the biggest independent producers expect their production to rise by double-digits this year. Platts found 13 of 16 large independent producers are expecting 2018 production increases of 12% to 40%, including ConocoPhillips, Concho Resources and EOG Resources.

In Q4 2017, crude and condensate production from US shale jumped 14% to 5.3 million b/d from the prior quarter. That was driven by “accelerated” completions, particularly in the Permian Basin of West Texas/New Mexico, Platts Analytics indicated.

While completions of previously drilled but unfinished wells — popularly known as DUCs — were slow for most of 2017, new well tie-ins picked up near year-end. That accounted for the rise in oil production by about 650,000 b/d in Q4, the Platts Analytics review said.

As year-end 2017 neared and crude prices headed toward the psychologically important $60/b level, confidence was running so high that several oil and gas companies provided Wall Street with not just a single year of guidance, as is customary, but three years, from 2018 to 2020.

For example, Noble Energy, Devon Energy and Concho Resources all stated they believed they could sustain growth levels for total production, oil production, or both, in the double-digits during that period.

Their confidence came from drilling results in 2017 — where drilling longer horizontal well legs, using more proppant to keep well fractures open, and better “landing” of the drill bit in the choicest parts of subsurface zones has gradually lifted per-well oil volumes in recent years.

Throughout the 2015-2016 downturn, oil companies became expert at driving more and more oil from the ground at increasingly lower costs — a knack which keeps improving.

In fact, even though oilfield service and equipment costs are expected to rise 7% to 15% this year, which the Platts Analytics review believes will largely come from drilling and well completions, oil companies claim continued efficiencies and other mitigations can offset cost increases.


For example, operators pre-purchased goods and services such as contracting rigs late last year or earlier this year for all of 2018 rather than on an as-needed basis, using locally sourced sand and other proppants for hydraulic well fracturing, and self-sourcing their goods and services.

Even so, rising costs “remain a concern,” the Platts Analytics review said.

The expected 7% to 15% cost increase estimated for this year is on top of about 10% to 15% cost inflation in late 2017, Floyd Wilson, CEO of small-cap Halcon Resources, said earlier this month in a conference call, echoing other sources.

“We’ve seen this every time there’s been a major movement in crude prices for decades,” said Wilson, who is also former CEO of Petrohawk Energy, which is generally credited with discovering the big Eagle Ford shale play in South Texas. BHP Billiton bought Petrohawk in 2011.

But capital budget increases appear modest despite higher oil prices, rising about 10% to 15%, according to most accounts. For instance, a Cowen & Company analysis of 58 E&P companies found their 2018 capital spending plans on average were up just 11% over last year.

Further out, consultants Westwood Global Energy Group expects a 15% year-over-year expenditure rise between 2018-2022 for six major shale basins that include the Permian, Eagle Ford, the Williston Basin in North Dakota/Montana, the DJ Basin in Colorado, the Midcontinent plays in Oklahoma and the Haynesville Shale, a gas play in North Louisiana and East Texas.

An important variable in spending “will be the relaxation of supply chain constraints, as service providers add further [fracturing] capacity…allowing completion activity to accelerate, resulting in a 54% increase in completion spend this year,” the consultancy said.

The post Oil’s recovery quells concerns over rising costs appeared first on The Barrel Blog.

Source: http://blogs.platts.com/2018/03/19/oil-recovery-oilfield-costs/

In the Delaware Basin, an 8.75 in. U716M drilled 5,323 ft. in just one day! This #UlterraBit ran a mile in a day with an ROP of 221 ft/hr #RunRecap

In the Delaware Basin, an 8.75 in. U716M drilled 5,323 ft. in just one day! This ran a mile in a day with an ROP of 221 ft/hr

source https://twitter.com/UlterraBits/status/974356304411217920
Source: https://ulterra.blogspot.com/2018/03/in-delaware-basin-875-in-u716m-drilled.html

Gasoline, jet fuel prices set the pace in the Trump era: Of Presidents and Prices

With President Donald Trump now into his second year in office, several key commodity prices were 5% stronger on average through the end of February, compared with on January 19, 2017, the day before his inauguration.

Eight of the 11 commodity benchmark, running-average prices being tracked by S&P Global Platts since Trump took the oath of office were up, led by Chicago gasoline (+11.8%) and jet fuel (+8.9%).

