Curtains: The record low prices of shale gas and its grim future outlook have made Schlumberger sell off its North American fracking business, perhaps for good | Photo:

Schlumberger offloads North American fracking business

One of the world’s largest oilfield equipment providers, Schlumberger Ltd., has sold off its American and Canadian fracking businesses after months of the COVID-19 pandemic causing a precipitous drop in oil and gas prices. Schlumberger’s decision follows similar exits by Weatherford International and Baker Hughes Co., and reflects the possibility that shale gas from the US’s Permian Basin may never come back to pre-pandemic levels of profitability. 

While its fracking equipment, OneStim, has been bought by Denver-based Liberty Oilfield Services, the decision to sell the fracking business is a stark reversal from Schlumbeger’s $430 million acquisition of Weatherford’s fracking unit less than three years ago. 

British fracking firm sues Slovenia govt over “unreasonable” EIA request

British fracking firm Ascent Resources is suing the Slovenian government over its request that the firm conduct an environmental impact assessment (EIA) to local water quality at a proposed fracking site in the country. Ascent had signed a fracking deal with Slovenia in 2007, but the outgoing Slovenian government was in the process of banning the practice within its borders. 

Ascent has said in its lawsuit that the demand for an EIA was “arbitrary and unreasonable”, even though the UK itself has banned fracking over its adverse impacts. The firm is also using the EU’s Energy Charter Treaty (ECT), under which firms can demand compensation for projects that were signed upon but are later cancelled by partner nations over climate concerns. The site in question is at Petišovci in eastern Slovenia and Ascent has so far invested €50 million into the project.

Germany’s unprofitable 1.6 GW Moorburg coal plant to shut down after just 5 years 

Germany’s largest and newest coal unit, the 1.6GW Moorburg plant in Hamburg, will be shut down by the middle of next year after having started operations only in 2015. The plant’s owner, Sweden’s Vattenfall Group, has said that the plant is being shuttered as it is no longer profitable, despite being highly modern and efficient. The facility was commissioned amidst heavy protests, but it also failed to be connected to Hamburg’s heating network in 2019 as the city wanted to phase out coal power for heating applications. 

Vattenfall will now bid for a shutdown premium under Germany’s 2038 coal phaseout target, and curiously, the firm’s own internal target to exit fossil fuels now stands at 2030. 

Coal India to restart discontinued underground mines, India to gasify 100 MT of coal 

Coal India Ltd. (CIL) is reportedly getting ready to restart production from discontinued underground coal mines to boost its output to one billion tonnes a year by 2023-24, and it has identified 12 such blocks that together hold 1,060 million tonnes (MT). Some of the blocks were discontinued as long as 20 years ago because of factors such as the economic unviability of extracting the deep-seated reserves and the lack of appropriate technology at the time. However, coal from deep underground is said to be of better quality and four of the blocks have coking coal deposits, which are rare in India. This development comes quick on the heels of record fall in profits reported by the coal giant for the first quarter of the 2020-21 fiscal year.

India’s coal minister Pralhad Joshi also announced that the country will gasify 100 MT of coal by 2030 to produce syngas, petrochemicals and urea for fertilisers. The production will be undertaken in three phases, but the rationale behind it has been stated by the minister as to “harness the nation’s reserves for maximum utilisation while heading on the path to sustainability as per global standards”. 

City gas operators finally get force majeure guidelines from oil and gas regulator board

City gas operators have been given some relief through the new force majeure guidelines issued by the Petroleum and Natural Gas Regulatory Board (PNGRB). In a September 2 notice, the PNGRB detailed conditions eligible for time extensions. This gives some clarity to city gas operations which had been hit hard due to the COVID-19 lockdown since March 25. PNGRB has set 15 days as the time limit within which intimation of the force majeure has to be made, after which the duration of relief measures will be decided by the board.

“In the event of authorized entity being rendered unable to perform any obligation required to be performed by it as per the work program, due to force majeure, the relative obligation of the entity affected by such force majeure shall be suspended for the period during which such force majeure lasts,” PNGRB said. Riots, natural disasters and government enforced restrictions have been included in the list of events that would be considered for time extension requests by operators.

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