Saturday, March 08, 2025

World Nuclear News

Canadian government announces nuclear investments


Thursday, 6 March 2025

The Government of Canada is to lend AtkinsRéalis up to CAD304 million (USD212 million) over four years to support the development of next-generation Candu reactor technology, and has also announced millions of dollars in new funding commitments and support for nuclear projects in Saskatchewan, Alberta and Ontario.

Canadian government announces nuclear investments
A rendering of the Monark concept (Image: AtkinsRéalis)

Minister of Energy and Natural Resources Jonathan Wilkinson announced that the government had entered into a preliminary agreement with AtkinsRéalis to finance up to half of the design costs of a "new, large-scale, natural uranium-fuelled Canadium deuterium nuclear reactor (e.g. Monark)" to a maximum of CAD304 million, through a loan over four years. This is to be matched by AtkinsRéalis. Atomic Energy of Canada Ltd (AECL), plant operators and the broader Canadian supply chain will also be included in the work to modernise the Candu design.

The Candu pressurised heavy water reactor design was developed from the 1950s onwards by federal Crown corporation AECL. AECL sold its reactor division to SNC-Lavalin's Candu Energy subsidiary in 2011 - along with an intellectual property licensing agreement - but still owns the intellectual property rights for the technology. AtkinsRéalis is the original equipment manufacturer of Candu technology (SNC-Lavalin Group Inc rebranded to AtkinsRéalis in 2023).

AtkinsRéalis unveiled its plans for the 1000 MW Candu Monark, a Generation III+ reactor with the highest output of any Candu technology, in November 2023. It completed the conceptual design phase in September 2024, and is in the planning stage of a vendor design review with the Canadian nuclear regulator.

Candu reactors currently operate in seven countries, and Wilkinson noted that, with their "almost entirely Canadian-made, Canadian-designed supply chain", they provide "good-paying, long-lasting, and sustainable jobs in manufacturing for Canadians" as well as being fuelled by uranium mined in Saskatchewan. "The Government of Canada is acting now to modernise Canadian-owned Candu technology, which will provide a viable, cost-effective design in support of the expansion of nuclear energy capacity in Canada and internationally,” he said.

AtkinsRéalis President and CEO Ian Edwards said the company has been the "proud steward" of Candu technology for more than a decade, and with its Candu supply chain partners has serviced, life-extended and refurbished Candu nuclear reactors on time and on budget as well as advancing the prospects for new Candu reactors. "The federal government’s decision today, to invest in the further development of Candu technology, an evolution of the proven Darlington reactor model, will enable us to continue this important work already underway with our utility partners," he said.


Jonathan Wilkinson announced the Canadian government's latest investment in Candu technology during a visit to BWXT Tecnhologies Inc's facility in Cambridge, Ontario (Image: X/@JonathanWNV)

SMR collaborations
 

Wilkinson also announced further funding for nuclear projects under Environment and Climate Change Canada’s Future Electricity Fund, on behalf of Minister of Environment and Climate Change Steven Guilbeault, plus a total of CAD52.4 million for various projects supporting the development and deployment of SMRs and Candu reactors and decarbonisation efforts in Saskatchewan, Alberta and Ontario under two Natural Resources Canada programmes.

The Future Electricity Fund mainly consists of proceeds collected from electricity-generating facilities which are being returned through funding agreements with provincial or territorial governments for which the federal carbon pollution pricing system for industry currently applies, or has applied in the past, to support clean electricity initiatives.

CAD55 million from the fund has been awarded to Ontario Power Generation (OPG) to support pre-development work for the Darlington New Nuclear Project, where the company plans to build up to four GE Hitachi BWRX-300 small modular reactors. Specifically, these funds are to be used for planning, site preparation, various procurements and regulatory approvals for units 2, 3 and 4 at the site. OPG signed a commercial contract for the first of the four SMR units in January 2023.

He also announced an increase to Future Electricity Fund programme funding to the Saskatchewan Government’s Crown Investments Corporation by CAD54 million to CAD80 million, to support of SMR pre-development work by SaskPower. The funding will support pre-engineering work and technical studies, environmental assessments, regulatory studies and community and Indigenous engagement.

Three projects will receive a total of CAD11.4 million under Natural Resources Canada's Enabling SMRs programme: the University of Western Ontario is to receive nearly CAD5 million to conduct a detailed study of TRISO-based used fuel properties and characteristics; Canadian Nuclear Laboratories will receive just over CAD3.5 million for a project on developing guidelines, strategies and standards for SMR deployment to support the Canadian nuclear industry; and the Saskatchewan Industrial and Mining Suppliers Association will receive CAD2.8 million for a project to evaluate the capabilities of the existing supply chain in Saskatchewan to support SMRs.

Under Natural Resources Canada's Electricity Predevelopment Program, four projects in Alberta will receive funding totalling CAD41 million, including CAD13 million to develop an assessment of the potential suitability of three locations in Alberta as potential host locations for SMR deployment and increase public and Indigenous community understanding and awareness of SMRs and nuclear power generation.

“Nuclear is an integral part of Canada’s resilient and independent energy future, and Candu technology is helping us get there - while creating good domestic jobs and supporting international Canadian energy exports," Wilkinson said.

"By advancing innovative projects like Monark reactors, this government is reinforcing our commitment to domestically sourced and processed uranium, which is creating good-paying jobs in Ontario and throughout the country. And through investments in the Darlington New Nuclear project and SMRs in Alberta, we are providing a powerful example of how public and private sectors can work together to enhance energy security; advance cutting-edge, made-in-Canada nuclear technologies; and deliver a clean and reliable energy future."