Dated Brent crude’s running average during the Trump era was $56.14/b for the January 20, 2017 through February 28, 2018 period, compared with $53.31/b on January 19 a year ago, an increase of 5.3%. New York Harbor fuel oil’s running average was $49.04/b for the same period, up 4.3% from the January 19, 2017 mark of $47.03.

But the running average prices of natural gas (-6.5%), thermal coal (-5.9%) and global iron ore (-11.1%) remain lower than on President Barack Obama’s last day on the job.

Among key metals benchmarks, gold (+6.4%) and aluminum (+5.3%) lead the way, charting higher running averages through the end of February from Trump’s first day on the job.

For steel, US-made hot-rolled coil was only averaging 1% higher ($636.10/st) for the period, but this was before a 25% tariff on US imports of steel was announced, and then signed on March 8 by the president. In recent days, since March 1, this same benchmark steel price has averaged $823.61/st, nearly $188/st above the 13-month running average.

Platts has been monitoring this group of 11 price benchmarks and comparing them in Trump’s term to date versus Obama’s eight years in office — although fundamentals and a range of other factors influence commodity prices.

The post Gasoline, jet fuel prices set the pace in the Trump era: Of Presidents and Prices appeared first on The Barrel Blog.

Source: http://blogs.platts.com/2018/03/15/gasoline-jet-fuel-prices-set-pace-trump-era-presidents-prices/

Seismic deniability in ANWR debate: Fuel for Thought

Alaska wants to update decades-old seismic surveys of the Arctic National Wildlife Refuge to boost exploration. But in a twist, some officials feel that ignorance in this case may be better for the state’s coffers.

Alaska officials hope to jump-start exploration in ANWR with $10 million in “seed money” toward the cost of a 3-D seismic program to gather new information on oil and gas prospects.

ANWR is estimated to hold as much as 10 billion barrels of recoverable oil. But that estimate, compiled by the US Geological Survey, is years old and based mainly on results shared from one group-sponsored seismic survey in the 1980s that relied on older 2-D geophysical profiling.

The new plan involves modern 3-D seismic that would present a much more detailed picture of potential reservoirs, says Andy Mack, the state’s Commissioner of Natural Resources.

Some 3-D seismic can even indicate the presence of fluids in reservoir rock, although exploration drilling is still needed. If the Legislature approves the appropriation, the state will solicit partners who will share in the information, Mack said. A seismic operator would be contracted to do the project.

ANWR's resource potential could bring hefty demand for leases


Although Alaska has been a gung-ho supporter of ANWR exploration for decades, and the recent decision by Congress to open the refuge was spearheaded by the state’s congressional delegation, some Alaska legislators question the state’s investment in seismic.

State Senator Peter Micciche, Republican from Kenai, in southcentral Alaska, thinks the venture could backfire.

“There is a risk that you could chill interest if the seismic results devalue certain prospects,” in the refuge’s coastal plain, Micciche said.

Sometimes it’s better to hype the lease sale but leave companies without the data, so they bid blind. Just this happened in one of the earliest North Slope lease sales. Right after the 1969 Prudhoe Bay oil discovery, the state, which badly needed money, decided to auction unleased lands around the discovery. The sale
was held in a matter of months, deliberately timed so no company had time to do seismic.

Tom Kelly, the state resources commissioner, became the state’s chief huckster and talked up the sale at industry forums. The result was $900 million in bonus bids, an astounding amount at the time.

As it turned out, most of the leases sold in the sale turned out to be unproductive — “moose pasture,” as Alaskans put it. Kelly said later that if companies had had time to do seismic the state would have received a fraction of what it got.


Roger Herrera, a retired BP geologist who has done extensive work on ANWR, said the state’s proposal is a risk like anything in the oil business. But he cautions that if only the participants in a state-led consortium have the data, it creates a split among prospective bidders, with “haves and have-nots,” which will definitely discourage the have-nots from taking a gamble.

“My suggestion is for the state to use its limited funds to do 3-D seismic only on the most prospective areas and then sell the information at very low cost to as many people as possible,” Herrera said. That strategy disseminates the information broadly, rather than having it be held by only a few, he said.

