(Reuters) – Alberta, Canada’s largest oil-producing province, will finalize an investment incentive program for emissions-cutting technologies like carbon capture and storage in “coming months,” the province’s energy minister, Brian Jean, said on Tuesday.

Carbon capture and storage (CCS) is seen as a key tool in helping Canada’s high-polluting oil and gas industry slash emissions without cutting back on production, but companies are holding back on final investment decisions because of the high costs involved and have been lobbying for more government support.

An Alberta incentive program, which would work alongside a federal government investment tax credit first announced last year, would be a key step forward for Canada’s nascent CCS industry and could spur projects forward.

Jean said the incentives, which will be similar to the existing Alberta Petrochemical Incentives Program, should be designed properly, and he is having conversations with stakeholders.

“We’re going to make sure we do a robust consultation to get it right,” Jean told Reuters in an interview. “If we get it right, that means that we’re going see another economic boom here in Alberta.”

Liberal Prime Minister Justin Trudeau’s federal government is aiming for net-zero emissions by 2050. But oil producers in Canada, the world’s fourth largest producer, are also the country’s biggest polluters.

A number of companies including Enbridge Inc, TC Energy and a group known as the Pathways Alliance, consisting of Canada’s six largest oil sands producers, are proposing to build major CCS storage hubs.

Alberta Premier Danielle Smith instructed Jean in a mandate letter in July to develop an incentive program for technologies including CCS, lithium for batteries and geothermal development.

However Alberta, which also has a net-zero 2050 target, has repeatedly clashed with Ottawa over interim targets and a promised cap on oil and gas emissions that is supposed to be announced later this year.

Since last year, Ottawa and the Alberta government have been urging each other to contribute more public funding to support CCS technology.

(Reporting by Nia Williams, editing by Timothy Gardner)

OSLO (Reuters) – Some 51 employees of oil service group Archer working at Norway’s Ekofisk oilfield plan strike action from Sept. 27 in a bid to support union members locked in conflict with a rival company, the Industri Energi labour union said on Wednesday.

The planned strike action comes in response to an ongoing labour conflict at SLB UK, where a group of Industri Energi members have been on strike since March in a bid to secure a collective bargaining agreement, the union said.

If it goes ahead, the strike action at Archer will halt maintenance work at Ekofisk wells and also impact so-called well stimulation work at the field, which is operated by ConocoPhillips, Industri Energi added.

(Reporting by Terje Solsvik, editing by Gwladys Fouche)

FRANKFURT/DUESSELDORF (Reuters) -German oil and gas producer Wintershall Dea on Wednesday tried to assuage fears that the hit from its planned Russian exit would be too painful, saying its remaining operations were strong and stable.

Chief Executive Mario Mehren told Reuters that the company considered its Germany, Norway, North Africa and Latin America businesses as core to safeguarding future gas and oil production as well as shifting to green gases and carbon management.

“Our remaining portfolio is a strong and balanced one in which we ensure sensible risk diversification,” he said.

Wintershall Dea has relied on Russia for decades but decided to legally separate its local activities, including joint ventures with Gazprom and its stake in the Nord Stream pipeline, in the wake of Moscow’s invasion of Ukraine.

That essentially strips it of half its output and 60% of its reserves.

Mehren said that Russian authorities were making an exit difficult, a fate shared by other Western groups, which, according to sources, face strenuous demands, including large discounts, as a price to divest their local assets.

“In Russia there is a high level of negative creativity in order to keep building up new hurdles (when separating) and making it more difficult for us to withdraw,” he said.

His comments come a day after Wintershall Dea, a joint venture of BASF and Russian billionaire Mikhail Fridman’s investment firm LetterOne, announced it would axe a quarter of jobs as a result of the Russian exit.

The move is part of efforts by Germany to sever ties with what was formerly the country’s most important energy partner and biggest supplier of natural gas, a direct response to Russia’s invasion of Ukraine.

Wintershall Dea, Uniper and SEFE, formerly Gazprom Germania, have been among the German firms most affected.

The legal separation of its Russian assets was expected to be completed by mid-2024, leaving open whether this included a possible sale, Wintershall Dea said.

It confirmed investments would be between 1 billion and 1.2 billion euros ($1.1 billion to $1.3 billion) in 2023, but said the final amount would likely be in the mid to lower part of that range.

Wintershall Dea’s stake in the WIGA pipeline company, which Wintershall Dea shares 50/50 with nationalised SEFE, may or may not be considered for sale, now that its role in transporting Russian pipeline gas has ended, Mehren said.

“(WIGA) can become a strategic investment in the direction of hydrogen, carbon management, or new energies,” he said.

($1 = 0.9322 euros)

(Reporting by Vera Eckert and Tom Kaeckenhoff; Writing by Christoph Steitz; Editing by Miranda Murray, Peter Graff and Alexander Smith)

OSLO (Reuters) -Norway’s latest offshore oil and gas exploration licensing round attracted bids from 25 companies, including Shell, ConocoPhillips, Aker BP and Equinor, the energy ministry said on Tuesday.