 

Chernobyl: Emergency work completed after drone strike on shelter


Friday, 7 March 2025

The State Emergency Service of Ukraine has said that work to tackle the smouldering fires in the insulation layers of Chernobyl's giant shelter has been completed, three weeks after it was struck by a drone. The International Atomic Energy Agency says radiation levels have remained at normal levels.

Chernobyl: Emergency work completed after drone strike on shelter
Workers on the roof of the New Safe Confinement two days after the February 14 drone strike (Image: State Emergency Service of Ukraine)

According to the State Agency of Ukraine for Exclusion Zone Management, thermal image monitoring will continue and emergency workers, including climbers, will remain on site in case they are required. It said that the next step will be analysis of the damage to the arch-shaped New Safe Confinement.

The Chernobyl nuclear power plant operators say that the drone caused a 15 square metre hole in the external cladding of the arch, with defects affecting an area of 200 square metres, with some joints and bolts also damaged.

In its most recent update, on Wednesday, the International Atomic Energy Agency said that no smouldering fires had been detected that day and that its experts had undertaken its own radiation monitoring - "to date, all monitoring results have shown that there has not been any increase in the normal range of radiation levels measured at the site nor any abnormal readings detected".

It said the IAEA team at Chernobyl had reported multiple air raid alarms over the past week.

What is the New Safe Confinement?
 

Chernobyl Nuclear Power Plant's unit 4 was destroyed in the April 1986 accident (you can read more about it in the World Nuclear Association's Chernobyl Accident information paper) with a shelter constructed in a matter of months to encase the damaged unit, which allowed the other units at the plant to continue operating. It still contains the molten core of the reactor and an estimated 200 tonnes of highly radioactive material. 

However it was not designed for the very long-term, and so the New Safe Confinement - the largest moveable land-based structure ever built - was constructed to cover a much larger area including the original shelter. The New Safe Confinement has a span of 257 metres, a length of 162 metres, a height of 108 metres and a total weight of 36,000 tonnes and was designed for a lifetime of about 100 years. It was built nearby in two halves which were moved on specially constructed rail tracks to the current position, where it was completed in 2019.

It has two layers of internal and external cladding around the main steel structure - about 12 metres apart - with the IAEA confirming that both had been breached in the incident. The NSC was designed to allow for the eventual dismantling of the ageing makeshift shelter from 1986 and the management of radioactive waste. It is also designed to withstand temperatures ranging from -43°C to +45°C, a class-three tornado, and an earthquake with a magnitude of 6 on the Richter scale.

According to World Nuclear Association, the hermetically-sealed New Safe Confinement allows "engineers to remotely dismantle the 1986 structure that has shielded the remains of the reactor from the weather since the weeks after the accident. It will enable the eventual removal of the fuel-containing materials in the bottom of the reactor building and accommodate their characterisation, compaction, and packing for disposal. This task represents the most important step in eliminating nuclear hazard at the site - and the real start of dismantling".

The wider context
 

The Chernobyl nuclear power plant lies about 130 kilometres north of Ukraine's capital Kyiv, and about 20 kilometres south of the border with Belarus. A 30-kilometre exclusion zone remains around the plant, although some areas have been progressively resettled. Three other reactors at the site, which was built during Soviet times, continued to operate after the accident, with unit 3 the last one operating, until December 2000.

When Russia launched its invasion of Ukraine in February 2022 it rapidly took control of the Chernobyl plant. Its forces remained there until withdrawing on 31 March 2022 and control returned to Ukrainian personnel. The IAEA has had experts stationed at the site as the war has continued, seeking to help ensure the safety and security of the site.

IAEA teams are also in place at Ukraine's three operating nuclear power plants and the Zaporizhzhia nuclear power plant, which has been under the control of Russian forces since early March 2022.

Ukraine has blamed Russia for the drone strike, while Russia denied it was responsible and blamed Ukraine. The IAEA has not attributed blame to either side during the war, with Director General Grossi explaining in a press conference at the United Nations in April last year that this was particularly the case with drones, saying "we are not commentators. We are not political speculators or analysts, we are an international agency of inspectors. And in order to say something like that, we must have proof, indisputable evidence, that an attack, or remnants of ammunition or any other weapon, is coming from a certain place. And in this case it is simply impossible".

Orano and Energoatom sign enrichment services agreement

Friday, 7 March 2025

France's Orano has signed an agreement to supply enrichment services for Ukraine's Energoatom through to 2040.

Orano and Energoatom sign enrichment services agreement
(Image: Orano)

The agreement, which guarantees a diversified supply of enrichment services for fuel for Ukraine's nuclear power plants, was signed by Nicolas Maes, CEO of Orano, pictured above left, and Petro Kotin, acting CEO of Energoatom, above right.

Maes said: "We are proud to accompany Energoatom in its development to reinforce Ukraine's energy independence. This agreement reflects our commitment to provide our customer with support and thus contribute to European energy security."

Kotin said: "Energoatom continues to strengthen Ukraine's energy security. Uranium enrichment is one of the important stages in the process of nuclear fuel production, and the agreement signed allows our state to plan a stable, bright future, relying on the operation of nuclear power plants."

Orano is in the process of extending the production capacity at its Georges Besse 2 uranium enrichment plant in France by 30% to meet growing international demand.

