2024-06-03 08:04
SEOUL, June 3 (Reuters) - South Korean President Yoon Suk Yeol gave the green light on Monday to conduct exploratory drilling for potentially vast oil and gas prospects off the east coast of one of the world's largest energy importers. There is a "very high" possibility the area contains as much as 14 billion barrels of oil and gas, Yoon told a press conference, citing a study that he said was reviewed by experts and industry groups. "Today, I approved the Ministry of Trade, Industry and Energy to go ahead with the drilling for exploration deep in the east sea," Yoon said. The project, with an estimated cost of more than 500 billion won ($363 million), will begin near the end of the year in the hope of finding energy reserves by the first half of next year, he said. The site was off the southeastern industrial port city of Pohang, Yoon said, with an industry ministry official adding that the prospects are in South Korea's Exclusive Economic Zone. Yoon said that South Korea's exploration efforts for oil and gas since 1996 have tapped gas reserves equivalent to about 4.5 million barrels, with commercial development completed in 2021. The new prospects promise enough gas to fuel the country for 29 years and oil equivalent to four years of consumption, he added. Energy stocks in Seoul jumped on the news. Shares of oil refiner SK Innovation (096770.KS) New Tab, opens new tab closed with a 6% gain, Korea Gas Corporation (036460.KS) New Tab, opens new tab jumped 30% to a 17-month high, Daesung Energy (117580.KS) New Tab, opens new tab also hit the daily limit of 30% and SK Gas (018670.KS) New Tab, opens new tab advanced by 7%. The potential volume is eye-catching, said Readul Islam of research company Rystad Energy, emphasising that nothing is certain. "Only spinning the drill bit will reveal how much oil and gas is actually present," he said. But the project could have huge benefits for the world’s third-largest importer of LNG. "Any significant volumes of gas found in South Korea could serve to reduce the pressure on LNG producers to meet the increasing demand for the super-chilled fuel globally in coming decades," Islam added. The project's estimated success rate is about 20% based on data received so far, Yonhap news agency said, citing a senior South Korean government official. South Korea is the world's fourth-largest buyer of crude and gas, according to the Korea National Oil Corporation (KNOC), and the ninth-largest energy consumer. Three quarters of the prospects are estimated to contain gas and the rest oil, said Energy Minister Ahn Duk-geun, with commercial production targeted for 2035. Another industry ministry official said KNOC will lead the drilling, aiming to determine the size of the prospects. Up to 10 wells may be needed to be drilled at a cost of 100 billion won each, said the official, who spoke on condition of anonymity. With minimal resources of fossil fuels, South Korea imports all but 1% of its coal, oil and natural gas supplies. ($1=1,376.0500 won) (This story has been corrected to say South Korea is world's third-largest LNG importer, not second largest, in the analyst's comment, in paragraph 11) Sign up here. https://www.reuters.com/world/asia-pacific/skoreas-yoon-says-vast-amount-oil-gas-reserve-possible-off-east-coast-2024-06-03/
2024-06-03 07:27
DUBAI, June 3 (Reuters) - The head of the global airline body IATA said there was no need to reduce growth in global aviation in order to meet an industry target to meet net zero carbon emissions by 2050. The International Air Transport Association Director General Willie Walsh said the costs of the transition to net zero would have to be passed on to passengers. Delays in deliveries of new, more efficient aircraft to airlines were hindering decarbonisation plans and frustrating airlines, he added. Sign up here. https://www.reuters.com/business/aerospace-defense/no-need-reduce-aviation-growth-hit-net-zero-iata-head-says-2024-06-03/
2024-06-03 07:07
