21st October 2024

Monday morning. Let’s get at it. Here’s all you need to know today in oil, gas, and energy:

• 🎺 Matterhorn making an impact

• 🙏 Thank a fracker

• 🌏 Aramco’s energy realities

• 🌋 Volcanic energy

• ➕ plus Falklands dreams still alive; rig count edges up; Petrofac limps on; Russia’s shadow tankers arrive in Asia; SLB sells Canadian upstream; Indo’s new O&G hotspot; and barrels more.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Matterhorn making an impact - the much-needed new 580 mile gas pipeline from the Permian to Gulf Coast export hubs is helping to support gas prices, with Waha hub prices remaining above $0 for almost a month. A severe lack of gas export capacity has meant producers have been having to pay for large volumes of associated gas production to be taken away.

• SLB sales Palliser block interest - the oilfield services firm has sold its interest in the producing Palliser block in Alberta, Canada, to an unknown buyer for $430m. The block includes wells, surface facilities, a pipeline network, and development rights. The company also reported steady Q3 results.

• Rig count edges up - the oil rig count rose by 1 last week to 482, while gas rigs were down by 2 to 99. The rig count has been flat as a pancake for months now as it seems the US shale patch may have found an equilibrium at $65-$80/bbl WTI.

🏰 Europe

• MOL and Turkish Pet partner up - the two companies have signed an MoU to join forces to share expertise and for the potential joint participation in E&P projects in the Caspian region, Turkey, MENA, and Central and Eastern Europe.

• Petrofac limps on - the struggling services company has staved off insolvency for a little longer as a group of lenders have agreed to another one-month time extension to finalise a financial restructuring plan.

🕌 The Middle East

• A quiet weekend in the Middle East oil patch…

⛩️ Asia & Oceania

• Russia’s Arctic LNG shadow tankers arrive in Asia - speculation is mounting about where the tankers will offload their cargo. The flagship LNG project has been hammered by Western sanctions and Russia has had to resort to shadow tankers to try and sell the molecules.

• Indo’s new O&G “hotspot” - Pertamina and partners have signed a new production sharing contract for the Melati block in the frontier Sulawesi region that they claim has resources of over 850 mmbbls of oil and 4.7 tcf of gas.

• China and Vitol in swap deal - Vitol will purchase 0.5 mtpa of LNG from China Gas’ contracted US volume on FOB (free on board) basis and sell 0.5 mtpa of LNG to China Gas on DES (delivered ex ship) basis from 2029. These sorts of deals help the companies add more flexibility to their LNG portfolios.

• Shell Singapore oil leak under control - vessels and drones had been deployed to locate the spill which came from a pipeline at Shell’s Energy and Chemicals Park.

• “Exceptional” results at West Erregulla - Strike Energy’s share price rocketed by 10% after announcing one of “the highest flowing pressures ever measured" in the Perth basin at its Kingia Sandstone gas discovery in Western Australia.

🦁 Africa

• Nothing much happening here either

🗿 Central & South America

• Rockhopper keeps plugging away in the Falklands - the company has received licence extensions to keep working on the Sea Lion oil development. The project would be the frontier region’s first offshore development and is estimated to hold 791 mmbbls of oil. Offshore Falklands is said to hold large reserves but progress has been stymied by lack of infrastructure and high costs.

• Total sells Brazil downstream biz - the sale to SIM Distribuidora involves a network of about 240 filling stations and several storage facilities for petroleum products and ethanol.

• Cuba still in the dark - millions have been without power for days as the government struggles to deal with disruptions caused by a hurricane and the general dire state of the country’s grid.

🌍 GEOPOLITICS & MACRO

• Aramco boss berates energy transition planning - Amin Nasser called for a reset in energy policy, here are some of the highlights:

  • “Progress in the energy transition in Asia is far slower, much less equitable and more complicated than many have expected”

  • “The Global South is likely to see significant growth in oil demand for a long time, and while that growth will stop at some point, that is likely to be followed by a long plateau…If so, more than 100 mmb/d would realistically still be required by 2050”

  • “Asia’s voice and priorities, like those of the broader Global South, are hard to see in current transition planning, and the whole world is feeling the consequences”

  • Nasser remains “fairly bullish” on Chinese oil demand

• China’s economy keeps underwhelming - according to official figures, the county’s GDP grew by 4.6% in Q3, which was slightly above expectations but below the official target of “around 5%”. And right on cue, the Chinese central bank has cut key interest rates by 0.25%.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Drilling into volcanoes - scientists in Iceland are preparing to drill into volcanoes to study the possibility of harnessing geothermal energy from magma. They will be drilling about a mile deep and dealing with temperatures of over 500C (900F). Hot work.

• Meta pledges $35m for carbon removal projects - the investment over the next year is in “direct response” to the carbon removal purchase program the US Department of Energy launched in March.

• Waste to gas - Vision RNG has landed $207m in financing to convert gas from landfill sites in Ohio to renewables natural gas.

🛢️ BOTTOM OF THE BARREL

The single biggest reduction in CO2 achieved anywhere has been via a coal-to-gas switch in US power generation, enabled entirely by the shale gas miracle.

👋 BEFORE YOU GO

Any feedback, requests, terrible jokes? Please just ping a reply to this email and let rip. We read every word. 

Oh and if you could share us with your pals who might like a drop of us, then we’d be very happy.

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

Was this forwarded to you? Both Barrels is a concise and irreverent oil, gas, and energy briefing, delivered to you daily. It’s free to subscribe.