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RIYADH: US energy firms in July cut the number of oil rigs for an eighth straight month while adding natural gas rigs for the first time in three months, energy services firm Baker Hughes said in its closely followed report.
Last week, drillers cut the number of oil and gas rigs operating for a third week in a row.
The oil and gas rig count, an early indicator of future output, fell by five to 664 in the week to July 28, the lowest since March 2022.
Baker Hughes said that puts the total rig count down 103, or 13 percent, below this time last year.
US oil rigs fell by one to 529 this week, their lowest since March 2022, while gas rigs decreased by three to 128.
For the month, drillers cut 10 total oil and gas rigs in July, the smallest decline in three months.
Oil rigs dropped by 16 rigs in July. That put the oil count down for an eighth month in a row for the first time since drillers cut oil rigs for a record 12 consecutive months through November 2019.
Gas rigs, meanwhile, rose by four rigs in July, their first increase in three months.
Despite lower prices, especially for gas, US crude production was on track to rise from 11.9 million barrels per day in 2022 to 12.6 million bpd in 2023 and 12.9 million bpd in 2024, according to projections from the US Energy Information Administration in July.
US gas production was on track to rise from a record 98.13 billion cubic feet per day in 2022 to 102.35 bcfd in 2023 and 102.40 bcfd in 2024, according to EIA’s projection.
Calcasieu Pass 2 project gets final US environmental nod
Venture Global LNG’s proposed Calcasieu Pass 2 project in Louisiana received the US Federal Energy Regulatory Commission’s environmental approval, clearing the way for a final vote by the commission on expanding the company’s natural gas liquefaction facility.
CP2 was the first US liquefied natural gas project in 2023 to receive a final investment decision as the country seeks to expand exports of the super-chilled gas to meet growing global demand.
FERC said the potential impacts of the project would not significantly affect local resources, adding that the commission had developed specific mitigation measures for the construction and operation of the project.
Implementation of mitigation measures would avoid or reduce the impact of CP2 and CP Express, of a proposed connecting natural gas pipeline from Texas to the LNG facility, the regulator said in its environmental impact statement.
The construction and operation of the project would increase the atmospheric concentration of greenhouse gases, but the FERC said it would not classify it as “significant or insignificant” and instead would made several recommendations to reduce its effects.
Venture Global said the decision puts the company on track for a commission vote and commencement of construction later this year.
About 9.25 million tons per annum of CP2’s 20 mtpa nameplate capacity have been sold under 20-year sales and purchase agreements, with discussions ongoing for the remaining capacity, the company said in its statement.
CP2’s LNG customers include oil majors ExxonMobil, Chevron and Japan’s top liquefied natural gas buyer JERA among others, the company added.
Brazil’s Petrobras to trim dividends under new policy
Brazilian state-run oil firm Petrobras’ board of directors approved a new shareholder remuneration policy that will trim its hefty dividend and allow share buybacks, according to a securities filing.
Under the new policy, Petrobras’ quarterly dividend will have to be at least 45 percent of its free cash flow, down from the current 60 percent, when the firm’s gross debt is below $65 billion.
It will also allow the company to repurchase shares.
The move is part of a broader strategy switch for the firm led by CEO Jean Paul Prates, who told Reuters earlier this month that investors should not get used to the blockbuster dividends they enjoyed last year, adding the new policy would be “adjusted” to the reality of a company investing in the future.
The change in policy marks a shift from a period in which the company was a major cash cow to its investors, at times paying far more than any of the biggest international oil producers.
In 2022, Petrobras paid a total of 215.8 billion reais ($45.6 billion) to its shareholders, including the Brazilian government, which holds a controlling stake in the firm.
Petrobras will announce its second-quarter dividends and earnings on Aug. 3 after the market closes.
(With input from Reuters)