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- 4th December 2023
4th December 2023
Venezuela on edge | Brazilās confused OPEC stance | Nuclearās big break | More danger on the Red Sea
Happy Monday Both Barrels crew.
Hereās what hit the wires over the weekend in all things oil, gas, and energy:
š Venezuela on edge
š¤ Brazilās confused OPEC stance
āļø Nuclearās big break
š More danger on the Red Sea
ā plus US rig count climbing; bickering at COP; coal rescues Europe from cold snap.
Letās go.
š THE NUMBERS
As of 04:55 ET on 04/12/2023. N.B. prices for JKM LNG and uranium can be delayed by a day or two.
šļø WELL-HEADLINES
š½ North America
Oil rig count climbs - the US fleet increased by 5 rigs last week to 505, with most of the additions in the Permian. The count is still well below the 627 a year ago but the recent uptick over the past few weeks may alarm oil bulls at a time when US output is already surging to record highs.
š° Europe
Equinor and OKEA in dispute over Statfjord deal - in March, OKEA agreed to acquire a 28% stake in the asset for $220m but has told Equinor that completion will be postponed as it says the field has less reserves and higher costs than previously thought.
Struggling Petrofac shedding assets - the company plans to sell non-core assets and warned cashflow for the year will disappoint. Its share price fell by 8% to a new record low.
Shareholders approve TGS / PGS merger - the combination of the two geophysical heavyweights will create a company worth ~$2.5bn.
š The Middle East
ā©ļø Asia & Oceania
Final nail in the coffin for Brookfieldās Origin bid - Origin investors voted against Brookfieldās latest ~$10.6bn bid. The market thinks Brookfield will now walk away: Originās share price is at a nine-month low.
Jadestoneās strong drilling campaign in Malaysia - the company has said that its four well campaign at the offshore East Belumt field was āvery successful, significantly exceeding our pre-drill expectationsā.
š GEOPOLITICS & MACRO
Venezuela on edge - in a controversial referendum, Venezuela has voted in favour to annex the oil-rich Esequibo territory of Guyana. There are concerns Venezuela may be preparing to invade Guyana to follow through on the outcome of the vote. Meanwhile, the US has said itās ready to āpauseā sanctions relief unless Venezuela makes further progress in releasing political prisoners in the next few days.
More Red Sea ship attacks - three more commercial Israeli vessels came under attack from Houthi missiles and drones in the Red Sea. A US warship came to their rescue and reportedly shot down other drones. Iranian-backed militants coming into very close contact with the US navy in one of the worldās most important shipping lanes is a dicey situation to say the least.
Brazilās strange OPEC stance - President Lula has said the country āwill never be a full member of OPEC [and wonāt have a production quota], because we don't want to be. What we want is to influence." He added that Brazilās objective was āto convince the countries that produce oil that they need to prepare for the end of fossil fuelsā. Says the country that just announced $100bn of investments into upstream expansionā¦
āMost of your country is actually oursā¦ā
šØ CARBON, CLIMATE, & OTHER ENERGY STUFF
Nuclearās big break - after being overlooked for decades, 2023 is the year COP finally starts taking nuclear seriously. Over 20 countries including the US, Canada, Japan, France, and the UK have pledged to triple nuclear capacity by 2050.
Bickering begins at COP - in a heated live event, the UAEās President of COP said āplease help me, show me the roadmap for a phase-out of fossil fuel that will allow for sustainable socioeconomic development, unless you want to take the world back into cavesā¦.There is no science out there, or no scenario out there, that says that the phase-out of fossil fuel is whatās going to achieve 1.5C.ā Needless to say, those final comments ruffled a few feathersā¦
Oil firms join decarbonisation charter - companies representing over 40% of global oil output have agreed to strive for net-zero operations by 2050, end routine flaring by 2030, and minimize upstream methane emissions. The agreement is the first time that several NOCs have made net-zero commitments.
Bill Gates says world unlikely to keep warming below 2C - itās interesting that public figures are finally saying what has been obvious for a while. Thereās no chance CO2 emissions will fall in line with sub 2C warming scenarios. Weāre going to run the climate change experimentā¦
Vive Les Nukes | French President Macro called nuclear an āindispensable solutionā
š¢ļø BOTTOM OF THE BARREL
What do you get when you mix ideological energy policy and almost no windā¦
The wind took the weekend off. The Germans have a word for this lull: ādunkelflautenā
ā¦with subzero temperatures?
Many parts of Europe are blanketed in snow. | Munich yesterday.
One of the dirtiest coal-powered grids in the world:
Coal is keeping the lights on in Germany | Source: Electricity Maps
This is the inevitable consequence of trying to power modern economies on intermittent, weather-dependent energy sources.
Because when faced with a choice between keeping the lights on and preserving the environment, the former will always triumph.
If you want sustainability, you must first ensure reliability and affordability.
š BEFORE YOU GO
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Thanks for reading. Have a day out there. š¢ļøš¢ļø