ALBERT

Description: Electricity markets in the Mediterranean basin countries are characterised by the substantial disparity in their degree of openness and competitiveness. . There is also a difference in the maturity of their economies and their rate of economic and population growth. For example, the South and East Mediterranean Countries (SEMCs), which currently account for a quarter of total GDP of the region, are expected to grow at twice the rate of the North Mediterranean Countries (NMCs) until the end of the next decade. Similarly, the population in SEMCs is growing at a faster rate than the in NMCs. This imbalance has profound implications for energy stability and trade in the region. Development of cross border interconnections could reduce the energy gap among sub-regional markets and pave the way towards a well-integrated energy market. Additionally, in order for renewable energy to play an important role in the energy markets of the region the national electricity systems of the Euro-Mediterranean countries needs to be highly interconnected. Against this background, this paper aims to analyse the development of cross-border interconnections in the Mediterranean basin in light of existing disparities in the state of market maturities, institutions, national energy goals and regional objectives. Our analysis aims to illustrate how current provisions that regulate and discipline cross border interconnections in the EU do not apply, in the short- to medium-term, to SEMCs. And how the current regulatory framework, while designed to favour competition in electricity supply, appears to be poorly adapted to addressing security of supply at a regional level. The post Development of cross-border interconnections – A review of the case of Mediterranean basin appeared first on Oxford Institute for Energy Studies .

Description: Ghana’s electricity generation capacity is currently insufficient to meet demand, making power outages and load shedding common. The resulting impact is potentially devastating for the country’s growth prospects. Traditionally, lack of an affordable and reliable fuel supply for power generation, coupled with ineffective institutions and an unfavourable investment climate, have resulted in Ghana’s electricity sector performing poorly. In light of the 2007 discovery of natural gas reserves in Ghanaian waters, this paper examines whether domestic gas could advance the performance of the electricity sector, and if so, how. The results of our analysis show that utilization of gas reserves in Ghana’s gas-to-power market is an economically superior strategy compared to an export-oriented utilization scheme. The lack of an effective regulatory framework for investment, skill shortages, and an inefficient electricity pricing structure continue to be the main constraining factors. Our analysis also considers possible approaches to modification of the electricity tariff in order to send the right signal to potential investors in generation capacity, without compromising the affordability of power supply. Executive Summary The post Gas-to-power market and investment incentive for enhancing generation capacity – an analysis of Ghana’s electricity sector appeared first on Oxford Institute for Energy Studies .

Description: This issue of the Oxford Energy Forum is dedicated to gas pricing. A mild 2013/14 winter in Europe and parts of Asia and a slowing of demand growth for LNG saw European hub prices and LNG spot prices begin to fall through the summer of 2014. The collapse of the oil price in late 2014 resulted in a lagged reduction in long-term contract prices (LNG and pipeline gas) to levels below $10/MMBtu in Europe and Asia. These events followed a period from 2011 to 2013 in which regional gas reference prices in the USA, Europe, and Asia appeared to be held within stable ‘corridors’ at levels which incentivized the progression of a long list of new LNG projects in North America, East Africa, Australia, and Russia. Many of these will likely be ‘on hold’ pending indications of a more supportive future price environment, but some 150 bcm/year of new LNG supply from the USA and Australia will have achieved start-up by 2020; this will add further pressure on prices and stimulate inter-regional arbitrage. The post Oxford Energy Forum – Issue, 101 appeared first on Oxford Institute for Energy Studies .

Description: In this study, Mari Luomi examines how the resource-rich GCC countries are positioning themselves in the international relations of the green economy, focusing on the UAE’s state-led efforts to acquire the means of implementation for a national green energy transition. The study addresses four questions: What strategies, external relations, and engagements have the UAE and other GCC states developed over recent years that support a transition to a green energy economy? How are these engagements providing the means of implementation for a green economy transition? Are the national policy frameworks aligned with such a transition? What lessons can be drawn from the UAE’s experience by the other GCC states? The study concludes that, as the case of the UAE demonstrates, there are multiple ways in which the GCC states can actively employ their financial resources through external engagements to support a broader national green economy vision. However, enabling environments which are crucial for directing investments into green activities, jobs and infrastructure, are only beginning to emerge, and a lot of work still remains to be done in all six states, particularly in the areas of energy subsidy reform and sustainable job creation in productive sectors. The study closes with a number of related observations and recommendations. Executive Summary The post The International Relations of the Green Economy in the Gulf – Lessons from the UAE’s State-led Energy Transition appeared first on Oxford Institute for Energy Studies .

Description: As the birthplace of the oil and gas industry, Azerbaijan’s long and rich history is intertwined with hydrocarbon production, with oil drilling pre-dating activity in Pennsylvania by 13 years. The involvement of foreign oil companies in the late 1800s, including the Nobel Brothers, resulted in the country becoming the world’s foremost oil producer at the turn of that century. The Soviet era precluded further international investment, but saw a dramatic growth in gas production commencing in the 1920s. The 1990s witnessed the return of the IOCs with the Azeri-Chirag-Guneshli field (oil and associated gas) and the Shah Deniz (gas and condensate) field developments reversing the trend of production decline and creating an export surplus in both oil and gas. In this paper, Gulmira Rzayeva provides a comprehensive analysis of the challenges which were surmounted in the development of the Shah Deniz field, not least of which related to establishing export pipelines and marketing arrangements in Turkey, and (for Phase 2) Europe. Turning to the future, the paper details the nature and estimated potential of partially developed fields, discoveries at varying stages of appraisal and prospective structures in the Azerbaijan sector of the Caspian Sea. Apart from the inevitable range of uncertainty over future production levels and timing, what emerges are the twin challenges of drilling rig availability (it being impossible to bring an assembled rig into the Caspian due to width restrictions on the Volga-Don canal) and the highly challenging sub-surface drilling conditions. The modest prospects for domestic gas demand growth and Azerbaijan’s geographic location require that any future gas field development decision will also require a degree of certainty on export infrastructure capacity to the primary target markets of Turkey and South and South East Europe. These issues are covered in detail.   Executive Summary The post The Outlook for Azerbaijani Gas Supplies to Europe – Challenges and Perspectives appeared first on Oxford Institute for Energy Studies .

Description: The Middle East, home to nearly half of the world’s oil and natural gas reserves, has traditionally been amongst the world’s least diversified regions in terms of its domestic energy mix, which continues to rely for more than 98% on regionally produced fossil fuels. An increasing number of Middle Eastern and North African countries have set ambitious targets for the adoption of renewable energy to supply their future energy markets. Given the limited use of renewable energy technology in the region so far, governments and various private sector stakeholders interested in promoting renewable energy technology in the Middle East find themselves in a challenging position. This paper aims to examine the various stakeholders’ positions; to discuss barriers to the introduction of renewables to the region’s energy markets; and to propose realistic targets and policy solutions to effectively raise the share of renewables in the Middle East’s future energy mix. The post A Roadmap for Renewables in the Middle East appeared first on Oxford Institute for Energy Studies .

Description: This paper examines the implications of the rapid growth in US tight oil production for US and global energy markets. The behaviour of US crude markets is analysed, with a particular focus on changing arbitrage dynamics. The rapid growth in US tight oils production was not met with an equally fast response by the US midstream companies, resulting in severe regional crude price dislocations. These lower regional prices impacted on producer profits and, more significantly, benefitted refineries that secured cheap feedstock and sold end products at levels linked to global product markets. However, we argue that globally, US tight oil production has primarily impacted price spreads though changes in trade flows, rather than absolute oil price levels, given various offsetting factors such as extremely weak supplies from outside the US.‎ Put another way, we argue that perhaps the correct way of seeing the US supply shock is not as something that should result in the collapse of prices, but instead as a factor that has prevented prices from being significantly higher. The post US Tight Oils – prospects and implications appeared first on Oxford Institute for Energy Studies .

Description: Historically, the industry has had a very poor record in predicting oil prices and key fundamental shifts in the oil market, and this time is no different. Not only did most industry and oil market analysts fail to predict the scale of the tight oil revolution, but now that the pendulum has swung in the opposite direction, expectations regarding the impact of the tight oil revolution on global supply dynamics and international prices appear overhyped. However, contrary to the general view in the market that the abundance of tight oil would cause both a sharp drop in oil prices and create a supply glut in crude or refined products, neither has really materialized. This raises a key question: how can the oil market be undergoing a revolution without its effects being felt on global oil prices? One may argue that the impact of shale oil on prices and oil market dynamics is yet to be felt, as some of the underlying forces still need time to unfold. However, we find such an argument unconvincing. If, during the last three years, the large positive US supply shock failed to cause sharp price falls, why would a rise in US supply now bring about falling prices over the next few years? Instead, in this note, we argue that there are some fundamental weaknesses and flaws in the analysis underlying the ‘oil price-collapsing’ scenario and ‘hyped expectations’; current projections of the impact of shale on global oil market dynamics are hence likely to produce ‘off the mark’ predictions once again. We also argue that the current debate neglects some key areas in which the tight oil revolution is likely to have its biggest impact – namely on crude oil and product trade flows, on price differentials, and on the global markets for natural gas liquids. The post The US Tight Oil Revolution in a Global Perspective appeared first on Oxford Institute for Energy Studies .

Description: Spain is living with a high penetration of intermittent renewable power from wind and solar PV. Other EU electricity markets will soon have to do the same, if they are not already doing so. This Comment summarizes a number of the challenges facing Spain as a result of this form of de-carbonization, and also considers the implications for the EU.  For each of the challenges, the Comment suggests possible policy responses.  The Spanish case reveals the need for a fundamental revision of European wholesale electricity markets to reflect the cost structures of de-carbonised  power.  It also highlights the need to reconsider European policies on climate change to enable markets to support innovation in low carbon technologies. The post Living with Intermittent Renewable Power – Challenges for Spain and the EU appeared first on Oxford Institute for Energy Studies .

Description: The Italian gas market is the third largest in Europe with strong demand growth especially in the power generation sector up to the mid 2000s. But projections of demand growth from that era have not been realised. Clearly the impact of the financial crisis and subsequent recession has had a significant impact, exacerbated by the growth in wind and solar generation capacity. Market liberalisation in the 2000s failed to achieve levels of competition in the mid and downstream sectors to the extent seen in North West European markets. This resulted not only in some of the highest European end-user gas prices, but also delayed development of a liquid trading hub. Only in late 2012 did prices at the Italian gas hub PSV align with the prices at the Dutch gas hub TTF and other North West European hubs after capacity availability issues in linking infrastructure were resolved. Italy’s contracted supply commitments considerably exceed current and envisaged gas consumption levels. Scenarios on gas demand are not optimistic and will ultimately depend on future economic activity, tempered by the growth of renewable capacity. This paper takes these issues into consideration, and offers some insights regarding the challenges but also the opportunities that will arise in the Italian gas industry up to 2020. The post The Italian Gas Market – Challenges and Opportunities appeared first on Oxford Institute for Energy Studies .

Description: Natural gas commentary and industry focus on South Asia tends to target India, the largest gas market.   Pakistan and Bangladesh in aggregate however equal India in terms of gas consumption and as such are significant markets in their own right.  This paper by Ieda Gomes is an in-depth study of the genesis and present situation of these two significant gas consuming countries, including the drag on their potential economic output as a consequence of gas supply shortages and the attempts of each to secure gas import projects be they pipeline gas or LNG.  Their lack of success to date due to poor institutional capability, insufficient trust with potential suppliers or merely procedural shortcomings is recounted.  This said, there is clearly a need for both a re-invigorated upstream domestic exploration and development campaign and the implementation of a coherent import strategy.  Reform of domestic pricing is critical to the achievement of both these necessary developments. This paper is a detailed and comprehensive study of these gas markets at a crucial stage of their evolution. The post Natural Gas in Pakistan and Bangladesh – current issues and trends appeared first on Oxford Institute for Energy Studies .

Description: In this OIES Energy and Environment Brief, Benito Müller looks at lessons from fiscal transfer mechanisms, i.e. instruments used to allocate central tax revenue to sub-national governments, for the allocation of (adaptation) resources by the Green Climate Fund. The post The Allocation of (Adaptation) Resources appeared first on Oxford Institute for Energy Studies .

