15th November 2024

Happy Friday Both Barrels crew. Here’s what hit the wires today in all things oil, gas, and coal:

• 💰 Coterra splashes $4bn

• 🚢 Asian FPSO heavyweights joining forces

• 🪓 Exxon cutting 400 Pioneer jobs

• 📈 Venture readying IPO

• ➕ plus IEA’s latest oil market predictions; Shell considering Argentina LNG investment; China’s offshore solar; Pemex gets a lifeline; Germany rejects Russian LNG; exciting times in West Africa; and barrels more.

Have a great weekend.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Exxon cutting ~400 Pioneer jobs - the jobs will be lost over the next two years and will mostly be in Dallas and Midland, as Exxon consolidates and cost cuts following its $62bn acquisition of Pioneer.

• Venture LNG lining up $3bn IPO - the developer behind the Calcasieu Pass LNG facility is aiming to list in New York, possibly as soon as this year, with the help of Goldman Sachs and JPMorgan Chase. Venture remains embroiled in a spat with IOCs over cargoes from its recently opened facility in Louisiana.

• Coterra splashes $3.95bn - in two separate deals, the company has acquired assets in the Permian from Avant and Franklin Mountain, using cash and shares. The assets will add about ~65 kboe/d to Coterra’s production in 2025.

• Ridgemar explores $1bn sale - the PE-owned E&P is based in the Eagle Ford Basin and produces ~ 25 kboe/d across 70,000 net acres.

• Ovintin in two multibillion $ deals - it has acquired ~65kboe/d of production from Paramount Resources in the Montney shale in Canada for $2.4bn, and also sold its Uinta Basin assets in Utah to FourPoint Resources for $2bn.

• Oxy sells non-core acreage for $779m - the Powder River basin and the Delaware basin assets were acquired by Anschutz Exploration, which Oxy said was better placed than they were to develop the acreage. A busy few days for M&A.

• Sharp fall in US gasoline stocks - the decline of 4.4 mmbbls last week (vs an expected 0.6 mmbbls increase) has taken gasoline stocks to their lowest levels since Nov. 2022. Crude inventories were up by up by 2.1 mmbbls.

🏰 Europe

• Germany orders ports to reject Russian LNG cargo - a Russian shipment was reportedly about to offload at one of Germany’s new LNG import facilities before the government intervened. Russian LNG is not banned in the EU and much of it goes to France, Spain and Belgium.

• OMV wins €230m arbitration against Gazprom - the dispute was over irregular gas supplies by the Russian company in 2022. OMV admitted the proceedings would damage the relationship with Gazprom but basically said they didn’t care as they have now diversified their gas supply.

• Equinor on the money at Rhombi - a successful exploration well at the prospect near its Fram field offshore Norway discovered 13-28 mmboe.

🕌 The Middle East

• ANDOC signs LNG supply deal with GAIL - the UAE energy giant will deliver 0.52 mtpa to the Indian company for 10 years, starting in 2026.

⛩️ Asia & Oceania

• Asian FPSO heavyweights planning merger - Bumi Armada and MISC’s offshore business are considering joining forces and have signed an MoU to explore the possibility.

• Shell facing more strikes at Prelude FLNG - the facility offshore Australia looks like it might suffer more downtime as workers threaten to down tools, not for the first time since production started in 2019.

🦁 Africa

• Azule’s big year ahead in Angola - the BP-Eni JV is lining up three “very important” exploration wells in Angola in 2025, according to its CEO. The wells will be drilled in the Congo basin as well as the frontier Namibe basin.

• Halliburton opening up shop in Namibia - the OFS is opening up new offices in Namibia, signalling its optimism in the future of this West African E&P hotspot.

• Kosmos crosses fingers in EG - the indy has started drilling at the Akeng Deep prospect, offshore Equiatorial Guinea, where it is targeting 180 mmbbls of resources.

🗿 Central & South America

• Shell eyeing up Argentina LNG investment - Shell is rumoured to be considering investing in the proposed mega $55bn 30 mtpa LNG project led by YPF in Rio Negro, Argentina. The gas will be sourced from the vast reserves of the Vaca Muerta.

• Pemex gets a lifeline - the Mexican government is set to carve $6bn out of its 2025 budget to support the heavily-indebted NOC in meeting its debt obligations. Pemex has ~$21bn of debt maturing over the next 2 years and total debt of ~$100bn (equivalnt to ~6% of the country’s GDP!).

• Saipem wins big in Suriname - the OFS landed a $1.9bn contract with Total for work at the 750 mmbbls offshore GranMorgu development. Technip also bagged a juicy contract at the project.

• First steel cut at Woodside’s Trion - the semisub will be the first deepwater oil production platform to operate offshore Mexico, and its targeting max output of 100 kb/d, with first oil in 2028.

🌍 GEOPOLITICS & MACRO

• IEA raises demand forecast but warns of oversupply - the agency has increased its 2024 oil demand growth estimate slightly to 920 kb/d (from 862 kb/d in its last report), but thinks that “that even if the OPEC+ cuts remain in place, global supply exceeds demand by more than 1 mb/d next year”. Meanwhile, OPEC sees demand growth this year at ~1.8 mmb/d. Neither sources are particularly impartial in my view…

• Russia and Saudi going strong - Putin and MBS spoke to bolster their “friendly and mutually beneficial” relations, including cooperation in OPEC+. Back during Covid the relationship fell apart, sparking a “price war” which famously sent WTI down to -$37/bbl.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• China’s offshore solar - state-owned China Energy has begun operations at its 1GW solar farm in the sea offshore northeast China. The panels are not floating, but are on steel frames fixed to the seabed.

• Majors pledge $500m for energy access - the announcement made on the sidelines of COP earmarks finance for domestic solar systems, micro grids, and modern cooking fuels primarily in sub-Saharan Africa, and Asia.

• India after more nuclear - the federal government has encouraged states without coal resources to consider building nuclear power stations instead. India currently has about 8 GW of nuclear capacity and aims to increase this to 20 GW by 2032.

🛢️ BOTTOM OF THE BARREL

My British friends, how would you feel about being mandated to cut back on your burgers and summer holidays to help reduce global temperatures by a infinitesimally small fraction of a degree?

Most of the major world leaders weren’t there but Brazilian footballing legend Ronaldinho made it to COP:

👋 BEFORE YOU GO

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

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