22nd September 2023

Hello, hello BB crew. Here’s your daily dose of all things oil, gas, and energy, without the hot air.

Some highlights this lovely Friday morning:

• 🇷🇺 Russia bans fuel exports

• 😌 Chevron LNG strikes are over

• 🇧🇷 Equinor moving forward in the Campos

Let’s get to it…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• ONEOK gets the OK - Magellan Midstream Partners' investors have voted in favour of its sale to ONEOK for $18.8 bn, creating one of the largest energy pipeline companies in the US. MMP CEO will bank a cool $28 mil from the deal in cash, stock, and benefits. Not bad.

• US refineries’ unusual outages - part of the reason gasoline prices in the US have been climbing is that refineries have suffered a large number of outages this year. Analysts estimate there has been a 53% increase in the amount of unplanned outages in the first 9 months of 2023 compared with last year.

• Court overrules lease area reduction - a judge has ordered the White House to expand the area on offer in an upcoming Gulf of Mexico lease round. The government had previously reduced the area by 6 million acres at the last minute citing concerns over whales.

🏰 Europe

• Russia bans fuel exports - it’s not clear whether the move is political, perhaps to heap pressure onto already tight diesel markets, or practical, to protect domestic consumers from rising prices. Some suggest Russian refineries may be struggling to maintain output as they can’t get hold of needed parts due to sanctions.

• Waldorf up for grabs - the UK explorer is thought to be looking for a buyer as the new UK windfall tax on O&G companies has derailed its growth ambitions. Yet more evidence that the misguided tax is deterring investment in the UK North Sea. Higher taxes. Less investment. Less supply. Higher prices. It’s not complicated…

🕌 The Middle East

• Iraq’s gas beauty parade - Iraq’s PM has been meeting with dozens of energy execs in NYC to try and attract investment into the country’s fledgling gas sector. Despite having huge gas reserves, Iraq imports gas from Iran as it doesn’t have the infrastructure to process it itself.

⛩️ Asia

• All quiet over here. They must’ve taken a long weekend.

📍Everywhere else

• Chevron LNG strikes are over - Chevron and unions have accepted a proposal put forward by Australia’s labor regulator, ending the strikes at the Wheatstone and Gorgon LNG plants.

• Equinor’s major Brazilian gas projects - Equinor has submitted the development plan for two large gas fields in Brazil’s prolific Campos Basin. The investment is set to total $9bn and the fields will meet ~15% of Brazil’s entire gas demand at peak production.

• BP & Shell exploring T&T - The two IOCs have reached an agreement with Trinidad and Tobago to start exploring three deepwater blocks. 9 months ago the gov’t rejected bids on these licences so it looks like someone came back with a better offer.

🌍 GEOPOLITICS & MACRO

• Unloved oil & gas stocks - despite crude prices having climbed ~30% since June, the S&P Energy Index has only managed 14%. It’s also lagging the broad S&P Index for the year. Given the amount of cashflow E&Ps are generating these days, surely it will be hard for investors to ignore them for much longer.

• Israel and Turkey making up? - the long bickering countries have agreed to increase cooperation in energy, tourism, and tech after their respective leaders met during the UN General Assembly in NYC.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Coming for your cows - Germany’s agriculture minister has suggested a reduction in the country’s livestock in an attempt to tackle global warming. Ireland is also planning a cow cull for the same reasons…Yes, livestock is a big source of global CO2 emissions but such blunt policy will not win any fans and will make negligible difference to global warming if enacted in just one or two small countries.

• Poland going nuclear - Poland is building its first nuclear plant. What’s notable about this is that Poland is Europe’s biggest coal addict, generating ~70% of their power from the fuel.

• Hydro struggling in Asia - power generation from hydro across Asia declined sharply so far this year due to a lack of rainfall, particularly in parts of China, India, and Vietnam. The continent’s hydro output was down 18% in the year to July, one of the largest falls in decades.

🛢️ BOTTOM OF THE BARREL

We’ll end the week with one our favorites from the archive. Have a top weekend everyone. See you Monday.

👋 BEFORE YOU GO 

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Thanks for reading. Have a day out there. 🛢️