18th April 2025

Happy Easter everybody. If you don’t eat at least your body-weight in chocolate, I’ll be sorely disappointed.

• 💥 Destroying an Empire

• 🧠 OPEC has a plan

• 🤷 EU decides it needs Russian LNG

• 🪗 The Iran oil squeeze has begun

• ➕ plus California exodus continues; BP’s massive fail; Petronas exits Argentina; plenty more riches in GoA; Eni eyes up Argentina LNG; BP’s first cargo at Greater Tortue; and barrels more.

Have a great weekend.

📈 THE NUMBERS

Finally a better day in oil markets, with WTI climbing ~3% as OPEC as the US turns up the heat on Iranian volumes and OPEC announces production compensation plans.

🗞️ WELL-HEADLINES

 🗽 North America

• The California exodus continues - Valero’s 170 kb/d Benicia Refinery has become the latest in a spate of O&G facilities shutting down in California. The state is strongly anti oil & gas and is tightening regulations on emissions and the sales of gasoline vehicles, hurting the profitability of refineries.

• Plenty more riches in the GoA - the US U.S. Department of the Interior announced a “significant increase in estimated oil and gas reserves in the Gulf of America Outer Continental Shelf”. Its latest remaining reserve estimate is 7 bnboe, which is 1.3 bnboe higher than its last estimate in 2021, and since then 3.1 bnboe has been produced.

• Crude inventories edge up - they rose by 0.5 mmbbls last week to 443 mmbbls, almost exactly in line with expectations. Meanwhile, gasoline stocks fell by 2 mmbbls.

• Rig count stabilizes - after a large drop last week, the US oil rig count rose by 1 last week to 481. Gas rigs also rose by 1 to 104.

• Keystone restarts - after a leak of ~3.5 kbbls, the pipeline is back up and running, albeit at reduced flows.

🏰 Europe

• EU decides it needs Russian LNG - the EU has dropped plans to try and ban Russian LNG imports as it has realized it needs the gas. Funny that. Yet another example of how energy security will ultimately win out against all other considerations, even the European loathing of Russia.

🕌 The Middle East

• Ruwais LNG secures another customer - the supply deal with Japan’s Mitsui marks the fifth long-term agreement for the UAE’s 9.6 mtpa LNG export facility which is set to begin operations in 2028.

⛩️ Asia & Oceania

• China pours water on Russia export proposal - Gazprom had been hoping to increase gas flows to China via Kazakhstan but China has said this option would require building a new pipeline which would be too expensive.

• Winners in Indo’s licencing round - BP, Petronas, Inpex, and EnQuest and others have been awarded exploration acreage in Indonesia’s latest round.

• India also dishes out acreage - BP, Reliance, ONGC, and others have been granted 28 exploration blocks offshore India. Import-reliant India is on a big push to grow its own oil sector and attract international players.

🦁 Africa

• BP loads first cargo at GTA LNG - Greater Tortue Ahmeyim project, offshore Mauritania and Senegal, is one of the deepest developments offshore Africa and is set to production 2.4 mtpa of LNG.

• Excitement for Rhino in Namibia - Capricornus-1X exploration well in the offshore Orange Basin has hit hydrocarbons but it’s too soon to tell if it’s commercial.

🗿 Central & South America

• Eni eyeing up Argentina’s $50bn LNG project - Eni and YPF have signed an MoU for Eni to invest in the country’s planned flagship LNG project. The giant facility is aiming to export 30 mtpa of LNG by 2030 using gas from the Vaca Muerta shale play.

• Vista spends $1.5bn on Vaca Muerta asset - the company has bought Petronas’ 50% stake in the La Amarga Chica oil block in Argentina. The sale all but wraps up the Malaysian NOC’s exit from Argentina.

• Total inks Dominican Republic LNG supply deal - Total will deliver the Caribbean nation 0.4 mtpa of LNG for 15 years, starting in 2027. The gas will be used to power a under-construction gas power plant on the island, reducing the need for coal and fuel oil.

• Exxon quits two offshore Brazil blocks - after some failed drilling, Exxon has relinquished a pair of exploration blocks in the ultra-deepwater section of the Sergipe-Alagoas basin.

• Gran Tierra secures $75m debt facility - the South American-focused indy said the facility would be used to strengthen its balance sheet and enhance operational flexibility.

🌍 GEOPOLITICS & MACRO

• OPEC’s compensation plans - the cartel has announced plans to make-up for overproduction vs its self-imposed quota. Serial cheaters like Iraq and Kazakhstan will have to make the biggest cuts. In theory, this actually means that OPEC+ producers will produce lower volumes than planned this year and offset the 411 kb/d production hike in May.

• US targeting China / Iran crude flows - the US has sanctioned another Chinese energy company for purchasing Iranian crude, marking the third such measure in a month. China says it does not recognize the sanctions which prevent the targeted companies from accessing the US financial system (e.g. dealing in US$, working with US companies etc). Trump is cranking up the pressure on Iran as nuclear talks edge forward.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Destroying an Empire - The Trump gov’t has taken the dramatic step of ordering Equinor to stop construction of its already financed and permitted major Empire Wind 1 offshore wind farm, citing fault environmental analysis. The project has already spent $1.5bn. Trump has long said that he would end the expansion of offshore wind, but putting a stop to a major project like this that is already under construction sends a very clear message.

• Wake losses - Equinor and Orsted estimate that wake losses from a planned TotalEnergies offshore wind farm in the UK could cumulatively cost their nearby assets up to $480 million through reduced power generation. Not a good day for offshore wind and Equinor.

🛢️ BOTTOM OF THE BARREL

Easter weekend plans:

Remarkable that a major energy company could get it this badly wrong.

A summer intern could have told you how hard, slow, and expensive it would be to re-orientate the entire global energy system, the foundation of the $100 trillion global economy, which has been steadily built over ~200 years.

👋 BEFORE YOU GO

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

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