9th August 2024

Happy Friday team. Wrapping up the week with today in oil, gas, and energy:

• 🔼 Refill the entire SPR?

• 💊 A taste of Putin’s own medicine

• 🌳 The biomass scam

• 📷 Nuclear tourism

• ➕ plus China’s mega gas discovery; Penguin in place; new LNG terminal for Scotland; crude inventories fall; Brent back near $80/bbl; California’s surging power prices; Equinor packs more bags.

P.S. you may have noticed a different schedule to BB this week. I want to find a rhythm that I can stick to and that you can rely on so aiming to send this every Monday, Wednesday, and Friday.

Have a great weekend.

📈 THE NUMBERS

And just like that, confidence has returned to the markets. Brent is nearly back above $80/bbl and stock markets have recovered a good chunk of their losses.

Funny how fickle we humans are.

🗞️ WELL-HEADLINES

 🗽 North America

• Trump wants to refill the SPR - if elected, Donny T said he’d fill up the depleted tanks immediately. That would involve buying about ~300 mmbbls of crude, which equates to ~15x the USA’s daily demand. Oil price sure would love that…

• Franklin Mountain up for the sale - the Permian producer is the latest in privately held oil companies to go up for sale. Run by the already-loaded refining billionaire Paul Foster, it’s expected to fetch ~$3bn.

• Crude inventories drop - commercial stocks fell by 3.7 mmbbls last week to 429 mmbbls. Expectations had been for a smaller 0.7 mmbbls draw. This level is slightly lower than the five year average for this time of the year.

• Some earnings highlights: Oxy smashes forecasts on strong production; Marathon Oil misses and blames low gas prices; US refiners reining it in after strong Q2.

🏰 Europe

• Penguin in place - Shell’s Penguin FPSO has been successfully installed at the eponymous field in the UK North Sea. The vessel is Shell’s first new manned installation in the North Sea in nearly 30 years. First oil is due later this year.

• New LNG import terminal planned for the UK - Crown LNG plans to build the facility, which would be the UK’s fourth, in Grangemouth, Scotland. As domestic North Sea production declines (in large part thanks to suicidal government policy), the UK is becoming increasingly reliant on imports.

⛩️ Asia & Oceania

• China confirms 100 bcm gas discovery - the Lingshui field in the South China Sea is the first ultra-shallow gas field discovered in ultra-deep waters globally. The precise location of the field has not been revealed but the find raises the stakes even further in the fiercely contested South China Sea waters.

🦁 Africa

• Scraping with the Tanzanian government - Canadian-based indy, Orca Energy, is trying to sue the Tanzanian government for $1.2bn. The dispute is over the government’s failure to grant Orca an extension to a production licence for the Songa Songa gas field (what a name!) which Orca has been operating for over twenty years.

• Force majeure at Libya’s Sharara - after the 300 kb/d oilfield was forced to shut earlier in the week due to “political blackmail” and protests, the country’s National Oil Corporation had declared force majeure, meaning it’s free of contractual obligations relating to the supply of oil from the field.

🗿 Central & South America

• Equinor packs more bags- the company has withdrawn from Suriname as it continues to focus on a handful of core regions: Norway, the US Gulf of Mexico and Brazil. Over the last six years, Equinor has left 20 countries, including South Africa, Mexico, Turkey and Nicaragua.

🌍 GEOPOLITICS & MACRO

• Ukraine invades Russia - about 1,000 Ukrainian troops crossed into Russia, marking the first time since World War II that another country’s army has invaded Russia. It’s not clear what the objective is - perhaps to divert Russian forces away from the front lines in Ukraine - but nice to see Putin get a small dose of his own medicine. Good luck lads.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Nuclear tourism - in a novel approach to winning support for nuclear power, China’s General Nuclear Power Corp is opening up 9 of its power stations to visitors. Book online today!

• The biomass scam - the UK’s largest emitter, Drax, which operates biomass power plants, landed £500m in subsidies last year. Burning biomass for power emits more CO2 per MWh than coal but somehow the industry managed to convince naive politicians that it’s clean and rake in millions in subsidies.

• Virgin Atlantic sustainable aviation fuel ad banned - to much fanfare, Richard Branson flew across the Atlantic earlier in the year on a “100% sustainable” flight. However, while production of SAF is lower carbon, the emissions created during the flight are the same as traditional kerosene jet fuel.

• California’s surging power prices - consumers in The Golden State have seen their power bills double over the past decade, driven by large investments by utilities into renewable energy integration and grid upgrades to accommodate this intermittent power. California now has the second highest power prices of all US states (behind Hawaii) and ~20% of households are in arrears on their energy bills. Again: go woke, go broke.

🛢️ BOTTOM OF THE BARREL

All across Europe, biomass is labelled as “green” and counted towards low-carbon targets. It’s nonsense.

👋 BEFORE YOU GO 

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

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