Category Archives: Oil

(FR) Saudi Arabia faces weeks without full oil production

(FR) London/Tehran/Riyadh | Saudi Arabia faces weeks without full crude and gas production capacity after Saturday’s attack on the world’s most important oil facility.

While some officials in the kingdom have sought to reassure oil markets that production will come back quickly, people briefed on the matter say it could take far longer to restore output to its maximum level.

“It will take weeks to ramp up and bring the complex to maximum capacity,” said one person close to the energy ministry.

While the full extent of the damage is still being investigated, the person said there was enough concern that the kingdom was in talks with several OPEC countries. One option could be to call an emergency meeting of the oil producers’ cartel. Petrochemical feedstocks are also affected.

The kingdom, which is the de facto leader of OPEC, is in the initial stages of assessing whether it will need to ask other member countries to temporarily raise production to calm markets until Saudi Arabia’s output can fully recover.

The discussions are at an early stage and may not materialise into action, the person said. But given that Saudi Arabia has previously led the group in reducing output to support prices, the talks illustrate the depth of concerns in the kingdom.

The US has blamed Iran for the attacks on Abqaiq, a vital crude processing centre south-west of Saudi Aramco’s headquarters in Dhahran, and the Khurais oilfield, that forced the world’s top crude exporter to suspend more than half its oil production.

The attacks have heightened concerns about the vulnerability of Saudi Arabia’s oil infrastructure as the stand-off between the US and Iran has ratcheted up tension across the Middle East.

Stocks on Riyadh’s Tadawul exchange opened down 2.3 per cent before recovering to close down 1.3 per cent on Sunday. Bloomberg

Riyadh is the Trump administration’s closest Arab ally and has been a staunch backer of the US strategy of imposing “maximum pressure” on Iran in an effort to force it to renegotiate its 2015 nuclear agreement with world powers and curb its support for militant groups across the Arab world.

Iran-aligned Houthi rebels, who are fighting a Saudi-led coalition in Yemen’s four-year civil war, have claimed responsibility for what they said was an attack by 10 drones on the two oil facilities.

Mike Pompeo, US secretary of state, accused Iran of launching “an unprecedented attack on the world’s energy supply,” adding that there was “no evidence the attacks came from Yemen”.

For now, markets are well supplied with ample commercial stocks

— International Energy Agency

On Sunday, Iran dismissed the allegations, with the foreign ministry saying Washington’s claims were part of its policy of “maximum lies”.

Mohammad Javad Zarif, Iran’s foreign minister, said having failed at “max pressure” Mr Pompeo was turning to “max deceit”.

“US & its clients are stuck in Yemen because of illusion that weapon superiority will lead to military victory,” Mr Zarif said on Twitter. “Blaming Iran won’t end disaster.”

Pictures and video posted on social media showed large fires at Khurais, which lies more than 500 kilometres from the Yemen border.

Amin Nassir, Saudi Aramco chief executive, said that the company had extinguished the fire, which had caused no injuries, and was working on restoring production.

Saudi energy minister Prince Abdulaziz bin Salman said early estimates showed that the attack caused a suspension of crude oil supplies of 5.7m barrels or more than 50 per cent of daily production.

But he added that part of the loss of supplies to customers would be offset from inventories. He also said gas production had fallen 50 per cent as a result of the attack.

“This terrorist attack is an extension of recent attacks that targeted oil and civilian infrastructures and pumping stations and oil tankers in the Arabian Gulf,” Prince Abdulaziz said.

“These attacks do not only target the kingdom’s vital installations but also international oil supplies and threaten their security.”

Saudi Arabia supplies more than 10 per cent of global crude and is the world’s largest exporter of oil. The loss of more than 5m barrels a day would be the equivalent of 5 per cent of global oil supply.

While Saudi Arabia has said it expects output to be restored in the near future, the size of the loss is still sending shockwaves though global energy markets.

One person briefed by the Saudi Arabian energy ministry said part of the shutdown of output was precautionary and should be restored quickly.

The International Energy Agency, which co-ordinates global emergency oil stock releases, said: “We are in contact with Saudi authorities as well as major producer and consumer nations. For now, markets are well supplied with ample commercial stocks.”

Analysts warned that the size of the loss could trigger a sharp rise in oil prices, potentially spreading fears to the wider economy.

The US Department of Energy said: “The secretary [of energy] has been briefed on [the] drone attack in Saudi Arabia and stands ready to deploy resources from the strategic petroleum oil reserves if necessary to offset any disruptions to oil markets as a result of this act of aggression.”

“The Secretary has also directed DOE leadership to work with the International Energy Agency on potential available options for collective global action if needed.”

Oil consumers hold emergency stocks in reserve and Saudi Arabia may be able to mitigate some of the loss from its own oil stocks or spare production capacity.

Saudi Aramco informed petrochemicals companies that the supply of feedstock would be down.

Saudi Basic Industries Corporation said it had since reduced supplies to its petrochemicals affiliates by an average of 49 per cent. Industrial firm Tasnee said it had lowered supplies to its affiliates by an average of 41 per cent.

Stocks on Riyadh’s Tadawul exchange opened down 2.3 per cent before recovering to close down 1.3 per cent on Sunday.

“[The] attack on the Abqaiq processing facility constitutes a paramount oil bullish, equity bearish, and global growth negative risk,” said Bob McNally of the Rapidan consultancy, who previously advised the White House under George W Bush.

Saudi Aramco has been fast-tracking plans to launch an initial public offering as soon as later this year as part of the kingdom’s economic reform efforts. Security of supplies and management of Saudi barrels by the company are of utmost concern to potential investors.

Oil prices slipped last week after John Bolton, a noted Iran hawk, left his role as National Security Adviser to the White House and as US president Donald Trump had indicated he was willing to talk with Iran, which wants sanctions removed.

(Mish) Oil Shock, Crude Surges 20%, Treasuries Untouched: One Is Wrong, Which One?


In the wake of the attack on Saudi Arabia, crude futures jumped as much as 20%. Treasury yields are flat. One is wrong!

Oil Futures Up 20%

The Financial Times reports Oil prices jump 20% After Attacks Halve Saudi Output.

This is in the wake of a Saudi Oilfield Attack over the weekend.

Questions Abound

By Yemen, Iraq, or Iran? Israel?

Production Back Up When?

See the above link for discussion.

Treasury Yield Flat

Meanwhile, I note US Treasury yields are flat.

As of 8:20 PM central Sunday evening, there is no change in 3-month, 5-year, 10-year, or 30-year treasury yields.

