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Russian Energy Minister: Can’t Cut Oil Production Quickly

Russia’s energy minister Alexander Novak said Thursday that due to cold winter weather and geological conditions, Russia could not cut production too quickly, according to oil and gas news reports. Novak reiterated Moscow’s commitment to stick to the new OPEC + agreement and gradually reduce production.

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Novak pointed out that Russia will strive to cut oil production faster.

A few days ago, Saudi Arabia’s energy minister, Khalid al-Falih, said that Russia’s production cuts were “slower than I hoped”.

“Russia has started, slower than I hoped, but they have started, and I believe they will catch up and make a positive contribution to rebalancing the market as they did in 2017,” al-Falih told CNBC on Sunday.

Under the new OPEC+agreement, Russia will cut its crude oil production by 228,000 barrels a day within six months from January 1, 2019, and may assess it in April.

After agreeing in December last year, Novak said that Russian oil companies would cut production in the first quarter of 2019.

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Novak has said that as part of the OPEC+New Agreement, Russia plans to cut oil production by 50,000 barrels to 60,000 barrels a day in January, and will not directly reduce production by 228,000 barrels at the beginning of the agreement. Novak said Russia has drafted a timetable to determine how much oil production Russia will cut monthly before reaching the OPEC/non-OPEC reduction ratio. Novak reiterated Moscow’s position that Russia’s output cuts would be gradual, just as the previous agreements reached between OPEC and Russia’s non-OPEC members.

Novak said on Friday that Russia has cut its output by about 30,000 barrels a day compared with the October cut benchmark and still intends to achieve 50,000 barrels a day by the end of this month.

Today, Novak told the Russian news agency Agence Novosti that he would meet with al-Falih at next week’s World Economic Forum in Davos to discuss joint projects, cooperation and the implementation of the OPEC+agreement.

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Western South China Sea welcomes a new round of oil and gas reserves growth peak

Recently, Zhanjiang Branch of CNOOC (China) Co., Ltd. has successfully tested Ledong 10-1-13, an ultra-high temperature and ultra-high pressure exploration well in Yingge Haile East 10 area. Previously, the well drilled more than 100 meters of gas reservoirs. New breakthroughs have been made in the exploration of “Shuangchao” area in the western South China Sea. This is what Hainan Daily reporters learned from CNOOC on the 16th.

Looking back in 2018, oil and gas exploration in the west of the South China Sea has achieved a bumper harvest, and the reserves assessment index has been overfulfilled. Five commercial and potential commercial discoveries, six successful evaluations and three large and medium-sized oil and gas fields have been found. From crude oil to natural gas, from ultra-high temperature and pressure to deep water, exploration in Western South China Sea has blossomed at many points, breaking the silence of breakthroughs in Lingshui 17-2 gas field after its discovery, and forming a new peak of oil and gas reserves growth.

According to reports, CNOOC has four major oil and gas producing areas in China’s offshore: Bohai Bay, the western South China Sea, the eastern South China Sea and the East China Sea. Among them, the western South China Sea is rich in oil and gas resources. Since 1980s, a number of oil and gas fields have been discovered, and tens of millions of tons of oil and gas production capacity have been built. Entering the Eleventh Five-Year Plan, Zhanjiang Branch of CNOOC has strengthened geological research and technical tackling, effectively promoting oil and gas exploration. During the Twelfth Five-Year Plan period, 11 oil and gas fields were discovered in this area, and proved oil and gas reserves exceeded the sum of the Tenth Five-Year Plan and the Eleventh Five-Year Plan. Especially in natural gas exploration, many gas fields, such as Lingshui 17-2, have been discovered, and the exploration reserves of natural gas in the future are the sum of the previous 30 years. At the beginning of the 13th Five-Year Plan, because the geological conditions in the field of exploration are becoming more and more complex, the difficulty of exploration is increasing, and it is difficult to find more discoveries. In this regard, Zhanjiang Branch of CNOOC further strengthens theoretical research and technological innovation, and achieves good exploration results.