Ukraine has 15 reactors - including the six at Zaporizhzhia which have been under Russian military control since early March 2022 - whose combined capacity generates about half of its electricity. The country is planning expansion of its nuclear fleet and no longer uses Russian fuel.


KHNP to collaborate with Kazakhstan on uranium research

Friday, 7 March 2025

Korea Hydro & Nuclear Power has signed two agreements to collaborate with Kazakhstan on the utilisation of uranium resources dissolved in seawater and groundwater.

KHNP to collaborate with Kazakhstan on uranium research
The MoU with Al-Farabi University was signed on 3 March (Image: KHNP)

The company signed memorandums of understanding with Al-Farabi National University on 3 March, and with the Institute of High Technologies (IHT) on 4 March. IHT is the research arm of Kazatomprom.

The MOUs aim to facilitate technological exchange and joint research between the two countries to identify promising water resources for uranium extraction, KHNP said. Under the agreements, Korea Hydro & Nuclear Power (KHNP), Al-Farabi University, and IHT will jointly investigate uranium concentrations and distribution in Kazakhstan’s seawater and groundwater. They will also conduct performance evaluations of uranium adsorbents, a key technology currently under development by KHNP.


The signing of the MoU with IHT was on 4 March (Image: KHNP)

KHNP said it is actively researching efficient uranium extraction from seawater and is developing adsorbents as one of the key methods for this process. If these collaborations confirm the feasibility of utilising Kazakhstan’s water resources for uranium extraction, further technological cooperation between the two countries is expected to expand significantly, it added.

"This agreement will further strengthen technological cooperation between our two nations in the field of seawater uranium resource utilisation," Shin Ho-cheol, director of KHNP's Central Research Institute, said.

WANO looks to build on achievements as nuclear capacity grows


By Alex Hunt
World Nuclear News
Friday, 7 March 2025

As José Gago succeeds Tom Mitchell after a six-year term as chairman, the two talk to World Nuclear News about the role of the World Association of Nuclear Operators, its achievements and its future role with numbers of nuclear energy plants set to rise sharply in the years ahead.

WANO looks to build on achievements as nuclear capacity grows
Mitchell, centre, Gago, right, with CEO Naoki Chigusa (Image: WANO)

The association, best known as WANO, is a not-for-profit international organisation established in 1989 by the world's nuclear power operators to exchange safety knowledge and operating experience among organisations operating commercial nuclear power reactors. Its primary mission is to "maximise the safety and reliability of nuclear power plants worldwide, independent of geopolitical and national boundaries". It currently has 460 nuclear units as members, with 60 under construction.

The out-going chairman Mitchell, whose previous roles included six years as CEO at Ontario Power Generation and who was on the WANO governing board before taking up the chairman role in 2019, said that he was proud of the way the organisation, and the industry as a whole, had "remained united, remained focused on our nuclear safety mission" during his years in the role. Those years, of course, saw the massive global disruption of the COVID-19 pandemic and also a war in Ukraine which included the military occupation of a nuclear power plant.

He says that even during the enforced restrictions of the pandemic there was the opportunity and time for WANO to work on a new strategic plan - "I wouldn't want to go through that period again, but I would also say I think as an organisation we effectively used the time to get ready to move on to a new operational model."

That new model has seen the "evolutionary change" to more regular interactions with members rather than mainly focusing on a full WANO peer review mission every few years. New processes are being introduced and it is planned to be totally in place by the end of the year, says Mitchell. Work is also progressing on establishing a fifth regional centre in Shanghai - to go alongside those in Atlanta, Moscow, Paris and Tokyo.

WANO's new chairman Gago, who spent 10 years as director general of Spain's Asociacion Nuclear Asco-Vandellos (ANAV), has been ANAV's governor at the WANO Paris centre since 2012. He has also been president of the Spanish Nuclear Society and a member of the Foro Nuclear board of directors.

He paid tribute to the work of his predecessor in developing the new strategy which he will be overseeing in the coming years with CEO Naoki Chigusa (who was travelling on WANO work on the day of our interview). Gago says that he would continue Mitchell's emphasis on ensuring there is no complacency among existing operators, while also increasing focus on new entrants to the nuclear sector.

The large numbers of small modular reactors being proposed suggests an obvious growth area for WANO, with the promise of novel challenges in terms of new technology or new nations entering the nuclear energy 'club'. The organisation has developed new membership categories and outreach programmes - and worked with a variety of other organisations such as the International Atomic Energy Agency - and combined with a growing programme of pre-start-up peer reviews, it aims to help ensure that any new entrants will make the switch from construction to operation of nuclear units as smoothly and safely as possible. 

They both also highlight the workforce requirements of new nuclear projects, as well as the benefits of leadership programmes such as World Nuclear University, which has WANO as one of the founding partners. The WANO process of peer review visits to share good practice and advice is seen by many members as a crucial staff development opportunity, alongside secondments to WANO, Mitchell says.

The way that WANO operates - with peers from different nuclear power plants visiting other companies' plants and sharing experience and knowledge - means that discretion and trust is vital, and it tends not to have a high profile outside the industry. Mitchell says there are other organisations that advocate on behalf of the industry - who WANO has worked with on subjects like safety culture - but "we've learned that we are best if the operators have the ability to have really open, direct, conversations with each other". The question of whether to have a higher profile is one that has been had a few times during its 30-plus year history and Gago says that although he does not see a change in the future, he is sure that it is a debate which will be raised again.

