8th December 2023

Goooood morning. Here’s Both Barrels with your final wrap up of the week:

• 🇨🇦 Canada’s “de facto production cap”

• 📅 Vision 2030-something

• 🗝️ Unlocking Permian’s gas riches

• ✋ Woodside and Santos merger headwinds 

• ➕ plus the latest from the Venezuela / Guyana border; Shell committed to Nigeria; anti-LNG clowns.

Have a great weekend everybody. See ya Monday.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Industry balks at Canada’s cap and trade - the proposed new system will require Canadian O&G producers to reduce their emissions by 38% in just 6 years. An industry body has warned the plans were tantamount to a forced production cut, while the opposition Conservative party, leading in the polls, said the cap was an attack on “Canada's world-class energy industry”.

• Exxon delays Golden Pass LNG start - the 18.1 mtpa facility was due to fire up late next year, but is now expected online in H1 2025. Exxon, which owns the project with QatarEnergy, didn’t give a reason for the delay.

• New Permian gas export capacity onstream - Kinder Morgan’s 550 mmcf/d expansion of its Permian Highway Pipeline is up and running. Permian gas output has been surging, lots of which is associated gas, but takeaway capacity hasn’t kept pace, creating gluts and sometimes pushing local gas prices at the Waha Hub negative.

🏰 Europe

• Edison’s Italy gas storage assets catch a few eyes - various domestic and international players are understood to have made offers of over €600m for Edison’s three gas storage sites in Italy. Last year’s energy crisis served as a reminder of the importance - and value - of gas storage, so it’s no wonder these assets have attracted some suitors.

• Fault shuts Shetland Gas Plant - it’s unclear when Total’s facility in the UK will restart operations. A failure in a heating system caused the release of a large quantity of steam which could be seen from miles away.

⛩️ Asia & Oceania

• Woodside Santos merger hurdles - it’s expected that the possible merger between the two Australian O&G heavyweights would face domestic anti-trust pressure, forcing the sale of assets. The price that Woodside would be willing to pay, or not pay, is also likely to create some headwinds for the deal. Santos’ shares up are up ~6% since the news broke.

• BP and AKR to develop East Java LNG import terminal - the project is due onstream in ~2027 and is set to coincide with the start-up of many gas-consuming projects in the region.

• PTTEP reveals three “remarkable” discoveries - the oil & gas discoveries were made offshore Malaysia, close to the company’s large Lang Lebah gas field.

🦁 Africa

• Invictus Energy discovers gas in Zimbabwe - Exxon abandoned exploration activity in the country back in the 1990s but Invictus used Exxon’s data to help discover “the large potential of the Mukuyu field”. The company’s shares jumped nearly 30%.

• Shell’s $6bn Nigeria commitment - the company announced plans to invest $5bn in the offshore Bonga North oil project and a further $1bn to develop Nigeria’s gas industry. Shell has a long and chequered history in Nigeria where it has been operating since 1937.

🌍 GEOPOLITICS & MACRO

• Vision 2030-something - Saudi Arabia has admitted for the first time that some of the projects in its ambitious flagship Vision 2030 economic transformation plan will be delayed. The kingdom’s finance minister cited needing more time to build factories and human resources. All the money in the world can’t stem the flow of time. A wise lesson for life more broadly, I suppose.

• The latest on Venezuela / Guyana:

  • Brazil’s President Lula expressed “growing concern” about the situation. "If there's one thing we don't want here in South America, it's war”. Brazil has been increasing its military presence along its border with Venezuela.

  • The US military is upping its operations with the Guyanese army. That’s not a good sign…

  • Venezuela has issued arrest warrants for 13 individuals it accuses of being agents of Exxon and who tried to disrupt its referendum on the weekend. Unsurprisingly, many of those named are part of an opposition presidential candidate’s team.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• ‘Green’ groups at COP call for LNG restrictions - over 200 orgs released a letter at COP to US President Biden to halt support for the LNG industry. I suppose they’d rather we all use coal, or maybe just not bother with heating at all this winter? These are not serious people. They think they have the moral high ground but their policies would be devastating for hundreds of millions of the world’s poorest.

• US to vote on Russian uranium ban - Russia is the number 1 supplier of enriched uranium used to fuel the US’ 90+ commercial nuclear reactors. But the US House of Reps will soon vote on whether to ban imports of the stuff in light of Russia’s invasion of Ukraine.

🛢️ BOTTOM OF THE BARREL

Imagine putting this detour into your satnav:

We wonder why it takes so long to build anything in Europe:

Aaaaand, finally, it wouldn’t be a normal week without some bad news from the poster boy of how-not-to-do-an-energy-transition, Germany:

👋 BEFORE YOU GO 

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