Crude outing to Riga for speaking engagement

The Oilholic found himself in the Latvian capital of Riga for a speaking engagement at the 8th Baltic Oil and Gas Trading and Transportation Conference held there from October 22-24.

Packed over two days, yours truly touched on the market drivers of energy prices – including Iran sanctions, global energy demand prospects, OPEC and the emerging energy mix. Of course, key on the agenda was the emergence of US LNG cargoes to the Baltics. To say that the Baltic states of Estonia, Latvia and Lithuania are spooked by their reliance on Russian natural gas imports would be an understatement.

Enter Lithuania's Klaipeda LNG Terminal which has already received its first LNG cargo from US (back in 2017). It has also meant that Vilnius' reliance on Russian imports is now down to 50%, but that of Estonia and Latvia remains stubbornly high at 75%. 

However, for all of that, the Oilholic noted that US imports are unlikely to arrive in appreciable volumes, but rather serve as a corrective mechanism on pricing the Baltics receive from Russia's Gazprom. In any case, much of the imported LNG coming in via Klaipeda is under a long-term agreement with Norway's Equinor.  

One also doubts the Americans are too bothered about the Baltics in volume terms as they chase offtake agreements in Asia's lucrative markets. That's all from the beautiful city of Riga folks on this quick turnaround. Keep reading, keep it ‘crude’! 

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© Gaurav Sharma 2018. Photo: Gaurav Sharma (left) on panel at the 8th Baltic Oil and Gas Trading and Transportation Conference in Riga, Latvia, October 22-24, 2018 © Confidence Capital, 2018. 

Kazakhstan’s crude output: A view from Almaty

The Oilholic is roughly 4,200 miles east of London, on his first flying visit to Almaty, Kazakhstan – Central Asia’s lovely oil and gas capital surrounded by serene mountains, cable cars, gourmet restaurants and sprawling university campuses. Here’s a view of its iconic TV tower and adjoining hills.

The occasion happened to be Confidence Capital’s Kazakhstan Oil and Gas Trading and Transportation Conference. Earlier today, this blogger provided an overview of the global oil and gas markets – forecasts on market balancing, crude oil demand and the production of the key players.

Also on the panel were Ruslan Bakenov, Director General of the Oil and Gas Information and Analytics Centre, Ministry of Energy of Kazakhstan,  Kuanysh Kudaybergenov, Director for Oil Industry Development Department of the country’s Ministry of Energy, and of course, Andrew Rudenko, Director of Confidence Capital, and the host of ceremonies. 

Some slides of one’s presentation are flagged below, but the Oilholic’s take was a familiar one. It is doubtful, the oil price would escape the $45-55 per barrel range anytime soon, that the US would join Russia and Saudi Arabia in the 10 million barrels per day (bpd) club in 2018, and demand would continue to be driven by China and India. 

Specifically in the case of Kazakhstan, this blogger believes its participation in the OPEC and non-OPEC headline cut – however lacklustre it might be – is not serving any purpose, as OPEC lacks an exit strategy. 

If anything, Kazakhstan’s production is by all accounts expected to surpass 1.9 million bpd in 2018 from its current range of 1.8 million bpd with Kashagan at full speed.

The country has to find ways to cope with the era of ‘lower for longer’ oil prices. Multilaterals, independent observers and indeed the ratings agencies think it can cope with the help of banking, structural and constitutional reforms that are already underway. Slides are below (click to enlarge); but that’s all from Almaty folks! It was an immense pleasure to be here. Keep reading, keep it crude.  

Powerpoint slides: Confidence Capital’s Kazakhstan Oil and Gas Trading & Transportation Conference, Almaty, Sep 14-15, 2017

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© Gaurav Sharma 2017. Photo: Almaty's TV tower and adjoining hills, Kazakhstan. Powerpoint slides: Confidence Capital’s Kazakhstan Oil and Gas Trading & Transportation Conference, Almaty, Sep 14-15, 2017 © Gaurav Sharma 2017.