The Barrels are back, baby!

So, what did I miss…?!

Like a rig emerging from months of idle stack up, Both Barrels is back in business and ready to hunt for hydrocarbons.

Please forgive my absence over the past few months. Moving continents and jobs had me a little preoccupied but the dust has now settled and it’s time to get back to it.

I’ll do my best to drop in your inbox every morning but I apologize in advance if a day here or there slips through the net. Blame my new boss.

Anyway, enough of that. Here’s what going down in all things oil, gas, and energy today:

• 💨 Bracing for Beryl

• 🙏 Remembering Piper Alpha

• 💰 Majors back UAE LNG

• 🤖 Google’s net-zero plans decimated by AI

• ➕ plus Devon buys Grayson Mill; rare sensible energy policy in Germany; Shell’s biofuels hit; US refiners under strain; Great Barrier Reef is better than ever.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• GoM braces for Beryl - the US Coast Guard has warned that various ports, including Corpus Christi, in Texas may be forced to shut as the strengthening tropical storm Beryl makes landfall today. Shell has evacuated workers from several offshore platforms but Chevron has said that production at its assets remains at normal levels. Baton down the hatches.

• Devon splashes out $5bn - Devon has acquired Grayson Mill, which comprises of ~ 100 kboe/d of production (55% oil) and 307k net acres in the Williston Basin, in a cash and stock deal. The US onshore M&A frenzy ain’t over yet.

• Volatile fuel prices inbound - record summer heat and hurricanes are likely to put strain on the US refining system in the coming weeks. The threat of storms is obvious, but high temperatures can also lead to equipment malfunctions and reduce capacity.

• Oil rig count unmoved - the fleet remained flat at 479 last week, its lowest level since December 2021. There tends to be a ~3 month lag between oil prices and the US rig count so it will be a few weeks yet before the recent strength in oil prices is reflected in drilling activity.

• Pembina Gas snaps up Kaybob stake - the Canadian company is acquiring a 50% WI in the gas processing plant from Whitecap for ~$300m.

🏰 Europe

• Remembering Piper Alpha - a remembrance service was held in Aberdeen over the weekend to mark the 36th anniversary of one of the darkest days in the industry’s history. On the night of 6th July 1988, technical failures led to a huge explosion on the offshore Piper Alpha platform in the North Sea, claiming 167 lives.

• First gas at Kristin South - rapid work: the PDO for the offshore Norwegian project was approved by the authorities in 2022.

🕌 The Middle East

• Majors lumping into UAE LNG - Shell, BP, Total, and Mitsui have each taken a 10% stake in ADNOC’s planned 9.6 mmtpa Ruwais LNG project in the UAE, which will be one of the world’s lowest-carbon intensity LNG plants. As global demand for LNG is set to grow by 50% to 2040, energy big dogs can’t get enough of the super chilled gas.

• Looney’s comeback - the former BP boss is schmoozing up to officials in the UAE after getting booted out of the British company last year for some dubious ex-curricular activities.

• Turkmenistan → Iran → Iraq gas swap - 10 bcm of additional Turkmen gas will flow into Iran via a new 125 km pipeline, freeing up volumes for Iran to export into Iraq. Iraq is thirsty for more gas, while Turkmenistan, holder of the world’s fourth largest gas reserves, is looking for new markets. As they don’t share a border, Iran is acting as the middle man.

⛩️ Asia & Oceania

• A $5bn shot in the arm for Pakistan’s upstream sector - the PM announced that domestic and international firms have agreed to invest $5bn over the next 3 years to develop its fledgling E&P sector. The country of 285 million people produces just 70 kb/d of oil and so is heavily reliant on imports.

• Petronas boosts its LNG fleet - the Malaysian NOC is adding 3 more ships to its North American portfolio.

🦁 Africa

• Drilling starts at closely watched Namibia well - ReconAfrica is hoping to open up a frontier onshore basin in Namibia with its wildcat that’s targeting a 160 mmbbls prospect. Good luck lads and ladies.

🗿 Central & South America

• FLNG for Argentina - Golar LNG and Pan American Energy are deploying an FLNG facility to export gas from Argentina’s Vaca Muerta shale play. The project is expected to start up in 2027.

• Developing Mexico’s offshore gas - Grupo Carso, a company controlled by Mexico’s richest man, Carlos Slim, will invest $1.2 bn in developing the offshore Lakach gas field.

🌍 GEOPOLITICS & MACRO

• France’s shock election results - a surprise surge in votes for a left wing coalition has upended expectations that France’s right wing National Rally would come to power in the county’s elections. The left alliance won 182 seats, Macron's centrist alliance 168, and Le Pen's National Rally 143.

• Who’s behind Boliva’s botched coup? - President Arce blamed the US, claiming Uncle Sam wants to control Bolivia’s vast lithium resources. Others have suggested the president himself was behind it, in a classic false flag operation aimed at galvanizing his support. It wouldn’t be the first time the US has backed some foreign usurpers but given that lithium is a dime a dozen these days, and there’s plenty of the stuff in North America, Arce’s claim is far-fetched, even for this tin hat conspiracy theorist.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Shell’s $1 bn Rotterdam biofuel loss - the company is taking a hefty writedown after pausing construction at one of Europe’s largest biofuel plants in the Netherlands. Many majors are winding back their “low-carbon” plans as they realize most are a bonfire for shareholder cash.

• Google chooses AI over emissions - the tech company’s GHG emissions have climbed by 48% since 2019 due to a surge in power consumption at its data centers that drive AI. The company said its goal to reach net-zero emissions by 2030 was now “extremely ambitious”…you don’t say!

• Germany overhauling renewables subsidies - up until now, wind and solar developers have been given 20-year guaranteed fixed prices to incentivize deployment. In the first sensible piece of energy policy that has come out of Germany in decades, this is about to change. Developers will soon get one-off upfront subsidies but will then have to take market prices for their power.

🛢️ BOTTOM OF THE BARREL

Pray for the UK now it has a “Minister for Energy Security and Net Zero” (no matter those two things are fundamentally incompatible) who is dead set on a zero-carbon power grid by 2030.

Funny, this sort of thing doesn’t seem to make the headlines:

👋 BEFORE YOU GO 

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Thanks for reading and please share us with your pals. Have a top day out there. 🛢️🛢️