Another growth area has been that relating to life extension programmes which are rolling out at a growing number of existing plants. Mitchell gives the example of there being "a huge amount of information available these days about steam generator replacements ... so some plants that have started up later are now getting to that point where it's time to do that as well" and that is where members could get in touch with their WANO regional centre who can "put you in contact with someone else who's done it to see what were the lessons learned, what worked and maybe what could have been done better".

After six years as chairman, and an involvement with WANO going back a lot further, what are Mitchell's reflections as he leaves the London-headquartered organisation? "There will always be challenges, and I don't have a crystal ball so I don't know what the next one will be, but what I can tell you is that my view is that when we have a challenge as an industry we pull together. We stay focused on nuclear safety. I think if the founders came back today they would be very proud that we have stayed focused on that and helped us deal with whatever the issue is, and quite frankly we emerge as a stronger and more united and resilient industry."

Gago also makes a point of talking about the need to focus on the safety mission and ensuring that workers in the industry do not find their crucial work being affected by what is happening outside the plant. "One of the key messages is, for the sake of nuclear safety, to protect people from the political noise so they can focus on safely and reliably operating the plants," he says.

When a nuclear power plant is scheduled to be shut down there is, unlike some industries, no room to lower safety standards, and yet there will be the same challenges of retaining crucial staff. This challenge is not helped when, as seen in some countries recently, politicians announce a plant closure and then U-turn on that decision later. Mitchell, agreeing with Gago's point, says "it's actually essential that you don't get distracted, from a human behaviour point of view, and stay focused on the fundamentals - when I was a senior executive I saw it as my job to manage the external issues" so that people operating the plant could concentrate on their jobs.

After the last six years, who knows what the next six might bring, but, as Gago puts it: "This is an amazing association, unique in the world, based on the confidentiality and self-confidence of its members, which is needed to create the openness and transparency to help each other. WANO’s mission - to maximise the safety and reliability of nuclear power plants worldwide - is as relevant today as ever."

Commissioning milestone for WIPP ventilation facility

Friday, 7 March 2025

The new, state-of-the-art, large-scale ventilation system at the USA's repository for the disposal of transuranic waste has now been fully commissioned and is expected to be fully operational later this year.

Commissioning milestone for WIPP ventilation facility
The exterior of the SSCVS facility (Image: DOE EM)

The Safety Significant Confinement Ventilation System (SSCVS) is part of the US Department of Energy Office of Environmental Management's major project to significantly increase airflow underground in the Waste Isolation Pilot Plant (WIPP) in New Mexico. Increased airflow will mean that activities to emplace sealed waste drums in underground rooms mined out of the ancient salt formation can take place at the same time as facility mining and maintenance operations.

The ventilation system will work in tandem with a new utility shaft, and will pull air through the repository, remove salt when required and send the air through HEPA filtration units before releasing it to the environment. (HEPA - for High Efficiency Particulate Air - filters are mechanical air filters that can remove at least 99.97% of dust, pollen, mold, bacteria, and any airborne particles down to a size of 0.3 microns.)  The SSCVS includes two primary buildings: the Salt Reduction Building, which pre-filters salt-laden air from the underground repository; and the New Filter Building, which houses fans and 22 HEPA filtration units. The new system will increase underground airflow from 170,000 cubic feet (4814 cubic metres) per minute to a maximum of 540,000 cubic feet per minute.


HEPA filters inside the SSCVS facility (Image: DOE EM)

Construction of the SSCVS was completed in June. During the commissioning phase, WIPP management and operations contractor Salado Isolation Mining Contractors have tested each system individually and then the SSCVS as a whole to demonstrate complete functionality. Following commissioning, the SSCVS has now been turned over to the operations team members so they can gain proficiency in running the highly efficient system.

Assessments will now be carried out to show the SSCVS is fully integrated into other WIPP site systems, demonstrating that all primary and backup systems are functional and operating as expected, and that operators are proficient and fully understand the ventilation system. When all the reviews have been completed and approved by the US Department of Energy Office of Environmental Management, the SSCVS will be connected to the repository's underground ventilation system.

Construction of the SSCVS began in 2018, when it was estimated that the system would cost USD288 million with completion envisaged for November 2022. Progress was impacted when WIPP, like most of the Office of Environmental Management's field sites, focused on essential mission-critical operations during the COVID-19 pandemic. According to a report released last year by the US Government Accountability Office, by 2024 the cost estimate had risen to USD494 million.

WIPP is the USA's only repository for the disposal of transuranic, or TRU, waste which includes clothing, tools, rags, residues, debris, soil and other items contaminated with small amounts of plutonium and other man-made radioactive elements from the US military programme. The repository is excavated out of a natural rock salt layer 650 metres below ground, and has been operational since 1999.

UKAEA, Eni partner for tritium fuel cycle facility

Friday, 7 March 2025

The United Kingdom Atomic Energy Authority and Italian multinational energy company Eni SpA have entered into a collaboration agreement to jointly conduct research and development activities in the field of fusion energy. The collaboration primarily starts with the construction of the world's largest and most advanced tritium fuel cycle facility.

UKAEA, Eni partner for tritium fuel cycle facility
A rendering of the H3AT Tritium Loop Facility (Image: UKAEA)

Tritium recovery and re-use will play a fundamental role in the supply and generation of the fuel in future fusion power plants and will be crucial in making the technology increasingly efficient.

The UKAEA-Eni H3AT Tritium Loop Facility, located at Culham Campus in Oxfordshire, England, will be complete in 2028. It is designed to serve as a world-class facility providing industry and academia with the opportunity to study how to process, store and recycle tritium.

