16th February 2024

Happy Friday crew, here’s what we’ve got for you today in all things oil, gas, and energy, without the hot air:

• 👦 Young blood in the US shale patch

• 📈 Buffet going longer oil

• 🪓 Saudi axes $10bn contracts

• ⚠️ Avoiding the resource curse in Guyana

• ➕ plus more SPR refills; US House opposes Biden LNG plans; cyber war in the Red Sea; Canada’s CCS troubles; Venture not backing down;

Have a good one.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• A step closer to blocking Biden’s moronic LNG moratorium - the US House has passed a bill to strip the White House of the ability to grant and deny LNG approvals. However, the legislation needs to be passed in the Democratic-controlled Senate and signed by Biden to become law, both of which are unlikely. There is an election around the corner though…

• Buffet going longer oil - Berkshire Hathaway has further increased its interests in Oxy and Chevron in recent months, signalling the Oracle of Omaha’s confidence in the outlook for oil. The two companies are Buffet’s fifth and sixth largest holdings by value.

• Young blood in the oil patch - a gradual changing of the guard is set to put a younger generation of leaders in control of some of the US’s largest oil companies. Permian Resources’ COO told Texas Monthly, “I’m probably one of the more seasoned people here at the ripe old age of forty-one”.

• Venture Global not backing down - despite pissing off a bunch of majors by not supplying them with (allegedly) contracted LNG, Venture Global is seeking a year extension to complete the development of its Calcasieu Pass terminal. Shell, unsurprisingly, isn’t too happy with the request.

• More top ups for the SPR - the White House has bought another 3 mmbbls to replenish the SPR, taking the total purchased in recent months to ~23 mmbbls. A reminder that the government drained ~280 mmbbls over the past couple of years, so there’s still a long way to go.

• Oxy / CrownRock deal delayed by anti-trust requests - the $12bn deal is now expected to close in H2 this year, with Oxy complaining that the US Federal Trade Commission has “asked for everything”.

• Tellurian secures Driftwood LNG extension - the company’s shares jumped 15% after being given another 3 years to develop the long-delayed project in Louisiana.

• Total restarts Port Arthur refinery - the 238 kb/d facility had been closed for several weeks following a power outage and subsequent inspection.

• Some earnings highlights - Eni beats forecasts, helped by arbitration; Cenovus shares climb by 7% on production growth; PBF Energy posts surprise loss; Targa Resources reports strong earnings and forecasts more growth.

• Frac sand supplier going public - Alpine Silica has filed for an IPO.

🏰 Europe

• A tale of two seas - yesterday we wrote about the bleak outlook for the UK North Sea due to punitive policy proposals. But just across the maritime border, Norwegian companies are splashing the cash, and are set to invest $23bn this year, 18% higher than in 2023.

• Fire extinguished at Equinor’s Mongstad refinery - a fire at the facility in Norway caused a shutdown and evacuation. There we no injuries.

🕌 The Middle East

• Saudi cancels $10bn of contracts - following the recent announcement to reduce its oil capacity plans from 13 to 12 mmb/d, Aramco has axed a series of tenders for the expansion of its huge Safaniyah oilfield. The capacity cut is already starting to ripple through the sector…

⛩️ Asia & Oceania

• Troubles at Tangguh T3 - the third and newest 3.8 mtpa train at BP’s LNG export terminal in Indonesia is down due to an unknown technical issue.

🦁 Africa

• M&P officially kicked out of Carlyle deal - M&P had agreed to acquire Assala Energy in Gabon for $730m from Carlyle but the Gabonese government exercised its preemption rights and did the deal themselves.

🗿 Central & South America

• Avoiding the resource curse in Guyana - the hot new hydrocarbon patch is the world’s fastest growing economy thanks to booming oil production, but the success doesn’t come without its challenges, writes Bloomberg. Inflation, a growing wealth divide, and tensions with Venezuela mean that it isn’t all plain sailing (as many other oil nations know all too well).

🌍 GEOPOLITICS & MACRO

• Cyber war in the Red Sea - the US Navy hacked the computer systems of an Iranian spy ship that was being used to provide intel to the Houthis. Meanwhile, Iran has said it would reciprocate if its ships are seized, after the US announced the seizure of ~500 kbbls of Iranian fuel to clamp down on the "Revolutionary Guards' financing network".

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• World’s largest carbon capture project is floundering - the $12bn proposed Pathway’s Alliance project in Canada, being developed by a group of oil sands companies, “will be delayed and potentially scuppered” if the Canadian government cannot mitigate some of the financial risks involved, according to Wood Mackenzie.

• Sucks to be a New York pensioner - The New York State Common Retirement Fund is restricting and selling investments in oil & gas companies on environmental grounds. I hope the virtue signalling is worth sacrificing those returns...

• JPMorgan and State Street quit climate group - the banks are leaving Climate Action 100+, a group set up to pressure companies into stricter climate goals. The banks say the group impedes their ability to act independently.

• Solar and batteries to dominate US capacity additions in 2024 - not great news if you care about power prices and grid stability…The EIA forecasts that 81% of new capacity added in the US this year will be solar and batteries. Only 3.6% will be reliable baseload power (gas and nuclear).

🛢️ BOTTOM OF THE BARREL

A great primer on all things fracing:

👋 BEFORE YOU GO 

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