TOKYO, June 3 (Reuters) - Japan and the European Union on Monday agreed to work together on policies related to creating demand and supply for clean hydrogen as well as to cooperate in advancing technologies to develop the new fuel, a joint statement said. Japan sees hydrogen as a new and cleaner source to gradually substitute liquefied natural gas (LNG), part of the country's path to carbon neutrality by 2050, and for Europe, hydrogen is one of the options to phase out usage of Russian fossil fuels. "Hydrogen will be very soon an internationally traded commodity, and close EU-Japan cooperation will be essential for promoting renewable and low-carbon hydrogen globally, and ensuring that standards and regulations converge," Kadri Simson, European Commissioner for Energy, told reporters. On Monday, Simson met Ken Saito, Japan's minister of economy, trade and industry, and the two also chaired a Japan-EU hydrogen business forum attended by executives including of JERA, Tokyo Gas (9531.T) New Tab, opens new tab, Mitsui (8031.T) New Tab, opens new tab, Iwatani (8088.T) New Tab, opens new tab. The EU aims to produce 10 million metric tons and import 10 million tons of renewable hydrogen by 2030 as the bloc moves to cut carbon emissions but the switch needs investments in infrastructure to create demand for the new fuel. "Hydrogen is an important priority for European energy policy, and hydrogen will help us to get rid of the remaining Russian fossil fuels. But it also, in the long term, helps us to decarbonise our industry," Simson said on Monday. Last week Germany, a key buyer of Russian gas before the Kremlin sent troops to Ukraine in 2022, approved a bill to fast-track the construction of hydrogen infrastructure, import and production facilities, also as it aims to cut emissions. Japan plans to spend 3 trillion yen ($19 billion) over the next 15 years to subsidise production of clean hydrogen, according to Nikkei. Japanese trading house Itochu Corp (8001.T) New Tab, opens new tab on Monday said it is conducting a feasibility study of building hydrogen and ammonia supply chain in Kitakyushu in southern Japan, one of the future offshore wind hubs in the country. ($1 = 157.2800 yen) Sign up here. https://www.reuters.com/business/energy/japan-eu-agree-work-creating-hydrogen-demand-supply-2024-06-03/
2024-06-03 06:46
TOKYO, June 3 (Reuters) - Japan's top city gas supplier Tokyo Gas (9531.T) New Tab, opens new tab is looking to add more U.S. natural gas assets, its president said on Monday, as it aims to expand its gas-related businesses in North America after its recent acquisition of a U.S. shale gas producer. The Japanese company paid $2.7 billion to acquire Texas-based natural gas producer Rockcliff Energy in December and agreed to purchase a 49% stake in North American energy marketing and trading firm ARM Energy Trading in February. "We would still consider investing in shale gas assets if we can acquire them at the appropriate price and in a competitive way," Tokyo Gas President Shinichi Sasayama told reporters on the sidelines of the Japan Energy Summit conference in Tokyo. "But we are not only looking to upstream assets, but also to surrounding assets such as marketing, trading and storage batteries, so that we could link them together to build the total value chains," he said. In Asia, Tokyo Gas is studying two liquefied natural gas-to-power projects at Quang Ninh and Thai Binh in Vietnam and hopes to start commercial operations in late 2027 and in 2029, respectively. Asked about the timing of a final investment decision, Sasayama said that was unlikely before the end of the current fiscal year, which runs through next March. Tokyo Gas, a major LNG buyer in Asia, has been diversifying its procurement sources, buying about 13 million metric tons of LNG annually from 13 projects in four countries. Though the company still holds a high proportion of long-term LNG contracts, it is adjusting its portfolio to be more flexible by including term contracts of various durations and spot procurement, said Satoshi Tanazawa, the chief executive of Tokyo Gas' energy trading company. "We are incorporating not only long-term contracts but also term contracts of 5- or 10-years, as well as spot purchases," Tanazawa told Reuters on the sidelines of the conference. "We aim for a flexible structure to respond to any major changes in the business environment," he added. Sign up here. https://www.reuters.com/business/energy/tokyo-gas-seeks-more-us-natural-gas-assets-president-says-2024-06-03/
2024-06-03 06:32
HAMBURG, June 3 (Reuters) - Parts of the river Rhine in southern Germany were closed to cargo shipping on Monday after heavy rains raised water levels, navigation authorities said. Rhine river shipping stopped around Maxau and Mannheim in south Germany, the German inland waterways navigation agency WSA said. The high levels of water leave vessels insufficient overhead space to sail under bridges, and prevents vessels sailing to Switzerland. Shipping on northern sections of the river is operating normally, including the important points of Duisburg and Cologne. The Rhine is an important shipping route for commodities including minerals, coal and oil products such as heating oil, grains and animal feed. Sign up here. https://www.reuters.com/markets/commodities/river-rhine-germany-closed-shipping-after-rain-raises-water-level-2024-06-03/
