15th January 2025

Morning ladies and gents. Here’s your daily dose of all things oil, gas, and energy:

• 😎 What a dude

• 🧪 The Periodic Table of Oil

• ❌ East Coast backbone offline

• 🇷🇺 Stifling Russian sanctions

• ➕ plus Norway keeps exploring; upside risk to oil prices; GeoPark thwarted in Colombia; Namibian jackpot?; nuclear’s ballooning costs; on the brink of peace in Gaza; and barrels more.

Let’s dive in.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Chris Wright set for Senate confirmation hearing - Trump’s pick for Energy Secretary knows what’s what: “The security of our nation begins with energy…Previous administrations have viewed energy as a liability instead of the immense national asset that it is….[My first priority is to] unleash American energy…There is no climate crisis. And we are not in the midst of an energy transition either”. What a dude.

• Colonial Pipeline Line 1 shuts for spill - the main artery moving ~ 1.5 mmb/d gasoline from the U.S. Gulf Coast to the East Coast has been shut since Monday night due to a potential spill in Georgia. The pipeline is one of two mainlines on the more than 5,500-mile sprawling Colonial pipeline system.

• Kinder Morgan splashes $640m - the company acquired a 104 miles 350 mmcf/d natural gas gathering system and a 270 mmcf/d processing system in North Dakota from from Outrigger Energy II.

• Gas producers staying cautious - despite the recent rally in nat gas prices to two year highs, US producers in the Haynesville aren’t ramping up output anytime soon, according to Aethon Energy president. It would take at least $5/MMBtu gas for a "significant" increase in Haynesville output, he said.

🏰 Europe

• Russia grapples with new sanctions - by going after tankers, the new US sanctions try to force upstream fields to shut in. If a field has no tanker to offload to, then they will be forced to choke back their production or build up storage. Several fields in the Russian Arctic are already being disrupted in this way.

• Norway hands out 53 new exploration licences - "If we are to uphold a stable production in the years to come, we must explore more and invest more," said the country’s energy minister. Blindingly obvious, you’d think. But they haven’t got that memo across the North Sea in the UK.

• Equinor rolls out more power-from-shore - the company is hoping the strategy of powering its offshore platforms with mostly hydro-generated power from onshore will help it hit its net zero targets.

• AkerBP bites dust at Rumpetroll South -the exploration well near the Bøyla field in the Norwegian North Sea failed to find commercial volumes of hydrocarbons. Unlucky guys.

🕌 The Middle East

• Aramco’s localisation drive - at its annual event aimed at increasing the involvement of local businesses in Saudi Arabia's energy sector, Aramco has dished out $9bn worth of agreements to local contractors.

⛩️ Asia & Oceania

• China and India on the hunt for new supplies - refiners in the two Asian giants are seeking new sources of cheap crude after new US sanctions on Russia hit many of the tankers being used to ship Russian oil to India and China. Russia is expected to adapt by using more of its shadow tanker fleet, which is said to number ~600.

• Shell and CNOOC expand JV - the JV will invest $8.4bn to expand its petrochemical facility in south China's Guangdong province.

🦁 Africa

• A Namibian jackpot - rumours are that Total may have made another major billion barrel discovery in Namibia’s Orange basin with its latest exploration well.

🗿 Central & South America

• GeoPark Repsol Colombia deal thwarted - the planned $530m acquisition announced in November has been torpedoed by one of Repsol’s partners in the assets exercising its preemption rights.

🌍 GEOPOLITICS & MACRO

• Geopolitical upside to oil prices - Goldmans thinks that oil prices could rise above $85/bbl in the short term as the latest US sanctions take their toll on Russian output. If Trump also goes after Iranian production (which is technically sanctioned but the Biden govt has turned a blind eye to), then crude prices may reach $90/bbl.

• Ceasefire hopes in Gaza - an Israel - Hamas ceasefire deal is "right on the brink” of being signed. In the short term, the deal would halt the fighting, free the hostages, and provide humanitarian assistance to Palestinians. It’s not clear what longer term agreements, if any, might be reached.

• NATO beefing up in the Baltic - after a series of sabotage attacks on telecomms cables and energy infra in the region, NATO has launched Baltic Sentry, a mission to patrol the seas with aircraft, warships and drones. "There is reason for grave concern", said NATO head Mark Rutte.

• Incoming oversupply - the EIA in its Short Term Energy Outlook thinks that rising non-OPEC supply and OPEC+ spare capacity will put downwards pressure on oil prices over the next year or two, as demand fails to keep up.

  • The agency said that US crude production hit a record 13.2 mmb/d in 2024 and that figure could increase to 13.5 mmb/d in 2025 and 13.6 mmb/d in 2026.

  • Global oil consumption is set to increase by 1.3 mmb/d in 2025 and 1.1 mmb/d by 2026, with India being the “leading source of global oil demand growth”.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Sizewell C’s ballooning $50bn budget - a planned new nuclear plant in the UK has seen its cost estimate rocket to $50bn, nearly double developer EDF’s initial estimate.

  • If the the nuclear sector in the West is to take off, costs need to come down dramatically via: reduction in crippling red tape and regulation, technology standardization, and supply chain establishment.

  • I’m a big fan of nuclear but $50 bil a plant just isn’t going to fly. It can be done - and is being done in the Middle East and China - much cheaper.

• Germany resorts to oil power - in Europe, in 2025, Germany’s is burning oil for power generation at its highest rate in 8 years as another wind drought hits and cold weather grips. Using oil to generate power is a poor use of the expensive fuel, given the alternatives, and is often used as a last resort.

• China’s $88bn grid investment - that’s how much the country invested into upgrading its power grid in 2024, including massive long-distance ultra-high voltage transmission lines to bring power from mega-bases in western China to the country's population centres. China doesn’t do half measures.

🛢️ BOTTOM OF THE BARREL

One for the oil nerds out there.

Every year Platts releases an interactive “Periodic Table of Oil” which provides details like API, sulphur content, and volume for over 100 different crudes.

Click here to have a play.

Being British, it’s not easy for me to give credit to the French. But, on nuclear, they’ve got it spot on.

If even they can do it, in the 1970s, then so can we in the 2020s.

The technology exists, it has for decades, we just need the will power.

👋 BEFORE YOU GO

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

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