Economic Sense

I propose there is little economic sense to this reaction.

Oil shocks are inherently recessionary.

Theoretically, this could be an inflationary recession like the 1970s.

But really?

Global Fairy Godmother

With stocks priced well beyond perfection, a collapse in global trade, a UAW Trade Strike Involving 48,000 Workers, and trade war threats between the US and Europe (and the UK and Europe), this all seems strange.

Then again, perhaps the Global Fairy Godmother will solve all the issues and restore global inflation (as measured by central banks).

Mike “Mish” Shedlock

(Reuters) U.S. shale firms cut budgets, staff as oil-price outlook dims


ODESSA, Texas (Reuters) – Oil producers and their suppliers are cutting budgets, staffs and production goals amid a growing consensus of forecasts that oil and gas prices will stay low for several years.

The U.S. has 904 working rigs, down 14% from a year ago, and even that is probably too many, estimated Harold Hamm, chief executive of shale producer Continental Resources (CLR.N), which has reduced the number of rigs at work.

Bankruptcy filings by U.S. energy producers through mid-August this year have nearly matched the total for the whole of 2018. A stock index of oil and gas producers hit an all-time low in August, a sign investors are expecting more trouble ahead.

“You’re going to see activity drop across the industry,” Earl Reynolds, CEO of Chaparral Energy (CHAP.N), told Reuters at the EnerCom oil and gas conference last month.

The Oklahoma energy firm has slashed its workforce by nearly a quarter, trimmed its spending plan by 5%, and agreed to sell its headquarters and use some of the proceeds to reduce debt.

Investment bank Cowen & Co estimated last month that oil-and-gas producers spent 56% of their 2019 budgets through June, based on its review of 48 U.S. companies. It expects total spending this year to fall 11% over last year, based on proposed budgets.

The slowdown in drilling is spurring cost-cutting in oilfield services, including staff cuts and restructurings at top firms Schlumberger and Halliburton Co. Schlumberger plans a writedown yet to be determined this quarter, noting its results in North America have been “under significant pressure,” CEO Olivier Le Peuch said on Wednesday.

Halliburton is paring its North American workforce by 8% because of customer spending cuts, and National Oilwell Varco recently offered buyouts to its U.S. workers.

“The service sector I think is going to be flat,” said Superior Drilling Services CEO Troy Meier, whose firm canceled plans to add new machinery.

Such signs of a downturn come as the shale sector had just started generating the cash flow long demanded by investors, who have grown weary of drilling expansions without returns. Last quarter, a group of 29 top publicly-traded producers generated more in cash – $26 million – than it spent on drilling and dividends, according to Morningstar (MORN.O) data provided by the Sightline Institute and the Institute for Energy Economics and Financial Analysis. A year earlier, the same group had spent $2.4 billion more than it generated.

Despite that progress, many small to mid-sized shale firms are now pulling back on production targets amid the gloomy price projections.

A slowing oil industry could weigh on the United States economy. The boom in shale oil output added about 1 percent to U.S. gross domestic product, or 10% of growth, between 2010 to 2015, according to the Federal Reserve Bank of Dallas. In Texas, the center of shale oil production, energy employment dipped 1.8 percent in the first six months of 2019, according to the Dallas Fed. New drilling permits in the state fell 21% in July compared with the same month last year, according to state data.


Any broader economic impact, however, could be limited by the massive investments in shale drilling by some of the world’s biggest oil firms – Exxon Mobil (XOM.N), Chevron (CVX.N), Royal Dutch Shell (RDSa.L) and BP PLC (BP.L). Even as small and mid-sized firms dial back, the majors continue to pour billions of dollars into years-long shale drilling plans. They have argued their integrated well-to-refinery networks allow them to control costs enough to withstand a sustained period of low prices.

Spokespeople for Exxon, Chevron and BP declined to comment on the industry downturn but referred to previous statements of their longterm commitment to shale. Shell did not respond to requests for comment.

Chevron has focused much of its production growth plans on shale, and CEO Michael Wirth has called its Permian Basin holdings in West Texas and eastern New Mexico the “highest return use of our dollars.”

Exxon CEO Darren Woods told a Barclays energy conference on Sept. 4 that the company continues to take the long view.

“The way we look at the business is tied to some very basic fundamentals that haven’t changed for decades, if not hundreds of years,” he said, noting it took oil a century to replace coal as the world’s dominant energy source.

Exxon has estimated it can earn a double-digit return in the Permian Basin even if oil falls to $35 a barrel.


U.S. oil prices largely have traded just above $50 a barrel since last November, requiring higher output to generate the same profit as when prices were higher. Prices this quarter are about 18% lower than this time last year, according to U.S. government data.

U.S. oil prices are likely to remain below $55 a barrel for the next three years, said Scott Sheffield, CEO of Pioneer Natural Resources (PXD.N), one of the largest oil producers in the Permian Basin. Lackluster prices will result in a “significant fallback in Permian growth” and probably “no growth for most,” he said on a recent earnings call.

Part of the slowdown comes as the best drilling spots in some areas of the field are being “exhausted at a very quick rate,” Sheffield said.

The severity of the looming downturn is a matter of debate.

Flotek Industries Inc (FTK.N), a supplier of oilfield chemicals, has cut staff twice this year. CEO John Chisholm told Reuters that the industry is just “pumping the brakes” as it grapples with well-design issues.

Matt Sallee, a portfolio manager at energy investors Tortoise Capital, expects a longer industry decline.

“It’s hard to see how this gets any better for several quarters,” he said.

(ZH) US To “Drown The World” In Oil

(ZH) The U.S. could “drown the world in oil” over the next decade, which, according to Global Witness, would “spell disaster” for the world’s attempts to address climate change.

The U.S. is set to account for 61 percent of all new oil and gas production over the next decade. A recent reportfrom this organization says that to avoid the worst effects of climate change, “we can’t afford to drill up any oil and gas from new fields anywhere in the world.” This, of course, would quickly cause a global deficit, as the world continues to consume around 100 million barrels per day (bpd) of oil.

Global Witness notes that the industry is not slowing down in the United States, notwithstanding recent spending cuts by independent and financially-strapped oil and gas firms. If anything, the consolidation in the Permian and other shale basins, increasingly led by the oil majors, ensures that drilling will continue at a steady pace for years to come.