In 2018, two medium-sized and high-quality oilfields were harvested in crude oil exploration in the western South China Sea. Guided by the innovative knowledge of “low-angle fault reservoir control” and “sandy clastic flow lithologic trap”, we deepened the integrated operation of rolling exploration and development, deployed exploration wells between the two developed oilfields and implemented a medium-sized oilfield in the high-maturity exploration area of Weinan, Beibuwan Bay. In Wushi Depression of Beibuwan Bay, the first large-scale oil and gas discovery was made in Xiayang Formation of Wushi area, and another medium-sized oil field was implemented. In Wenchang exploration area of Pearl River Mouth Basin, rolling exploration was carried out and commercial discoveries were harvested.

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In the same year, gas exploration in the western South China Sea was gratifying. In Ledong 10-1 area in the field of ultra-high temperature and high pressure, the evaluation well Ledong 10-1-6 drilled 133 meters gas reservoir, creating the thickest single well discovery gas reservoir record, single well exploration and the largest third-class reserves record in the basin. The evaluation of Ledong 10-1 area is successful and shows great potential for natural gas exploration. On December 25, 2018, Zhanjiang Branch of China National Offshore Oil Co., Ltd. deployed Ledong 10-1-13, an ultra-high temperature and ultra-high pressure exploration well in Yingge Haile East 10 area, and made a new breakthrough in the field of “double supersonic” exploration in the western South China Sea. In the deep-water eastern area of Qiongdongnan Basin, CNOOC has drilled two exploration wells and obtained two potential commercial discoveries, which confirmed the Songnan-Baodao hydrocarbon-rich depression in the deep-water Eastern area, expanded two sets of new reservoir-forming assemblages, and pushed deep-water exploration into the fast lane again.

At the same time, China National Offshore Oil Co., Ltd. Zhanjiang Branch has set off a new upsurge in foreign cooperative exploration. Six petroleum contracts were signed in 2018, which set a new 11-year high in the western South China Sea. The imported exploration investment is particularly significant, which will greatly boost the exploration process in the western South China Sea.

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Domestic hydrofluoric acid market prices in China fell this week (1.7-1.11)

According to statistics, domestic hydrofluoric acid prices declined this week, the price at the end of the weekend was 12775 yuan/ton, down 3.58% from 13250 yuan/ton at the beginning of the week and 7.20% from the same period last year.

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Products: Hydrofluoric acid prices continued to fall this week, enterprises reflect that the current on-site supply of hydrofluoric acid is sufficient, the recent on-site situation has deteriorated, some enterprises have increased hydrofluoric acid inventory, factory prices continue to fall, but due to high domestic fluorite prices, the market price trend of hydrofluoric acid slightly declined, the current mainstream of hydrofluoric acid negotiations in the southern region is about 1250 yuan/ton. The price of hydrofluoric acid in the northern market ranges from 1250 to 13000 yuan/ton. In the near future, the northern region will be affected by the rain and snow weather. Some hydrofluoric acid plants will be parked and repaired. The price of hydrofluoric acid market will fall by a limited margin. Domestic hydrofluoric acid market prices slightly lower, due to the recent downstream refrigerant industry equipment overhaul more, the market is not good, the market price of hydrofluoric acid is lower. By the end of the weekend, the mainstream of domestic negotiations on hydrofluoric acid in Fujian was about 12 500 yuan/ton, the price of hydrofluoric acid in Shandong was 12 500 yuan/ton, that of hydrofluoric acid in Jiangxi was 12 500 yuan/ton, that of hydrofluoric acid in Inner Mongolia was 12 500-13 000 yuan/ton, and that of hydrofluoric acid was slightly lower.