Norway’s annual award of new offshore acreage for drilling is central to the country’s strategy of extending oil and gas production for decades to come, a policy that is fiercely opposed by environmental groups.

“Without exploration and new discoveries, we will neither be able to maintain production of oil and gas over time, nor further develop the petroleum sector and all jobs in the industry,” Terje Aasland, the oil and energy minister, said in a statement.

In May, the energy ministry offered 92 new blocks to search for oil and gas in the Norwegian and the Barents Seas, in the so-called pre-defined areas (APA) exploration round.

In recent years, Norway has used APA rounds to significantly expand exploration on the Norwegian Continental Shelf, especially in the Arctic Barents Sea, despite protests over the impact that burning oil and gas has on the global climate.

The latest offer added 78 new blocks in the western part of the Barents Sea and 14 blocks in northwestern part of the Norwegian Sea to the already existing APA area.

The Norwegian Petroleum Directorate, in a separate statement, said almost all companies active on the Norwegian Continental Shelf had submitted bids, with increased interest in the Barents Sea. It did not say how many blocks companies had bid for.

Norway in January awarded 47 new permits to a total of 25 companies, concluding its 2022 licensing round.

Oil and gas companies can also apply for blocks offered in the previous APA rounds that have not been awarded, including in the North Sea.

Vaar Energi, majority owned by Eni, was also among the bidders in the round, as were DNO, OMV, Okea and Wintershall Dea.

The oil and energy ministry said it plans to announce the winners of new acreage in early 2024.

(Reporting by Nerijus Adomaitis, additional reporting by Nora Buli; Editing by Terje Solsvik and Conor Humphries)

(Reuters) – A busy oil sands maintenance season and early summer wildfires put a dent in Canadian crude production in the second quarter, but oil companies are ramping up growth over the next two years and will add nearly 8% to Canada’s total output, analysts estimate.

The roughly 375,000 barrel per day (bpd) increase in two years would be more than Canada, the world’s fourth-largest oil producer, has managed to add over the last five years combined, even after promising European allies it would boost crude output in the wake of Russia’s invasion of Ukraine in early 2022.

According to Canada Energy Regulator data, Canadian oil production averaged 4.86 million bpd in 2022, up from 4.61 million bpd in 2018.

Much of the growth will come from oil sands producers like Cenovus Energy and Canadian Natural Resources Ltd (CNRL) tweaking operations to boost efficiency.

Companies are also moving forward on so-called “step-out” or “tie-back” oil sands thermal projects, where instead of building an entirely new facility to steam bitumen deposits, they are linking new areas with existing plants to speed up development and lower costs.

The move to boost output – while continuing to funnel free cash to shareholders – shows producers are confident prices will stay firm, analysts said.

“Companies can finally say things have recovered enough in the industry that we can maintain returns to shareholders and put some money into production growth,” said RBN Energy analyst Martin King.

Benchmark North American crude has averaged $75.64 a barrel year-to-date, declining from 2022 highs, but above the five-year average of $65.89 a barrel.

Increasing production would be at odds with the Canadian government’s effort to meet its goal of cutting carbon emissions by 40-45% by 2030, given oil and gas is the country’s highest-emitting sector.

RBN expects total Canadian crude output to increase 175,000 bpd this year and another 200,000 bpd in 2024, while S&P Global Commodity Insights analyst Kevin Birn said annual oil sands production alone will rise around 350,000 bpd by 2025.

Two-thirds of Canada’s crude comes from northern Alberta’s oil sands.

STEP-OUTS AND TIE-BACKS

Following a lacklustre second quarter, Cenovus downgraded its full-year production forecast due to wildfires, while Suncor Energy, CNRL and MEG Energy warned that output would come in at the lower end of their 2022 guidance after big maintenance turnarounds.

Output is expected to pick up in the second half of the year, and companies are making progress on tie-in projects.

Cenovus is building a 17-km (11-mile) pipeline connecting its Narrows Lake site to its Christina Lake processing facility that will add up to 30,000 bpd in 2025 , while CNRL is planning to develop the Pike project, purchased from BP in 2022, by stepping out from its Jackfish and Kirby facilities.

“It’s a great opportunity and quite innovative. Rather than building a central processing facility all way up at the site, we’ve been able to tie it back to our existing plant,” Norrie Ramsay, Cenovus’s executive vice-president upstream, told an earnings call this month.

The new volumes will coincide with the planned start-up of the 600,000 bpd Trans Mountain expansion (TMX) pipeline project in the first quarter of 2024. However, delays to TMX could result in pipeline congestion and force producers to ship crude by rail, adding costs.

“It’ll have to be done by the middle of next year or we’ll have to have more rail,” said Eight Capital analyst Phil Skolnick.