UKAEA and Eni will collaborate to develop advanced technological solutions in fusion energy and related technologies, including skills transfer initiatives. Eni will contribute to the H3AT project with its expertise in managing and developing large-scale projects, helping to de-risk its roadmap. The partnership combines UKAEA's extensive expertise in fusion research and development with Eni's established industrial-scale capabilities in plant engineering, commissioning, and operations.

"We are delighted to be working with Eni who have shown great commitment to fusion," said UKAEA CEO Ian Chapman. "We believe that fusion energy can contribute to a net-zero future, including going beyond the decarbonisation of electricity. The H3AT demonstration plant will set a new benchmark as the largest and most advanced tritium fuel cycle facility in the world, paving the way for innovative offerings in fusion fuel and demonstrating the UK's leadership in this crucial area of research and development."

Eni CEO Claudio Descalzi added: "Fusion energy is meant to revolutionise the global energy transition path, accelerating the decarbonisation of our economic and industrial systems, helping to spread access to energy, and reducing energy dependency ties within a more equitable transition framework. Eni is strongly committed to various areas of research and development of this complex technology, in which it has always firmly believed.

"Today with our UK partners we are laying the foundations for further progress towards the goal of fusion which - if we consider its enormous scope of technological innovation - is increasingly concrete and not so far off in time. To continue this virtuous development, international system-level technological partnerships like this one are indispensable."


A cutaway of the  H3AT Tritium Loop Facility Plant and Building (Image: UKAEA)

The H3AT facilities will comprise: advanced tritium infrastructure, to feed, recover, store and recycle tritium; a flexible suite of enclosures designed to enable a wide variety of experimental work, including pure tritium science, process development, component testing and waste detritiation; computational simulations and model validation; training facilities; and materials detritiation processes and facilities.

H3AT will include a prototype-scale process plant and experimental platform, which is a scaled version of the design for the International Thermonuclear Experimental Reactor.

In May last year, UKAEA appointed Canadian engineering firm AtkinsRéalis to deliver the detailed design of an isotope separation system to strengthen research into sustainable fusion delivery. The Isotope Separation System will form part of the H3AT facility.

The UKAEA carries out fusion energy research on behalf of the UK government, overseeing the country's fusion programme, including the MAST Upgrade (Mega Amp Spherical Tokamak) experiment as well as hosting the recently closed Joint European Torus (JET) at Culham, which operated for scientists from around Europe. It is also developing its own fusion power plant design with plans to build a prototype known as STEP (Spherical Tokamak for Energy Production) at West Burton in Nottinghamshire, which is due to begin operating by 2040.

In November 2022, the UK's First Light Fusion announced plans to build a 60 MW pilot power plant based on its unique projectile fusion technology to prove the integrated engineering for electricity generation and the production of tritium. It partnered with Canadian Nuclear Laboratories to design a system for extracting tritium from the reactor. The proposed pilot plant was expected to cost about USD570 million to develop and would produce about 2 kilograms of excess tritium per year.

However, earlier this month, First Light Fusion announced a change in strategy. The Oxfordshire-based company has dropped plans to develop a fusion power plant and will instead focus on commercial partnerships with other fusion companies who want to use its amplifier technology, as well as with non-fusion applications.


NOCs and the Evolving Energy Landscape in Latin America

By Rystad Energy - Mar 06, 2025

Latin American NOCs play a vital role in their national economies, and oil and gas remain critical to their prosperity and energy security.

While global oil demand remains robust, Latin American NOCs must increase efficiency and adopt cleaner production methods to stay competitive.

A pragmatic approach to energy transition involves integrating renewable energy sources, like green hydrogen, while maintaining hydrocarbons as a central component of the energy mix.



Latin America has long been a dominant force in the global energy market, built on vast oil and gas reserves. While the world increasingly eyes renewable sources of energy for the future, hydrocarbons remain the bedrock of economic stability for the region. As energy demand evolves, national oil companies (NOCs) must not forsake oil, but rather ensure its competitiveness while prudently exploring emerging energy markets. The challenge is not whether hydrocarbons have a future, but how regional NOCs can harness their expertise to safeguard Latin America’s standing in the global energy landscape.

For Latin America’s NOCs, oil and gas are not merely commodities, but are lifelines of national prosperity. Brazil’s Petrobras, Mexico’s Pemex, and Colombia’s Ecopetrol have generated vital revenues over the years, providing energy security and sustaining domestic industry.Schreiner Parker, Managing Director for Latin America

For Latin America’s NOCs, oil and gas are not merely commodities, but are lifelines of national prosperity. Brazil’s Petrobras, Mexico’s Pemex, and Colombia’s Ecopetrol have generated vital revenues over the years, providing energy security and sustaining domestic industry. Despite all the buzz around renewables, global oil demand remains robust, particularly in transport, heavy industry, and petrochemicals, and will continue to grow into the next decade. To remain relevant, Latin American NOCs must double down on efficiency, embrace cutting-edge extraction techniques, and adopt cleaner production methods to ensure the hydrocarbons they produce retain their edge in an increasingly scrutinized market.

Natural gas, a pragmatic "bridge fuel", offers another key opportunity. With plentiful reserves, Latin America is well-placed to expand liquefied natural gas (LNG) exports while keeping the lights on at home. Meanwhile, investment in refining and petrochemicals would allow the region to extract more value from its crude rather than merely shipping it off in barrels and hoping for the best.