However, there’s already a have and have-not situation in ANWR, Herrera said. Two companies who drilled an exploration well in the early 1980s, Chevron and BP, still have those test results as well as lease rights in a private land holding in the refuge.

Arctic Slope Regional Corp., an Alaska Native development corporation, owns a 92,000-acre private enclave in ANWR and has agreements with Chevron and BP. Herrera said this has always created a split in the industry because of the perception that BP and Chevron have the upper hand. Because of that, the bidding could be depressed anyway, he said.


The total price for a single winter “group shoot” in ANWR is unknown. But when Alaska proposed a similar project three years ago that would have been paid for completely by the state, a cost of $50 million was estimated.

Then US Interior Secretary Sally Jewell shot the plan down. Mack said he doesn’t think Ryan Zinke, the current Secretary, will have a problem.

“It’s our belief that having newer and better data on ANWR will generate more interest in two lease sales the Department of the Interior will conduct,” Mack told legislators in a recent hearing. “This is based on our experience in making seismic data we have obtained through its exploration tax credit program available to

The state has been able to stoke industry interest in new plays in the Colville River area west of Prudhoe Bay by making data available to explorers.

The post Seismic deniability in ANWR debate: Fuel for Thought appeared first on The Barrel Blog.

Source: http://blogs.platts.com/2018/03/14/seismic-deniability-anwr-debate/

Japan aluminum’s tipple of choice: US bourbon in a can

Jim Beam, the world’s biggest-selling US bourbon whiskey, is sold mostly in aluminum cans in Japan — which could potentially take an unintended hit from the US’ recent move to impose a 10% levy on aluminum imports.

Depending on how world leaders respond, global aluminum supply flows may change if there are hiccups in the supply chain and volatility in prices.

Australia, which has been exempted from the new US aluminum and steel tariffs, is not a major aluminum exporter to the US; its customers are mostly in Japan and South Korea.

However, Asian customers of Australian aluminum may soon find themselves competing with US buyers — and may consider switching instead to supply from Russia, Malaysia, Indonesia, India or even the Middle East.

Related blog post: Steel or bourbon? Trump may need both

The Australian exemption may also change how aluminum premiums are negotiated in Asia.

For 2018, buyers and sellers will honor existing annual term contracts.

But if Australia’s US tariff exemption is maintained in 2019, will Australian producers want to continue annual contracts with Asian buyers?
If not, the quarterly contract premium system that has been the leading market indicator in Asia for decades may change.

Uncertainty does not allow businesses to make long term plans. Jim Beam — owned by Japanese distiller Suntory since 2014 — and its peers, and other aluminum end-users, may start looking for alternatives to cans.

US beer makers say the tariff will raise their production costs by 1 cent/can, according to the US Can Manufacturers Institute.

With major brands such as Heineken already selling some beer product lines in PET bottles, any discussion of how to keep beer packaging costs down raises the specter of PET or paper being considered as alternatives.

In Japan, wine is already available in PET bottles and paper packs. Carbonated drinks are sold in PET bottles, too.

Cost control has always been a strong change driver. And the drive is stronger in a shrinking market.

While US beer production continues to grow amid the popularity of craft beer, Japan’s beer market is shrinking.

Japan’s domestic beer production fell 1.9% in 2016 and a further 2.9% in 2017, and its per capita consumption was a lowly 54th globally in 2016, latest data showed.

Its aluminum beverage can market is also shrinking overall. Demand was 10.3 billion cans in 2012, but had fallen 7% to 9.57 billion cans by 2017. A further 2% decline is forecast for 2018, to 9.38 billion cans, according to the Japan Aluminum Can Recycling Association.

But in the non-beer alcoholic drink segment, there is a glimmer of hope: Consumption from aluminum cans surged 12% in 2016 and a further 10% in 2017 to 3.54 billion cans.

For the moment, the decrease in demand from beer makers is being covered by the increase from whiskey.

And the Japanese aluminum industry will undoubtedly not cede ground in the beverage market without a fight — beverages account for 20% of rolled and extruded aluminum consumption in Japan, more than the automotive sector.

The post Japan aluminum’s tipple of choice: US bourbon in a can appeared first on The Barrel Blog.

Source: http://blogs.platts.com/2018/03/13/japan-aluminum-us-bourbon-in-can/