Description: The share of electricity generation from environmentally friendly renewable energy technologies is growing in many electricity markets worldwide. The increase of intermittent supply, with low variable generation costs from sources such as wind and photovoltaic, increases the need for flexibility in electricity systems. Power systems require flexibility both in the long term (secured generation capacity) as well as in the short run (system balancing). This paper focuses on short term flexibility requirements, i.e. balancing real time deviations in supply and demand. Penetration of intermittent resources can increase the cost of balancing demand and supply as the net load has more variability compared to the load itself. In the UK, the total cost of balancing service exceeded £1 billion in 2013-14. Thus, it is important that the power systems have access to an economically efficient portfolio of flexible resources. To some extent, National Grid in the UK has already started to integrate demand side in its balancing service. For example, under the Frequency Control Demand Management (FCDM) scheme, frequency response is provided through automatic interruption of contracted consumers when the system frequency transgresses the low frequency relay setting on site. National Grid is also trying to utilise slower responding demand response for load following services. In recent years advances in the design and manufacture of intermittent renewable generation technologies has allowed these resources (for example wind turbines) to contribute to various balancing services needed by power systems. However providing some of these balancing services, such as frequency response and regulation through intermittent renewable, is more costly than using conventional generation. This research analyses whether balancing mechanisms can be adjusted to more economically accommodate increasing amounts of intermittent renewable energy sources (RES). We focus on the integration of the demand side as well as the input from intermittent RES into the balancing systems. The study investigates whether both market and product design on the procurement side of balancing mechanisms could be modified to improve flexibility sources’ integration and thus reduce balancing costs. We analyse this question comparing two major European electricity systems, the British and the German market. The post Integrating Demand Side and Renewable Energy Resources into the Balancing Market appeared first on Oxford Institute for Energy Studies .

Description: This short comment discusses how oil policy in the Arab world is often perceived by some parts of the western media, focusing on media coverage over the latest oil price cycle. An abridged version of this comment was presented at the 2nd GCC Petroleum Media Forum (Riyadh, Saudi Arabia, 22-24 March 2015). The post The Image of GCC Oil Policy in the Western Media appeared first on Oxford Institute for Energy Studies .

Description: The role of the Arctic region in global petroleum supply over the next decades is becoming a subject of increasing interest as the potential of the region’s geology is revealed and the shrinking of the ice cap makes drilling an increasingly feasible activity. Nevertheless, significant concerns remain, not least the potential impact of any hydrocarbon E&P activity in an environmentally sensitive region. In addition, the lack of existing infrastructure and the likely high cost of any development in geographically remote and climatically harsh conditions mean that the economics of any new project will depend to a large extent on the size of discoveries and the oil price, which, in turn, will be impacted by the development of other sources of oil supply (for example, US unconventional oil) and alternative energies. As a result, although increased activity in a number of Arctic countries suggests that the region could become a major source of future oil supply, there are a number of challenges – including the impact of sanctions resulting from the Ukraine crisis – to be met before this potential can be realized. The objective of this paper is to provide an updated overview of offshore oil and gas developments in the Arctic and to discuss the potential for large-scale development of the region as a petroleum province over the next 20-30 years, thereby providing a starting point for future production estimates and for analyzing how relevant such estimates may be for global oil (and gas) markets. The paper argues that the most likely Arctic offshore areas to be developed first are the Barents Sea and the Kara Sea but that various factors – political, commercial, technological and environmental – have the potential to hamper petroleum development, particularly if the conflict between Russia and the international community continues to escalate, as partnership will be critical if the Arctic resources of the country with the largest geography in the region are to be developed successfully. Executive Summary The post The Prospects and Challenges for Arctic Oil Development appeared first on Oxford Institute for Energy Studies .

Description: The sharp decline in the oil price has altered the economic outlook for the GCC. After a period of sustained real GDP growth, which averaged 5.8 percent during 2000-2011, the IMF projects growth rates to slowdown to 3.4% in 2015 and 3.3% in 2016. Also, after achieving large fiscal surpluses that averaged 12.2% of GDP during 2000-2011, the GCC countries are projected to run fiscal deficits of 6.3% and 4% of GDP in 2015 and 2016. The change in the macroeconomic outlook is already having its impact on key sectors. The region’s stock markets have tumbled from their high levels reached in the first half of 2014, local banks are reining back on their lending, and the confidence of the private sector has taken a strong hit. But when compared to their counterparts in other parts of the world, the GCC oil exporters are in a much better position to withstand a period of lower oil prices. Key Gulf oil producers – such as Saudi Arabia, Kuwait, and the UAE – have low foreign and domestic debt. Also over the last few years, these GCC producers have accumulated large reserves of foreign currency, which provides their economies with a large fiscal buffer. While GCC countries have become more resilient over the years (thanks in large part to their ‘prudent’ counter-fiscal policy and sustained period of high oil prices), deeply rooted structural challenges remain. This paper will explore some of these structural challenges and how GCC governments are most likely to respond to these challenges. The post GCC Economies in a Low Oil Price Environment: Resilience has increased but Structural Challenges Remain appeared first on Oxford Institute for Energy Studies .

Description: This book will explore how far the European Union can go towards its new goal of forming its 28 member states into an Energy Union, in the belief that this will deliver energy affordability, security and sustainability. Situating today’s challenges in a broad historical sweep of EU policy development, it will deal in turn with the growing tension of liberalisation v. state intervention and subsidy in markets, the revolution in the electricity sector, and the need for a new market design and demand response to complete that revolution successfully. It will also examine the external context for Europe’s go-it-alone decarbonisation effort, specifically the cost impact on the competitiveness of energy-intensive EU industries with the rest of the world and the energy security risks of dependence on Russian gas in particular. The book will be published early autumn 2015. The post Europe’s long energy journey: towards an Energy Union? appeared first on Oxford Institute for Energy Studies .

Description: Global crude oil prices has plunged over 50% from its peak at $115 per barrel in June 2014 to around $50 per barrel in January 2015. In response to the falling oil price, the National Development and Reform Commission of China has lowered the retail prices of gasoline and diesel twelve times in a row since June 2014. The most recent retail prices for 90# gasoline and 0# diesel are 36% and 39% lower than their price levels six months ago, respectively. The plunging price of oil can have both direct and indirect impacts on the Chinese economy. For instance, it can reduce the costs of industrial production and residential consumption, which can have a direct impact on the producer price index (PPI) and consumer purchase index (CPI). In addition, the interconnection of industries in an economy means that the changes in oil price can also have indirect impacts on the price levels of industries that are not closely related to the oil industry. Some discussion is taking place around the issue of China’s economic development can benefit from the falling oil prices. However, there lacks sophisticated analysis on issues like to what extent the falling oil price could influence the Chinese economy and which sector is most likely to benefit from the price fall. This study aims to estimate the impacts of falling oil price on the general price levels (including CPI and PPI) and on industrial price levels in China. The Leontief Price Model (LPM) is used in this study. LPM is also known as cost-push input-output price model that captures the interconnections between different industries. The model has been used in the estimation of the impacts of price changes in an industry on the other industries and the economy. The post The Impacts of Falling Oil Prices on the Chinese Economy appeared first on Oxford Institute for Energy Studies .

Description: The integration of large share intermittent renewable resources into countries’ energy mixes necessitates more operational flexibility in their power systems. By increasing flexibility, power systems become more resilient to the inherent uncertainty of renewable energy, thus becoming capable of operating at different generation levels and smoothly shifting among them. (IEA, 2014). Although flexibility has been typically associated with rapidly dispatchable power plants, alternative resources, such as grid interconnections, storage capacity and demand-side integration are also relevant to facilitating flexibility. The future degree of flexibility required and the need to diversify the flexibility resource portfolio (in order to reduce costs and improve reliability), will shape the future role of demand side programmes. It is envisaged that in the case of Great Britain, demand side participation along with pumped storage and gas turbine plants will constitute the main sources of operational flexibility for its power system (Pöyry, 2014). In fact with ICT advancement, regulation services and contingency reserves, through automated dispatchable demand side resources, are no longer a dream. There is also the possibility of integrating slower responding demand control programmes to provide longer load following services. From an economic perspective, providing substantial amounts of flexibility to the system is costly as it increases the cost of wear and tear, fuel and the operation of flexible generation units. Additionally, it exposes the consumers to significant disutility when it is provided through demand response. Therefore electricity markets need to incentivise the resource owners to offer flexibility services. This research answers the fundamental economic question of what incentives are needed to enable flexibility in electricity markets especially in the context of demand side resources. Our contribution is: i) to explicitly model contractual relationships arising in different forms of flexibility trading, under the presence of multi-dimensional asymmetric information, ii) to model flexibility as a related but distinct commodity with three features of start-up time, capacity and duration and iii) to take a microeconomic approach by modelling individual decisions by agents involved in the exchange of flexibility. The post Flexibility-Enabling Contracts in Electricity Market appeared first on Oxford Institute for Energy Studies .

Description: The objective of this is to analyse how contractual stabilization devices have evolved since the late 1990s, based on a survey of 20 countries and a review of the literature and evidence on stabilization clauses. Although fiscal stability is a commonly cited attribute of a desirable upstream petroleum regime, one of the commonly observed features of existing regimes is the lack of stability. The paper studies the major triggers that push host governments to revise the fiscal terms to which they originally agreed with investors; amongst various economic and political factors, one of the obvious drivers is the oil price. Chasing the price of oil, however, is a burdensome and inefficient strategy, as oil is an internationally traded commodity where short-term price volatility is the norm. The paper’s three broad conclusions include: First, classical stabilization models have not been successful in practice; Second, the more modern clauses are more likely to treat changes in fiscal terms symmetrically, and may be equally beneficial to governments and oil companies; Third, modern stabilization clauses can allow policymakers to consider the overall tax system and its impact on revenue and growth, without worrying about the specific impact on the oil and gas sector, and without penalizing investors in the sector. Fiscal stability clauses in developing countries will remain a key feature of contractual agreements and oil and gas laws for years to come. However, the effectiveness of the more modern clauses in achieving the desired outcome remains as questionable as that of previous stability models, particularly in countries which continue to lack the administrative capability to enforce these mechanisms, and where government policy in general and investment laws and the judiciary in particular lack credibility. The post Fiscal Stabilization in oil and Gas Contracts – Evidence and Implications appeared first on Oxford Institute for Energy Studies .

Description: This paper argues that electricity markets in Europe are broken. The increasing penetration of subsidised, zero marginal cost, intermittent generation has distorted prices to the extent that they can no longer give effective signals for investment or operation. The problem is increasingly being recognised but there is no consensus on the solution. The paper considers a number of options; it concludes that a serious debate needs to get under way now if we are to develop sustainable markets for a low carbon future. The post Electricity markets are broken – can they be fixed? appeared first on Oxford Institute for Energy Studies .

Description: The increasing dominance of natural gas in power generation in the UK since the 1990s has led to growing interdependence between its gas and power sectors. From the perspective of the power sector, the security of supply of the natural gas industry has implications on the security of supply of the power industry. Following the gas sector’s perspective, demand from the power sector is more uncertain than other types of natural gas demand, posing challenge for the long-term contracting of supply and planning of infrastructure. Given this interdependence, only considering one of the industries in designing and evaluating energy policies to fulfil the UK’s energy agenda can lead to skewed perceptions and unintended consequences. This paper seeks to explore the impact of proposed regulation targeting energy security and sustainability on the extended gas-to-power supply chain, through scenario-based simulation using a System Dynamics (SD) model. The SD model is scoped to focus on industry agents that participate in the gas and power wholesale markets. The expected outcome of this research is an improved understanding of the nature, strength and dynamics of interdependencies between the investment decisions of the UK industry in power generation, gas production, pipeline/LNG terminal construction, under demand and global energy market uncertainty. The post A System Dynamics model of gas and power interdependence: the case of the United Kingdom appeared first on Oxford Institute for Energy Studies .

