6th February 2024

What’s up dear reader. Here’s all you need to know today in oil, gas, and energy:

• 👉 Decision time for Nord Stream sabotage

• 😍 Qatar courts India

• 🔽 Oxy sees near term oil shortage

• 💥 “Months more” war in Gaza

• ➕ plus EV maker goes bust; EU’s expensive new climate targets; BP’s bumper earnings.

Let’s take a peek…

📈 THE NUMBERS

US nat gas prices are about to fall into $1.00+ territory. Happy days for US consumers.

🗞️ WELL-HEADLINES

 🗽 North America

• Tellurian divesting its upstream business - the struggling LNG developer is considering a sale of its upstream gas operations in Haynesville to help finance its massive under-development Driftwood LNG project in Louisiana.

• Suncor faces record air pollution fine - the company has to pay a fine of $10.5m for air pollution during 2019-2021 from its Commerce City refinery in Colorado. As part of the penalty, Suncor must also set up and run air measurement equipment around the perimeter of the facility.

🏰 Europe

• Decision time for Nord Stream sabotage - the Swedish prosecutor leading the case into the incredible 2022 explosion at the Baltic Sea gas pipeline will decide this week on whether to drop the case, press charges, or request that someone is detained. We all know this is going to get swept under the rug…but at least they’ll make a cool movie out of it in a few years.

• Sanctions hit Arctic LNG icebreaker delivery - Japan’s shipping giant Mitsui OSK Lines is unable to deliver three ice-breaker class ships to Russia’s new LNG export project in the Arctic because of US sanctions. “It’s a bit complicated”, said a Mtisui spokesperson. You bet!

• BP’s strong earnings - BP beat earnings forecasts and announced an increase in share repurchases. The company reported its second highest annual profit in a decade, despite it being half the level it announced in 2022. BP’s new CEO said the company would be “pragmatic” in its approach to net zero.

🕌 The Middle East

• Qatar courts India’s gas consumers - Qatar has renewed a huge 20-year 7.5 mtpa LNG supply deal with India’s Petronet that expires in 2028. Qatar will reportedly be using India Energy Week, which kicks off today in Goa, as an opportunity to strike more LNG supply deals with the world’s most populous country. Unsurprisingly, Qatar sees India as a huge growth market for its gas.

⛩️ Asia & Oceania

• India's energy investment wave - inaugurating India Energy Week, PM Modi said a large share of India’s planned $134bn infrastructure investment will be directed towards the energy sector. He also commented that the country’s energy demand will double by 2045 and . that gas’ share in the primary energy mix will increase from 6% today to 15% by 2030.

• Corruption crackdown in Chinese energy - several senior execs of CNOOC, including the chairman of CNOOC Gas and Power Group, have been arrested in China on corruption charges. A few weeks ago, President Xi said he was intensifying his anti-graft crackdown, with state-owned energy companies among the enterprises in the crosshairs.

🗿 Central & South America

• Petrobras’ refinery expansion - the company recently announced a major $100bn capex plan as it grows into a global energy heavyweight, and its CEO today revealed that it plans to increase its refining capacity by 25% over the next 4 years. They’re going big in Brazil.

🌍 GEOPOLITICS & MACRO

• Months more war while Israel hunts Hamas leadership - Israeli PM Netanyahu said Israel wouldn’t stop its assault in Gaza until it had eliminated all of the Hamas leadership. “The war must not end before then. It will take time, months not years”, he remarked. Will there be anything left of Gaza by that point…?

• Oxy sees incoming shortage - highlighting the lack of new fields being brought onstream, Oxy’s CEO believes that “we’re in a situation now where in a couple of years’ time we’re going to be very short on supply”. Hmmm. I’m not so sure. There’s about 6 mmb/d of spare capacity in OPEC and new supply coming online in Guyana and Brazil which should be plenty to meet demand growth for the coming few years. “Very short on supply” feels too strong, “nicely balanced” I’d say.

• Kazakhstan’s government binned - the entire cabinet in the oil and uranium rich country has been removed by the president. No reasons were given for the sudden upheaval but this sort of thing is fairly common in a country where the president rules the roost. What, if anything, does this mean for energy? No idea. Too soon to tell.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• EU doubles down on climate targets - at a time when net-zero is facing a popular backlash amid rising costs, the European Commission has proposed that the EU cuts greenhouse gas emissions by 90% (compared to 1990 levels) by 2040. This is expected to require “close to €660 billion” in annual energy investments in the 2031-2050 period, equivalent to 3.2% of the EU’s GDP. Good luck Europe…

• Shell invests in UK wave power project - the Renewables for Subsea Power collaborative project is currently powering subsea equipment off the coast of the UK through a combination of wave power and subsea energy storage. The hope is that the tech can provide low carbon power and communications to subsea equipment, offering a cost-effective alternative to umbilical cables.

• Electric van maker Arrival goes bust - the UK-based EV manufacturer burned through £1.5bn of investor cash without ever producing a commercial vehicle. The company was once valued at ~$13bn on the Nasdaq but is now entering administration.

• SUV? Non, merci - Paris has voted to triple the parking costs for large, heavy cars on Sundays in an attempt to tackle pollution and congestion in the city. SUV sales globally are booming: they made up nearly half of all cars sold in 2022.

🛢️ BOTTOM OF THE BARREL

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