It isn’t as if the rest of the world is slowing down either. The global oil industry is set to greenlight $123 billion worth of new offshore oil projects this year, nearly double the $69 billion that moved forward last year, according to Rystad Energy. In fact, while shale drilling has slowed a bit over the past year amid investor skepticism and poor financial returns, offshore projects have begun to pick up pace.

But that trend might turn out to be just a blip. The U.S. is still expected to account of the bulk of new drilling and the vast majority of new production, with much of that coming from shale. Already, the U.S. is the world’s largest producer of both oil and natural gas. And the pace has accelerated in recent years. In 2018, U.S. oil and gas production increased by 16 and 12 percent, respectively. According to the EIA, the U.S. surpassed Russia in terms of gas production in 2011, claiming the top spot, and it surpassed Saudi Arabia in oil production last year.

Going forward, new production from the U.S. will be eight times larger than the next largest source of growth, which is Canada. In fact, the U.S. will add 1.5 times more oil and gas than the rest of the world combined, according to Global Witness.

But because so much drilling in the U.S. is concentrated in a few areas, individual U.S. states on their own tower over the rest of the world. If Texas were a country, it would account for the most new oil and gas production in the world. Between 2020 and 2029, Texas could account for 28 percent of all additional output, Global Witness says.

Canada and Pennsylvania tie for second and third with 7 percent each. Then comes New Mexico at 5 percent of the growth and North Dakota at 4 percent. Oklahoma, Brazil, Colorado, Russia and Ohio are all tied at 3 percent a piece.

In other words, 7 out of the top 10 sources of new oil and gas production globally over the next decade are U.S. states.

“If things don’t change, by the end of the next decade, new oil and gas fields in the US will produce more than twice what Saudi Arabia produces today,” Global Witness said in its report.

This presents a massive challenge. “To avoid the worst impacts of climate change, our analysis shows that global oil and gas production needs to drop by 40% over the next decade. Yet, instead of declining, US oil and gas output is set to rise by 25% over this time, fueled by expansion in new fields,” the report warned.

(EUobserver) US warns Greece on Iranian oil tanker

(EUobserver) The United States has warned Greece not to give harbour to an Iranian oil tanker suspected of smuggling oil to Syria in defiance of EU sanctions, saying it would treat the act as support for terrorism. The ship was previously seized by the British navy and detained in Gibraltar, but Gibraltar let it go despite US pressure, while Iran has denied any wrongdoing.

(EUobserver) EU mulls naval mission to Persian Gulf

(EUobserver) According to a German advisory note, the EU should send a European naval mission to the Strait of Hormuz in the Persian Gulf, writes the Belgian newspaper De Morgen. The German government would launch the idea at one of the informal European meetings in Helsinki at the end of August. According to the note, the mission would need five frigates, two corvettes and protection teams with planes and logistical ships.

(CNN) How Trump’s trade war could could crush oil prices


US and Chinese flags are seen as Secretary of State Mike Pompeo and China's Foreign Minister Wang Yi  meet at the US Department of State May 23, 2018 in Washington, DC. (Photo by Brendan Smialowski / AFP)        (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)

New York (CNN Business)The deepening trade war between the United States and China could deal a double shock to the fragile oil market.The tit-for-tat tariffs have already sent crude prices plunging because of fears of a severe global economic slowdown or even recession in the United States that could dent already anemic demand for oil.But there could also be a supply shock coming. Bank of America Merrill Lynch warned that China could retaliate against US tariffs by purchasing vast amounts of oil from Iran in defiance of Washington’s sanctions on the OPEC nation.

If China ignores US sanctions, Iran oil could flood the market.”


The one-two punch would cause Brent oil to crash from $60 a barrel today to just $40, Bank of America wrote in a note published on Friday.”A Chinese decision to reinitiate Iran crude purchases could send oil prices into a tailspin,” Bank of America commodity strategists led by Francisco Blanch wrote in a note to clients.US oil prices have tumbled by nearly 7% since July 31, the day before President Donald Trump vowed to impose a 10% tariff on $300 billion of US imports from China on September 1. Brent, the global benchmark, has plunged by 8%.The latest round of US tariffs on China could wipe out 250,000 to 500,000 barrels per day of global oil demand, Bank of America said. The world’s appetite for oil has already been running at a sluggish pace because of the economic slowdown.China has promised to retaliate, casting further doubt on the global economic outlook.Trump’s trade war with China is starting to get out of handBeijing on Monday allowed its currency to drop sharply below a key psychological level. China’s central bank in part cited the looming US tariffs.China is also taking further aim at American farmers by announcing Chinese companies have halted purchases of US agriculture goods.Oil could be in the crosshairs next. Although Beijing has imposed a 10% tariff on US liquefied natural gas, oil has so far avoided tariffs.

Iran’s oil exports have crashed

China could retaliate indirectly by seeking to undermine Trump’s foreign policy.Trump’s sanctions on Iran are aimed at starving Tehran of cash and creating economic pain that forces the country to abandon its nuclear ambitions.The sanctions have successfully scared away most of Iran’s oil buyers and stressed the country’s economy. Iranian unemployment is expected to soar above 16% in 2020, according to the International Monetary Fund.Iran’s oil exports plummeted to 530,000 barrels per day in June, according to the International Energy Agency. That’s down from 2.6 million barrels per day in May 2018.In other words, the sanctions have wiped out about 2 million barrels of daily oil supply, helping to blunt the impact of blockbuster output from the United States.Bank of America had been anticipating Iran’s oil exports would shrink to near-zero in 2020.”If China ignores US sanctions, Iran oil could flood the market,” the firm wrote.

China may seek to avoid ‘open provocation’

However, it’s not like China has completely stopped purchasing oil from Iran.China imported an average of 400,000 barrels per day from Iran during the first half of 2019, according to Matt Smith, director of commodity research at ClipperData.”Iran could be a possible way for China to get back at the US, but to some extent they’re already doing that,” Smith said.US sanctions Chinese company for buying Iranian oil. Beijing slams ‘bullying’ behaviorSmith said it’s difficult to say how many barrels were purchased in July because Iran has conducted “general subterfuge to try to disguise the origins of these flows.” He cited Iran turning off ship tracking signals and doing ship-to-ship transfers.Some believe China would be unwilling to escalate the trade war dramatically by emphatically undermining Trump’s Iran crackdown.”China will not phase out its imports from Iran by any means,” said Michael Hirson, Eurasia Group’s practice head of China and Northeast Asia. “But they are going to stop short of the kind of action that would be open provocation to the Trump administration.”Hirson pointed out that China would have “a lot to lose” if the United States responded to vast purchases of Iranian oil by sanctioning a major Chinese company or financial institution.”That would outweigh the benefit of importing more oil from Iran and thumbing Beijing’s nose at Washington,” he said.