Description: 〈p〉On 22 July, 2019, US Secretary of State Mike Pompeo announced the US’s decision to impose sanctions on a Chinese trader, Zhuhai Zhenrong, and its chief executive for ‘knowingly purchasing or acquiring oil from Iran, contrary to US sanctions’. While the US State Department’s decision to designate a Chinese entity may be seen as a sign […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/why-china-will-keep-importing-iranian-crude-but-volumes-will-remain-limited/"〉Why China will keep importing Iranian crude, but volumes will remain limited〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉The brief reprieve in the US-China tariff tit-for-tat seems to be coming to an end following Donald Trump’s tweet on 1 August, threatening to impose 10 per cent tariffs on $300 billion-worth of Chinese imports effective 1 September 2019. The announcement led to a steep fall in oil prices, as markets fear that the escalating […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/us-china-trade-tensions-here-we-go-again/"〉US-China Trade Tensions: Here we go again〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉In order to enable cost-effective renewable energy integration and realize decarbonization targets, the power system requires the efficient utilization of resources  on both sides of the market and not just on the supply side. This paper aims to deconstruct the complexity of electricity market design in light of the growing importance of  decentralized flexibility and related current developments.  The […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/the-electricity-market-design-for-decentralized-flexibility-sources/"〉The electricity market design for decentralized flexibility sources〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉The Canadian oilsands resource has gone from being touted as energy security for North America to being derided as an energy-intensive form of oil extraction with no long-term future. New investment has been affected by the emergence of other unconventional oil sources, particularly light tight oil (LTO) in the United States. Environmental concerns have also […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/the-canadian-oilsands-and-strategic-approaches-to-profitability/"〉The Canadian Oilsands and Strategic Approaches to Profitability〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉Since October 2018 Saudi Aramco has used the DME Oman daily settlement price in its pricing formula for Asian customers. The DME Oman futures contract settles daily, based on a weighted average of trades between 16.25 and 16.30 Singapore time (often referred to as a ‘window’). In line with the usual timing of Asian oil […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/next-asian-benchmarks-footnote/"〉What Next for Asian Benchmarks? – A Footnote〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉Australia’s National Electricity Market is an important global test case of the impacts of electricity sector transition in a large-scale liberalized energy-only market. The integration of variable and distributed energy resources has provided opportunities for clean, low-cost generation, but has also challenged existing market frameworks and resulted in a debate about the necessity for new […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/electricity-sector-transition-national-electricity-market-australia-managing-reliability-security-energy-market/"〉Electricity Sector Transition in the National Electricity Market of Australia: Managing Reliability and Security in an Energy-Only Market〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉Over the last four years, major and rapid developments have been taking place in Egypt’s natural gas market to reverse the country’s indigenous gas production decline and manage its unabated gas demand growth. In this podcast David Ledesma interviews Mostefa Ouki, Senior Research Fellow at the Institute, to discuss the Egyptian gas market. During the […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/egypt-undergoing-natural-gas-renaissance/"〉Is Egypt undergoing a natural gas renaissance?〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉 〈div class="enclosure"〉〈p class="enclosure-content"〉〈audio preload="none" src="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/10/12-Mostefa-Ouki-and-David-Ledesma.mp3" controls="controls"〉〈/audio〉 〈a download="" href="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/10/12-Mostefa-Ouki-and-David-Ledesma.mp3"〉💾〈/a〉〈/p〉〈/div〉

Description: 〈p〉In his presentation, given at the recent Argus conference in Paris, Thierry Bros presents not only the LNG tightness indicator devised with Argus, but also the new European narrative for gas as explained in the last two OIES Quarterly Gas Reviews: 1/more coal to gas switching in Europe if the energy efficiency boost witnessed in […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/new-narrative-gas/"〉A new narrative for gas〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉Since the COP 21 meeting in Paris in December 2015, there has been a growing realisation that with the long-term objective that the energy system should be approaching carbon-neutrality by 2050, continuing to burn significant quantities of fossil-derived natural gas will not be sustainable. If existing natural gas infrastructure is to avoid becoming stranded assets, […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/power-gas-linking-electricity-gas-decarbonising-world/"〉Power-to-Gas: Linking Electricity and Gas in a Decarbonising World?〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉This presentation discusses the oil market outlook for 2018 and 2019. It outlines the main factors behind the rebalancing of the oil market, including stronger than expected global oil demand growth and strong OPEC cohesion (caused in part due to involuntary cuts). The presentation then analyses the main trends shaping oil price outcomes in the […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/crude-oil-market-2018-2019-get-next/"〉The Crude Oil Market in 2018 & 2019 – How Did We Get Here & What Next?〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉This issue of the Oxford Energy Forum looks at the future of gas from different perspectives. Future development of decarbonised gases – biogas, biomethane and hydrogen – and the consequences for gas networks. The importance of reducing methane emissions from the gas chain. Progress towards reducing the costs of liquefaction and the affordability of gas […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/oxford-energy-forum-future-gas-issue-116/"〉Oxford Energy Forum – The Future of Gas – Issue 116〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉This issue of the Oxford Energy Forum focuses on the electrification of Africa, especially sub-Saharan Africa (SSA). Due to significant expected population growth, the number of Africans without electricity access in 2030 may not fall much from today’s level of about 600 million, which is about 60 per cent of the world’s current population without […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/oxford-energy-forum-electrifying-africa-issue-115/"〉Oxford Energy Forum – Electrifying Africa – Issue 115〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉In these times of heightening geopolitical tensions, can Iberia be part of the solution to diversify the Security of Supply of natural gas to Europe? For a number of years now, there has been growing concern amongst politicians of the dependence of Europe on Russian gas and there is growing pressure to find alternative supplies, […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/hub-europe-iberian-promise/"〉“A Hub for Europe”: The Iberian promise?〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉The growing level of interest displayed in LNG as a marine fuel, driven by both environmental restrictions and economic attractiveness, means usage is certain to grow. There is, however, less certainty over the pace and scale of demand growth. In this podcast David Ledesma has a telephone interview with Chris Le Fevre, Senior Visiting  Research […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/lng-marine-transport-become-environmentally-friendly-fuel-choice/"〉LNG in marine transport – is it about to become the environmentally-friendly fuel of choice?〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉 〈div class="enclosure"〉〈p class="enclosure-content"〉〈audio preload="none" src="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/09/11-Chris-Le-Fevre-and-David-Ledesma.mp3" controls="controls"〉〈/audio〉 〈a download="" href="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/09/11-Chris-Le-Fevre-and-David-Ledesma.mp3"〉💾〈/a〉〈/p〉〈/div〉

Description: 〈p〉As OPEC’s Declaration of Cooperation with non-OPEC producers draws to a close (ending-2018), the future of this historic joint effort of 24 (now 25) OPEC and non-OPEC oil-producing countries has moved to the top of the producers’ agenda. The next Joint Ministerial Monitoring Committee’s meeting on September 23rd in Algiers, could provide some hints regarding […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/51-key-facts-opec-declaration-cooperation/"〉5+1 Key Facts about the OPEC Declaration of Cooperation〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉In October 2017, the International Maritime Organization (IMO) decided to limit sulphur content in all marine fuels from the current 3.5 per cent to 0.5 per cent, commencing in January 2020. Meeting these requirements will involve huge effort by the refining and shipping industries. Investments in the energy industry are notoriously large, risky, price sensitive […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/imo-2020-brent-dubai-spread/"〉IMO 2020 and the Brent-Dubai Spread〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉The European Commission launched the revision process for phase IV of the EU ETS in 2015, at a moment when the carbon price generated by the system was at a relative low, compared to previous levels and expectations. The final agreement on the revision package, adopted in early 2018, defines the EU ETS rules for […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/eu-ets-phase-iv-reform-implications-system-functioning-carbon-price-signal/"〉The EU ETS phase IV reform: implications for system functioning and for the carbon price signal〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉In Issue 3 of the Quarterly Gas Review, we explain why the EU Commission should consider transforming the crude and refined products strategic obligations into an energy storage obligation, allowing all fuels to be included, in the cheapest way, in providing the required energy storage buffer. This could be achieved by changing Directive 2009/119/EC which […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/quarterly-gas-review-issue-3/"〉Quarterly Gas Review – Issue 3〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉This presentation and speech, was given by Bassam Fattouh at the Eleventh Arab Energy Conference, Marrakesh, Morocco, 1-4 October 2018, on Arab oil exporters’ diversification strategies in the context of the global energy transition. Speech – Economic diversification in the context of the energy transition〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/arab-oil-exporters-diversification-strategies-context-energy-transition/"〉Arab Oil Exporters’ Diversification Strategies in the Context of the Energy Transition〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉James Henderson and Trisha Curtis, the CEO and founder of PetroNerds and a visiting fellow at OIES, discuss her forthcoming paper on current trends in the US shale oil industry. Following recent industry concerns that productivity and well performance might be set to undermine the future production outlook, Trisha outlines her view that in fact […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/oxford-energy-podcast-current-trends-us-shale-oil-industry/"〉Oxford Energy Podcast – Current Trends in the US Shale Oil Industry〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉 〈div class="enclosure"〉〈p class="enclosure-content"〉〈audio preload="none" src="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/12/17-Trisha-Curtis-and-James-Henderson.mp3" controls="controls"〉〈/audio〉 〈a download="" href="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/12/17-Trisha-Curtis-and-James-Henderson.mp3"〉💾〈/a〉〈/p〉〈/div〉

Description: 〈p〉Gazprom’s pipeline projects that aim to diversify transit away from Ukraine, Nord Stream 2 and Turkish Stream, are very unlikely to be operating at full capacity by 31 December 2019, when the current transit contract between Gazprom and Naftogaz expires. New contractual arrangements must therefore be agreed – and are being negotiated in an atmosphere […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/russian-gas-transit-ukraine-2019-options/"〉Russian gas transit through Ukraine after 2019: the options〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉The concept that Russia has a huge amount of spare gas production capacity has been a key theme for the European gas market since 2012, when Gazprom’s long-anticipated launch of the Bovanenkovo field on the Yamal peninsula coincided with a fall in demand for its gas at home and abroad.  The result was that Russia had at maximum […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/shrinking-surplus-outlook-russias-spare-gas-productive-capacity/"〉Shrinking surplus – the outlook for Russia’s spare gas productive capacity〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉The transformation of the European Union’s energy sector poses a number of challenges to the European electricity system. Above all, both the anticipated increase of intermittent electricity from renewable sources and the completion of the internal energy market while guaranteeing a secure supply require an extensive development of electricity infrastructure at the European level. Nevertheless, […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/utilization-scenarios-european-electricity-policy-ten-year-network-development-plan/"〉Utilization of Scenarios in European Electricity Policy: The Ten-Year Network Development Plan〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉In 2017, a gas crisis emerged in Australia’s East Coast gas market. Gas prices had increased rapidly from mid-2016 as the full effect of the three LNG projects starting operations on Curtis Island worked through the gas market, putting domestic energy users under pressure. In March 2017, the Australian Energy Market Operator (AEMO) forecast gas […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/oxford-energy-podcast-lng-australias-east-coast-gas-market/"〉Oxford Energy Podcast – LNG and Australia’s East Coast gas market〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉 〈div class="enclosure"〉〈p class="enclosure-content"〉〈audio preload="none" src="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/12/16-Nikolai-Drahos-and-David-Ledesma.mp3" controls="controls"〉〈/audio〉 〈a download="" href="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/12/16-Nikolai-Drahos-and-David-Ledesma.mp3"〉💾〈/a〉〈/p〉〈/div〉