Industry chain: The price of fluorite in the upstream of hydrofluoric acid is stable this week. The factory price of fluorite is 3600 yuan/ton by the end of the week. The fluorite trend is stable this week. Recent fluorite plant start-up is at a low level. The rate of fluorite plant start-up in Inner Mongolia and Hebei provinces continues to decline. On the whole, the supply of fluorite is limited, the price of fluorite remains high, and the high price of upstream raw materials is the market belt of hydrofluoric acid. With substantial positive impact, the price decline of hydrofluoric acid market is limited. Recent downstream refrigerant product maintenance devices are more, the demand for upstream fluorite and hydrofluoric acid has weakened, the recent downstream refrigerant trading market has declined, and the price of hydrofluoric acid products has slightly decreased. Recent downstream refrigerant product maintenance devices are more, the demand for upstream fluorite and hydrofluoric acid has weakened, the recent downstream refrigerant trading market has declined, and the price of hydrofluoric acid products has slightly decreased. Recent downstream refrigerant market transactions are cool, R22 refrigerant facility starts at 70%, R22 refrigerant facility start-up rate declines, the main production enterprise bulk water out-of-factory offer price drops to 17500-18500 yuan/ton, but the production enterprise does not have bulk water spot, mainly with a small number of cylinders shipped. In addition, the actual demand side of the market has declined, and the shipment market trend is poor. The domestic market price of R134a is slightly lower, the start-up rate of production enterprises is lower, the market demand for refrigerants is weakened, and manufacturers mainly export their products. However, the on-site transaction price does not change much, and the merchants purchase on demand. Recently, due to the impact of equipment maintenance, the upstream market demand for hydrofluoric acid has weakened. Aluminum fluoride prices of downstream products have recently declined, from 13300 yuan/ton at the beginning of this week to 13200 yuan/ton at the end of the week. The price trend has declined by 0.75%. Recently, the market price of hydrofluoric acid has slightly declined due to the bad market conditions.

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Industry: This week, the upstream raw material fluorite and hydrofluoric acid Market devices started to slightly lower, but the downstream refrigerant industry overhaul devices increased, hydrofluoric acid market prices slightly lower.

Recent domestic refrigerant plant overhaul is more, the market demand for hydrofluoric acid is decreasing, and the spot supply of hydrofluoric acid is sufficient, but the raw material market price is still at a high level. Chen Ling, an analyst of hydrofluoric acid business association, believes that the market price of hydrofluoric acid will decline slightly next week, and the price of hydrofluoric acid will be about 12,500 yuan/ton.

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Iraq’s oil exports surge in December 2018

Iraq’s oil exports surged in December compared with November, due to a slow temporary recovery in November after a year of stagnation, an increase in exports from the northern Kirkuk oilfield and a record high in exports from the southern port of Basra.

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In December 2018, Iraq’s oil exports averaged 3.726 million barrels a day, compared with 3.372 million barrels a day in November, when exports fell to their lowest level in seven months due to bad weather at the southern port.

Reuters quoted a statement from the Iraqi Ministry of Oil on Wednesday as saying that Iraq’s oil exports from Basra terminal in December averaged 3.63 million barrels a day, a record high, higher than last month’s average of 3.363 million barrels a day.

According to the Iraqi Ministry of Oil, federal exports from Kirkuk Oilfield to the Mediterranean Port of Seihan, Turkey, surged from an average of 8716 barrels a day in November to 99,000 barrels a day in December.

In mid-November, Iraq resumed oil exports from Kirkuk Province, where oil flows were halted a year ago due to disputes with the Kurdistan region. After a referendum held in the semi-autonomous region that Baghdad did not recognize, the Iraqi federal government took over the Kirkuk oilfield from Kurds in October 2017, shutting down about 300,000 barrels of crude oil per day that had previously been transported and exported to Seihan in Kirkuk Province. However, the only export of Kirkuk’s oil is the Kurdistan Regional Government (KRG) pipeline. Iraq and KRG use the federal government’s export pipeline to reach agreements in Baghdad.

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