(ZH) China’s Largest Oil Company Caught Importing Iranian Crude

(ZH) The Trump Administration’s decision to reimpose sanctions on the Iranian oil trade has dramatically reduced Iranian crude exports – but it hasn’t stopped some of the US’s largest economic rivals from accepting shipments of Iranian crude, according to several media investigations. Not only has China continued to import Iranian crude, so have several other Asian and Mediterranean countries, according to data from several tanker tracking services studied by the New York Times and other media organizations.

Per the NYT, in April 2018, before Trump withdrew from the nuclear deal, Iran exported 2.5 million barrels of oil per day. One year later, that figure was at one million. And in June, after the end of the exceptions or waivers, ships in Iranian ports loaded about 500,000 barrels per day, according to Reid I’Anson, an energy economist at Kpler, a company tracking seaborne commodities.

Of course, this fact isn’t lost on the Trump Administration, which, according to the FThas been tracking the movements of tankers linked to China’s biggest state-run oil company amid signs that the ships are helping to bring in Iranian crude.

China National Petroleum Corp, via its subsidiary, the Bank of Kunlun, has, in recent months, employed a fleet of tankers to move oil from Iran to China.

And an NYT visualization of tanker traffic shows the route some of these tankers take while moving oil from Iran to China and elsewhere in the region.

Below are satellite images of some of these tankers docking at Chinese ports.

Last week, the Treasury Department sanctioned Chinese oil trader Zhuhai Zhenrong for buying oil from Iran. The decision was intended to send a message to other Chinese firms, and anyone else buying Iranian oil who also hoped to do business with the US.

“Any entity considering evading our restrictions, particularly related to Iranian petrochemicals, should take this message seriously,” said one official. “We recently sanctioned Zhuhai Zhenrong…for knowingly engaging in a significant transaction for the purchase or acquisition of crude oil from Iran. This action underscores our commitment to enforcement.”

But targeting CNPC would be an especially serious escalation at a time when tensions between the US and China are nearing a breaking point. Even as satellite data and imagery suggest that the tankers linked to Bank of Kunlun are employing tactics including turning off tracking devices and changing their names.

Any US decision to target CNPC would mark a significant escalation given the company’s status as China’s largest oil producer. Its publicly listed arm, PetroChina, has operations in the US and secondary shares listed in New York, in addition to partnerships with international energy companies such as Ineos.

Bank of Kunlun said it was “not involved in the crude oil import business” and denied having “violated any laws or regulations.” But people in Washington familiar with the activities of the bank said it was viewed by the US as a “bad actor.” “Bank of Kunlun has always been the sacrificial lamb for CNPC and, more broadly, for the Chinese government,” said one former senior US intelligence official. “It is a bank that the Chinese government recognises as expendable in some sense.”

And cracking down on the Bank of Kunlun would come with certain risks that might impede the US’s agenda, particularly when it comes to North Korea.

“China is not going to do the US any favours,” said Dennis Wilder, a former top CIA and White House official. “This is the price you pay strategically. You cannot tell China on the one hand to be aligned with you on Iran and North Korea and at the same time decide you’re going to retard or destroy some of their corporations.”

Still, after labeling China a currency manipulator last night, it appears Washington has decided on a hardline approach. Will sanctions on CNPC and the rest of the Chinese energy industry be next?

After all, Beijing has made clear that it has no problem being Iran’s most important lifeline during an extremely difficult time.


Has China announced yet that it will import all Iranian oil it has to sell? cc: @JZarif682:08 PM – Aug 5, 2019Twitter Ads info and privacy29 people are talking about this

(ZH) Iran Seizes Foreign Oil Tanker Accused Of Smuggling Fuel


In what will be seen as another escalation of tensions in the Persian Gulf, Iran’s Revolutionary Guards seized a foreign oil tanker in the Persian Gulf on July 31, adding to rising concerns about the safety of shipping in a region crucial to oil exports.

The vessel – the third foreign ship seized by Iran in the Gulf since July 14 in response to a UK seizure of Iran’s own ship – is suspected of smuggling a large volume of fuel, the Guards said on their Sepah News portal according to Bloomberg. They did not, however, give any details about the flag or nationality of the ship or its operator.

The ship’s seizure took place last Wednesday, Sepah News, the Revolutionary Guard’s official news service, reported, a day after United Arab Emirates officials traveled to Iran to discuss maritime border cooperation and the flow of shipping traffic, including illegal movements.

Edward Wong@ewong

BREAKING: Iran says it has seized a third foreign oil tanker. This NYT investigation shows how 12 Iranian tankers have brought oil to China & other nations since May, despite US sanctions. Countries defy Trump, who has failed to get allies on Iran. …257:33 PM – Aug 4, 2019Twitter Ads info and privacy20 people are talking about this

The ship was carrying 700,000 liters (4,403 barrels) of smuggled fuel when it was seized near Farsi Island in the western part of the Gulf, off Iran’s southwestern coast, Sepah News reported. The island is located about 400 miles (640 kilometers) from the Strait of Hormuz, the volatile center of Iran’s standoff with the West in recent weeks. Iran’s state-run Press TV reported that the seized ship is an Iraqi tanker that was delivering the fuel to some Arab countries in the Persian Gulf.

Iranian state news agency IRNA reported that a video of the moment the vessel was seized showed it was Iraqi, although as the WSJ notes, maritime confrontations between Iran and Iraq are considered rare. The Iraqi ship’s seizure would follow July’s visit to Tehran by Prime Minister Adel Abdul-Mahdi, who has sought to ease tensions between the U.S. and Iran, both close allies of Iraq.

Gen. Ramezan Zirahi, a navy forces commander in the Guard, was quoted by Iran’s Fars News Agency as saying the fuel had been transferred to the vessel from another ship, and was bound for Arab countries in the region when it was impounded. The seven detained crew members – who were arrested – were foreign, he said, without naming their nationality or that of the vessel. The ship was taken to Bushehr port on Iran’s southwest coast, and its cargo was confiscated and handed over to the National Oil Distribution Company of Iran.

The announcement of the ship’s capture coincides with a joint meeting between the Iranian and Qatari coast guards in Tehran aimed at improving and developing maritime cooperation between the Gulf neighbors, state-run Islamic Republic News Agency reported earlier Sunday. That gathering follows a rare meeting between the coast guards of Iran and the U.A.E. last week.