Description: 〈p〉In Europe, the Brexit unknowns are increasing, and the gas markets have still not been properly addressed, leaving little time before March 2019 to find a commonly agreed solution not only for the short but also the long-term. We are now seeing industry lobby groups like Eurogas and Eurelectric interfering in Brexit energy issues, making […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/quarterly-gas-review-issue-4/"〉Quarterly Gas Review – Issue 4〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉The Oxford Institute for Energy Studies held a Work​shop on “The Future of Gas Networks” to examine decarbonisation plans and the impact of the potential growth in the use of renewable and decarbonised gases in Europe. Participants included representatives from nine European gas network companies (both transmission and distribution), technical experts in decarbonisation, regulators, government […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/the-future-of-gas-networks-key-issues-for-debate/"〉The Future of Gas Networks – Key Issues for Debate〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉OPEC is faced with a wide range of uncertainties, which are perhaps best reflected in the gulf in narratives between the bulls and the bears. For the bulls, OPEC is in a strong position: the declines in non-OPEC supply are structural while the slowdown in global economic growth is temporary. Based on this view, a […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/the-dilemma-continues-opec-choices-amid-high-uncertainty/"〉The Dilemma Continues: OPEC choices amid high uncertainty〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉In the last couple of years there has been increasing recognition by key players in the European gas industry that to mitigate the risk of terminal decline in the context of a decarbonising energy system, there will need to be rapid scale up of decarbonised gas. This has led to several projections of the scale […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/a-mountain-to-climb-tracking-progress-in-scaling-up-renewable-gas-production-in-europe/"〉A mountain to climb? Tracking progress in scaling up renewable gas production in Europe〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉US Shale performance has been disappointing this year. Most international organisations have been revising down their 2020 US shale production forecasts. The downgrade reflects lower oil prices, lower rig counts, capital constraints, pipeline bottlenecks and a negative trend in well-productivity. After all, 2019 has been a punishing environment for any company to lower its production guidance, […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/prospects-for-us-shale-productivity-gains/"〉Prospects for US shale productivity gains〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉With thanks to Argus Media, we updated our “LNG tightness” metric that measures the spread between the US Gulf Coast LNG FOB and the Henry Hub price. It is interesting to keep track of this ‘LNG tightness’ in a fast-changing energy world. So far it has never been low and/or long lasting enough to force […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/quarterly-gas-review-issue-7/"〉Quarterly Gas Review – Issue 7〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉President Trump’s tweet on February 25 urging OPEC to ‘relax’ and to take it ‘easy’ with their cuts, and that a ‘fragile’ global economy can’t tolerate a higher oil price, did have an immediate price impact, with the Brent price declining by 4 per cent on the day, from nearly $67/b down to $64/b. But […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/opec-policy-age-trump/"〉OPEC Policy in the Age of Trump〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: 〈p〉In the power generation sector, the competition between gas and coal, at least for the fossil fuel share, can be intense in many countries.  However, there are some areas of the world where there is little or no coal fired power generation and the principal means of generation is oil and/or hydro. Many of these […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/oxford-energy-podcast-opportunities-gas-sub-saharan-africa/"〉Oxford Energy Podcast – Opportunities for Gas in Sub-Saharan Africa〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉 〈div class="enclosure"〉〈p class="enclosure-content"〉〈audio preload="none" src="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/03/21-Mike-Fulwood-and-David-Ledesma.mp3" controls="controls"〉〈/audio〉 〈a download="" href="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/03/21-Mike-Fulwood-and-David-Ledesma.mp3"〉💾〈/a〉〈/p〉〈/div〉

Description: 〈p〉In this Oxford Energy podcast James Henderson, Director of the Natural Gas Programme at OIES, and Jeff Edwards, General Manager at Shell Energy responsible for global LNG market analysis, discuss Shell’s LNG Outlook 2019. The Outlook provides a consensus view of key trends in the LNG industry, and as a result the podcast addresses a […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/oxford-energy-podcast-shells-lng-outlook-2019/"〉Oxford Energy Podcast – Shell’s LNG Outlook 2019〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉 〈div class="enclosure"〉〈p class="enclosure-content"〉〈audio preload="none" src="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/03/22-James-Henderson-and-Jeff-Edwards.mp3" controls="controls"〉〈/audio〉 〈a download="" href="https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/03/22-James-Henderson-and-Jeff-Edwards.mp3"〉💾〈/a〉〈/p〉〈/div〉

Description: 〈p〉In February 2019, the EU reached a political agreement to amend the Gas Directive to extend its scope to apply to pipelines from third countries to the EU. The proposal is aimed primarily at Nord Stream 2 – a pipeline which would bring Russian gas to Germany and has been under construction across the Baltic […]〈/p〉 〈p〉The post 〈a rel="nofollow" href="https://www.oxfordenergy.org/publications/gas-directive-amendment-implications-nord-stream-2/"〉Gas Directive amendment: implications for Nord Stream 2〈/a〉 appeared first on 〈a rel="nofollow" href="https://www.oxfordenergy.org/"〉Oxford Institute for Energy Studies〈/a〉.〈/p〉

Description: The sharp drop in the oil price between June 2014 and January 2015 turned the world’s attention to Saudi Arabia’s role in the oil market and the determinants of its oil output policy. Initial hopes that Saudi Arabia would come to ‘rescue’ and ‘balance’ the market and put a floor under the oil price were replaced by stories of ‘price wars’ and ‘conspiracy theories’ aimed at pushing prices down to achieve some wider geopolitical objectives. This raised a set of fundamental questions: has there been a shift in Saudi Arabia’s oil policy? And if the answer is yes, what are the implications of this shift in policy on the short and long run dynamics of the oil market? Has the role of ‘swing producer’ shifted from Saudi Arabia to the US shale producers? Is Saudi Arabia still relevant in the ‘new oil order’? This paper argues Saudi Arabia’s oil policy should not be analysed in isolation of the evolution of global oil market dynamics. It is also fundamentally rooted and shaped by some salient features of its political, economic, and social systems. Given Saudi Arabia’s multiple objectives, some of which are short term while others are long term, and also given the limited number of tools available to policy makers (essentially: adjusting output and signalling to the market in the short term, and determining the pace of investment in its energy sector in the long term), Saudi Arabia faces trade-offs with regards to its oil output decisions. One key trade-off is between the objective of revenue maximization vis-à-vis that of maintaining market share and production volumes above a certain level. With the advent of US shale, Saudi Arabia has entered uncharted territory where it is still learning about a new source of supply and its responsiveness to price signals, which has made the calculus of the trade-off more uncertain. It is in the context of ‘second best’, trade-offs, imperfect information, internal constraints, and wide uncertainty introduced by a new source of supply, that this paper attempts to explain the behaviour of Saudi Arabia in the current price cycle. Executive Summary The post Saudi Arabia Oil Policy – More than Meets the Eye? appeared first on Oxford Institute for Energy Studies .

Description: In this presentation, given at the Bank of England, Bassam Fattouh looks at current developments in the oil market and explores some short and medium term prospects and concludes with the following observations: • It is important to be clear about causality; it is supply and demand imbalances that cause stocks to rise and for the shape of the curve to switch to contango. • High levels of stocks will continue to put downward pressure on the oil price and on time spreads. Until stocks are drawn-down, any potential price recovery will be capped. • Most pressure will be felt on light sweet crudes and on the Brent structure given that the North Atlantic (ex-US) has become the clearing destination for light sweet cargoes. • Saudi oil policy is not constant and Saudi cuts should not be excluded but the bar to implement the cut has risen. Saudi Arabia output policy has become less flexible both on the upside and the downside and its signaling power has reduced. • The perception of the loss of supply feedback to clear markets affects market sentiment, increasing volatility and increasing the risk premium in investment in energy projects. • Clearing excess supplies through supply and demand adjustment to lower prices is subject to uncertainty and lags. • So far demand growth has done most of the work, though it has not been strong enough to absorb the entire glut. • The supply response is yet to come, but global supply has become more varied and the nature of the investment cycle has changed – there are three investment cycles being superimposed on each other: The US shale cycle; the non-OPEC ex- US cycle; and the OPEC/Middle East cycle. The outcome of these combined investment cycles on output is yet to be seen. • A key question remains: If non-OPEC outside the US falters and OPEC investment does not materialise, can US shale fill the projected gap? The post Global Oil Markets – Current Developments and Future Prospects appeared first on Oxford Institute for Energy Studies .

Description: Argentina is the largest gas consuming country in South America with a century of oil and gas production history. Following the economic crisis of 2002 Argentina’s upstream investment declined and in 2011 it became a net fuel importer. For gas, low regulated domestic market prices resulted in the need for LNG imports. Argentina possesses conventional but vast unconventional gas resources. The most promising formation is the Vaca Muerta (‘Dead Cow’) which is the size of Belgium and has a shale gas formation thickness of 1,000 feet in places. This paper will assess the development potential for its shale gas resource and whether the country is capable of developing the necessary policy framework to achieve gas production self-sufficiency in the 2020s. The paper will also compare the fundamentals of Argentina’s gas industry with the key enablers and success factors in the US. The post Shale Gas in Argentina – Will it become a real game changer? appeared first on Oxford Institute for Energy Studies .

Description: This study will proceed in two stages and therefore potentially will constitute two separate papers. The pipeline bottlenecks and price de-linkages identified in previously published papers by Beatrice Petrovich will be calibrated with the EWI’s European gas network simulation model to ascertain whether it can ‘re-create’ the transport congestion events observed historically. The second stage will be to model the consequences of future scenarios of Russian pipeline gas and LNG supply to study whether the observed bottlenecks are exacerbated or eased and indeed what the potential is for new problems to appear. This work will also enable the evaluation of the relative merits of proposed new interconnectors and LNG import terminals. Beatrice Petrovich’s work has been very well received by commercial players and regulators and there is much interest in the potential of this study. The post European Transportation Bottlenecks for a Range of Global Scenarios appeared first on Oxford Institute for Energy Studies .

Description: Ghana’s electricity generation is currently insufficient to meet demand making power outages and load shedding common. The resulting impact on the economy is devastating for the country’s growth prospects. Traditionally, lack of an affordable and reliable fuel supply for power generation, coupled with ineffective institutions and an unfavourable investment climate, have resulted in Ghana’s electricity sector performing poorly. In light of the recent discovery of natural gas reserves in Ghanaian waters, this paper examines if and how domestic gas could advance the performance of the electricity sector. The results of our analysis show that utilization of gas reserves in Ghana’s gas-to-power market is an “economically” superior strategy, compared with an export-oriented utilization scheme. The lack of an effective regulatory framework for investment and an inefficient electricity pricing structure continue to be the main constraining factors. Possible approaches to modification of the electricity tariff in order to send the right signal to potential investors in generation capacity, without compromising the affordability of power supply, are also discussed. The post Gas to power and investment incentive for enhancing generation capacity: An analysis of Ghana’s electricity sector appeared first on Oxford Institute for Energy Studies .

Description: Howard Rogers, Director, Natural Gas Research Programme, shares insights and conclusions on his paper published in early July 2015. To access the talk please click here . Please click here to access the accompanying slides. The post The Impact of Lower Gas and Oil Prices on Global Gas and LNG Markets appeared first on Oxford Institute for Energy Studies .

Description: Gazprom has faced increasing threats in its two traditional markets, Europe and the FSU, as well as being challenged by the Independents in its domestic Russian market. As a result, its sales volumes have fallen from 550bcm in 2008 to 444bcm in 2014, and it has been forced to look for other outlets for its gas. In addition geo-political pressure caused by the crisis in Ukraine has catalysed a desire to find alternatives to a European market that is increasingly becoming eager to diversify away from Russian gas. The result has been a “pivot to Asia” that has seen Gazprom sign two major pipeline deals that could see 68bcm of gas exported to China in the 2020s, as well as the possibility of LNG exports into North East Asia. This has raised questions about Russia’s overall export strategy and the possibility of Europe becoming less important to Gazprom as an outlet for its gas. This paper analyses this question, reviewing the potential for Asia to become a major market for Russian gas and assessing what implications this might have for Europe. It also analyses the gradual shift in Gazprom’s attitude towards European exports, in particular prompted by the cancellation of the South Stream pipeline and the announcement of its replacement with Turkish Stream. It questions whether Gazprom is preparing a new, more competitive, trading strategy in Europe, and asks how this may be related to the emergence of Asia as a viable alternative market for Russian gas. In particular, the paper reviews the competitiveness of Russian gas versus the alternative sources of supply to Europe, especially US LNG, and reviews the political and commercial drivers of Gazprom’s export plans as well as the response of European consumers and the EU regulators. The paper’s preliminary conclusions suggest that Europe will continue to rely on Russian gas for the foreseeable future, and also that Gazprom’s plans to develop alternative markets will not provide Russia with any realistic “insurance policy” against European diversification plans. In fact both parties will have to continue to co-operate commercially, but in a more market-driven environment thanks to the emerging internal market in the EU and the growing supply of LNG in the global gas market, which is forcing all suppliers to become more competitive on price. The post The Political and Commercial Drivers of Russia’s Gas Export Strategy appeared first on Oxford Institute for Energy Studies .

