Latest news with #Woodmac
Business Recorder
22-07-2025
- Business
- Business Recorder
Panels formed to address issues facing gas sector
ISLAMABAD: The government has established four specialised panels to address key issues in the gas sector, including circular debt, LNG tariffs, unaccounted-for gas (UFG) losses, and the increasing share of LNG in the national gas system, official sources told Business Recorder. According to sources, a Committee on Implementing Structural Reforms in the Petroleum Sector— formed by the Prime Minister and chaired by the Minister for Petroleum and Natural Resources— has convened multiple meetings to deliberate on these matters. The composition of the Committee is as following: Minister for Petroleum (Convener), Advisor to Prime Minister on Privatisation, National Coordinator on Energy Reforms, Lt General Muhammad Zafar Iqbal (retd) Secretary, Power Division, Secretary, Petroleum Division, Secretary, Cabinet Division/ representative and Chairman, OGRA. Pakistan faces LNG glut: minister The Minister for Petroleum emphasised that while the foundational work for the committee's assignment had been done through its Integrated Energy Study (Woodmac) conducted by the Petroleum Division, the present focus is to chalk out an implementation plan. He highlighted the importance of aligning the Committee's recommendations with the preparation of the Annual Delivery Plan (ADP) to be settled with LNG suppliers. The representative of Power Division commented that challenges need to be addressed and disruptions need to be looked into. The Chair responded that the tactical issues would be discussed later and, presently, the focus needs to be on sustainability of the gas sector and how LNG over supply/ less off-take is affecting it. The Secretary Petroleum framed the key issues to be addressed by the Committee, namely: rationalisation of gas tariffs (for both indigenous and imported gas), synchronisation of LNG demand with the power sector along with resolution of circular debt within the gas sector. He noted that most of the required data and foundational analysis is already available through the Woodmac study and will serve as the basis for the committee's deliberations. The Chair commented that Committee should focus on implementation as a Plan. The Committee needs to focus on 2026 ADP's preparation and to devised policy of Integrated Energy strategy for Pakistan. The Committee constituted a sub-committee comprising Secretary Power (Lead), DG Gas, MD SNGPL and a nominee from the Task Force. The chair can co-opt any member if he/she deems it necessary to effectively carry out the work and decided to constitute the following (ToRs) for the four sub-committees: Subcommittee 1: work out a comprehensive proposal to synchronise LNG demand of the power sector in a manner that ensures timely and adequate supply without causing abrupt fluctuations in demand. GCEP submission to Woodmac to be considered; and identify causes and propose solutions to avoid sudden changes in LNG requirements by the power sector that lead to diversion of LNG cargo to other sectors. Net Proceeds Differential (NDP) claims, if any, arising due to reduced off-take by Power Division to be considered. Sub-Committee -2 comprising Muhammad Ali (Lead), a nominee of KPMG, Islamabad and any co-opted member to formulate proposals to deal with circular debt stock in the gas sector. Sub-Committee 3 is on LNG tariff rationalisation. Its scope will formulate proposals for LNG tariff rationalisation by revisiting all compositions of tariff (terminal charges, importer margins and LNG service agreement charges etc.) RLNG demand maximization options to be proposed (especially in domestic sector). Sub-Committee 4- domestic gas tariff efficiency and transparency will address efficiency and transparency in tariff for domestic gas tariff including revenue requirements of the gas utilities, actual UFG losses taking into account growing LNG share in gas system, etc. Sui Companies Return on Assets formula revision to be considered to bring better efficiencies. Copyright Business Recorder, 2025
Axios
14-04-2025
- Business
- Axios
Why U.S. oil production could even go into reverse
The prospect of U.S. oil production growth not just stalling but going into reverse is edging into the picture. Why it matters: The price drop and trade policy uncertainty might spur a decline this year or next despite Trump officials' goal of boosting output. It would be a striking example of how President Trump's trade policies hit the sector that embraces other parts of his agenda. "At these prices, we would not be surprised to see U.S. oil output decline this year," Barclays' Amarpreet Singh said in a note Friday. While Trump has paused big new tariffs on many countries, the baseline 10% remains, and he imposed massive levies on China. And what happens after the 90-day pause announced last week is a mystery. So is the hit to demand growth from economic headwinds. State of play: Even before the April 2 tariff announcement, analysts were predicting rather modest 2025 growth from world-leading levels. Most outlooks still project a small rise. But it's looking wobbly. The U.S. Energy Information Administration last Thursday revised its U.S. oil outlook slightly downward, now seeing production growth of 2.2% this year and 0.4% in 2026. How it works: While shale production is rather flexible, commodity outlook changes have a delayed effect unless they're huge. That's true even as prices are near or below what it takes to profitably drill new wells in many locations. What they're saying: Wood Mackenzie analyst Ann-Louise Hittle noted it takes 6-9 months for a change in rig activity to affect production. Woodmac still sees modest growth this year. "We believe even lower near-term oil prices would be needed to result in deferred well completions or shut ins to reduce 2025 Lower 48 oil supply significantly," Hittle, Woodmac's VP for oil markets, said via email. Threat level: S&P Global Commodity Insight, even before April 2, saw just a 150,000 barrel-per-day increase in production growth from Lower 48 onshore wells this year. If U.S. crude prices fell to $50 per barrel, S&P sees U.S. onshore production falling by over a million barrels per day over 12 months. The U.S. benchmark WTI is trading at $62.43 Monday morning after dropping to $58-range briefly last week. The big picture: As Axios noted recently, "drill, baby, drill" is also about setting the stage for long-term access to acreage and opportunities, not just near-term supply.