Latin America has historically played a formidable role in shaping global energy markets. Venezuela and Mexico were among the original oil powerhouses, while Brazil’s deepwater discoveries and Argentina’s Vaca Muerta shale play have reaffirmed the region’s relevance. These resources remain invaluable, but history has shown that riding the booms and busts of commodity cycles is no way to build a resilient economy. Latin American NOCs must, therefore, look beyond just exploration and production and will need to integrate new revenue streams into their businesses while keeping hydrocarbons at the heart of the equation.

That said, it would be reckless to dismiss renewables altogether. Latin America already boasts some of the greenest energy grids on the planet, on the back of its abundant hydropower. Rather than treating this as an either-or proposition, regional NOCs should see renewables as a strategic complement to their existing portfolios.

Green hydrogen, even with its current long-distance transportation issues, proves a prescient example of what the commodity of the future could be for Latin America. With its vast renewable resources, coupled with its low demand density, the region could become a major supplier and exporter of green hydrogen, provided the infrastructure and investment are in place. Lithium, critical for battery production, presents another tantalizing opportunity – but only if managed sustainably and with a keen eye on long-term profitability rather than a short-lived gold rush. The smartest path forward is not some radical transformation but a pragmatic, integrated approach – one that ensures hydrocarbons remain the mainstay while capitalizing on green energy where it makes good business sense.

For Latin America’s NOCs, the future is not about abandoning oil but instead about making it better, cleaner, and more profitable while keeping an eye on new frontiers. By optimizing production, embracing technological innovation, and selectively investing in renewables, these companies can secure their place in the global energy hierarchy for decades to come. The world still needs hydrocarbons, and Latin America has plenty to offer. The challenge now is to ensure it remains a supplier of choice rather than just another name on a lengthy list of resource exporters.

By W. Schreiner Parker, Managing Director for Latin America at Rystad Energy

 

Brazil Plans to Use $3.5-Billion Oil Fund to Bolster Economy

Brazil looks to boost its economy with money from its $3.5-billion social fund, which collects revenues from oil and gas exploration and production, as approval ratings of President Luiz Inacio Lula da Silva have slumped to a record low.

Inflation and most of all rising food prices have sapped the confidence of Brazilians in their president in recent weeks.

In the middle of February, a poll by pollster Datafolha showed that approval of Lula’s government dropped to 24% from 35% in December—a record low during any of Lula’s three terms in office as president of Brazil.

The share of people who view Lula’s administration as bad jumped to 41%, up from 34% in December — a record high.

Amid record-low approval, the Brazilian president and his government have now drafted a measure to create a committee to manage the so-called social fund. The fund, created in 2010 to collect royalties from oil, has accumulated $3.5 billion (20 billion Brazilian reals) so far.

The committee will be tasked to decide how Brazil should spend the money. It could use it for general budget purposes or transfer it or part of it into different funds, a finance ministry official told Bloomberg.

While Lula looks to support the economy amid the worst approval rating ever, he defended oil drilling in the Amazon.

Lula is pressuring Brazil’s environmental regulators to approve oil drilling near the mouth of the Amazon River, arguing that revenue from this new fossil fuel supply could help finance a transition to green energy.

“I want it (oil) to be explored. But before exploring, we need to research and see if there is oil and how much oil there is,” Lula said during an interview with radio station Diario last month.

“What we can’t do is stay in this endless chatter that drags and drags—Ibama is a government agency, but it seems like it’s working against the government.”

By Tsvetana Paraskova for Oilprice.com

 

Indonesia’s Gas Demand Rising as LNG Starts to Replace Diesel for Power

Indonesia has started replacing diesel as a fuel in dozens of power plants with LNG, which is set to boost demand for natural gas in one of the world’s top LNG exporters.

Following a decade of delays, Indonesia finally launched a $1.5 billion project to distribute LNG on a small scale to power dozens of plants that currently run on diesel, Reuters reports.

PLN EPI, a fuel procurement and transportation operator for Indonesia’s largest power company, PLN, is leading the project.

Last year, Japan’s JERA signed a collaboration agreement with PLN EPI to collaborate in LNG procurement, optimization, and the development and operation of LNG receiving terminals in anticipation of growing demand for LNG in Indonesia. By utilizing JERA’s LNG expertise, JERA and PLN EPI will establish an LNG value chain for the power segment in Indonesia, the companies said.

The project will need more LNG supply in the future, and could lead to Indonesia turning to LNG imports later this decade, according to estimates reported by Reuters.

“We are obliged to provide the LNG ... And we are keen on securing more domestic LNG for the project,” Rakhmad Dewanto, director of fuels and gas at PLN EPI, told Reuters.

Early this year, Indonesia reportedly asked its buyers to accept delays to Indonesian LNG cargo exports this year, as the Southeast Asian country looks to meet rising domestic energy and gas demand.

Indonesia has one major LNG project planned for later this decade.

Japan’s oil and gas producer Inpex owns 65% of the Abadi gas project and plans a final investment decision (FID) for the $20-billion Abadi LNG project by 2027.

Abadi LNG has seen years of delays as it has had to change design concepts and then reorganize after supermajor Shell withdrew from the project nearly two years ago.

The Abadi LNG project in Indonesia has received interest from potential buyers to purchase gas from the facility in volumes exceeding the facility’s design capacity, according to Inpex.

By Tsvetana Paraskova for Oilprice.com

 

Nigeria Boosts Oil Production Above Its OPEC+ Quota

Higher exports and increased demand from the huge new African refinery, Dangote, pushed Nigeria’s oil production in February 70,000 barrels per day (bpd) above its OPEC+ quota of 1.5 million bpd, a Reuters survey showed.

