OPEC+ production in June was only marginally above its target, according to research from Rystad Energy

OPEC+ production exceeded its target by just 53,000 bpd – its lowest level since the start of the year.

Undercompliance with production cuts by the OPEC+ group hit its highest level in April 2024 since April 2021 (399,000 bpd). Since then, compliance has been rapidly improving.

In May, the group overproduced by 176,000 bpd, while in June, overproduction was just 53,000 bpd. Production in June averaged 33.903mn bpd, while the target was 33.85mn bpd.

Increased overall compliance

The increased overall compliance due to the fact that compliance among the eight voluntary cutters – Oman, Kuwait, the UAE, Algeria, Saudi Arabia, Russia, Iraq and Kazakhstan – has improved since April. This comes from lower overproduction in Kazakhstan (151,000 bpd in April down to 80,000 bpd in June), Iraq (310,000 bpd in April down to 236,000 bpd in June), Russia (253,000 bpd in April down to 176,000 bpd in June) and Saudi Arabia (82,000 bpd in April down to 6,000 bpd in June). While the UAE underproduced in June by 55,000 bpd.

The rest of the OPEC+ countries – Sudan, South Sudan, Nigeria, Gabon, Equatorial Guinea, Congo-Brazzaville, Bahrain, Azerbaijan, Brunei and Malaysia – continue to overcomply with the official cuts. 

Senior vice president Oil Market Research, Jorge León, commented, “The recent improvement in compliance levels with the OPEC+ cuts shows strong commitment and cohesion inside the group. It also shows that the compensation mechanism put into place is working. I expect to see strong compliance continuing in the coming months.”

TripleFast is committed to strengthening the regional supply chain, digital adoption and delivering high-quality solutions. (Image source: Adobe Stock)

Part of the Lonestar Group, the world’s largest manufacturer and provider of critical bolting, TripleFast is firmly committed to supporting the growth aspirations of the GCC countries

TripleFast plays a pivotal role in enhancing the local economy through its dedication to strengthening the regional supply chain, digital adoption and delivering high-quality solutions.

Steve Kettle, vice president APAC, said, “Our focus is on unlocking maximum value from the energy sector's resources, ensuring that we deliver tangible benefits to the economies we serve. By establishing domestic supply chains and nearshoring industry best practices, we aim to create opportunities for today's and future generations. This approach not only aligns with the future growth aspirations of the GCC but also helps mitigate the risks associated with diversification initiatives, reducing uncertainty and volatility.”

TripleFast's ethical and transparent business philosophy has been the cornerstone of the organisation’s operations in the Middle East for over 22 years.

Kettle said, “We strive to be a critical component and contributor to the GCC's transition and diversification ambitions. Our commitment to delivering high-quality solutions ensures that we meet the needs of our customers both in the region and globally.”

Integrating digital technologies 

By integrating digital technologies, TripleFast ensures that it remains at the forefront of the industry. The organisation’s efforts to realise local content value through local production not only support the local economy but also contribute to the broader goals of the GCC countries.

Kettle concluded, “TripleFast's dedication to local production and delivering high-quality solutions underlines our commitment to supporting the economic growth and diversification aspirations of the GCC. We look forward to continuing our legacy as a key player in the region's development, ensuring a prosperous future for all.”

The rigs will be deployed on artificial islands at the offshore Zakum field. (Image source: Adobe Stock)

ADNOC Drilling has been awarded a contract worth around US$733mn by ADNOC Offshore, for three next-generation island drilling rigs to be used in the drilling and completion of wells on artificial islands at the offshore Zakum field

The rigs, which are due tol be delivered in 2026, will be constructed by Honghua Group (HH), and will incorporate industry-leading technology and automation, harnessing AI, digitisation, and advanced technology in their design and operation. They will leverage real-time condition, performance and utilisation data to create actionable insights, enhancing rig performance and leading to improvements in safety and well delivery times.

The rigs will be built to deliver extended reach drilling (ERD) as well as having the capability of walking between wells, so not needing to be dismantled to be moved, and thereby improving efficiency and safety while reducing costs and emissions.

