Fossil fuels lead as Offshore Technology lists the top five terms tweeted on exploration in Q1 2022, based on data from GlobalData’s Oil & Gas Influencer Platform.
The top trends are the most mentioned terms or concepts among Twitter discussions of more than 83 exploration experts tracked by GlobalData’s Oil & Gas Influencer platform during the first quarter (Q1) of 2022.
1. Fossil fuels – 446 mentions
Soaring demand for fossil fuels likely to defeat climate goals, US and UK oil majors continuing to focus primarily on producing fossil fuels, and US coal miners experimenting with greener projects, were some of the popular discussions in Q1.
Svein Tveitdal, former Director of the United Nations Environment Programme (UNEP), shared an article on soaring fossil fuels demands likely to disrupt climate goals. According to a report, global oil and gas prices have skyrocketed to $90 per barrel, which could encourage investors to put in more money into long-term fossil fuel projects, thereby causing millions to be wasted in such investments and crushing efforts to limit carbon emissions, the article detailed.
Recent price rises are expected to give a major push to lucrative investments in more potential projects, opine financial think tanks. However, the analysis also suggested that the demand for fossil fuels will decline once these projects begin, making it a difficult scenario for both climate campaigners and investors. The demand for oil and gas has rebounded strongly after the economic slowdown caused by the pandemic, the article further noted. This in turn has led to a global supply shortage of oil and gas and rising energy prices.
The term also trended in an article shared by Mark LaCour, editor in chief of the oil and gas global network (OGGN) podcast, on four of the largest oil and gas companies failing to meet their pledges to cut carbon emissions, according to a new study. Despite their mentions of investments in renewables and low-carbon energy in their annual reports, the study found that such a transition was not happening over the past ten years. Instead, all the four companies, namely Chevron, BP, ExxonMobil, and Shell were focusing on producing fossil fuels, the article detailed.
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The study further revealed that their oil and gas production remained consistently high, while less than 1% of their capital investment had gone into low-carbon technology between 2010 and 2018. All the four oil majors are related to significant amounts of greenhouse gas (GHG) emissions. As per one such estimate, the companies accounted for over one-tenth of the CO2 that has been released since 1965, the article noted.
In another tweet, Taylor Kuykendall, a mining and energy reporter, discussed how US coal miners are looking at previously mined lands as opportunities to diversify into renewable energy. Additionally, rich coal mining companies are now insulating themselves against a future fall in demand by creating solar projects on their land or setting up carbon sequestration zones, the article detailed. Others are either burning the coal waste, or finding alternative ways to use coal that can assist in the energy transition. A Tulsa-based coal producer, Alliance Resource Partners LP, for instance, is also evaluating many non-fossil opportunities, but the company also expanded its interest in oil and gas minerals in the Anadarko, Permian, and Williston basins in the US, the article noted.
2. Oil production – 199 mentions
US and European officials turning to Iran to replace Russian oil and gas, the United Arab Emirates (UAE) encouraging the Organization of the Petroleum Exporting Countries (OPEC) members to increase oil production, and Permian oil production to hit record highs in March, were popularly discussed in the first quarter.
Robin Mills, the CEO of Qamar Energy, a consulting firm, shared an article on the prospects of Iran being able to replace Russian oil and gas. As a result, US and European officials were turning to make their presence felt in Tehran, Iran in pursuit of non-Russian hydrocarbons. Iran holds the world’s second-largest gas reserves, and is among the few countries with sufficient spare oil production capacity, the article detailed. For instance, the country is expected to have up to 90 million barrels of crude and condensate stowed on land, sea, and in tanks in China, enough to supply one billion barrels per day to the market over three months.
It would take Iran a few months to prepare for full pre-sanctions crude output of 3.8 mb/d, out of which the country would need 2 mb/d for its exports, the article noted. However, the country had already gone through this process after the original 2015 Joint Comprehensive Plan of Action (JCPOA), and produced close to pre-sanctions levels in three months. The International Energy Agency (IEA) now expected Russia’s production to decline by 3 mb/d in April owing to sanctions and buyer aversion. Therefore, Iran’s full return would contribute majorly if not totally compensate it, the article highlighted.
The term also trended in an article shared by Neil Hume, a natural resources editor, on the UAE urging OPEC members to increase oil production as Russia’s invasion of Ukraine drove crude oil prices to its highest levels in more than ten years. The UAE was the first OPEC member to call for a boost in production since the invasion, the article detailed. Yousef al-Otaiba, the UAE’s ambassador to Washington stated that the stability in energy markets was critical for the global economy, and therefore OPEC members should increase production to meet the supply shortages. His statement came immediately after the US President Biden imposed an urgent ban on Russian crude imports, igniting worries that other countries would follow, the article noted.
In another tweet, Anas Alhaji, an energy markets expert, shared an article on Permian oil production to hit record highs in March, according to a US Energy Information Administration (EIA) report. The report highlighted that oil output in the Permian basin, the biggest US shale oil basin, in Texas and New Mexico, would increase 71,000 barrels per day (bpd) to a record 5.205 million bpd in March 2022. The EIA further projected the total production across all major US shale oil basins would increase 109,000 bpd to 8.707 million bpd in March, the highest since March 2020, the article noted.