Last month, Nigerian production exceeded its quota in the OPEC+ agreement by the most among all participants.

The rise in Nigerian oil production and an increase in Iran’s output despite U.S. attempts to curb Iranian flows pushed up the total OPEC production in February, according to the Reuters survey.

Nigeria’s overproduction last month comes after years during which the top African oil-producing country consistently failed to pump to its OPEC+ quota due to oil theft and vandalism and struggles to launch new projects.

But in recent months, Nigerian authorities have been clamping down on oil theft and have been supportive of an increase in oil and gas output.

The Nigerian government aims to boost the country’s oil production by 1 million bpd by December 2026, from the current 1.75 million bpd, the head of the upstream regulator of Africa’s top crude producer said last month.

Thanks to a government crackdown on oil theft, losses have declined by 5,000 bpd and current oil output in the country is at about 1.75 million bpd, Gbenga Komolafe, chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said at a town hall conference in February.

Oil theft and pipeline vandalism have long plagued Nigeria’s upstream oil and gas industry, driving majors out of the biggest OPEC producer in Africa and often resulting in force majeure at the key crude oil export terminals.

“Looking ahead, he said the government aims to increase production by 1 million BOPD by December 2026 under the Project 1 MMBOPD initiative, leveraging collaboration among operators, service providers, financiers, and host communities,” NUPRC said.

Nigeria is “more ready for business than ever,” the executive said, adding that the federal government is committed to regulatory certainty, investment-friendly policies, and global competitiveness.

By Tsvetana Paraskova for Oilprice.com

 

Shell Boosts Deepwater Oil Production Offshore Malaysia

Shell has started first oil production from the next development phase of a deepwater oil project offshore Malaysia, the UK-based supermajor said on Friday as Europe’s largest oil and gas companies are pivoting back to strategies to boost output of fossil fuels.

Shell’s subsidiary Sabah Shell Petroleum Company Ltd, announced first oil production from Phase 4 of the Gumusut-Kakap-Geronggong-Jagus East deepwater offshore development project. The Phase 4 production is flowing to the existing Gumusut-Kakap Semi-submersible Floating Production System located off the coast of Sabah, offshore Malaysia, where SSPC is the operator.

The GKGJE Phase 4 development includes a subsea tie-back that straddles the Malaysia - Brunei border and involves the drilling of three producer wells and one water injection well. Located in water depths of 1,200 meters (3,937 ft), Gumusut-Kakap was the first deepwater project for Shell in Malaysia and began production in 2014.

The new development contributes towards Shell’s commitment to bring online new upstream projects between 2023 and 2025, which will deliver an additional combined 500,000 barrels of oil equivalent per day (boe/d) at peak production, the supermajor said.

So far this year, Shell has launched commercial production at the Whale field in the Gulf of Mexico, eyeing peak output levels of 100,000 barrels daily. Shell has also resumed oil and gas production from the Penguins field in the UK North Sea with a new floating, production, storage and offloading (FPSO) facility, replacing the previous export route via the Brent Charlie platform, which ceased production in 2021.

Shell was one of the first European majors to pivot back to oil and gas in a 2023 strategy to continue investing in oil and gas production and selectively pour capital into renewable energy solutions.

Shell’s CEO Wael Sawan has said that reducing global oil and gas production would be “dangerous and irresponsible” as the world still needs those hydrocarbons.

By Charles Kennedy for Oilprice.com

China Looks To Derail The West’s Strategy To Replace Russian Gas Supplies


By Simon Watkins - Mar 05, 2025

China is ramping up its energy investments in Egypt.

Egypt's strategic energy position makes it a key battleground, as U.S. and European firms, including Chevron, BP, and ExxonMobil, have heavily invested in its gas sector.

The West is responding to China’s growing influence with major new gas projects, including Chevron’s Cyprus-Egypt pipeline and ExxonMobil’s discoveries.




China’s North Petroleum International Company (NPIC) last week signalled its intention to dramatically increase its presence in Egypt’s energy sector. An initial US$100 million is earmarked to acquire new concessions and establish partnerships in the gas and oil sectors of Egypt’s Western Desert and offshore areas, according to comments the firm’s regional director Sun Bao. This funding is only the opening salvo in a planned investment push from China into the strategically crucial country, a senior source in the European Union’s (E.U.) energy security complex exclusively told OilPrice.com last week. “Beijing has set aside billions of dollars to build its presence in Egypt starting from now, which will initially focus on the energy sector before broadening out into the range of other projects commonly seen in priority one BRI [‘Belt and Road Initiative’] targets,” he said.

Perhaps the main reason for China’s interest in significantly expanding its presence in Egypt is that the country became a key focus of the West’s attempts to secure gas supplies to help compensate for those lost from Russia following its invasion of Ukraine on 24 February 2022, and so it remains. U.S. and European investments poured into the country that holds a uniquely strategic position as part of North Africa, the Middle East and the Eastern Mediterranean, beginning most notably with Chevron. The oil and gas behemoth quickly expanded on its initial presence there before announcing in December 2022 that it had hit at least 99 billion cubic metres of gas with its Nargis-1 exploration well in Egypt’s eastern Nile Delta, about 60 kilometres north of the Sinai Peninsula. Following that, Italy’s Eni announced a potentially huge offshore gas field in its concession area in the Red Sea focused as well on the Nargis-1 site. According to the president of Chevron International Exploration and Production, Clay Neff: “The East Mediterranean has abundant energy resources, and their development is driving strategic collaboration in the region.” These entry points effected into Egypt’s gas sector by the U.S. and Europe have since been broadened and deepened by the U.K.’s Shell and BP. The latter said recently that it will invest US$3.5 billion in the exploration and development of Egypt’s gas fields in the coming three years. This amount could be doubled if the exploration activity yields new discoveries. Meanwhile, Shell began the development of the tenth phase of Egypt’s Nile Delta offshore West Delta Deep Marine (WDDM) concession in the Mediterranean Sea. This came after the British firm and its partner had developed the previous nine development phases of the WDDM concession that comprises 17 gas fields.Related: Russian Oil Supply To Czech Republic Cut Amid U.S. Sanctions