2024-06-03 06:22
Nifty, BSE index hit record high, see best daily gain in 40 mos Rupee sees best single-day gain in more than five months 10-year bond yield at lowest level since early April 2022 Political stability seen supporting bull market - analysts MUMBAI/SINGAPORE, June 3 (Reuters) - Indian shares hit lifetime highs while the rupee gained and bond yields dropped, as investors were buoyed by expectations of sustained economic growth after exit polls indicated a decisive mandate and a third term for Prime Minister Narendra Modi. Weekend exit polls projected the alliance led by Modi's Bharatiya Janata Party (BJP) would increase its 303 seats in the 543-member lower house and likely get a two-thirds majority - enough to initiate amendments to the constitution. The broader Nifty index (.NSEI) New Tab, opens new tab ended up 3.25% at 23,263.90 points after touching a record high of 23,338.70 in opening deals. The BSE index (.BSESN) New Tab, opens new tab closed up 3.39% at 76,468.78 points, just off its lifetime peak of 76,738.89 hit earlier. The Nifty and BSE index have both nearly doubled in value since their close a day before election results in 2019. "As we await the official election results, significant volatility is expected. The index has now established a base in the 22,600-22,800 range, and a decisive close above 23,400 could drive it towards the 24,000 mark," said Ajit Mishra, senior vice president, research, at Religare Broking. The benchmark 10-year government bond yield ended at 6.9438%, its lowest closing level since April 7, 2022, down 4 basis points on the day. The rupee ended at 83.1425 against the dollar, rising nearly 0.4% on day, to mark its best single-day gain in more than five months. A win for the BJP had been widely expected but, if confirmed in the official results, the margin will be larger than analyst forecasts and will be seen as a positive for equity markets that have scaled record highs on the back of economic growth. India's exit polls have a patchy record, often getting the outcome wrong. The results of the general election where 642 million people voted are to be announced on Tuesday. RIDE THE WAVE "People will continue to clamour for a correction, but I believe every dip will be bought into. The month of June could be a defining one for the bulls, so one should make the most of this opportunity and stay a bit greedy," Vikram Kasat, Head - Advisory at brokerage Prabhudas Lilladher said. "Last month, I kept saying 'buy the dip'; this month's slogan is going to be 'ride the wave'," he added. Foreigners, who poured a net $20.7 billion into Indian equities last year but had pulled back ahead of the election, may also see the vote's conclusion as an excuse to buy. Analysts at Kotak Institutional Securities find very little value in the market and assess that most sectors and stocks are overvalued, "with the extent of overvaluation increasing in the inverse order of market capitalization, quality and risk". "A large BJP victory may sustain rich-to-bubble multiples in parts of the market (automobiles, capital goods, public-sector units) for longer, but we would be surprised if many of the lofty embedded expectations come to fruition," they wrote. POLITICAL CONTINUITY India's economic growth accelerated to 8.2% in the financial year to March 2024 led by government spending on infrastructure and a boom in real estate, data showed last week. If a Modi victory is as strong as indicated by the exit polls, analysts think he would have the political capital to push for tougher land and labour reforms. "The sustenance of the broad rally is anticipated to continue in-line with the magnitude of the actual tally, as inflows pour in, which were sitting on the sidelines over the last three months, said Vinod Nair, head of research at Geojit Financial Services. Investors expect the Modi government to continue focusing on turning the country into a manufacturing hub - a project that has courted foreign companies including Apple (AAPL.O) New Tab, opens new tab and Tesla (TSLA.O) New Tab, opens new tab to set up production as they diversify beyond China. Sign up here. https://www.reuters.com/markets/asia/india-equity-futures-jump-markets-cheer-modis-exit-polling-2024-06-03/
