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- 7th November 2023
7th November 2023
Equinorās 55-day development | Crescent acquires Hammerhead for $1.9bn | Chinaās economy on the mend | When everything is climate change

Morning crew. Hereās Both Barrels with all that matters in oil, gas, and energy.
šØ Equinorās 55-day development
š° Crescent acquires Hammerhead for $1.9bn
šØš³ Chinaās economy on the mend
𤔠When everything is climate change
ā plus smog disrupts Cricket World Cup; more tiny SPR top ups; Britain confuses de-industrialisation for decarbonisation.
Letās get to it.

š THE NUMBERS

As of 04:45 ET on 07/11/2023. N.B. prices for JKM LNG and uranium can be delayed by a day or two.

šļø WELL-HEADLINES
š½ North America
Crescent Point acquires Hammerhead for $1.9bn - the acquisition will add ~ 56 kboe/d and 800 drilling locations to Crescentās portfolio in the Montney shale play in Alberta, Canada.
Kinder Morgan bags NextEraās Texas pipelines - the $1.8bn deal involves gas pipelines with a total capacity of 4.9 bcf/d.
Some more tiny SPR top ups - the White House wants to buy another 3 mmbbls for the SPR to add to the 6 mmbbls it previously said it hoped to buy. For context, the administration has drained ~290 mmbbls from the āemergencyā stockpile since 2020 for largely political reasons.
Refiners easing off - after a turbo summer where utilization rates were in the high 90%s, US refineries are expected to reduce rates to the low 90%s as the sector enters maintenance season. It should be enough to keep a lid on gasoline prices.
US investors pushing back against shareholder climate calls - BlackRock, Vanguard, State Street, and JPMorgan, all major shareholders in the top 5 western IOCs, voted against an activist shareholderās resolution for more climate action at each of the 5 IOCs.
š° Europe
Equinorās 55-day development - the company announced a discovery of up to 16 mmboe of gas near the Gina Krog field in the North Sea and plans to start production as soon as this year. Yes, really, within the next 55 days. Impressive.
Private equity chasing Rosen - Partners Holding Group, a Swiss PE firm, is in talks to buy Rosen Group, a European company that specializes in testing the integrity of oil and gas assets. Rosen is said to be worth ~$4bn.
OMV shares jump 5% on ADNOC rumors - the long-expected chemicals merger could be announced within weeks.
Lime farms into Brasse - the deal for a 17% WI from OKEA and DNO corresponds to 4 mmboe of net resources. FID on the offshore Norway field is due next year.
š The Middle East
Kuwaitās mega borrowing - KPC needs to raise a cool $45 billion from lenders and asset sales to help fund its 5-year spending plan. The country is going on a spending spree as it pushes to increase its oil capacity by 0.3 mmb/d over the next couple of years to 3.2 mmb/d. OPEC really needs high oil pricesā¦
Egypt imports rare LNG cargo - energy shortages and power outages caused by disrupted gas supplies from Israel have pushed Egypt, usually an LNG exporter, to import an LNG cargo.
Iranās oil exports slipping - the country exported ~1.4 mmb/d of crude and condensate in October, down ~0.2 mmb/d compared with September. Iran keeps its data hush hush to avoid sanctions so exports are estimated by using satellite imagery to track oil tankers.
Aramcoās earnings - the worldās most profitable company reported a 23% decline in net profit in Q3 2023 to just $32.6 billion. Poor Saudis, can anyone spare some change?

Absolutely loaded.
ā©ļø Asia & Oceania
Japan concerned about Arctic 2 LNG - impact to the massive Russian LNG project is āinevitableā after the US imposed sanctions on it, according to Japan which is a 10% owner. The project was set to be an important source of LNG supply for Japan which will now have to ārespond appropriatelyā to protect its energy supply, said the industry minister. Meanwhile, Russia sees the move as a US ploy to push global LNG prices higher for US LNG exporters.
Kazakhstan says nyet to Russian gas this winter - the central Asian country has pushed back to 2024 the signing of a long discussed gas supply deal with Gazprom.
š¦ Africa
Panoro hits pay in Gabon - the āsignificantā offshore oil discovery at Hbiscus South contains recoverable reserves of ~6-7 mmboe and Panoro hopes to have it onstream in 2024.
šæ Central & South America
Venezuela courting OFS - the country only has one active drilling rig today, compared with 80 in 2014, so is desperate to hire oilfield firms to ramp up production after the US lifted sanctions. Expectations are that the worldās largest oil reserve holder will only be able to increase output by ~200kb/d over the next couple of years thanks to years of mismanagement and under-investment.

š GEOPOLITICS & MACRO
Chinaās economy on the mend - Chinaās recent stimulus measures seem to be working: the IMF has upgraded its forecast for the countryās GDP growth in 2023 to 5.4% vs a previous estimate of 5%. Growth is still expected to slow next year though to 4.6% due to ācontinuing weakness in the property market and subdued external demand.ā

šØ CARBON, CLIMATE, & OTHER ENERGY STUFF
British Steel de-industrializing - the company is closing down its blast furnaces as it canāt meet environmental standards. Itās replacing them with electric arc furnaces which are unable to produce āvirginā steel but can repurpose scrap steel. The move will also cost 2,000 jobs and just shift that steel production abroad. Again, Europe confuses deindustrialization for decarbonisation.
Delhi choking on smog - school have been shut, some cars are banned from the road, and training sessions for the Cricket World Cup have been cancelled due to awful air pollution in Indiaās capital.
A tough year for battery metals - after surging in 2022, prices for battery metals have fallen back sharply this year. Lithium is down ~70%, nickel by 40%, and cobalt by ~15%. Why? Supply has surged and demand, largely driven by EVs, hasnāt kept pace.

If you squint, you can just about make out the Taj Mahal | Source: Hindustan Times

š¢ļø BOTTOM OF THE BARREL
When everything is climate change:
Marxists never waste a crisis.
ā Steve Milloy (@JunkScience)
12:37 AM ⢠Nov 5, 2023

š BEFORE YOU GO
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