Good morning guys and gals. Trust you had sizzling weekend. This is Both Barrels. Your daily dose of all things oil, gas, and energy, without the hot air.

Here’s what we’ve got for you today:

• 😶 G20 keep coy on hydrocarbons

• 👍 US shale reacting to higher prices?

• 🇬🇾 Boom time in Guyana

plus a lot more. Let’s drill…

📈 The numbers

No major moves in oil prices but European gas has jumped higher again after strikes have raised the prospects of outages at two of Chevron’s Australian LNG facilities.

🗞️ Well-headlines

 🗽 North America

• The US oil rig count rose last week for the first time since June. The massive increase of one rig, to 513, could be a small hint that the US shale sector is beginning to react to higher oil prices. There’s usually a 3 month lag between oil prices and rig count so you’d expect rigs to be climbing again around about now.

• Exxon’s closely watched exploration well at the Gale license, offshore Newfoundland and Labrador, Canada, has come up dry. The company is scheduled to have another go next year.

🏰 Europe

• Russia has shipped its first tanker of crude to Brazil since 2016 as it seeks new markets in light of Western sanctions. It’s a bit unusual as Brazil is a major oil producer itself, but it does sometimes import crude for refinery purposes (as many large producers do). Plus both countries are part of the BRICS alliance so maybe that’s got something to do with it.

🕌 The Middle East & North Africa

• Libya is closing four oil export terminals for at least three days as it braces for an incoming hurricane. Due to civil war, Libya’s oil production has yo-yoed in recent years and today stands at ~ 1.2 mmb/d. In the Gaddafi-era (pre-2011) it was stable at around 1.6 mmb/d but has fallen to almost 0 several times since.

⛩️ Asia

• Thailand’s LNG regas capacity is expected to nearly double by 2030 as the country becomes increasingly reliant on gas imports, according to a PTTEP official. LNG imports contribute ~30% of the country’s total gas demand. Thailand is one of many countries building new LNG infrastructure, helping to develop the market from a long-term “floating pipeline” system to a more flexible, multi-noded, and liquid market.

📍Everywhere else

• A US judge has ruled that Argentina must pay $16bn to YPF minority shareholders after the country nationalized Repsol’s 51% stake in the company back in 2012. Argentina, which is hardly flush with cash these days, has said it will appeal the verdict.

• Chevron has said that it sees “no reasonable prospect of agreement” with unions to end strikes at its Gorgon and Wheatstone LNG plants in Australia. Its plan now is to call on a new, unused law that will see a government official force both parties into an agreement (no idea how) and end the strikes.

• Guyana, the hot new kid on the crude block, is expected to reach oil production of 1.2 mmb/d by 2027 (vs ~0.35 mmb/d today), surpassing several OPEC countries. The boom has been driven by various large high quality crude discoveries by an Exxon-led consortium, and last year helped the country’s GDP grow by a whopping 62%. Sounds like Georgetown is the place to be…

• Sierra Leone’s capital, Freetown, has suffered powercuts after Turkish company Karpowership switched off power ships over an unpaid debt of ~$40 million. The ships, which are basically floating power plants fueled by LNG or heavy oil, are docked in the city and provide ~80% of the entire country’s power.

🌍 Geopolitics & macro

• G20 leaders, gathered in Delhi over the weekend, found some time between photo ops to agree on a tripling of global renewable power capacity by 2030. The only reference to hydrocarbons was a pledge to phase down "unabated coal power". Re emissions, the wording was typically open ended: "we reiterate our commitment to achieve global net zero green house gas emissions/carbon neutrality by or around mid-century, while taking into account the latest scientific developments and in line with different national circumstances". Looks like Saudi et al got their way.

• In other non-energy related G20 news, India’s PM Modi is on a mission to change the country’s name to Bharat. Bharat is how the country is referred to in ancient Sanskrit scriptures. Modi says the name “India” is an artifact of colonial slavery.

💨 Carbon, Climate & other energy stuff

• The energy policy maestros in Germany have struck again. The government has passed a law banning most oil & gas use in domestic heating. The policy will come into effect for new builds from next year, and by 2028 for existing homes. Given the country has effectively banned nuclear too, the poor Germans will be reliant on the whims of the weather to stay warm. Is it possible to short an entire country?

🛢️Bottom of the barrel

It’s not surprising that the G20 didn’t make a concrete commitment to reduce hydrocarbons. There are geopolitical reasons that they didn’t, of course, but also practical ones.

Despite trillions in investment into wind and solar, hydrocarbons still provide ~80% of the world’s energy needs and have been responsible for huge improvements in our collective quality of life since the early 1900s.

Whether you like it or not, there’s a long long future ahead for hydrocarbons. Growing standards of living in the developing world and in sectors where there are no viable alternatives such as heat in heavy industry, aviation, shipping, plastics, concrete, fertilizers etc, will drive demand for decades to come.

Changing a country’s name sounds like the biggest admin headache ever…

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