6th December 2023

Morning, morning. Here are your highlights in all things oil, gas, and energy today:

• 🤔 Russia teases more cuts

• 🔎 Anti-trust probing Exxon / Pioneer

• 🇨🇦 Canada’s stranded crude

• 🇳🇴 Norway’s untapped gas riches

• ➕ plus US crude inventories rise; BP spuds at ACE; Russia’s resilient oil revenues.

Let’s go…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Anti-trust probing Exxon’s Pioneer takeover - The US Federal Trade Commission has sent the two companies a second request for more info on their deal. Several senior politicians have raised concerns the merger will push up domestic gasoline prices but anti-trust experts believe it’s unlikely the FTC will stop it because it’s a merger of producers rather than refiners or retailers.

• Trans Mountain delays causing Canadian oil glut - producers who ramped up output in expectation that the 590 kb/d export pipeline project would be operational by now are having to discount their crude and put it in storage while they wait for the troubled project to finally get completed. Western Canada Select crude is trading at a $22/bbl discount to WTI, ~$7 larger than average.

• US Coast Guard responds to another spill in GoM - the spill is in the same area as the Main Pass Oil Gathering pipeline system where a significant leak - the source of which is still yet to be identified - was discovered in November.

• Suncor’s rosy outlook - the oil sands giant expects production growth of 7% next year to ~800 kb/d and has hiked its capex forecast.

• Crude inventories climb - stocks rose by 600 kbbls last week according to the API. Analysts had expected a 2.3 mmbbls draw.

🏰 Europe

• Russia’s oil export revenue higher than before the war - unsurprisingly, misguided Western sanctions have totally failed to restrict the flow of cash to Moscow. Trying to squeeze output only serves to push up prices and bolster revenue. If the West really wanted to put pressure on Russian coffers they should have worked to flood the market with crude and crash prices. In the oil game, prices have a far greater impact on bottom line than volumes.

• Norway’s untapped gas riches - a government mapping of natural gas resources has estimated that 65% of total gas resources in the Norwegian Continental Shelf have yet to be produced. Geology, economics, and lack of infrastructure are responsible. It goes to show how much gas Europe has in its back yard.

⛩️ Asia & Oceania

• BP starts drilling at ACE - the $6bn Azeri Central East project is the next stage development of the giant Azeri-Chirag-Gunashli oil field in the Caspian Sea which currently produces ~375 kb/d.

• Shortlist for Shell’s Singapore midstream assets - CNOOC, Vitol, Eversun, and Befar Group are said to be in the running to acquire a 237 kb/d refinery and an ethylene plant from Shell.

• OMV expecting hundreds of millions from its SapuraOMV sale - the company is in talks with bidders for the sale of a 50% stake in its Malaysian business. It has separated the sale of its New Zealand assets.

🦁 Africa

• Nigeria shifts crude pricing - traders have said the change, which will shift its pricing base from a monthly average Brent price to a five-day average Brent price, may make Nigerian crude less competitive and harder to compare against other crudes.

🗿 Central & South America

• Woodside signs Mexico Pacific LNG supply deal - the Australian company will purchase 1.3 mtpa for 20 years from the Saguaro Energia LNG project in Mexico. Commercial ops at the project are not due to start until 2029.

🌍 GEOPOLITICS & MACRO

• Russia teases more output cuts - deputy PM Novak said OPEC+ could deliver further output cuts next year if needed to wipe out "speculation and volatility". OPEC+ is currently holding back about 5.9 mmb/d of output - will they really go even deeper? The market doesn’t seem to think so, as oil prices edged lower today.

• Brazil bulking up its border force - due to inaccessible jungle terrain, the main road connection between Venezuela and Guyana is via Brazil so Brazil has sent military reinforcements to the area following Venezuela’s referendum to annex the oil-rich Esequibo territory.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• China’s back-up coal system - state planners of the world’s largest coal consumer and producer are developing a reserve coal supply system to stabilize prices and secure supply. The details are not clear but the aim is to have 300 million tons of "dispatchable" annual coal production by 2030, equivalent to 7% of its 2022 production.

• Iberdrola and Masdar announce $15bn strategic partnership - the two energy giants will jointly develop offshore wind and green hydrogen projects in key markets including Germany, UK and the USA.

🛢️ BOTTOM OF THE BARREL

Wild to think that the US currently produces ~45% more crude than Saudi Arabia:

👋 BEFORE YOU GO 

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Thanks for reading. Have a day out there. 🛢️🛢️