11th December 2024

Good morning team - this is Both Barrels with your daily dose of all things oil, gas, and energy:

• ☀️ China’s solar cartel

• ⏩ Trump steps on the gas

• 📈 Sky high European power prices

• 💤 Shell and Greenpeace settle

• ➕ plus US crude imports decline; a South Korean mega discovery?; delays to Johan Castberg; a good day for PNG; bitcoin is worth more than Aramco; China preps more economic stimulus; king coal reigns on; and barrels more.

Let’s dive in…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Trump steps on the gas - the incoming president has said that any company investing at least $1bn in the US will receive expedited permits, “including, but in no way limited to, all environmental approvals”. Good news for LNG developments that often get mired in long approval processes.

• US net crude imports at lowest level for decades - due to rising domestic production and reduced refining activity, US net crude imports next year are forecast at 1.9 mmb/d, a fall of 20% vs 2024, and their lowest levels since 1971. Despite high domestic output, the US still imports large volumes of heavier crude that its refineries are better suited to, and exports lots of its lighter shale crude.

• New Alaskan leases on offer - the US gov’t will offer O&G drilling leases across 400,000 acres of Alaska’s Arctic National Wildlife Refuge in January. This is the minimum required by a 2017 law that mandated the sale.

• Pantheon pops by 25% on Alaska discovery - the small indy’s share price jumped after it revealed a well at its Ahpun field in Alaska hit a “large” column of liquids.

🏰 Europe

• Bad weather blights Johan Castberg start-up - first oil at Equinor’s new ~550 mmbbls development in the Barents Sea in Norway has been postponed by a month or two until Jan or Feb 2025 due to terrible weather. The project will produce for 30 years, reaching a max production of 222 kb/d of oil.

• IOCs greenlight major UK CCS projects - Equinor, BP, and Total have given the greenlight to construct the UK’s first two CCS projects that will have the capacity to store 4 mtpa of CO2 per year. Now do the same for a few more oil and gas developments, please.

🕌 The Middle East

• Not much going on here…

⛩️ Asia & Oceania

• South Korean E&P? - that’s the first I’d heard of it too, but a drillship has arrived in the country to spud a rare exploration well, named Blue Whale 1, that is targeting a multi billion barrel resource.

• Breakthrough for Papua New Guinea - Twinza Oil and the PNG government have agreed terms for the Pasca oil project, a major step forward for the country’s first offshore oil and gas development.

• More good news for PNG - Exxon is fast tracking its P’nyang gas field “years sooner than previously envisaged”. The field holds 4.4 tcf of gas and is set to be a key source of feed gas for PNG’s existing and under-construction LNG export terminals.

🦁 Africa

• Nor here…

🗿 Central & South America

• And, unsurprisingly, not here either.

🌍 GEOPOLITICS & MACRO

• Israel takes its chance - taking advantage of the power vacuum in Syria, Israel has flattened Syria’s military, destroying its air force, navy and weapons stockpiles in nearly 500 airstrikes to ensure the equipment doesn’t fall into the hands of extremists. Good stuff.

• More Chinese economic stimulus - the government said it would adopt an “appropriately loose monetary policy” next year in an attempt to spur economic activity. Reading between the lines, analysts think the wording signals large fiscal stimulus, interest rate cuts, and quantitative easing.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• China’s solar cartel - a group of over 30 of China’s biggest solar panel producers have signed a pact to set production quotas in an attempt to combat the huge oversupply and low prices in the solar market that is pushing many to bankruptcy. I hope they call themselves OSEC.

• Europe power prices surge - a slump in wind power generation has pushed power prices in parts of Europe to 2 years highs, with prices in Germany reaching €267/MWh (for context, the long term average is ~€50/MWh). It’s total madness to rely on the weather to power our economies.

• Shell and Greenpeace reach settlement - hmm how boring. Greenpeace has agreed to pay £300,000 to a lifeboat charity in an out of court settlement after its protesters twice boarded Shell infrastructure in the UK last year. Shell was originally suing Greenpeace for £1.7m in damages. Shame they didn’t go after them harder.

• King coal reigns on - global consumption of coal is set to hit new record highs this year, growing by ~2% vs 2023. But what about that energy transition I keep hearing about?

• Norway and Australia’s hypocrisy - both countries have published new national guidelines saying they wont invest in overseas hydrocarbon projects that don’t have carbon capture. A reminder that both countries are major hydrocarbon producers and exporters…

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO

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

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