Advanced rigs

Abdulrahman Abdulla Al Seiari, chief executive officer of ADNOC Drilling, said, “These new island rigs will be the most advanced in the world, embracing artificial intelligence, the most tranformative technology of our generation. Our partnership with HH will amplify the creativity and ingenuity of our industry as we design and build these rigs of the future that drive efficiency and safety and deliver exceptional value for our customer ADNOC Offshore.”

Tayba Abdul Rahim Al Hashemi, chief executive officer of ADNOC Offshore, said, “This award will strengthen our partnership in the future as we work together to harness AI and innovation to maximise energy, minimise emissions and unlock significant value for stakeholders.”

Since the fourth quarter of 2021, ADNOC Drilling has invested more than US$2.2bn in building one of the largest integrated drilling fleets in the world, which is now expected to total at least 148 by 2026, including the three new rigs.

Synergy Consulting discusses the advantages and challenges of e-fuels, and how a favourable environment can be created for their growth

E-fuels, or electro fuels, are synthetic fuels produced using electrolytic hydrogen. They are considered low-emission fuels when both their hydrogen and carbon inputs are derived using methods that result in minimal life-cycle greenhouse gas emissions. The production of e-fuels involves combining hydrogen with other elements to create different types of fuel products, each with specific applications and infrastructure requirements. Various different fuel types can be produced along this basic route.

Different fuel products can be further categorised by their ease of use. Drop-in e-fuels such as e-kerosene, e-diesel and e-gasoline are compatible with existing refuelling infrastructure and can be blended with limited constraints with petroleum-derived counterparts. By contrast, alternative e-fuels such as e-ammonia and e-methanol require investments in distribution infrastructure and end-use equipment to enable their use in the transport sector.

These types of fuels present yet another avenue in our quest towards a cleaner future by reducing greenhouse gas emissions in the energy and transportation sectors given that they utilise renewable electricity for their production. Drop-in e-fuels offer an easier transition due to their compatibility with existing infrastructure, whereas alternative e-fuels, despite their potential, require significant upfront investments.

E-fuels offer significant advantages in terms of reducing greenhouse gas emissions and utilising existing infrastructure, but they also face substantial challenges, particularly related to production costs, energy efficiency, and the need for substantial investments in new infrastructure. Balancing these factors is essential for the successful development and deployment of e-fuels.

• Reduction in greenhouse gas emissions: E-fuels can significantly lower life-cycle greenhouse gas emissions when produced using renewable energy sources and sustainable carbon capture methods
• Compatibility with existing infrastructure: e-fuels like e-diesel, e-gasoline, and e-kerosene can be used with existing refueling and distribution infrastructure, reducing the need for significant changes or new investments
• Energy storage and transport: can store energy from intermittent renewable sources (like wind and solar) in a stable, transportable form, addressing the challenge of renewable energy storage
• Energy security: By producing these fuels domestically, countries can reduce their dependence on imported fossil fuels, enhancing energy security

However, there still exist significant challenges in a greater adoption of such fuels. The current cost of producing e-fuels is relatively high compared to conventional fossil fuels due to the energy-intensive nature of the processes involved and the need for advanced technologies.

The overall energy efficiency of e-fuel production can be low, as significant energy is required for electrolysis and subsequent synthesis processes, leading to higher overall energy consumption.

In addition, alternative e-fuels such as e-ammonia and e-methanol require new investments in distribution and refuelling infrastructure, as well as modifications to end-use equipment, posing a financial challenge. Many technologies related to e-fuel production are still in the development or early commercialisation stages, requiring further research, development, and scaling up to become viable.

Given these challenges, accelerated deployment of e-fuels thus requires a comprehensive approach that includes policy support, infrastructure investment, cost reduction of key technologies, R&D promotion, and exploitation of synergies with other sustainable technologies.

Integrating e-fuels with biofuels and carbon capture utilisation and storage (CCUS) can lead to maximising benefits.

By addressing these areas, host countries and governments can create a favourable environment for the growth of the e-fuel industry, driving down costs and making e-fuels a viable alternative to conventional fossil fuels.

This article is authored by Synergy Consulting IFA