(Reporting by Nia Williams; Editing by Denny Thomas and Sephen Coates)

MOSCOW (Reuters) – Russian gas giant Gazprom shipped a first cargo of liquefied natural gas (LNG) from its plant on the shores of the Baltic Sea via the Northern Sea route, according to Refinitiv ship tracking data.

According to the data, the Velikiy Novgorod tanker was loaded with LNG from the Portovaya LNG plant on Aug. 14. As of Tuesday, it was moving in the Barents Sea in the Arctic. The final destination for the cargo has not been disclosed.

Earlier this month, Russia also shipped a rare naphta cargo via the North Sea route, according to traders and Refinitiv data.

Russia has long viewed the route, which runs from Murmansk near Russia’s border with Norway eastwards to the Bering Strait near Alaska, as an alternative to the Suez Canal.

Although the route is physically challenging, it could cut sea transport times between Europe and Asia at a time when Russia’s trade with Western countries is at post-Cold War lows following Moscow’s decision to send troops into Ukraine.

The Portovaya LNG with annual output capacity of 1.5 million tons started production last September. LNG cargoes from the plant had so far been shipped only to Turkey or Greece.

Gazprom has not replied to a request for comment.

(Reporting by Oksana Kobzeva; writing by Vladimir Soldatkin; Editing by Tomasz Janowski)

ARENDAL, Norway (Reuters) -Norway’s sovereign wealth fund made a profit of 1,501 billion crowns ($143 billion) for the first half of the year, partly due to the growth of U.S tech companies and their development of artificial intelligence.

The $1.4 trillion fund’s holdings in tech companies jumped by nearly 39% in the period, with Apple, Microsoft and Nvidia as the stocks contributing the most, helping to drive the fund’s 10% overall return.

CEO Nicolai Tangen told Reuters the strong return came as a surprise for such a large fund given “a pretty worrisome backdrop”, with high inflation and geopolitical tensions.

It was partly due to AI becoming mainstream from previously being seen as “something with potential”, said deputy CEO Trond Grande.

“Now we are seeing that potential being realised and that is being priced in the stock markets of these companies,” Grande told Reuters.

That has also led the fund, the world’s single largest stock market investor, to recently reduce its overweight investment position in major tech companies.

Asked whether he was concerned about a possible crash in tech stocks, Tangen said: “We are always conscious and worried about the biggest exposures of the fund. Now they are in the tech sector. Therefore we monitor that very thoroughly.”

Tech is the largest sector among the fund’s equity investments, representing 11.9% of the its total value at end-2022, its data showed. The fund is also urging companies it invests in to develop and use AI responsibly.

Looking ahead, Tangen said the fund expects it will be difficult to reduce inflation worldwide, not least due to a new phenomenon – inflation fuelled by climate change.

Global warming is lowering food harvests, and thus increasing food prices, and reducing productivity since some workers are unable to work in the middle of the day in some countries.

“The new thing here is the link between climate (change) and inflation and therefore between climate and financial markets,” Tangen said.

The fund, which invests the Norwegian state’s revenues from oil and gas production, owns on average 1.5% of all listed stocks worldwide. It also invests in bonds, unlisted real estate and renewable energy projects.

($1 = 10.5224 Norwegian crowns)

(Reporting by Gwladys Fouche; writing by Nerijus Adomaitis; editing by Niklas Pollard and Jane Merriman)

(Reuters) -Canada’s Imperial Oil reported a 72% drop in second-quarter profit on Friday as maintenance activity hit its production while a slump in energy prices further dented earnings.

Global oil prices dropped in the second quarter from a year earlier, pressured by a banking crisis that saw several large lenders fail and fears of a looming recession that crimped demand.

Imperial said its average realized prices for Western Canada Select, the benchmark Canadian crude, fell 39% to $58.49.

The company, majority-owned by Exxon Mobil, said its second-quarter upstream production declined 12% to 363,000 barrels of oil equivalent per day (boepd), hurt by maintenance-related stoppages.

The company’s crude utilization stood at 90% in the reported quarter, lower than last year’s 96% due to the impact of the planned turnaround at its Strathcona refinery.

This pushed its quarterly total downstream throughput lower by 6% to 388,000 barrels per day (bpd).

“With substantial turnaround activity now behind us, we anticipate strong production in the second half of 2023,” CEO Brad Corson said.

The company reported a net income of C$675 million ($510.82 million), or C$1.15 per share, for the quarter ended June 30, down from C$2.4 billion or C$3.63 per share, a year earlier.

Imperial added that it has completed construction work for expanding the existing seepage interception system at its Kearl oil sands mine in northern Alberta.

In May, Canada’s federal environment ministry had opened a formal investigation into a months-long leak at Kearl of tailing, a toxic mining by-product containing water, silt, residual bitumen and metals.

Imperial also said it had started construction at Strathcona renewable diesel project.

($1 = 1.3214 Canadian dollars)

(Reporting by Sourasis Bose in BengaluruEditing by Vinay Dwivedi)