12th December 2023

Morning, morning everyone. Here’s what hit the wires today in oil, gas, and energy:

• 🚢 Missile attack on Norwegian tanker

• 👑 Oxy takes its Crown

• 😬 COP deal on life support

• 🥊 BP vs Venture latest round

• ➕ plus AI meets an LNG tanker; Petrobras’ digital twin; Niger becomes and oil exporter.

Let’s take a took.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Oxy takes its Crown - the widely expected deal will see Oxy acquire privately held Permian producer CrownRock in a cash-and-stock deal valued at $12bn. CrownRock produces ~170 kboe/d and has ~1,700 undeveloped locations that can breakeven at $40/bbl WTI. Oxy will be raising over $9bn of new debt to finance the deal, which it will then aim to pay down through asset sales. Merger mania continues apace in the US shale patch and deals in the Permian alone have surpassed a combined value of $100bn in 2023. .

• Coastal GasLink looking for $740m in damages - the developer of Canada’s Coastal GasLink project, which was completed in October at over double the budget, is after one of the main contractors for the sum, alleging poor performance. Building energy pipelines in Canada sounds like a nightmare…(also take a look at the Trans Mountain project).

• BP asks US regulators to intervene in Venture Global dispute - in the latest round of oil majors vs Venture, BP claims the regulator isn’t enforcing its own rules and that Venture’s Calcasieu Pass operations aren’t meeting transparency requirements. Venture, again, shrugged off this latest attempt by one of its origin buyers to start commercial operations (and therefore deliver contracted cargoes) at the facility.

🏰 Europe

• Neptune hits pay at Kyrre and shores up Ofelia - wells drilled at the two prospects in the Norwegian North Sea estimate up to 19 mmbbls and 33 mmbbls, respectively, of recoverable reserves at the two fields.

🦁 Africa

• Niger set to export crude for the first time - the China-financed pipeline, which will carry oil from Niger’s Agadem oilfield to Benin’s port of Cotonou, is set to export its first barrels in January.

• South Africa looks to Russia for refinery financing - state-owned PetroSa is raising capital from Gazprombank to restart operations at its 45 kb/d Mossel Bay refinery which has been mothballed since 2020 due to dwindling domestic offshore gas resources. Western sanctions is a risk SA seems willing to take to revitalize its struggling energy sector.

🗿 Central & South America

• Petrobras and Halliburton building digital twin for giant pre-salt field - a digital twin is a virtual representation of the physical asset that replicates its behavior and characteristics. It allows operators to run 'what if' scenarios to improve decision-making and optimize field development.

• Business as usual in Guyana, for now - Chevron’s CEO is confident that the dispute between Guyana and Venezuela will be resolved diplomatically. Meanwhile, Guyana’s president commented that oil majors are “moving ahead aggressively” with production plans and that troops are ready to defend the country’s territory if need be.

🌍 GEOPOLITICS & MACRO

• Houthi missile strikes Norwegian tanker - things are really hotting up in the Red Sea. A cruise missile launched from Yemen hit a chemical tanker which was bound for Israel. Somehow there were no injuries. With attacks escalating like this in one of the world’s most crucial waterways, the US and its allies will surely be forced to respond. At this rate, what captain would want to sail their ship through these seas? And who would insure them?

• Frozen Russian assets to pay for Ukraine’s reconstruction - the EU is hoping to generate $16bn from a windfall tax on profits generated by Russian Central Bank assets, with the proceeds going to Ukraine. In total, G7 nations have frozen a cool $280bn of Russian Central Bank assets around the world. Estimates for the cost to rebuild Ukraine range from $400 billion - $1 trillion.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• COP deal on life support - various delegates including those from USA, UK, and Germany have said they cannot support the current draft deal as it’s not explicit enough in phasing out hydrocarbons. Meanwhile, many countries have made it clear that they will not agree to such a radical commitment. Al Gore tweeted that “this obsequious draft reads as if OPEC dictated it word for word. It is even worse than many had feared. It is “Of the Petrostates, By the Petrostates and For the Petrostates.”. Sounds like he’s not too happy then…The summit is due to conclude today but negotiations may go long into the night.

• US passes bill to ban Russian uranium imports - although there are various caveats including the ability to import Russian uranium in case of a shortage…

• Gunvor getting into power plants - the energy trader has acquired BP’s 75% stake in a Spanish power plant, marking the company’s first foray into the power generation industry.

🛢️ BOTTOM OF THE BARREL

When AI meets an LNG tanker (click the tweet to see the tanker get increasingly more chillllled):

It is, quite simply, delusional to think that we are ready to phase out hydrocarbons without huge negative impacts on the quality of life for everyone on the planet.

Get real, Al.

👋 BEFORE YOU GO 

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