* * *

The impounding of the ship will escalate the tensions that have flared in the region’s waters as Iran resists U.S. sanctions that are crippling its all-important oil exports and retaliates after one of its ships was seized July 4 near Gibraltar. Iran grabbed a British tanker, the Stena Impero, in Hormuz two weeks later and continues to hold it. Iran also detained a small Emirati-based vessel, the Riah, earlier in July and accused it of smuggling fuel. Nine of the 12 Indian crew members have since been released, but the vessel remains impounded. Ship-tracking experts noted the size of the cargo on the vessel seized on Wednesday was even smaller. Petroleum products sold domestically in Iran are heavily subsidized, so it is potentially lucrative to divert them to foreign markets, where they can be sold for a higher price.

The passage at the mouth of the Persian Gulf accounts for about a third of the world’s seaborne oil flows. To reduce the risks of navigating the waterway, the Royal Navy has started to escort British ships, and a plan for a European naval mission is taking shape.

Meanwhile, the U.S. has blamed Iran for attacks on oil tankers in the region in recent months, a charge Tehran has denied.

The crisis in the Gulf has caused oil prices and shipping premiums to rise and prompted some vessel owners to avoid the region. Last week, Bloomberg reported that British oil giant BP, which had to shelter one of its tankers in the Persian Gulf this month in fear it could be targeted by Iranian forces, was avoiding sending ships to the region after tensions flared between Tehran and London.

BP is “certainly not sending British ships and crews” through the Strait of Hormuz, the only way for tankers to reach the world’s biggest oil-exporting region, Chief Executive Officer Robert Dudley said in a Bloomberg TV interview.

Earlier this month, a BP tanker had to abandon a plan to load Iraqi crude and instead took shelter near Saudi Arabia because the company feared the ship could be targeted in a tit-for-tat response for British Royal Marines seizing a vessel transporting Iranian crude in the Mediterranean, a person familiar with the matter said at the time.

At the same time, the U.S. has boosted military deployments in the Persian Gulf and Strait of Hormuz and is trying to pull together an international maritime force to patrol the region. The British also plan to create a separate European maritime security force.

Ironically, it remains unclear if allies in the North Atlantic Treaty Organization will cooperate: as the WSJ notes, the U.K., Germany and France are at odds with the Trump administration over its decision to pull out of the 2015 Iranian nuclear deal to which they are co-signatories, and are working to keep the deal alive and to ease tensions with Tehran.

For its part, Iran says it is trying to maintain maritime security in the region. But its officials also have repeatedly warned they would block the Strait of Hormuz—through which a third of the world’s seaborne oil is transported—in response to crippling U.S. sanctions. Iran has accused the Europeans of not providing adequate relief from American pressure.

(AJ) Iran seizes British oil tanker in Strait of Hormuz

(AJ) Iran’s Revolutionary Guard Corps says tanker was captured ‘for failing to respect international maritime rules’.

The vessel was seized by 'small crafts and a helicopter', the owner of the vessel said [Stena Bulk/Handout/via Reuters]
The vessel was seized by ‘small crafts and a helicopter’, the owner of the vessel said [Stena Bulk/Handout/via Reuters]

Iran’s Revolutionary Guard Corps (IRGC) said its forces have captured a British oil tanker in the Strait of Hormuz for allegedly violating international laws, amid rising tensions in the Gulf. 

The Stena Impero tanker “was confiscated by the Revolutionary Guards at the request of Hormozgan Ports and Maritime Organisation when passing through the Strait of Hormuz, for failing to respect international maritime rules,” the IRGC’s official website Sepahnews announced.

The tanker “was led to the shore and handed over to the organisation to go through the legal procedure and required investigations,” it said.

The vessel was seized by “small crafts and a helicopter” at 7:30pm local time (15:00GMT), the owner of the vessel, Stena Bulk, and Northern Marine Management said, adding that they are “presently unable to contact the vessel”. 

Tanker tracking service Marine Traffic showed that the UK-flagged, Swedish-owned Stena Impero last signalled its location near the Island of Larak in the highly sensitive waterway at 9pm local time (16:30 GMT).

There are 23 crew members on board, the company’s statement added.

“We are urgently seeking further information and assessing the situation following reports of an incident in the Gulf,” a spokesperson for Britain’s Ministry of Defence said.

Second vessel seized

The British Foreign Office confirmed a second naval vessel, a Liberian-flagged vessel, had been seized in the Strait of Hormuz by Iranian authorities.

Later on Friday, Iran’s semi-official Fars news agency reported that the Liberian-flagged Mesdar tanker was briefly held and given a notice to comply with environmental regulations before being allowed to continue on its way.

“I’m extremely concerned by the seizure of two naval vessels by Iranian authorities in the Strait of Hormuz,” said Foreign Secretary Jeremy Hunt.

“I will shortly attend a COBR (national security) meeting to review what we know and what we can do to swiftly secure the release of the two vessels.

“These seizures are unacceptable. It is essential that freedom of navigation is maintained and that all ships can move safely and freely in the region.”

There was no immediate confirmation from Iran that its forces had seized a second vessel. 

Strait of Hormuz

‘Provocative moves’

The developments came a day after the IRGC said it had seized a foreign tanker accused of smuggling oil with a crew of 12 on Sunday.

The Strait of Hormuz in the Gulf, the world’s most important waterways for the transport of oil, has become a hotspot for tensions with Iran amid a spate of incidents there.

Relations between Britain and Iran and the United States and Iran have soured in particular.

Earlier this month, British Royal Marines seized an Iranian oil tanker off the British overseas territory of Gibraltar for allegedly violating sanctions against Syria.

On Friday, Gibraltar’s Supreme Court extended for 30 days the detention of the seized Iranian supertanker, Panama-flagged Grace 1, which was intercepted off the southern tip of Spain on July 4.

Richard Weitz, a security analyst at Wikistrat, a global risk consultancy group, said Friday’s incident was a “reciprocal action” by Iran.

“This was anticipated,” he told Al Jazeera from Washington, DC. “This is just the latest in a series of these subconventional forms of provocative moves.” 

(BI) Russia is joining forces with Europe to rescue the Iran nuclear deal that Trump abandoned


putin rouhani russia iran

Russia’s President Vladimir Putin shakes hands with his Iranian counterpart Hassan Rouhani.REUTERS/Mikhail Klimentyev/RIA Novosti/Kremlin

  • The Financial Times reported that Russia has signaled it wants  join an EU payments channel designed to go around Trump’s sanctions on Iran and boost oil exports. 
  • The channel, known as Instex, would be a huge step in rescuing the 2015 Iran nuclear deal which Trump abandoned last year. 
  • Iran has been been in breach of the deal recently by going past levels of uranium enrichment set by the 2015 deal. 
  • View Markets Insider for more stories.