Description: The military conflict in eastern Ukraine, and the deterioration of political relations between Russia, Ukraine and the EU, is influencing relationships in the sphere of energy, including natural gas. Russia has stepped up its efforts to diversify gas transit away from Ukraine, and Gazprom says that it intends to cease using Ukraine as a transit corridor completely after 2019, when its contract for doing so expires. Ukraine has begun to make serious efforts to reduce its dependence on Russian gas imports, and the idea of cutting them to zero has entered political discourse. The paper will consider: Scenarios for the transit of Russian gas to Europe after 2019. Could Gazprom cease using Ukraine as a transit corridor? If it does so, how will its gas reach its European customers? European attitudes: What is, or might be, the attitude of companies who purchase Russian gas, and of European governments and the EC, to the changes? Transit and storage: Under the post-2019 scenarios for transit, what are the realistic prospects for Ukraine’s gas transport and storage businesses? To what extent might they be integrated into European gas networks? What is the likely direction of Ukrainian policy? The Ukrainian domestic gas market: To what extent is the dramatic fall in demand levels in 2014-15 a guide to the future? How much will be changed by market reform? To what extent could gas be replaced by other fuels? The post Ukraine as a Gas Transit Corridor and Gas Market: What Happens after 2019? appeared first on Oxford Institute for Energy Studies .

Description: This working paper will analytically review the terms and structure of Iran’s newly developed petroleum contracts, namely IPCs. It begins with explaining the political economy context within which the previous investment contracts (known as ‘buybacks’) were developed and tries to shed some light on the unknown aspects of buybacks when they were introduced in mid 1990s. The paper then continues to elaborate on the reasons behind the development of IPCs and examine their legal, fiscal and technical terms. Before the discussion ends with some concluding remarks, various political, commercial and market implications of IPCs’ implementation both for foreign and domestic petroleum companies and Iranian authorities will be addressed. The technical content and some political analysis of this paper will benefit from the insight of Mr. Seyed Mehdi Hosseini, the Head of Iran’s Petroleum Contract Revision Committee, who was also the mastermind behind the development of buybacks in mid 1990s. The paper will be co-authored with Ms. Ayeh Katebi who has served as the Advisor and Secretary to the Revision Committee since its establishment in 2013. The post Iran’s Petroleum Contract appeared first on Oxford Institute for Energy Studies .

Description: The recent increased Chinese activity in the Platts Dubai window is yet another manifestation of the eastward shift of international oil markets. In light of these changing dynamics, the necessity for a new marker for East of Suez crude oil pricing is commonly taken for granted. But must the benchmark for East of Suez necessarily move to Asia, or may strengthening the Middle Eastern benchmark system offer a feasible alternative? To answer this question, this comment briefly examines the factors underlying the current eastward shift of international oil markets. Subsequently, two candidates for an Asian marker for East of Suez will be presented briefly (ESPO Blend, Shanghai Crude Oil Futures Contract). Hereafter, the four main arguments for the necessity of such a new Asian marker will be presented and critically evaluated. Finally, a proposal to rebuild the current Middle Eastern benchmark system, in order to strengthen its position in times of eastward shifting oil markets, is outlined. The proposal aims at linking the physical Dubai market with the Oman futures market on the Dubai Mercantile Exchange. This would allow price signals from the physical Dubai assessment to feed into the DME Oman futures contract (and vice versa) as well as offer the opportunity for physical players to hedge the Dubai price exposure by means of the DME Oman contract. This comment argues that this would not only cope with shifting oil market dynamics, but also solve several issues currently weakening both the Dubai marker and the DME Oman futures contract. The post Eastward Shifting Oil Markets and the Future of Middle Eastern Benchmarks appeared first on Oxford Institute for Energy Studies .

Description: Released today by the Center on Global Energy Policy The US Shale Gas Revolution and its Impact on Qatar’s Position in Gas Markets is a collaborative study between CGEP, Columbia and the Oxford Institute for Energy Studies that examines how Qatar may be impacted by major changes to the global LNG market. The expansion of Qatar’s LNG industry in the latter half of the 2010s, unprecedented in its scale and pace, established the country as the world’s largest LNG supplier. Such a move was made possible due to a sound business strategy of diversified sales and the disciplined execution of multiple projects. In addition to supporting its LNG business, Qatar’s offshore North Field also underpinned the rapid growth of a domestic industrial sector and limited regional pipeline exports. LNG is a dynamic sector however and Qatar has many new challenges to address, including the rise of competing new supplies from Australia, the US, East Africa, Canada and Russia, uncertainty about the pace of Asian LNG demand and a desire on the part of LNG importers to move away from oil-indexation as the price formation mechanism for long term LNG contracts. With its moratorium on new LNG projects expected to remain in place for the medium term at least, Qatar will seek to adapt its sales portfolio strategy in order to optimise its revenues in a more competitive market. This said, Qatar has a number of comparative advantages. Its geographic location enables it to access Asian and European markets without undue transport cost penalties, co-production of condensate and NGLs from the North field adds significant robustness to the economics of existing and future new projects and its remaining undeveloped reserves available for LNG notably exceed those of its competitors. In addition Qatar’s proven track record on project implementation and its low cost location would also allow it to deter competition, should it announce an intention to resume an expansion of capacity. Although the recent falls in oil and regional gas prices will impact Qatar’s hydrocarbon revenues, the country has the financial resilience to weather these storms and to remain a powerful force in the LNG business for the foreseeable future. Full Report The post The US Shale Gas Revolution and its Impact on Qatar’s Position in Gas Markets appeared first on Oxford Institute for Energy Studies .

Description: This paper follows on from ‘ Saudi Arabia’s Oil Policy: More than Meets the Eye? ’ published in June 2015, which raised a set of fundamental questions in relation to the sharp drop in the oil price between June 2014 and January 2015, and OPEC’s decision, spearheaded by Saudi Arabia, not to cut output in response. We develop a simple analytical framework, which formalizes Saudi Arabia’s decision-making process relative to the fundamental revenue maximization-market share trade-off in the 2014-15 oil price fall. Using a simple game, we show that under uncertainty, it is always better off for the Kingdom to assume shale oil supply is elastic and not to cut output. But we also argue that as Saudi Arabia learns more about this new source of supply, its policy will adapt accordingly. The fact Saudi Arabia’s oil policy could change as the trade-off between revenue maximization and market share evolves, and as new information is transmitted to the market, will keep the market second-guessing. It will continue to shape market expectations and influence market outcomes. Executive Summary The post The Dynamics of the Revenue Maximisation–Market Share Trade-off – Saudi Arabia’s Oil Policy in the 2014–2015 Price Fall appeared first on Oxford Institute for Energy Studies .

Description: The oil market has changed very significantly over the past 10 to 15 years. Concerns about carbon emissions and climate change have increased materially. And, more importantly, the US shale revolution has introduced a new source of supply, with very different production and financing strcutures. In this comment, Spencer Dale, the Chief Economist of BP, considers the implications of these changes and argues that the principles and beliefs that served us well in the past are no longer as useful for analysing the oil market. He calls for a new set of principles reflecting the New Economics of Oil. These four principles are: Oil is not likely to be exhausted : As such, there shouldn’t be a presumption that the relative price of oil will necessary increase over time. A key factor governing the future price of oil is whether the standardised, repeated, ‘manufacturing-like’ processes characterising shale production, with the associated rapid gains in productivity, can be applied to other types of oil production. The supply characteristics of shale oil are different to conventional oil : Shale oil is more responsive to oil prices, which should act to dampen price volatility. But it is also more dependent on the banking and financial system increasing the exposure of the oil market to financial shocks. These financial shocks have the potential to increase oil market volatility. Oil is likely to flow increasing from west to east with important implications for energy markets, financial markets, and geo-politics. OPEC remains a central force in the oil market but when analysing OPEC’s ability to stabilise the market, it is important to consider the nature of the shock driving the change in oil prices and, in particular, whether it is a temporary or persistent factor. The post The New Economics of Oil appeared first on Oxford Institute for Energy Studies .

Description: From 2006 onward, a series of oil discoveries put Uganda on the global energy map. These were the largest onshore oil finds in sub-Saharan Africa in over two decades, and part of an oil and gas surge in East Africa and a wider energy boom on the continent. But almost immediately after the discovery of oil, a series of regulatory disputes between the Ugandan government and international oil companies delayed development and production. This paper provides an overview of the history of oil exploration in Uganda, it considers future production and reserve levels and infrastructure development along with Uganda’s regulatory environment, through the refinery demands, tax disputes, and contractual negotiations between the Ugandan government and international oil companies and how politics may impact the advancement of Uganda’s oil industry. The post Oil in Uganda – Hard bargaining and complex politics in East Africa appeared first on Oxford Institute for Energy Studies .

Description: Most discussion on the future of the market for internationally traded gas focuses on the ‘swing towards Asia’. Specifically, China and India, the world’s two most populous nations, are frequently highlighted as major drivers of future demand. Yet, there is considerable ambiguity over the assumptions underpinning this observation, particularly with regards to India. In fact, despite several years of relatively high economic growth in the last decade, it is difficult to make a confident and accurate assessment of India’s potential as a major Asian gas market. Official government forecasts carried out within a central planning framework tend to be overly optimistic, whereas projections by multilateral organisations tend to be cautious but confused. The reason for this lack of clarity is that the Indian gas sector is broadly characterised by two moving parts: one which has prices and quantities set by the Indian government, and another which utilises gas at market (LNG import) prices. Additionally, there is some overlap between the two, further complicating attempts to assess these as separate markets. The lack of a clear pricing signal therefore makes it difficult to determine future levels of demand. This paper analyses whether or not recent reforms to the pricing of domestic gas could potentially change the Indian gas landscape by making price signals clearer. It investigates three important questions: First, could gas pricing reforms reverse the recent decline in domestic production? Second, could they lead to new upstream investments in gas? Finally, what is the impact of the reforms on downstream consuming sectors? The paper begins with an analysis of the 2014 gas pricing reform, followed by an overview of demand, supply and consumption. It then delves into the three broad questions posed above, and concludes with observations on whether reforms to gas ‘price formation’ (as opposed to ‘price level’) in India are in fact achievable, or whether they will continue to elude successive governments, and on whether India can ever be Asia’s next gas market ‘Goliath’. Executive Summary The post Gas Pricing Reform in India – Implications for the Indian gas landscape appeared first on Oxford Institute for Energy Studies .

Description: This joint paper, to be written in partnership with Angus Miller will examine the development of the Kazak oil industry during the post-Soviet era and will outline the potential for its future expansion. Two major PSAs with foreign investors (Tengiz and Karachaganak) have dominated output to date, supported by significant Chinese investment in medium-sized Kazak companies, with only a limited number of smaller fields developed. A third PSA, covering the giant Kashagan field, is under development but has hit multiple problems that have delayed initial production. The paper will analyse the interaction between all these projects and the state companies (KMG and KMG E&P) and institutions which govern them, and will question whether the expansion plans that have been outlined by the government are possible in a lower oil price environment without significant reform. The tax and licensing regimes may require radical change, while the issues of corruption and overbearing bureaucracy may also undermine future growth in an industry that makes a huge contribution to the Kazak economy. The paper will ask whether positive change is likely under the current regime or under any future government that may emerge following the ultimate departure of President Nazerbayev. The post The future of the Kazak oil sector appeared first on Oxford Institute for Energy Studies .

Description: This paper forms part of an OIES Gas Programme research theme focusing on natural gas demand development and markets. While most attention has been given to the power sector, little has been done to understand the factors driving future gas consumption in the industrial sector and what are the expectations at the 2030 horizon. This sector still represents about 20% of total gas volumes consumed in OECD Europe (2013) but has been facing an –almost-steady decline since the early 2000s especially in the major gas markets. The rationale behind this paper is that each sector of consumption has specific characteristics and complexities which are essential to understand in order to look at future trends. This paper follows the previous publications on natural gas demand outlook in Europe. The post Industrial gas use in Europe appeared first on Oxford Institute for Energy Studies .

