“First-Of-Its-Kind” Insurance of LNG Purchases.  Deep Sea Mining in Arctic Ocean.

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Today’s Key Takeaways: AI in the oil and gas industry in 2024.  Japan to back LNG purchase bank loans.  Mining in the Arctic Ocean.  COP28 roundup. 


Will Oil, Gas Companies Ramp Up Their Use of Generative AI in 2024?
Andreas Exarheas, December 5, 2023

Will oil and gas companies ramp up their use of generative artificial intelligence (AI) in 2024? And are some oil and gas companies reluctant to implement generative AI technology?

Those were the questions Rigzone posed to Amazon Web Services (AWS), which describes itself as the world’s most comprehensive and broadly adopted cloud, and CruxOCM, which describes itself as the future of autonomous control room operations.

“We anticipate the adoption of generative AI to increase across all industries in the coming year, including the energy and oil and gas industry,” Joseph Santamaria, the Director of Solutions Architecture for Energy and Utilities at AWS, told Rigzone, responding to the questions.

“While it’s still early days and the industry is working to define the potential impact of this transformative technology, many organizations are working with decades worth of valuable data that can be used to enhance exploration, drilling, and production operations, helping to reduce costs, risk, and carbon footprint,” he added.

“We are encouraged by what we’re seeing and hearing from our customers, with a large majority looking at adopting generative AI at some level. We have many customers quickly embracing the technology and actively developing secure generative AI enterprise capabilities, and others working on a wide range of proof-of-concept projects,” Santamaria went on to state.


Japan to back LNG purchases by insuring $680m bank loan
Mao Kawano, Nikkei Asia, December 5, 2023

First guarantee of its kind help JERA diversify procurement

A  Japanese state-backed insurer will cover a 100-billion-yen ($680 million) credit line extended by Sumitomo Mitsui Banking to power company JERA for LNG purchases, Nikkei has learned, seeking to help diversify the country’s energy procurement.

The policy, offered by Nippon Export and Investment Insurance (NEXI), will be the first covering a domestic loan. The guarantee is expected to help the power company cultivate diverse sources of liquefied natural gas. NEXI will evaluate only risks tied to JERA itself, not the countries where it will do business.

Previously, the government’s trade insurance program generally applied only to Japanese investments involving overseas business opportunities, or for lending to an overseas unit of a Japanese company. But a regulatory change in July lets NEXI extend trade insurance to lending by a Japanese bank to a domestic company in three areas: strengthening supply chains, decarbonization and assistance to startups.

JERA is a 50-50 venture of Tokyo Electric Power Co. Holdings and Chubu Electric Power. The company is working to diversify its supply chains to meet growing LNG demand, especially with Russia’s invasion of Ukraine driving greater global competition for the fuel.

With fuel prices surging, banks are nearing their limit on lending to energy companies. Insurance by a state-backed institution could open the door for additional financing.

The regulatory shift also means NEXI could provide insurance for the construction of overseas factories for storage batteries, semiconductors, and other critical products. Such efforts could make Japanese businesses more resilient to supply chain disruptions.

In a fiscal 2021 survey, around half of responding companies said they planned to diversify sourcing options as a way to bolster supply chains.


Lawmakers in Norway make a deal opening up for deep sea mining in Arctic Ocean
Eye on the Arctic/Associated Press, December 5, 2023

Norway’s minority center-left government and two large opposition parties made a deal Tuesday to open the Arctic Ocean to seabed mineral exploration despite warnings by environmental groups that it would threaten the biodiversity of the vulnerable ecosystems in the area.

Norway said in June it wanted to open parts of the Norwegian continental shelf for commercial deep-sea mining in line with the country’s strategy to seek new economic opportunities and reduce its reliance on oil and gas.

“This is a disaster for the sea,” said Frode Pleym, head of the local chapter of Greenpeace. “Norway is now allowing irreversible interventions in areas where nature is completely unknown.”

Martin Sveinssønn Melvær of the Norwegian Bellona environmental group said it was “completely contrary to scientific recommendations” and believes “it is a dangerous derailment in the fight against climate change to open up seabed minerals.”

Significant mineral resources

The government — made up of the Labor and the Center Party — made the deal with the conservatives from Hoeyre and the Progress Party, Norwegian news agency NTB said. It said they had agreed on a step-by-step opening process where the Norwegian parliament, or Stortinget, will approve the first development projects, in the same way as it has done for certain extraction projects in the petroleum sector.

The Scandinavian country, which is one of the world’s wealthiest countries due to its vast oil and gas reserves, says there are significant mineral resources on the seabed of the Norwegian continental shelf.

According to the Norwegian Petroleum Directorate, there are sulphides and manganese crusts containing metals and minerals that are crucial for making batteries, wind turbines, PCs, and mobile phones.

If proven to be profitable, and if extraction can be done sustainably, seabed mineral activities can strengthen the economy, including employment in Norway, while ensuring the supply of crucial metals for the world’s transition to sustainable energy, the Ministry of Petroleum and Energy said in June. The planned area is located southwest of the Arctic island of Svalbard.


COP28 ROUNDUP: As leaders prepare for their second week of COP28, here’s a rundown of some of the biggest announcements so far:

A global renewable energy commitment: The U.S. joined 117 other countries this weekend in pledging to triple the world’s renewable energy capacity by 2030.

The U.S., European Union, and the United Arab Emirates are pushing for the renewables pledge to be included in the final United Nations climate summit pact, which would require approval from all 200 countries in attendance—and it’s unclear if they can get there.

It’s also unclear if the language would be to “phase down” or “phase out” the burning of fossil fuels by the target date, a small detail that could have enormous global consequence.

New nuclear commitments: More than 20 nations also signed a pledge to triple their nuclear capacity by 2050.

U.S. climate envoy John Kerry said Saturday that the world “cannot get to net-zero 2050 without some nuclear, just as you can’t get there without some use of carbon capture, utilization and storage.”

Oil and gas companies announced a joint Global Decarbonization Accelerator plan: Fifty global oil and gas companies committed this weekend to cut operational methane emissions by 80% by the end of the decade and to halt such emissions completely by 2050.

The landmark pledge, backed by Saudi Aramco and ExxonMobil, includes provisions to hold the companies accountable on their methane-slashing targets—including verification by international monitors.

Still, environmental groups criticized the plan, noting it does not account for the emissions caused by the burning of fossil fuels.

“The pledge doesn’t cover a drop of the fuel they sell, which accounts for up to 95% of the oil and gas industry’s contribution to the climate crisis,” the World Resource Institute’s Melanie Robinson told Reuters.

The Biden administration announced a methane rule: The final rule seeks to limit methane emissions from U.S. oil and gas wells by 80% over the next 15 years compared to current projections.

EPA officials said it will prevent an estimated 58 million tons of methane emissions from escaping into the atmosphere between 2024 and 2038—or the equivalent of 1.5 billion metric tons of CO2. It will also apply to roughly 900,000 new and existing wells in the U.S.

Kerry called for a halt to new coal plants everywhere: “There shouldn’t be any more coal fired power plants permitted anywhere in the world,” Kerry said in a speech. “That’s how you can do something for health. And the reality is that we’re not doing it.”

Kerry has traveled to China to pressure the country to move away from coal projects, though his actions have yielded little progress. China permitted some 106 GW of new coal power capacity in 2022, according to an analysis from the Centre for Research on Energy and Clean Air, or roughly quadruple the amount of coal capacity it permitted the previous year.

From the Washington Examiner, Daily on Energy, December 4, 2023