Russia has signaled it wants to team up with the European Union in joining an EU payments channel, avoiding US sanctions banning trade with Iran and boost oil exports, the Financial Times reported. 

The payments channel, Instex, would be a massive step forward in attempts by the EU and Russia in rescuing the 2015 Iran nuclear deal. 

Iran’s President Rouhani and President Trump have in the past year been at loggerheads over the nuclear deal, with Trump abandoning it last May. 

Read More: How the Strait of Hormuz, a narrow stretch of water where ships transport $1.2 billion worth of oil every day, is at the heart of spiraling tensions with Iran

The move by Moscow to work with the EU is also surprising, given the little cooperation between the two parties since Russian annexed Crimea in 2014, attempted murder of a double agent in the UK, and alleged attempts to meddle in EU elections. 

However, it also marks a move by both the EU and Moscow to ignore Trump’s sanctions. Since he pulled out of the deal last May, France, Germany, China, the UK, and Russia all have been trying to maintain trade with Iran, but have been hindered by companies not wanting to risk problems with the White House.

Since then Iran has breached the deal by going above the agreed limit on uranium enrichment levels, out of retaliation for US sanctions on Iran. 

“Russia is interested in close co-ordination with the European Union on Instex,” the Russian foreign ministry told the Financial Times. It added that it would become more effective as more countries got involved. 

Iran has been expressing it’s frustration with the other parties who signed the 2015 deal at not helping Iran after the US imposed sanctions — namely on oil imports, which is Iran’s most valuable commodity. 

In a televised speech on Sunday, Iranian President Rouhani said “we are ready to hold talks with America today,” but wants to return to the Obama-era nuclear agreement and have the economic sanctions from President Donald Trump’s administration lifted before that happens.

(ZH) Iranian Boats Attempt To Seize UK Tanker In Straits Of Hormuz

(ZH) With the Persian Gulf uncharacteristically quiet in recent days, without any material provocation either real of staged, late on Wednesday CNN reported that five armed Iranian Islamic Revolutionary Guard boats unsuccessfully tried to seize a British oil tanker in the Persian Gulf. There was no independent verification of the report, but instead it was once again sourced to those who stands to gain the most from a way with Iran, namely “two US officials with direct knowledge of the incident.”British Heritage tanker

According to the report, the British Heritage tanker was sailing out of the Persian Gulf and was crossing into the Strait of Hormuz area when it was approached by the Iranian boats. The Iranians ordered the tanker to change course and stop in nearby Iranian territorial waters, according to the officials. A US aircraft was overhead and recorded video of the incident, although so far a video has not been released.

In addition to the US aircraft escort, the UK’s Royal Navy frigate HMS Montrose had been escorting the tanker, and during the confrontation, it trained its deck guns on the Iranians and gave them a verbal warning to back away, which they did. Montrose is equipped on the deck with 30 mm guns specifically designed to drive off small boats. The frigate was in the region performing a “maritime security role” according to a prior notification from UK officials.HMS Montrose

The incident takes place less than a week after British Royal Marines in Gibraltar stormed and seized an Iranian ship believed to have been carrying oil to Syria, in what authorities said was a violation of European Union sanctions on Syria. Iranian President Hassan Rouhani warned earlier Wednesday that the UK “will see the consequences” after the Gibraltar seizure.

Rouhani, speaking in a cabinet session, said, “I tell the British that they are the initiator of insecurity and you will understand its consequences later.”

On Tuesday, the US Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford said that the US and allies were working to put together a coalition of countries to come up with a system to enforce freedom of navigation in the region amid what the US says are heightened threats from Iran.

“We had a discussion today, the Secretary of State, the Secretary of Defense and I and we are engaging now with a number of countries to see if we can put together a coalition that would ensure freedom of navigation both in the Straits of Hormuz and the Bab el Mandeb,” Dunford said following an awards ceremony for his Finnish counterpart.

“I think what we’ll do is, we certainly from the United States perspective would provide maritime domain awareness and surveillance,” he said, adding that naval vessels would escort commercial ships that shared a country of origin, if required.

“Escorting in the normal course of events would be done by countries who have the same flag so a ship that is flagged by a particular country would be escorted by that country and I think what the United States can provide is domain awareness, intelligence, surveillance, reconnaissance and then coordination and patrols for other ships that would be in the area would be largely coalition ships,” Dunford said.

This alleged latest provocation by Iran comes just hours after President Trump announced on Twitter that sanctions on Iran will “soon be increased, substantially!” following news that Iran was enriching uranium beyond the limits imposed by the Iran Nuclear Deal.

Last month Trump halted plans for a military strike against Iran in retaliation for the shooting down of a US drone, Trump said he found it hard to believe it had been an “intentional” act. “I think that it could have been somebody who was loose and stupid that did it,” Trump said in the Oval Office on June 20.

It is unclear if Trump has been briefed on the latest events in the Gulf, and if this alleged attempt at seizing a western tanker will give the neocons in Trump’s circle enough sway to finally commence the Gulf war which could send oil above $300 and involve all the world’s superpowers in what would be one giant, and very deadly proxy war.

(EUobserver) British navy seizes oil tanker busting EU sanctions


The British navy has seized an oil tanker called Grace 1 on its way past Gibraltar to the Syrian refinery of Baniyas, which is under EU sanctions. Fabian Picardo, the Gibraltar first minister, told the BBC he had written to the European Commission and EU Council presidents to give details. The operation comes amid uncertainty on UK-EU defence and foreign policy cooperation after Brexit due later this year.

(Axios) Higher temperatures could fuel a global energy demand to stay cool


A fan blowing on Earth to cool it down
Illustration: Sarah Grillo/Axios

A new peer-reviewed study finds that higher temperatures could bring large increases in energy demand as use of cooling soars, far outweighing reduced need for heating.

Why it matters: The paper published in Nature Communications finds that depending on future warming levels, global demand in 2050 could be 11%–58% higher than what’s otherwise expected based on economic development and population growth.

One level deeper: While the total and regional ranges are significant, the paper notes: “We find broad agreement among [Earth System Models] that energy demand rises by more than 25% in the tropics and southern regions of the USA, Europe and China.”