Contrarily, the report found that the productivity in the largest oil and gas basins declined after hitting records of new oil well production per rig of 1,546 bpd in December 2020 in the Permian and new gas well production per rig of 33.3 million cubic feet per day (mmcfd) in Appalachia in March 2021.
3. Extraction of petroleum – 138 mentions
OPEC+ seeing limited impact from Omicron as it discussed another oil production increase, and the UAE-based Dragon Oil having made its first oil discovery in the Gulf of Suez, were some of the popularly discussed topics in Q1.
Herman Wang, an energy reporter, shared an article on OPEC+ seeing limited impact from Omicron, citing another oil production increase. OPEC and its Russia-led allies believed the Omicron impact to be limited on the global oil demand, and thereby reduced their forecast of the market’s surplus of supply to 1.4 million b/d for Q1, less than half of the 3.0 million b/d surplus they had projected a month ago, the article highlighted. The forecast hinted at the group’s approval of another 400,000 b/d increase in production quotas for February.
As a result, the 23-member alliance, which controls nearly half of the world’s oil production capacity, focused on gradually restoring output in 400,000 b/d monthly increases, aiming to re-achieve pre-pandemic levels by the end of 2022, the article further noted. An internal OPEC+ analysis projected an oversupply in every quarter of 2022, provided the group maintained the monthly production hikes as it believed that the Omicron impact is mild and short-lived.
The term also trended in an article shared by Robin Mills on UAE’s Dragon, an oil and gas company, making its first oil discovery in the Guld of Suez. The Egyptian petroleum minister stated that the discovery was one of the largest in the area in the past 20 years, and could hold almost 100 million barrels in reserves, the article highlighted. The petroleum minister Talek EL Molla further added that there were 40 to 50 million barrels that could be extracted in less than a year. As a result, the new oil discovery would be put on a rapid action plan after speaking with Dragon, so that it could be extracted within a year, the article detailed.
4. Pricing – 85 mentions
The US and other IEA member states agreeing to release oil reserves as prices soared after Russia’s invasion of Ukraine, oil prices to hit $100 per barrel this year, and how the rise in crude oil prices could hurt energy transition, were some of the popular discussions in Q1.
Mark LaCour shared an article on US, and allies set to release 60 million barrels of oil reserves to meet the supply disruptions caused by Russia’s invasion of Ukraine. Russian oil trade was in a chaotic as several nations imposed sanctions on Russian banks, companies, and individuals, the article detailed. Despite the release, the oil market was uncertain with Brent crude rising $7 per barrel to close at $104.97, highest since 2014. The US Energy Department stated that half of the oil reserves release came from the US. However, further disruption of exports from Russia could lead to higher prices, the article noted.
The term also trended in an article shared by Svein Tveitdal on investment banking company Goldman Sachs expecting a surge in oil prices to $100 per barrel in the third quarter of 2022, with prices continuing to rise in 2023, thereby signalling higher prices at pumps. The bank also added that oil inventories in advanced countries will drop to its lowest levels since 2000. It also estimated Brent to hit $105 per barrel next year, up from an earlier forecast of $85, the article detailed.
In another tweet, Dan Graeber, an energy correspondent, discussed the rise in crude oil prices and how it will drive more drilling of oil and gas on the one hand, but will significantly hurt clean energy investors and goals like it has done in the past. As a result, the soaring prices of gasoline, diesel, and other products of crude oil will drive the shift to electric vehicles (EVs) and investments in clean technologies like hydrogen, but will also drive more drilling of oil and gas across the globe, contributing to abundant and affordable oil once again, the article detailed.
However, volatility in prices is a bigger risk for energy transition, state experts. Therefore, the tendency to meet high prices with increased supply will lead to further volatility, making it difficult for investors to plan and will also kill some other energy projects, according to Deborah Gordon, leading the oil and gas solutions initiative at RMI, a Colorado-based research group on energy efficiency and innovation.
5. Export – 66 mentions
Brent’s six-month calendar spread indicating a severe shortage of oil due to sanctions cutting off Russian exports, and Russian crude exports having risen in March, were popularly discussed in the first quarter.
John Kemp, an energy analyst, tweeted on BRENT’s six-month calendar spread showing a severe oil shortage caused due to the sanctions that cut off Russian exports. He stated that the spread is trading in a backwardation of more than $13 per barrel currently, and the last time this happened was when Iraq invaded Kuwait between September and October 1990.
Kemp further added that the IEA energy ministers would have to order a large release of emergency stocks and demand curbing measures in order to ease the fears around shortages, stop the upward on spot prices, and control the backwardation.
The term also trended in discussions around Russian seaborne exports having risen in March, despite some deliveries awaiting destinations amid Western sanctions on Moscow. Alex Lawler, an energy correspondent, shared an article Russian crude exports in March having risen 350,000 barrels per day (bpd) from February to an almost 3 million bpd on an average, while oil products cargoes were more than two million bpd in March, according to the tanker-tracker Petro-Logistics.
Analysts claimed that the US ban on Russian oil and gas imports will further disrupt supply chains, leaving more cargoes on the sea with no buyers, the article detailed. Daniel Gerber, a Petro-Logistics chief executive stated that his firm spotted several cargoes without destinations. The firm also saw some indication of cargoes changing owners, like a crude shipment changing its lifter from a western oil company to a Chinese company.