16th September 2024

Good morning. Hope you all had a fun-filled weekend. Here’s what went down in all things oil, gas, and energy:

• ⛵ Wind powered LNG tankers

• 🎯 CIA foiled in Venezuela?

• ☠️ UK “fatally wounded”

• 🎲 No luck for Exxon in Newfoundland

• ➕ plus another pop at Trump; Apollo’s $1bn TAP deal; Salvaging Sounion, take 2; Saipem wins BIG; China in Suriname; nonsense in the Hague; Roc Oil bids for Tethys; US rig count climbs; commodities have never been so cheap; and barrels more.

Let’s dive in…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• No luck for Exxon in Newfoundland & Labrador - the closely watched Persephone wildcat in the frontier Orphan basin offshore Canada failed to find commercial volumes of hydrocarbons. The company had been drilling the well for ~3 months and was rumoured to be targeting a 3bnboe prospect.

• Judge blocks Converse County project - the 5,000 well project in Wyoming across 1.5 million acres was approved in the final days of Trump’s administration but is now in doubt after a judge ruled in agreement with activist groups that the environmental assessments are flawed.

• Rig count climbs - the US oil rig count grew by 5 last week to 488. Not what the market needs right now…Note there’s usually a lag of up to three months between oil prices and rig count impact so it will be a few more weeks before the recent oil price declines feed through.

🏰 Europe

• Apollo takes takes $1bn stake in Trans Adriatic gas pipeline - the EP firm has signed a deal with BP for a non-controlling stake in BP's unit that holds a 20% interest in the pipeline. Trans Adriatic Pipeline is the final 880km leg of the Southern Gas Corridor pipeline system, a 3,500km network stretching from the Caspian Sea to Europe.

• UK “fatally wounded” - a Wood Mackenzie report warns that UK government tax plans for the O&G sector could wipe-out £19bn of investment, halve UK production by 2030, and all but eliminate industry cash flows by the 2030s. A truly remarkable case of economic suicide.

• Roc Oil makes offer for Tethys - the all-cash offer values Sweden-based Tethys, whose key assets are in Oman, at $185m and represents a ~89% premium to its last closing price. Tethys’ board has unanimously recommended that shareholders accept the offer.

🕌 The Middle East

• Happy days for Saipem in Qatar - the company has landed an offshore EPC contract at Qatar’s North Field worth ~$4bn. The work involves six new platforms as well as 100s of kms of new pipelines and subsea cables. They’ll be popping bottles over at Saipem.

• Salvaging Sounion, take 2 - after a previous attempt failed due to safety concerns, a new operation with tug boats is underway to try and tow away the still-burning tanker in the Red Sea. The risk of a spill is said to be “real but not acute at this moment”. Reports are that the tanker will be towed to a habour in Suez where the crude can hopefully be offloaded.

🦁 Africa

• Dangote starts gasoline sales - Nigeria’s mega new 650kb/d refinery that started up this year has kicked off gasoline sales to the domestic market, using a fleet of hundreds of trucks. The flagship project, which will have more than enough capacity to cover Nigeria’s entire demand, is expected to upend West African markets that have been heavily reliant on products imports, despite plenty of domestic crude production.

🗿 Central & South America

• PetroChina lands Suriname PSCs - the Chinese NOC has got involved in the exploration hotspot in an agreement with Staatsolie for interests in offshore blocks 14 and 15. Excitement is running high in Suriname which neighbours booming Guyana but is a few years behind in the development of its resources and O&G sector.

• GranTierra taps bond market - the Colombia-focused indy is raising $150m at 9.5% to help pay for its acquisition of i3 Energy.

• Colombia gas drilling halted by judge - Petrobras and Ecopetrol have been ordered to suspend operations at the offshore Uchuva-2 well following complaints by Indigenous communities that say they didn’t give their consent. Colombia’s industry has been on a downward trend for years due to under-investment and hostile regulation.

🌍 GEOPOLITICS & MACRO

• Another pop at Trump - an assailant with an AK-47 was apparently found hiding in some bushes on the golf course that Trump was playing a round at. It’s unclear whether any shots were fired but the gun wielding nutter has been arrested. Thankfully all these would-be assassins are all completely useless.

• US denies Maduro assassination attempt - three US citizens, two Spaniards and one Czech were arrested in Venezuela, and weapons seized, with Venezuela claiming they are CIA “mercenaries” plotting to take out President Maduro. Who knows if it’s true but it certainly wouldn’t be the first time the US has opted to meddle in a communist Latin American nation’s politics via the barrel of a gun…

• Macquarie sees “heavy surplus” in oil markets - the bank sees oversupply for the next five quarters as non-OPEC supply increases amid tepid demand growth. Along with other financial institutions, Mac has lowered its crude price forecasts, and now sees Brent averaging $80/bbl for the rest of 2024 (feels optimistic to me!).

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Nonsense in The Hague - the Dutch city has become the first in the world to ban adverts for hydrocarbon-intensive industries such as aviation and cruises. Right, so no adverts for food, construction, medicine, cars, and anything made from plastic then? If these people hate hydrocarbons so much, why don’t they stop using them altogether?

• Wind powered LNG tanker - MOL and Chevron are planning to equip an LNG tanker with two 50m high hard sails, a world first. The vessel is due to be operational in 2026 and could save 5-8% of fuel per voyage.

• India’s $386bn renewable funding commitments - led by Reliance and Adani, two the country’s largest conglomerates, the commitments are aimed at helping India hit a goal of 500GW of low carbon power capacity by 2030 (from a current total of 153 GW). Coal output, meanwhile, is expected to grow ~9% in 2025 in India. Your regular reminder that you can’t replace baseload with intermittency.

🛢️ BOTTOM OF THE BARREL

Parts of the climate movement are fundamentally anti-human.

If you think there are too many people on Planet Earth, well…you first.

👋 BEFORE YOU GO 

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

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