What’s new: “These are the first globally comprehensive estimates of how much energy demand will change due to the increase in temperatures that is projected to happen, not just globally averaged but depending on where around the globe different climate models say it is going to be hotter rather than colder compared to the global mean,” Boston University professor and co-author Ian Sue Wing tells Axios.

My thought bubble: The paper underscores a sticky problem. Adapting to warming could make cutting emissions even harder if those higher energy needs aren’t met with low-carbon sources.

  • The paper — co-authored by researchers with the International Institute for Applied Systems Analysis and Ca’ Foscari University of Venice — does not model how additional demand will be met.
  • “The emissions story is going to depend on how we choose to generate that additional electricity,” Sue Wing said.

What they did: The study is a global and regional look at potential warming-driven energy demand increases in 2050, looking at use of electricity, petroleum and natural gas in four sectors: industry, housing, business and agriculture.

They modeled a large set of potential outcomes based on 2 major emissions scenarios commonly employed by scientists.

  • One shows emissions soaring essentially unchecked through the century, enabling large temperature increases.
  • The other is an emissions peak around 2040, follow by a plateau and decline, which still brings significant warming.

But, but, but: The authors acknowledge limitations in the modeling and the need for future research.

  • Their analysis does not consider factors including changes in energy prices that could dampen energy demand growth, technological improvements, policy changes and more localized energy demand responses.

Go deeper: A/C demand expected to triple

(JN) Gulbenkian vende Partex a petrolífera tailandesa por 622 milhões


A petrolífera da Fundação Gulbenkian trocou de mãos após mais de um ano de negociações: foi comprada pela tailandesa PTT Exploration and Production (PTTEP).

A Partex já tem novo dono: a PTT Exploration and Production (PTTEP), empresa pública tailandesa de exploração e produção de petróleo. A venda, que estava a ser negociada há mais de um ano, foi fechada por cerca de 622 milhões de dólares (o equivalente a 553,3 milhões de euros) e anunciada esta segunda-feira, 17 de junho.

“A operação terá um valor de 622 milhões de dólares, sujeita aos ajustes habituais nestas transações. O acordo seguirá agora o habitual processo de autorizações, que deverá estar concluído até final do ano”, informa a empresa em comunicado.

Segundo a mesma informação, a PTTEP pretende utilizar a Partex “como uma plataforma de crescimento, alargando as relações que a empresa hoje detém nos países em que opera”, comprometendo-se a petrolífera tailandesa a “manter a gestão e restantes colaboradores da empresa, bem como o escritório em Lisboa”. Também a marca Partex vai ser mantida. 

“A compra da Partex encaixa na estratégia da PTTEP, focando-se em áreas prolíficas no Médio Oriente, em parceria com operadores mundiais. Este portefólio diversificado e auto-financiado não fornecerá apenas o fluxo de receita, a produção e as reservas imediatas, mas também fortalecerá o nosso relacionamento com os governos locais, abrindo um caminho forte para a PTTEP expandir seus futuros investimentos em exploração e produção nesta região”, afirma a empresa tailandesa numa nota publicada esta segunda-feira e citada pela Bloomberg.

A PTTEP, cotada na bolsa da Tailândia, tem 46 projetos petrolíferos em 12 países.

Nesta operação, a Fundação Calouste Gulbenkian – que decidiu em 2018 desinvestir na área do petróleo e gás – teve como consultores a Jefferies International Limited, a Linklaters e a Morais Leitão, Galvão Teles, Soares da Silva & Associados.

O CEO da petrolífera, António Costa e Silva, já havia avançado que o objetivo era concluir a venda da Partex até ao final de junho. “A Partex é uma noiva apetecível”, declarou em entrevista ao Jornal Económico, na qual revelou ainda que existiam “mais de três interessados” na altura.

A petrolífera já havia sido cobiçada – e quase entregue – aos chineses da CEFC China Energy, em fevereiro de 2018. Mas no espaço de dois meses as negociações caíram por terra, uma vez que a empresa chinesa não foi capaz de prestar suficientes esclarecimentos sobre a investigação de que o fundador e presidente da CEFC, Ye Jianming, era alvo naquele momento. “Concluiu-se que não existem condições para continuar as conversações”, disse a FCG em comunicado.

(JN) Trump ameaça sanções para travar gasoduto entre Rússia e Alemanha


Donald Trump quer travar o projeto Nord Stream 2 e ameaça avançar com sanções, embora não especifique contra quem. Moscovo acusa-o de “chantagem” e concorrência “injusta”.

Donald Trump continua a disparar ameaças a vários dos principais parceiros mundiais dos Estados Unidos. Desta vez, os alvos foram a Alemanha e a Rússia. Em causa está o projeto do gasoduto Nord Stream 2, que irá ligar os dois países europeus e que também tem merecido resistência por parte da Comissão Europeia. O projeto irá aumentar o fluxo de gás da Rússia para a Alemanha, uma meta que Trump pretende travar.

Não é a primeira vez que o presidente norte-americano faz críticas a este projeto, mas fica por esclarecer quem seriam as empresas ou governos alvo de sanções por parte dos Estados Unidos. Na mais recente investida, limitou-se a dizer que está a “proteger” a Alemanha.

“Estamos a proteger a Alemanha da Rússia. A Rússia está a receber milhões e milhões de dólares da Alemanha pelo seu gás”, afirmou o presidente dos Estados Unidos, na Casa Branca, após uma reunião com o presidente polaco, Andrzej Duda. Para Trump, “a Alemanha está a cometer um erro tremendo ao confiar tanto no gasoduto”, já que “é uma tremenda quantidade da sua energia que será fornecida” por esse projeto.

Mesmo sem detalhes, as afirmações de Trump já mereceram resposta por parte de Moscovo. Estas declarações, afirmou o porta-voz do Kremlin, “não são nada se não chantagem e uma forma injusta de concorrência”.

O presidente russo Vladimir Putin foi mais longe e, em declarações ao canal de televisão Mir TV, afirmou que as relações entre os Estados Unidos e a Rússia estão a “deteriorar-se e a ficar cada vez piores”.

O Nord Stream 2 é um empreendimento conjunto entre a energética russa Gazprom e outras cinco empresas europeias. O objetivo é fornecer 55 mil milhões de metros cúbicos de gás natural russo, anualmente, à Alemanha e a outros países europeus, através de um gasoduto duplo colocado no fundo do Mar Báltico.