The West, like China, is also well aware of Egypt’s unique strategic importance on several levels. For a start, it is the only country in the Eastern Mediterranean gas hotspot region with an operational liquefied natural gas (LNG) export capacity and is consequently ideally placed to become the top regional export hub for the gas. Crucially as well, its geographic positioning means it controls the major global shipping chokepoint of the Suez Canal, through which around 10% of the world’s oil and LNG is moved. It also controls the vital Suez-Mediterranean Pipeline, which runs from the Ain Sokhna terminal in the Gulf of Suez, near the Red Sea, to Sidi Kerir port, west of Alexandria in the Mediterranean Sea. This is a vital alternative to the Suez Canal for transporting oil from the Persian Gulf to the Mediterranean. The Suez Canal’s importance to the global energy sector is further boosted by the fact that Egypt is currently one of the very few major transit points that is not controlled by China. Specifically, Beijing already has effective control over the Strait of Hormuz through the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article on the subject and analysed in my latest book on the new global oil market order. The same deal also gives China a hold over the Bab al-Mandab Strait, through which commodities are shipped upwards through the Red Sea towards the Suez Canal before moving into the Mediterranean and then westwards. This has been achieved as it lies between Yemen (the Houthis having long been supported by Iran) and Djibouti (over which China has also established a stranglehold through debts connected to its multi-generational power-grab BRI project).

As important as any of these factors from the West’s geopolitical perspective is that Egypt has long been seen in the Arab world as at least as much of a leader of it as Saudi Arabia. It was a leading proponent of the ‘Pan-Arab’ ideology which held that the enduring strength of the Arab world can only be found in the political, cultural, and socioeconomic unity of the Arab peoples in their various locations that emerged after the two World Wars. The idea found one of its two key champions in Egypt’s president from 1954 to 1970, Gamal Nasser. Among the most palpable signs of this movement at the time was the formation of the United Arab Republic union formed between Egypt and Syria from 1958 to 1961, the formation of OPEC in 1960, the series of conflicts with neighbouring Israel over the period, and then the 1973/74 oil embargo, as also analysed in full in my latest book. By bringing this leader of the Arab world on side, the West hoped to offset the geopolitical impact of long-term ally Saudi Arabia’s drift into the China-Russia sphere of influence.

For its part, Egypt could well be seen by Beijing as the ‘one that got away’, so focused was it on securing its immediate post-Ukraine invasion energy supplies from other countries in the Middle East, most notably Qatar. NPIC began its operations in Egypt in 2014 with the intention being for it to rapidly expand its presence in the Eastern Desert and the Suez Canal areas, as part of a broader strategic energy push in the country led in part by NPIC’s parent company, ZhenHua Oil. This huge conglomerate is in turn the energy exploration and production arm of Chinese defence giant Norinco. Under international law, foreign energy firms are legally entitled to station as many of its own personnel on gas and oil sites – including as many ‘security staff’ – as they want, in order to safeguard their investments on the ground, as also detailed in full in my latest book. China has stretched the legal point by including in its high-level government-to-government long-term relationship deals the right to build out transport routes (including airports, seaports and railway networks) that are also protected by Chinese security personnel when and wherever they are required. Beijing’s Egypt expansion programme – under the umbrella of the BRI – were a lower priority back in 2014 than its plans for the heart of the Middle East and the region’s biggest oil deposits in Iran, Iraq, and Saudi Arabia. Consequently, NPIC’s plans in the Eastern Desert and the Suez Canal areas were not fully realised. However, last year saw the signing of a comprehensive strategic partnership to run until the end of 2028. This agreement foresees multi-billion-dollar investment by Chinese firms into Egypt in energy, infrastructure, and technology. It also includes provisions for increased cooperation in new sectors, including technology, artificial intelligence, and defence.


This roadmap to an enhanced relationship between Egypt and China has not gone unnoticed by the West. Recent weeks have seen a flurry of investment activity into Egypt. U.S. energy giant ExxonMobil recently announced a new natural gas discovery in the Nefertari-1 well in the North Marakia Block, located five miles off Egypt’s northern coast. Two further exploratory gas wells at the Cairo and Misri concessions in Egyptian waters in the Mediterranean Sea area will be drilled in the first quarter of 2026 at an initial cost of US$240 million. Even more potentially significant was the very recent announcement by Chevron that a development and production plan has been approved to establish a floating production unit within Cyprus’ Exclusive Economic Zone with a pipeline to export gas to Egypt. This will build on the existing Cyprus-Egypt gas connections that allow Cyprus to export gas to Egypt for processing and re-export to Europe. This further cements Egypt as a key energy hub in the West’s Eastern Mediterranean gas supply complex, which in turn is vital to Europe’s future energy security.

By Simon Watkins for Oilprice.com