18th January 2024

Goooood morning. Here’s Both Barrels with the d-low on all things oil, gas, and energy today:

• 🔼 No sign of peak oil demand

• 🔎 Barents back in focus

• 🤷 Aramco and Mercuria see things differently

• 🖕 PHUCK-A-HOUTHI

• ➕ plus Pakistan strikes Iran; Philippines bulking up in the South China Sea; more delays to Iraq / Turkey pipeline; Saudi’s oil rig theme park

Let’s dive in.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• LNG is the cold’s latest victim - not even the super chilled LNG is entirely immune to the cold. The Cameron LNG and Corpus Christi facilities in the US have had to delay several LNG shipments after operations were disrupted by the winter storm. No material impact is expected on global gas markets, though, thanks to high levels of gas storage in Asia and Europe.

• API shows surprise crude build - US crude stocks climbed by 480 kbbls last week, according to the API, compared with expectations of a 2.4 mmbbls draw. Gasoline stocks jumped by 4.9 mmbbls after a similar build in the previous week.

🏰 Europe

• Barents back in focus - the frigid, under-explored Barents Sea is believed to hold 15 bnboe of undiscovered resources but a lack of infrastructure and harsh conditions have held back activity in the remote waters. Today there’s only two producing fields in the region. This may be set to change following Norway’s recent licencing round where Equinor, AkerBP, and Vaar won eight licences in the Barents and have expressed their commitment to unlock its vast potential. Good luck!

• Shell green lights Victory development - the gas field in the UK North Sea, which was discovered nearly 50 years ago, will produce ~25 kboe/d at peak when it comes onstream in ~2026. A rare investment in the UK’s ageing hydrocarbon province.

• Harbour’s big ambitions - the fast growing UK independent that recently acquired Wintershall DEA has released plans to grow internationally and expand it’s production.

🕌 The Middle East

• Fresh hold ups to Iraq / Turkey pipeline restart - the reopening of a crucial 450 kb/d crude export pipeline that has been shut for 10 months due to a dispute is being delayed further. The hold up now is down to disagreements between the Iraqi government and oil producers over “the cost of producing barrels”. Iraq’s PM said there was no solution on the table yet.

⛩️ Asia & Oceania

• More tight gas success in China - Sinopec has revealed 133 bcm of new tight gas reserves in China’s southwest Sichuan basin. China’s NOCs are undergoing a big drive to unlock domestic hydrocarbon resources, especially of the unconventional variety, to reduce the country’s import dependency.

🗿 Central & South America

• Maha acquires 3R Petroleum stake and eyes expansion - the Swedish company announced it acquired a 5% interest in the Brazilian O&G producer and has also proposed carving out 3R’s onshore O&G assets and combining them with a third company, PetroReconcavo.

🌍 GEOPOLITICS & MACRO

• Aramco sees a tightening oil market - CEO Amin Nasser highlighted that global crude stocks have shrunk to the low end of a five year average after consumers depleted inventories by ~400 mmbbls over the past two years, leaving OPEC spare capacity as the only cushion. Aramco sees demand growth of 1.5 mmb/d this year, on top of the 2.6 mmb/d in 2023. Meanwhile, OPEC reiterated its demand growth expectation of 2.3 mmb/d in its latest monthly report, and a further 1.85 mmb/d in 2025. Bullish.

• Mercuria doesn’t - the CEO of the commodity trading firm thinks OPEC may need to cut further in light of stuttering demand growth and high US oil output if they wan’t to keep oil prices at current levels. Aramco / OPEC or the traders? Pick your fighter.

• Pakistan strikes Iran in retaliation - two days after Iran struck militants in Pakistan, Pakistan has responded by conducting airstrikes in Iran against “terrorists”. The neighboring countries have long had unstable relations but the spate of attacks represent the severest escalation in years.

• Philippines bulking up in the South China Sea - undeterred by Chinese threats, the Philippines is expanding its military presence in the South China Sea and strengthening defense ties with the US. “Whatever it is, their legal proposition is untenable and has been rejected by the whole world.”, the country’s defense secretary said of China’s claims to the sea.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• US identifies 22 million acres of public land for solar development - the Biden administration is pushing to install renewable energy facilities across public lands as part of its goal to decarbonize the U.S. electricity grid by 2035. Behold the industrialization of the countryside in the name of the environment.

• BP acquires German power and gas utility - Getec Energie supplies 40 TWh / year of power and gas to commercial and industrial consumers across Europe. The buy (for which no value was disclosed) fits with BP’s overachieving strategy to become and integrated energy company, rather than just and oil & gas player.

🛢️ BOTTOM OF THE BARREL

Saudi Arabia is building an oil themed resort on an abandoned offshore oil rig.

Called “The Rig”, the resort will host three hotels, a marina and helipads as well as an extreme sports and adventure park!

Honey, I’ve sorted our summer holiday plans.

The badass Serbians are trolling the Houthis. This is real, you can check here.

👋 BEFORE YOU GO 

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