TPT May 2017

G LOBA L MARKE T P L AC E

› Finance editor Lianna Brinded of Business Insider was less measured about the Oil & Gas UK report. After reviewing its contents she summarised its essential message: “Operators in the North Sea are finally going to be making money again.” Technology A novel catalyst holds promise for monetising wasted methane A Washington State University (WSU) research team reported having improved upon an important catalytic reaction in common use in the oil and gas industry, an innovation that the researchers believe could lead to dramatic energy savings and reduced pollution. Their paper detailing the work appeared in the German journal Angewandte Chemie , which flagged it as being of special interest and importance. Reporting on the research for Science X , Tina Hilding noted that methane gas is a by-product of much oil and gas production, in which its build-up can be a safety concern. Methane is also a constituent of natural gas, convertible into electricity when the strong bond between its carbon and hydrogen is broken. But this takes a tremendous amount of energy. “[Methane is] a very happy molecule,” said Jean-Sabin McEwen, co-leader, with Su Ha, of the research team at the WSU School of Chemical Engineering and Bioengineering. “It does not want to break apart.” (“WSU Research Advances Energy Savings for Oil, Gas Industries,” 27 February) Conventional methane conversion employs a nickel-based catalyst. But it is often less expensive to simply burn the methane in giant flares on-site, adding greenhouse gases to the atmosphere, contributing to global warming, and wasting energy. In the US, burned methane accounts for as much as 25 per cent of annual natural gas consumption. The researchers determined that they can dramatically reduce the energy needed to break the bond between carbon and hydrogen by introducing a bit of carbon within the nickel- based catalyst. This creates nickel carbide, which generates a positive electrical field, weakening the methane molecule’s hydrogen-carbon bond and allowing it to break at much lower temperatures. The researchers found that while too much carbon in the catalyst kills the reaction, a very low concentration actually enhances it. They have built a numerical model of the reaction and are exploring ways to demonstrate the work experimentally. Professor Ha said: “If we can efficiently and effectively convert methane from shale or gas fields to electric power or useful products, that would be very positive.” Elsewhere in oil and gas . . . › According to Juan Carlos Zepeda, the head of Mexico’s oil regulator CNH, a pipeline network with spare capacity could allow Mexico to export oil and gas from its flagship deepwater Trion project to the US. An exporter of crude oil,

Mexico is also a gas importer. Trion could help the country reduce its imports. The field, with prospective reserves of almost 500 million barrels of oil in the Gulf of Mexico, was leased out in December by state-run Pemex to Australia’s BHP Billiton, which became the operator of the $11bn project. As noted by Reuters (9 March), the Mexican oil company, which retains a 40 per cent stake, “jointly shares for the first time the risks and rewards of a potentially lucrative project with a private producer.” The Great White Field, operated by Royal Dutch Shell, BP and Chevron, is producing around 70,000 barrels per day (bbl/d), Mr Zepeda said, leaving 50 per cent available capacity in a crude line and a gas line connected to the US. He pointed out to Reuters that it is only 24 miles from the Trion Field to the Great White’s facilities. › As reported by Reem Shamseddine on the maritime and offshore website gCaptain (8 March), US oilfield services and equipment provider McDermott International (Houston, Texas) has said it will build a fabrication yard at the shipbuilding complex planned by national oil giant Saudi Aramco for Ras Al Khair, on the east coast of Saudi Arabia. The two companies signed a memorandum of understanding for the first major manufacturing investment in the complex, part of Saudi Arabia’s drive to diversify its economy and create jobs in an era of cheap oil. Saudi officials have estimated the cost of the Ras Al Khair complex at more than $5bn. According to the gCaptain notice, the kingdom wants to jump-start local manufacturing industries by making more of the equipment required for its oil industry. Cor por at ion taxes in the US The belief persists that the US corporate income tax rate is too high, even when billion-dollar companies pay no taxes “Complaining that the US has one of the world’s highest corporate tax levels, President Trump and congressional Republicans have repeatedly vowed to shrink it.” Patricia Cohen of the New York Times was taking note of a truism of the US political scene: that a cripplingly high corporate tax rate – topped out at 35 per cent – is impeding American competitiveness and penalising American initiative. She followed up with a question: why, then, if the level is so high, have so many US companies’ income tax bills added up to zero? That is what is shown by a new analysis of 258 “Fortune 500” companies earning more than $3.8tn in profits. The report, by the Institute on Taxation and Economic Policy, found that, exploiting loopholes and pursuing aggressive strategies, those 258 corporations paid tax at an average rate of 21.2 per cent. Ms Cohen reported the further finding that 100 of

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MAY 2017