A própria Comissão Europeia tece críticas a este projeto e tem procurado mesmo chegar a acordo com a Alemanha para estabelecer regras que lhe permitam ter uma palavra a dizer sobre a gestão do gasoduto, uma opção que tem sido rejeitada por Angela Merkel. Já da parte dos Estados Unidos, os receios são de que a Rússia utilize o fornecimento de gás natural como forma de pressão sobre os restantes países europeus dependentes da sua energia.

(ZH) 2 Tankers Damaged After Suspected Torpedo Attack Near Strait Of Hormuz; Oil Soars


Update: The Front Altair, the Marshall Islands flag tanker damaged in Thursday’s attacks, has now sunk, according to Iranian television.

* * *

And just like that…war with Iran is now almost assured.

Roughly one month after the US accused Iran of attacking Saudi- and UAE-docked oil tankers with naval mines in the Strait of Hormuz, two oil tankers were attacked in the Sea of Oman (not far from where the prior attacks occurred), leaving both ships seriously damaged, Bloombergreports.

So far, no casualties have been reported. The attack left one of the ships “ablaze and adrift,” according to the Associated Press.

Sailors from both vessels were being evacuated as the US Navy rushed to assist.


The Bahrain-based US Fifth Fleet said it received distress signals from the two ships roughly 50 minutes apart. As BBG reports, the incident will almost certainly “inflame” tensions between the US and its Arab allies on one hand, and Iran on the other.

The development will inflame already-rising political tensions in the region weeks after four vessels, including two Saudi oil tankers, were sabotaged in what the U.S. said was an Iranian attack using naval mines. Tehran denied the charge.

The Bahrain-based Fifth Fleet said it received two separate distress signals at 6:12 a.m. and about 7:00 a.m. local time. “U.S. Navy ships are in the area and are rendering assistance,” Commander Josh Frey, a spokesman, said. Iran said it has rescued 44 sailors.

Though a suspected aggressor has not yet been officially named, and an investigation into the cause of the incident has only just begun, the notion that Iran will be implicated looks extremely likely, even as Iranian ships helped rescue all 44 sailors who were aboard the two ships. Iran has already denied responsibility for the attack.


The manager of one of the tankers, the Japan-flagged Kokuka Courageous, which had been carrying a cargo of methanol from Saudi Arabia to Singapore, said the vessel had been damaged as the result of “a suspected attack,” though the manager added that the ship’s cargo was secure.

“The hull has been breached above the water line on the starboard side,” Bernhard Schulte GmbH & Co KG said in a statement on its website.

Another tanker, Norwegian-owned and Marshall Islands-flagged Front Altair, sent a distress signal to the UAE port of Fujairah. It had loaded an oil shipment in Abu Dhabi not long before the incident.

Officials said it appeared the ships had been attacked with torpedoes. Another report cited officials saying three detonations had been heard.

The Front Altair was delivering a cargo of naphtha to Taiwan refiner CPC Corp, one company official said. The cargo was supplied by Abu Dhabi’s Adnoc.

Considering the involvement of the Japan-flagged vessel, the timing of the incident would be ironic. The suspected attacks unfolded as Japanese PM Shinzo Abe met with Iran’s Supreme Leader Ayatollah Ali Khamenei on Thursday, the second and final day of his visit, which was intended to de-escalate tensions in the region. There were no immediate details about what they discussed.

Meanwhile, in Tokyo, Japan’s Chief Cabinet Secretary Yoshihide Suga, a top government spokesman, told reporters that Abe’s trip was intended to help de-escalate tensions in the Mideast — but not specifically mediate between Tehran and Washington.

Oil prices are popping higher on the news, as the latest replay of one of history’s most famous false-flag naval attacks, the Gulf of Tonkin incident, which helped precipitate the Vietnam war, ratchets up tensions in the region. At one point, Brent crude was up as much as 4% to over $62 a barrel.

At the very least, the US military will use the attack as an excuse to continue its escalation of personnel in one of the most sensitive waterways for the global oil trade. One-third of all oil traded by sea passes through the Strait of Hormuz.

Worst case, it looks like NSA John Bolton may have just gotten the excuse he needs to justify a full-scale invasion of Iran.

(BBG) Sonangol Boss Fired by Angola’s President as Fuel Runs Dry


  •  Saturnino, board dismissed amid revamp of state oil company
  •  Sonangol has said lack of dollars a reason for fuel crunch

Angolan President Joao Lourenco fired Sonangol EP Chairman Carlos Saturnino as he revamps the company amid persistent fuel shortages in the southern African nation.

The presidency appointed Gaspar Martins to lead the state-owned company with a new board after incumbent members were dismissed, according to a statement late Wednesday. Lourenco met with oil industry officials on Tuesday, vowing to end shortages at gas stations across the country that imports almost all of its fuel.

Lourenco appointed Saturnino chairman in 2017 and fired Isabel dos Santos after he replaced her father, Jose Eduardo dos Santos, as president. Sonangol, long the main engine of Angola’s oil-focused economy, has been at the center of the leader’s vow to fight corruption. He also plans to revive crude output, which has dropped to the lowest level in more than a decade following years of under-investment in new projects.

Angola's oil production has dropped to the lowest in more than a decade

The firings appear to be driven by the fuel shortage, one of the worst in Angola’s history, according to Salih Yilmaz, an analyst at Bloomberg Intelligence. “Reforms and the reorganization of the company look like steps in the right direction, though the outlook for the country’s output profile remains dim,” he said.

Sonangol said last week that a lack of foreign currency reserves needed to import fuel was the main reason for the shortages in the country. The presidency blamedinsufficient communication between the company and other state institutions for the supply crunch.

Oil Reforms

The government of Africa’s second-biggest producer has taken measures to boost oil activity, including tax concessions to companies developing smaller fields. As part of the reforms, it has transferred the role of concessionaire of crude and gas blocks from Sonangol to the new National Agency for Petroleum, Gas and Biofuels. Sonangol is also selling companies and assets outside its core business to focus on oil.

Angola’s output dropped below 1.4 million barrels a day in April from almost 1.9 million as recently as 2015, according to data compiled by Bloomberg. Production could fall to 1 million barrels a day by 2023 without more projects, Yilmaz said. French major Total SA and Italy’s Eni SpA have started pumping from new areas in the past year.

The last few years have been dramatic for Saturnino. He was fired from Sonangol in 2016 by Isabel dos Santos, and was brought back by Lourenco to replace her. Angola is on the brink of a “blackout due to the lack of fuel,” dos Santos tweeted on Tuesday.

Martins has served on the board of Sonangol and in various other roles, according to the company’s website.