Description: Between 2011 and mid 2013, the Brent price oscillated within a very narrow range, with quarterly average Brent prices exceeding the $100/barrel mark for 14 consecutive quarters. This relative stability has been remarkable given the various shocks that have hit the oil market ranging from macroeconomic shocks, to geopolitical shocks, to unplanned outages and to North America’s positive supply shock. This price stability however was disrupted and since June 2014, the oil price has fallen sharply. This fall in the oil price has occurred despite the general deterioration in the geopolitical backdrop in many parts of the world. This paper examines the main factors responsible for the fall in the oil price and the short-term and long-term implications for the oil market and the oil industry. It will also examine the behaviour of OPEC over the last cycle and how market perceptions about the role of its key player Saudi Arabia have changed. The paper will then draw some main lessons, making some comparisons with the previous oil price cycles. The post The Oil Price Crisis of 2014-2015: Causes, Implications and Lessons appeared first on Oxford Institute for Energy Studies .

Description: This paper analyses the fundamental drivers of Russian oil production in the current low oil price environment, highlighting a number of dichotomies currently at work. The low oil price has forced Russian oil companies to cut dollar expenditure and to re-assess their investment strategies, apparently putting oil production and exports at risk. However, the impact of rouble devaluation and changes in the fiscal regime can help to offset these negative factors. US and EU sanctions have restricted access to technology and finance, but import substitution and a search for alternative sources of funding can start to redress these problems. New field developments are being delayed, but a number of projects are already underway that can help to keep production flat in 2015. Arctic and tight oil projects have been undermined by sanctions but this has caused the Russian industry to re-focus on arguably more economic assets in core regions. Finally, even if production does remain flat or even decline slightly, exports may continue to grow as domestic refineries reduce throughput due to recent tax changes that disadvantage production of fuel oil. Executive Summary The post Key Determinants for the Future of Russian Oil Production and Exports appeared first on Oxford Institute for Energy Studies .

Description: The aim of this paper is to outline the main structural features of the upstream oil and gas (O&G) sector of two important but maturing producers, namely Oman and Abu-Dhabi/UAE. More than ever, both countries are dependent on the continued and/or intensified deployment of Enhanced Oil Recovery (EOR) techniques to manage, maintain, and expand production in both oil and gas. A decade ago, Oman successfully reversed declining reserves and production through heavy investments in these techniques. Arguably, Abu-Dhabi is at a similar point now, as it is renewing its concessions while confronting the needs for massive investments to increase output. Another common feature is their “gas impasse”, namely the competing demands on gas produced to satisfy power generation, industrialisation needs, and for re-injection in EOR techniques (around 20%-30% of gas use in both countries). The paper will trace the evolution of fiscal regimes, and of the underlying IOC/NOC relationship: despite a common starting point of long term concessions, Oman’s upstream has displayed more flexibility and diversity of IOCs, including Asian companies, which are also rising in Abu-Dhabi’s upstream. It will argue that the key drivers in both cases are: the capabilities of NOCs (EOR techniques; managing large-scale long term projects); and IOCs’ mastery of the technology required for the geology of reserves in the host country. The post Oman and Abu Dhabi’s Upstream: a comparative analysis of structure and outlook appeared first on Oxford Institute for Energy Studies .

Description: Natural gas is expected to provide approximately 10% of China’s total primary energy consumption in 2020, which is a significant increase from 5.9% in 2013.The growing demand is a significant factor in the global gas demand balance as well as a source of uncertainty. In 2013, China’s gas demand increased by 13.3% which accounted for half of the additional gas demand in the world. Some projections indicate that China will account for 30% of the additional global gas demand between 2014 and 2019. A number of studies have examined natural gas development in China at national level, however, for a country as large as China, the analysis of natural gas development needs to address its regional variations. China’s regions have distinctive features in terms of the nature of gas supply and demand. Firstly, natural gas resources are unevenly distributed; most of the producing regions (such as Shaanxi, Xinjiang and Sichuan) are remote from the main demand centres (the coastal areas). Secondly, the consumption patterns of different regions show significant differences. For example, in Sichuan, the largest gas consumer in China, industrial use accounted for 43% of the total gas demand, followed by residential use (42%). Power and heat supply only accounted for 0.6% of the total gas demand. By contrast, in Guangdong, the 2nd largest gas consumer in China, power and heat supply accounted for 50% of gas demand, followed by industrial use (30%) and residential use (10%). This study aims to examine and compare the production and consumption patterns of natural gas in China’s provinces. A number of provinces are examined in this analysis, including Sichuan, Xinjiang and Shaanxi, representing the largest producing region, and Guangdong, Beijing and Shanghai, representing the largest consuming region. The outcome of this research can provide a better understanding of China’s gas market at regional level. The post Natural gas in China: a regional analysis appeared first on Oxford Institute for Energy Studies .

Description: With US shale gas dominating the headlines of the energy media for the past several years, Canadian gas has been somewhat overshadowed. While gas industry followers outside North America may have been aware of the reduction in Canadian gas exports to the US, they will likely have missed the complex interaction of lower cost US shale invading regional Canadian markets formerly domestically supplied. This situation has been further exacerbated as Canadian transportation tariffs have been raised to compensate for lower throughput. Ieda Gomes provides a comprehensive analysis of the dynamics of these and other key elements of Canada’s gas fundamentals and how they have, and will continue, to evolve. The loss of Provincial and Federal tax and royalty take due to lowered exports, production growth and prices is also important and leads to an assessment of potential new market segments such as natural gas and LNG vehicles and Tar Sands sectors (currently impacted by low oil prices). This inevitably leads to the exploration of the obvious replacement for the lost pipeline export volumes, namely LNG exports. Readers will already be aware of the numerous proposed LNG export projects on Canada’s West and East Coasts. The paper provides a succinct description of each of these and details at the individual project level, and in overview, the significant challenges to be overcome; both physical, in terms of transportation distances and greenfield construction (in a region of insufficient skilled resources), and political, in terms of the myriad overlapping approval and consent processes that have to be satisfied prior to construction starting. A lack of clarity on the LNG-specific fiscal framework adds yet another layer of uncertainty. The final hurdle is of course the relative competitiveness of Canadian LNG projects to US Gulf Coast brownfield projects and Australian expansion projects at a time when; global demand for LNG over the next decade appears to have declined, the window for new supply requirement appears to have moved back to the early 2020s, and Asian buyers appear set on moving away from oil-indexed long term contract prices. Executive Summary The post Natural Gas in Canada – what are the options going forward? appeared first on Oxford Institute for Energy Studies .

Description: Efficiency analysis lies at the heart of incentive-based regulation of electricity distribution networks. Most regulatory authorities have graduated from using exclusively ex ante (rate of return based) reviews of firms’ expenditures to relying also on ex post assessments of their costs – the latter are underpinned by benchmarking techniques (Poudineh and Jamasb, 2014). However, an assumption underlying these frontier analysis and efficiency measurement techniques is that all units share the same production technology and face similar environmental conditions. In the framework of electricity distribution companies, this assumption is unrealistic as exogenous environmental factors could also affect the efficiency of firms. Existing literature recognises the fact that the cost efficiency and quality of service performance of electricity distribution network operators can be affected by various firm-specific non-discretionary factors (environmental conditions) that are beyond the control of the management, such as geographical and climatic conditions. But this typically uses factor analysis to reduce the number of environmental factors into a few composite indices and applies second stage regression or pooled versions of stochastic frontier models to examine the effect of the composite environmental parameters on the efficiency of utilities. In contrast with this conventional method that studies the effect of environmental factors in isolation, exogenous environmental factors may in fact impact directly on the structure of technology by which the inputs are converted to output, or they may influence the efficiency with which inputs are converted to output. The question then arises over how the marginal effects of these environmental variables should be computed, and more importantly, whether both inefficiency (efficiency) and its marginal effects should be based on the same formula. Models in which the environmental variables enter into the mean and/or the variance of inefficiency have been proposed in some earlier studies. In this work we investigate the determinants and marginal efficiency effects of exogenous environmental variables using a balanced panel of 128 Norwegian electricity distribution companies observed from 2004 to 2010. The post Marginal Efficiency Effect of Environmental Variables: The Case of the Norwegian Electricity Distribution Networks appeared first on Oxford Institute for Energy Studies .

Description: This paper is an update on the book ‘ Sino-Russian Oil and Gas Coooperation ‘ by Keun-Wook Paik published by OUP in 2012. It aims to explain the importance and implications of strengthened Sino-Russian oil and gas cooperation; it also tries to analyse whether this level of cooperation could move into a strategic level. It reviews the changing characteristics of Sino-Russian oil and gas relations, from symbolic and scratching-the-surface levels during the 2000s, to the meaningful and substantial levels seen in the 2010s, based on the two major crude supply deals in 2013 and the two major gas deals in 2014. It explains the real capacity and the limits to Russia’s oil and gas exports to China and the main drivers of Russia’s ‘Pivot to Asia’ policy. It also explores China’s domestic gas supply capacity in the coming decades, and at elaborates on both the role of the WEP corridor development for pipeline gas imports from the Central Asian republics and Russia, and the potential of LNG supply to the coastal provinces. It covers price and financing factors, and the issue of multilateral gas cooperation in the north-east Asian region and the implications of Sino-Russian gas deals for future LNG projects. The post Sino-Russian Gas and Oil Cooperation – Entering a New Era of Strategic Partnership? appeared first on Oxford Institute for Energy Studies .

Description: Electricity networks exhibit natural monopoly characteristics and are thus subject to economic regulation. In the absence of competition there is little incentive for innovation especially if the regulatory model is not innovation friendly. At the same time, electricity networks play a pivotal role in realising the objective of low carbon economy. In fact, integrating distributed energy resources, electric vehicles and implementing smart grid solutions requires ample amounts of investment and innovation by grid companies. Thus the question is how to incentivise innovation in regulated infrastructures. In recent years, electricity sector regulators have recognised this need and incorporated specific innovation stimulus in their regulatory framework of network companies. The UK electricity market regulator Ofgem, for example, initiated Innovation Funding Incentive in 2004 where the distribution network companies were allowed to spend half a percent of their revenue on innovation projects. In 2010 price control review, this was replaced by Low Carbon Network Fund (LCNF) under which distribution companies were competing for innovation projects. In the most recent regulatory framework (RIIO) Ofgem has allocated three specific funds for innovation. These all highlight the importance of innovation on the agenda of electricity sector regulators. This paper analyses the problem of incentivizing innovation under regulation with a specific reference to the case of electricity network and the RIIO regulatory model in the UK. The result of this paper provides some insights for the possible approaches that the innovation incentives can be designed and implemented under regulation. The post Innovation incentive under regulation – The case of the electricity networks appeared first on Oxford Institute for Energy Studies .

Description: China is now the world’s largest oil consumer and importer. While this gives China significant clout in the global oil market, its weight is compounded by the fact that in 2013, China was also the world’s fourth largest oil producer, after Saudi Arabia, the US and Russia. The oil sector has been dominated by three large state-owned oil companies, who have been developing China’s domestic reserves, building and operating pipelines, managing the country’s increasingly sophisticated downstream and filling China’s strategic petroleum reserves (SPR). These companies employ millions of workers, enjoy ministerial rank and close connections to the top leadership. Over the years, as China’s demand has outstripped production, they have also become major investors in the global upstream and established a presence in oil trading. They now rank among the top ten global oil companies. Yet despite China’s growing international reach, the oil sector remains heavily dominated by the Chinese State: From a majority stake in the oil companies, through price setting and diplomatic support for outbound investments, the government maintains significant influence over commercial decisions. At the same time, the NOC’s technical knowhow and market expertise offer them an important role in policy-making. This relationship is poorly understood, but it is now set to further evolve, alongside government efforts to gradually liberalize the energy sector. As the government embarks upon an ambitious economic restructuring and environmental upgrading that will allow more private participation throughout the oil industry, the regulatory framework, as well as China’s oil and gas companies will also have to adjust. This research project will provide a historic overview of the development of the Chinese oil industry, focusing on the relations between the government and the oil companies. It will then assess how the current reform agenda and the liberalization of the oil industry will impact government-industry relations, policy making as well as China’s global oil profile. The post The structure of China’s oil industry – Past trends and future prospects appeared first on Oxford Institute for Energy Studies .

