20th December 2024

• 🔄 Swapsies

• 💬 Putin ready for compromise

• 🐼 Peak oil in China

• 🇳🇬 Quid pro quo in Nigeria

• ➕ plus Chevron’s mega gas deal; Shell joins $50bn Argentina LNG project; breakthrough in Kirkuk; Kazakhstan blames the foreigners; all eyes on Namibia; more Nord Stream II gaslighting; crude inventories dip; and barrels more.

Let’s dive in…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• “Throw it in the trash” - unsurprisingly the US O&G sector isn’t happy about the report that the Department of Energy released earlier in the week that advocated restrictions on the growth of the US LNG industry. Critics, including the American Energy Alliance say it is inaccurate, outdated, and should be “thrown in the trash bin on January 20, because that’s where it belongs”. Hard to argue with that.

• Crude inventories dip - US crude stocks fell by 0.94 mmbbls last week to 421 mmbbls, less than expectations of a 1.6 mmbbls draw. Gasoline stocks meanwhile rose by 2.3 mmbbls, more or less in line with expectations.

• Chevron and Energy Transfer ink major LNG deal - Energy Transfer will supply Chevron with 2 mtpa of LNG from its Lake Charles LNG project for 20 years. That’s a lot of volume for a long time! Shows you how confident Chevron is in the future of gas.

• Kinder Morgan going ahead with $1.4bn gas pipeline - the Mississippi Crossing Project will transport up to 1.5 bcf/d of natural gas and involves the construction of nearly 206 miles of pipeline in the southeast US.

🏰 Europe

• DNO and OKEA in Norway exploration swap - DNO is taking a 10% interest in the Mistral exploration prospect from OKEA, in return for a 10% interest in the Horatio prospect. Spreading their bets.

• North Sea oil spills “stubbornly high” - a report by Offshore Energies UK found that oil and gas spills across UK North Sea infrastructure increased by 13% to 85 incidents last year, with ageing assets emerging as the highest risk category.

• Tyra II ramp up thwarted by bad weather - Total’s plans to hit plateau production at the large gas field in the Danish North Sea have been delayed by several weeks.

🕌 The Middle East

• Breakthrough in Kirkuk development plans - BP has reached an agreement with the government of Iraq on key technical terms for the redevelopment of oil & gas fields in Kirkuk which still hold billions of barrels of recoverable oil. BP’s involvement in Iraq dates back to the 1920s when it helped discover oil in the Kirkuk region.

⛩️ Asia & Oceania

• Woodside and Chevron’s Aussie asset swap - Woodside is acquiring Chevron’s interest in the North West Shelf project in return for all of its interests in both the Wheatstone and Julimar-Brunello gas projects. Chevron will also make a cash payment to Woodside of up to $400m. Woodside said the deal “simplifies our portfolio…[and] consolidates our position in our operated LNG assets”.

• Kazakhstan blames the foreigners - Kazakhstan has pointed the finger at foreign-operated projects, including the flagship Tengiz and Kashagan oil fields that have suffered various technical issues recently, for the 3% decline in the country’s oil production this year.

• Canadian LNG to fuel Taiwan’s microchip builders - TSMC, the world’s largest microchip manufacturer, has said that it hopes new Canadian LNG projects can be a source of energy to power its factories.

• Golar cancels FLNG conversion - the original plan was to convert the Golar Gandria LNG tanker into an FLNG vessel but this has now been shelved and the Golar will be scrapped.

• Pharos secures Vietnam licence extensions - the government gave Pharos five more years for its two producing offshore assets.

🦁 Africa

• Shell gets $2.4bn Nigeria sale approval - after the government had initially rejected the sale to Renaissance Group, it has now given its blessing. Funnily enough, this approval comes just days after Shell announced it would invest billions into Nigeria’s long delayed Bonga North deepwater development. Quid pro quo.

• Rhino crosses its fingers in Namibia - Rhino Resources has spudded its debut exploration well in Namibia’s prolific Orange basin, targeting a huge prospect nearby the giant Mopane discovery that the country’s petroleum commissioner previously described as “amazing”. Meanwhile, Azule has farmed into the block.

🗿 Central & South America

• Shell gets involved in $50bn Argentina LNG project - the major is investing in the 10 mtpa flagship project run by YPF that will export gas from the country’s vast Vaca Muerta shale deposit to global markets. Details of the agreement are scarce.

• Brazil bulking up bid rounds - the government plans to add four more pre-salt areas to future oil auctions as it looks to keep ramping up its oil output.

🌍 GEOPOLITICS & MACRO

• Russia “ready for negotiations and compromises” - Putin has said that he is ready to work with Trump to end the war in Ukraine. Trump has made it clear that he wants to quickly end the war, although he hasn’t specified how, and the devil, as always, will be in the detail. Putin also commented that he regretted not invading Ukraine sooner.

• Buy our oil & gas or face tariffs - this is the message President Trump has given to Europe today, hoping that it will help reduce the trade deficit between the US and Europe.

• More US sanctions for Nord Stream II - the US sanctioned more Russian companies over their apparent involvement in blowing up the Nord Stream II gas pipeline in 2022. Come on…Why would Russia destroy its own asset and leverage over Europe? No one has benefited more from the Nord Stream II sabotage than Uncle Sam and its LNG. Just saying…

• Peak oil in China - China’s state-owned Sinopec has forecast that oil demand in the country will peak in 2027 at about 16 mmb/d. The slowdown in growth has been largely due to a shift to EVs and the rise of trucks fueled by LNG. China has been an engine of huge global oil demand growth for about two decades so where, if anywhere, will drive the next phase of growth? India? Africa?

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• BP greenlights German green hydrogen facility - the Lingen project is BP’s first fully owned green hydrogen facility and is due to produce 11,000 tonnes per year after it starts up in 2027. Green hydrogen is created by splitting hydrogen from water using electricity generated by low carbon sources.

🛢️ BOTTOM OF THE BARREL

All I want for Christmas is $100 crude.

Oh and maybe one of these too:

See you all in 2025!

👋 BEFORE YOU GO

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

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