Description: This special issue of the Forum is dedicated to Robert Mabro who founded the Oxford Energy Policy Club in 1976, the Oxford Energy Seminar in 1979, and the Oxford Institute for Energy Studies in 1982. The fact that these institutions still thrive today is testament to his vision and foresight. In this issue of the Oxford Energy Forum, Robert’s colleagues and friends reflect on the man and his work and how his extraordinary contribution to the field has enriched our understanding of energy markets, the behaviour of the various players, the dynamics within OPEC, the consumer-producer dialogue, and the interaction between governments and oil companies and how his deep insights and intellectually integrity continue to shape and influence thinking. The post Oxford Energy Forum – Issue, 100 appeared first on Oxford Institute for Energy Studies .

Description: Egypt’s gas sector has gone through an existential crisis the last decade. The government and the national oil and gas company EGPC (and EGAS) have changed their main focus from exporting natural gas (LNG/pipelines) to supplying the internal market. Almost all indigenous and international oil and gas operators, especially the LNG producers, have been confronted by a fledgling and unsustainable Egyptian government policy for years. At the same time, Egypt’s political instability and turmoil is also taking its toll. The external and internal gas market has also changed dramatically for Egypt. Most of its former historical markets (Israel, Jordan, Syria or Lebanon) have almost disappeared. A total reshuffle of strategies, internal and external policies and investments assessments, is needed to get Egypt’s gas sector again back on the road. The current Egyptian government is confronted by a wide-range of issues to be solved however before. These changing dynamics necessitate an up-to-date analysis which will include the following main topics: Egypt’s natural gas sector’s reorientation; Egypt’s renewed focus on the domestic market; the subsidies reform; and current and future natural gas allocation policy and prioritization. The post The Natural Gas Sector in Egypt – Prospects and Challenges appeared first on Oxford Institute for Energy Studies .

Description: Over the past decade, China has become a key driver of global oil demand growth. As China’s GDP growth increased at double-digit rates, oil demand growth increased by an average 0.5 mb/d between 2003 and 2012. Over the same period, China accounted for two-thirds of global oil demand growth. Thus, any changes in China’s energy profile and oil consumption habits can send shock waves through the global oil markets. In 2014, Chinese oil demand increased by 0.27 mb/d (2.7 per cent), broadly on par with 2013’s growth and the slowest pace of expansion in the past two decades. The question is whether 2014 was a blip, or the beginning of a deeper change. In this report, it is argued that 2014 is a harbinger of things to come. As the government moves to rebalance the economy and implements an aggressive environmental agenda, oil consumption in China will become more efficient, leading to slower demand growth rates. Thus, any outsized expectations of Chinese oil demand growth are likely to be disappointed in 2015, and weigh on global crude prices. It is also argued that the structural shift in the Chinese economy heralds not only slower demand growth, but also a change in product demand patterns and the structure of the refining industry, with important implications for global trade flows of crude oil and related products. The post China – the ‘new normal’ appeared first on Oxford Institute for Energy Studies .

Description: Wind power in China has experienced significant growth since the beginning of this century. Total installed capacity has increased almost 300 fold – from 346 MW in 2000 to 91,413 MW in 2013. This rapid development however has created new set of challenges. In particular, wind power has not been fully integrated into the electricity system as a whole, as the growth of wind generation capacity has not been matched by a corresponding growth in transmission capacity. This has resulted in a substantial requirement to curtail excess wind power, leading to the loss of a significant proportion (approximately 20 per cent) of potential wind output. To help with this problem, a number of transmission routes are planned, in order to link the wind farms in the interior to load centres on the coast. Nevertheless, it remains unclear whether the proposed expansion of the transmission system is adequate to accommodate the future growth of wind. It is also unclear whether the existing pricing systems for electricity itself, and for electricity transmission, reflect the real costs involved. The rapid growth of wind generation has led to a growing deficit in China’s renewable energy fund; this in turn is leading to uncertainty over payments to wind farm developers and turbine manufacturers. This paper highlights two options that could help the future development of wind power and its efficient integration into the electricity system: a more coordinated approach to the application of government policy in this area and the development of more market-based price signals in the power sector. Together these could provide a more coherent path towards the overall development of the power system and help secure the optimum contribution from wind power. Executive Summary The post Decarbonizing China’s power system with wind power – the past and the future appeared first on Oxford Institute for Energy Studies .

Description: The cancellation of the South Stream gas pipeline across the Black Sea may signal a fundamental reorientation of Russian gas export policy. Its replacement by similar pipelines direct to Turkey, and the abandonment of Gazprom’s long time strategy of supplying gas directly to European customers, comes in the wake of financial sanctions and an inability to negotiate the construction of new pipelines within the EU due to Third Energy Package regulation. The signing a first major pipeline export contract with China in 2014, and the possibility of a second contract in 2015, is shifting the emphasis of future Russian gas exports away from Europe and towards Asia. The irony of this change, which has largely been forced on Russia following US and EU measures taken in response to the Ukraine crisis, is that it has pushed Gazprom into a much more logical commercial export strategy and one which it should have adopted some years previously. The principal problem is that financial sanctions may prevent the company from being able to simultaneously finance a number of very large pipeline export projects. The post Does the cancellation of South Stream signal a fundamental reorientation of Russian gas export policy? appeared first on Oxford Institute for Energy Studies .

Description: During President Putin’s visit to Beijing in November 2014 Gazprom and CNPC signed a memorandum of understanding concerning the export of gas to China via the so-called “western route” via the Russian republic of Altai. The announcement was hailed by Russia as another example of its shift towards Asia as a diversification of its traditional gas export business in the West. This has important implications not only for Russia and China, but also for all the other potential suppliers of gas, and especially LNG, into North-East Asia. Confirmation that China could import up to 68bcma of Russian gas starting from 2019 would create a significant dent in the country’s potential LNG import requirement from 2020, increasing the competition between the planned sources of supply that are being constructed and planned over the next 5-10 years. Despite remaining doubts as to whether both Russia – China pipeline deals proceed to completion, it would appear that LNG suppliers are right to be concerned, as there is real commercial as well as political logic for significant Russian gas to flow south into the world’s fastest growing gas market. From a Chinese perspective, growing gas demand, uncertainty over some of its existing sources of supply, a desire to create more competition with Central Asian gas and the one-off nature of the opportunity to negotiate with Russia from a position of exceptional bargaining strength mean that an Altai deal is also likely to make sense. There may be some concern over the need for more Russian gas, with the possibility that total supply of 68bcma (the combined capacity of the Power of Siberia and Altai pipelines) could account for as much as one third of total Chinese imports by 2030. However, any potential security of supply threat is offset by the fact that the Russian contribution to overall Chinese gas consumption would be much lower, at around 13%, while the share of gas in the China’s total energy balance is estimated to remain below 10% at that date. Overall, then, the potential for a deal on exports via the Altai pipeline appears to have significant commercial and political logic. If a deal is signed, substantial problems will still remain, not the least of which will be Gazprom’s ability to raise the money needed to build the pipeline given its current inability to access western capital markets. Nevertheless, the impact of the signing of an Altai deal alone could have a significant impact on the ambitions of companies planning LNG projects that are also targeting the Chinese market, and as such the continuing discussions will require attentive observation over the next 12 months. The post The Commercial and Political Logic for the Altai Pipeline appeared first on Oxford Institute for Energy Studies .

Description: The power sector has a central role in modern economies and other interdependent infrastructures rely heavily upon secure electricity supplies. Due to interdependencies, major electricity supply interruptions result in cascading effects in other sectors of the economy. This paper investigates the economic effects of large power supply disruptions taking such interdependencies into account. We apply a dynamic inoperability input–output model (DIIM) to 101 sectors (including households) of the Scottish economy in 2009 in order to explore direct, indirect, and induced effects of electricity supply interruptions. We then estimate the societal cost of energy not supplied (SCENS) due to interruption, in the presence of interdependency among the sectors. The results show that the most economically affected industries, following an outage, can be different from the most inoperable ones. The results also indicate that SCENS varies with duration of a power cut, ranging from around £4300/MWh for a one-minute outage to around £8100/MWh for a three hour (and higher) interruption. The economic impact of estimates can be used to design policies for contingencies such as roll-out priorities as well as preventive investments in the sector. Executive Summary The post Electricity Supply Interruptions – Sectoral Interdependencies and the Cost of Energy Not Served for the Scottish Economy appeared first on Oxford Institute for Energy Studies .

Description: In this report published by the German Marshall Fund of the United States, Bassam Fattouh and Laura El-Katiri examines the prospects of Lebanon turning into a natural producer and exporter. Lebanon’s exclusive economic zone forms part of the Levant Basin, which has been estimated to hold up to 122 trillion cubic feet of recoverable natural gas, in addition to some 1.7 billion barrels of recoverable oil. The development of its hydrocarbon reserves would enable Lebanon to reduce its dependence on imports of oil products, which in 2012 constituted more than 97 percent of its total primary energy supplies. The government is keen to diversify Lebanon’s energy mix away from oil to strengthen its security of supply and to reduce air pollution. But gas production is not likely to begin before the mid-2020s. Until then, Lebanon would need to import all its gas requirements in order to increase the share of natural gas in the energy mix. The commercial development of Lebanon’s hydrocarbon reserves faces many internal and external challenges. Lebanon’s hydrocarbon sector and its institutional and regulatory framework are still in their infancy. Deadlock in Lebanon’s sectarian political system has led to long delays in the country’s hydrocarbon development and produced a volatile regulatory environment. The country suffers from weak administration, widespread corruption, and a poor business climate. As yet, Lebanon has no proven gas reserves, and until 2005 it did not have any gas infrastructure at all. The international community has a strong interest in ensuring that Lebanon’s potential hydrocarbon wealth brings benefits to the country and the region and does not become an additional source of tension. View the report. The post Lebanon – The Next Eastern Mediterranean Gas Producer? appeared first on Oxford Institute for Energy Studies .

Description: The infrastructural developments such as power grid, waste disposal facilities, wind farms, landfill, hydraulic fracturing, nuclear power plants etc. have an overall social benefit, distributed across the country, yet their deployment and operation incur a cost to the local communities living in the developments’ proximity. This problem which is traditionally termed NIMBY (Not-In-My-Back-Yard) is becoming increasingly problematic in democratic societies and often leads to social opposition and projects standstill. The economic aspect of the NIMBY problem is, therefore, an example of market failure, caused by externalities, in the sense that private actions no longer coincide with society’s best interests. Thus, it calls for regulation and intervention to restore social efficiency. This paper aims to analyse the economic aspect of NIMBY problem in order to shed light on the nature of economic solution using the established economic theories. This is achieved by applying the concept of property right and negotiation (Coase theorem), in a game theoretic setting, to explore the challenges of formulating a compensatory-based approach that foster social acceptance of energy projects. The post Public Opposition to Energy Infrastructures Development: An Economic Perspective appeared first on Oxford Institute for Energy Studies .

Description: The report will begin by explaining the background to the interest in demand response in the electricity sector. It will identify three main reasons why policies are increasingly aiming to encourage demand response: the reduction of investment and operating costs; the growing importance of demand-side flexibility to support decarbonization (and intermittent renewables); and technological changes, such as smart systems, that increase the potential, and the importance, of real-time demand response. This section will also distinguish different kinds of demand response, including short-term and long-term shifting of demand away from peak periods, as well as flexibility services that lower the costs of operations in wholesale markets and in the distribution network. The second part of the report draws on international experience and existing studies to explain how one might value the savings resulting from demand response and to provide some indicative figures. To the extent that data permits, the report will consider how this international experience may apply to demand response in Shanghai. The final part of the report identifies policies, regulations and market mechanisms that help to support demand response, identifying the sort of mechanisms that could encourage demand response in Shanghai. The post Potential and market value analysis on demand response in the electricity sector in Shanghai appeared first on Oxford Institute for Energy Studies .

Description: Oxford Institute for Energy Studies has, for the second year running, been named the top Energy and Resource Think Tank in the world by the University of Pennsylvania’s annual think tank report. The Global Go To Think Tank Index is designed to identify and recognise centres of excellence in all major areas of public policy research in every region of the world. To achieve the number one ranking in our field is a testament to the work of our Research Fellows, the multidisciplinary nature of our research, our academic excellence and intellectual independence. We will continue to conduct research that leads to a more informed and balanced understanding of the behaviour, motivations and objectives of the various economic forces, agents and policy makers that operate in or influence the performance of international energy markets. Top Energy and Resource Policy Think Tanks Table 17 1. Oxford Institute for Energy Studies (OIES) (United Kingdom) 2. World Resource Institute (WRI) (United States) 3. Institute of Energy Economics (IEEJ) (Japan) 4. James A Baker III Institute for Public Policy (United States) 5. RAND Corporation (United States) 6. Center for Science of Environment, Resources, and Energy (Japan) 7. TERI: The Energy and Resources Institute (India) 8. Center for Energy and Environmental Policy Research (CEEPR) (United States) 9. Resoucres for the Future (RFF) (United States) 10. Energy Studies Institute (ESI) (Singapore)   To view the full report please click on the link: http://repository.upenn.edu/cgi/viewcontent.cgi?article=1008&context=think_tanks The post OIES No. 1 Energy and Resource Think Tank 2014 appeared first on Oxford Institute for Energy Studies .

Description: Recent changes in international oil prices have highlighted the issue of petroleum product pricing reforms in a number of non-OECD economies, particularly as the non-OECD now accounts for the bulk of the global growth in consumption of petroleum products. In 2014, oil demand from the non-OECD is predicted to overtake OECD oil demand for the very first time. Of this, four economies – Brazil, Russia, India, and China, the ‘BRIC’ countries – will account for 45 per cent of non-OECD oil demand. The BRIC countries have some common socioeconomic and demographic characteristics, and face similar challenges in domestic energy policy. One significant common policy stance has been associated with petroleum product pricing – specifically, the historical use of price controls, together with efforts to reform these over time. The most interesting feature of this shared policy stance is that it has led to different outcomes in the BRIC economies, particularly in relation to the impacts on downstream investment. This paper investigates the impacts of gasoline and diesel pricing reforms on downstream investment in the BRICs. Of the BRICs, India and China (the two countries that are the largest net importers of oil) have accounted for the largest downstream investments and expansions in refining capacity. However, these are also the two BRICs where price controls for petroleum products have been largely retained by governments, which have preferred a gradual approach towards the liberalization of prices. In contrast, Brazil and Russia, where petroleum product prices were officially liberalized in the early 1990s and early 2000s, have experienced serious constraints in attracting downstream investments and have struggled to expand (in the case of Brazil) or upgrade (in the case of Russia) their refining capacity. These outcomes run counterintuitive to expectation, according to which liberalization and the alignment of domestic petroleum product prices with international oil prices should be conducive to fostering competition and investment along the entire value chain. In investigating the reasons for this counterintuitive outcome, an analysis of the ‘pass-through’ of international price movements to domestic prices for gasoline and diesel shows broad evidence of price controls being exercised in Brazil and Russia despite the official liberalization of prices, through implicit or indirect measures, with governments typically influencing domestic pricing through intervention in the operations and capital expenditure plans of the National Oil Companies (NOCs). In contrast, India and China have used explicit or direct measures such as setting prices directly, adjusting federal taxes, and compensating NOCs and marketing/retailing companies, as well as specific consumer groups affected by price changes directly using cash transfers. The findings therefore demonstrate a dichotomy of experience amongst the BRICs. This paper sets out three broad policy lessons – first, that the impacts of price controls generally tend to be concentrated in one part of the value chain, and although governments may view this as ‘manageable’ or ‘containable’ – these impacts have knock-on effects, as shown in this paper. Second, that petroleum product price liberalization is not irreversible – demonstrated by the experiences of Brazil and Russia where price controls were reintroduced implicitly. And third, that there is a need, post-liberalization, for policies and price adjustment mechanisms which are logical and transparent, and which take into account the potentially negative impacts of price controls on downstream capital expenditure. Executive Summary The post Gasoline and Diesel Pricing Reforms in BRIC Countries – A Comparison of Policy and Outcomes appeared first on Oxford Institute for Energy Studies .

Description: The most common business structures in the industry today are either production sharing contracts (PSCs) or royalty/tax systems (R/Ts). Roughly half of the governments of this world use PSCs and the rest use R/Ts. While these systems are fundamentally different from philosophical and legal perspectives, their structures are dramatically similar from financial, economic, and accounting points of view. Both of these approaches to the business relationship provide the IOC a means of recovering costs incurred and earning a share of profits if (1) a commercial discovery is made and (2) sufficient revenues are generated. There has always been discussion about the most efficient and effective contract design from a financial/economic point of view. There are many things involved especially considering these agreements are structured to last decades in spite of all the risks and uncertainties. However, recently, hot debate is underway over one of the most fundamental aspects of the world’s agreements. The current debates in Mexico and India have been particularly intense. On one side of the debate are those who believe basic ‘profits-based’ structures found in the world’s PSCs and R/Ts are the best alternative. On the other hand there are those who propose a structure based simply on the division of production or revenues. The overriding concern behind this initiative is the lack of faith in the accounting for costs and the spectre of cost overruns, goldplating, or even cheating. In Mexico the debate has not entered the public domain but is being promoted by serious factions within Mexico. In India the positions have been formalized and explicitly articulated and publicly represented by two separate committees: The Rangarajan Committee and the Kelkar Committee. The Rangarajan Committee recommended the government move away from PSCs and embrace revenue sharing contracts (RSCs). The Kelkar committee contested the Rangarajan Committee recommendation to move to a RSC. The post Fundamental Petroleum Fiscal Considerations appeared first on Oxford Institute for Energy Studies .

Description: The 20th session of the Conference of the Parties to the UN Framework on Climate Change (COP 20) recently concluded in Lima, Peru. It was the last COP before the Paris Climate Change Conference, to be held in December 2015, when the parties are expected to sign a universal agreement that would take effect from 2020. The first part of this article by David Robinson explains the pessimism about reaching a meaningful agreement in Paris, with a particular focus on mitigation. Part two summarizes the reasons why an agreement is widely anticipated in spite of this pessimism. Of course, the point is not just to reach an agreement and to let the negotiators declare victory, but to make a meaningful contribution to combatting climate change; part three of this article identifies some of the key negotiation issues that will determine the level of ambition, the structure of the agreement and, indeed, whether there will be any agreement at all. Part four identifies some of the initiatives that are required to bridge the gap between the mitigation called for by the science and the pledges that are expected in Paris. It argues that the currently low price of oil offers an opportunity for governments to eliminate fossil fuel subsidies, introduce carbon taxes, and pay owners of fossil fuels to leave their resources in the ground; all tangible ways of combating climate change. However, successful de-carbonization also requires action by civil society and business, in particular technological innovation, improved energy efficiency, widespread implementation of low-carbon technologies, and the adoption of transformative and profitable low-carbon energy business models. The post Paris 2015 – just a first step appeared first on Oxford Institute for Energy Studies .

Description: This paper will update the analysis on price correlation and volatility at European gas trading hubs based on 2014 pricing data from the OTC market. A key focus will be on whether transmission system bottlenecks (whether physical or contractual) have improved or worsened compared with previous years. The post European Gas Hub Correlations appeared first on Oxford Institute for Energy Studies .

Description: The aftermath of warmer than normal 2013/2014 winters in Europe and Asia, evidence of slowing Asian LNG demand growth through 2014 and the collapse of the oil price in late 2014 has resulted in a painful ‘new normal’ for key players in the global gas system, specifically LNG project investors and Russia/Gazprom. At one level we can rationalise the slowdown in Asian LNG demand and stagnant European gas demand as having a direct causal impact on European hub and LNG spot prices. The oil price fall has in parallel brought oil-indexed gas and LNG contract price levels down to levels unimaginable just two years ago. With project economics challenged and cashflows crimped, investors in new gas supply projects, especially LNG, will inevitably hold back, cut costs and await a more positive market outlook. At a more fundamental level however, what we may be about to witness is a significant disruption to regional gas equilibria as a wave of new (Australian) LNG supply meets a slowing Asian market and a significant regional component (US/North America) re-connects with the global system in the form of 77 bcma (and counting) of new LNG export projects. Europe will be a passive recipient of excess supply at a time when its gas demand growth is at best tepid, but its import requirement may be rising due to declining domestic production. This paper addresses the following questions: 1. What has been the impact of lower oil and lower gas prices on existing and future gas and LNG projects? 2. What is the outlook for the period to 2030 for markets connected by flexible LNG supplies given the uncertainty in regional demand outlooks in the light of new LNG supply currently under construction? 3. What is the impact of the probable delay to new LNG project FIDs given demand uncertainties and the apparent need to move from oil indexation to new contract price formation structures ? 4. To what extent can Russia, using its market power in Europe to ‘control’ hub prices influence such outcomes? Through quantitative scenario analysis, the paper explores the major uncertainties in the global gas system connected by flexible LNG to 2030. The lack of clarity on Russia’s future preferred commercial behaviour however, adds a level of complexity most market participants would prefer to ignore. Gazprom is occupied on many fronts in both political and commercial spheres. At some point however the need to adopt a more market-oriented strategy is likely to rise on its list of priorities. While the timing of this is at present uncertain, the conclusions of this paper would strongly suggest that this is a development that players in the wider LNG-connected global system should be closely monitoring. Executive Summary The post The Impact of Lower Gas and Oil Prices on Global Gas and LNG Markets appeared first on Oxford Institute for Energy Studies .

Description: In collaboration with OIES and KAPSARC, Clingendael International Energy Programme (CIEP) hosted a workshop in March 2015 to discuss the structural changes shaping the crude oil and petroleum products markets and the shifts in trade flows. The general view was that apart from the structural changes in crude oil supply and demand, oil product markets are also rapidly changing, creating even more complex import and export relationships among countries. As refined product exports increasingly displace crude exports among some of the major producers, producers and end-consumers will be bound by more varied chains of trade in refined products. The post Crude Oil Markets in 2015 – the battle for market share appeared first on Oxford Institute for Energy Studies .

Description: In a trend that started in December 2014, India’s oil demand has been rising significantly, with February 2015 data showing a record rise in oil demand to 3.91 million barrels per day (mb/d), higher year-on-year by 0.34 mb/d (or 9.4 per cent), and the second highest year-on-year growth ever. This strong growth has continued despite the removal of oil subsidies and the imposition of excise duties, which means that the full extent of the fall in oil prices has not even been passed through to consumers; instead, consumer prices have stabilised at the equivalent of roughly $70-$80 per barrel. There are three potential implications of this upsurge in India’s oil demand. First, India’s push towards expanding the share of manufacturing in its GDP from 15 per cent at present to 22 per cent by 2022, along with greater spending of its tax revenues on infrastructure, could imply that oil demand growth will continue to exceed expectations. In early 2015, the IMF revised India’s GDP growth forecast for the current fiscal upwards to 7.5%, overtaking China’s at 7%. In fact, while the other three BRIC economies have seen systematic downward revisions to their GDP growth estimates across the past 15 months, India has seen progressive upward revisions. Second, regardless of the push towards manufacturing, the fall in oil prices is sufficient to increase affordability for a whole new segment of the growing middle class population. The most visible reflection of this trend is in the changing structure of the automobile sector, with rising car sales (as opposed to two-wheeler sales). It has been suggested that this could be the inflection point for Indian car sales this year, even though income per capita remains below $4,000, the threshold usually associated with a pick-up in rates of car ownership growth. Once adjusted for purchasing power parity, Indian GDP per capita is said to have reached $4,000 by late 2014. This may, in turn, deliver a marked increase in demand growth rates, particularly for gasoline. A final implication of Indian oil demand growth is the net effect on global oil demand in the medium to long term. For instance, while gasoline demand growth in India is coming off a much smaller base than China (~2.6 mb/d), the current growth rates are reminiscent of China 10 years ago. Given the slowdown in China’s economy, and short-run uncertainties around global supply, the question that arises is whether India’s demand growth would potentially be replacing China’s demand volumes, or whether it could surpass them, and to what extent India can support global oil demand growth. This Comment explores these three implications by analysing recent oil consumption and macroeconomic data against the context of India’s push towards manufacturing, identifying potential constraints, and disentangling some of these ‘effects’ to arrive at a broad conclusion for India’s oil demand. The post India’s Oil Demand: On the Verge of Take-off? appeared first on Oxford Institute for Energy Studies .