22nd July 2024

Hello, hello, hello. A little late today. My apologies. Here’s what’s up in oil, gas, and energy today:

• 💪 A global LNG powerhouse

• 👋 Good Biden

• 🚢 Tanker hit and run

• 🪸 Rare detente in the South China Sea

• ➕ plus rig count falls again; Joleit out of action for 3 weeks; fatal rig collapse in Turkey; Russian refinery on fire; Petronas takes over Exxon assets.

📈 THE NUMBERS

A large selloff on Friday brought WTI back below $80/bbl.

🗞️ WELL-HEADLINES

 🗽 North America

• Woodside acquires Tellurian - Woodside is paying $1.2bn, including debt, at a price of $1/share, which represents a 75% premium to the struggling LNG developer’s last closing price. The deal gives Woodside a big foothold in the US LNG export market through Tellurian’s fledgling 27.6 mtpa facility in Lake Charles, Louisiana. Woodside said the purchase was part of its ambition to become a “global LNG powerhouse”.

• Exxon’s Joliet may be down for 3 weeks - the 252 kb/d refinery in Illinois suffered an outage during Hurricane Beryl and restoring power and ramping-up the refinery to full operations may drag into August.

• Rig count falls again - the US oil rig count fell by one last week to 477. The count has been on a steady decline for the past 9 weeks.

🏰 Europe

• Fatality at collapsed rig in Turkey - one worker has lost his life, and two others injured, after a rig tower overturned at an onshore rig in the southeastern province of Şırnak.

• Azerbaijan ain’t happy with Europe - the gas producer’s ambassador to the EU has criticized the bloc for not offering it long term gas purchase agreements, saying “We cannot be a firefighter just sending gas for three to six months…We need the contracts so that we can go to banks for financing for drilling deep into the Caspian Sea.”

⛩️ Asia & Oceania

• Petronas takes over operatorship of Exxon assets - the deal involves two PSCs in Malaysia - which includes the Tapis oilfield in Terengganu - but is not a sale, as had previously been reported. Exxon’s working interests in the licences will not change.

• Tanker hit and run?! - Malaysia’s coast guard has intercepted a tanker that was involved in a dramatic collision with another tanker off the coast of Singapore. The Ceres I had left the location of the collision and had turned off its tracking system. That’s not suspicious at all…Can’t have been much of a high speed chase.

• Indonesia seeking Russian crude - for the first time in years, Pertamina has added Russian crude to its shopping list. Unsurprisingly, affordable energy takes top priority again, including over Western sanctions.

🦁 Africa

• Europa Oil & Gas boosts EG resource estimate - the company said that it had identified an additional 716 bcf of gas at its EG-08 block in Equatorial Guinea, taking total prospective resources to 2.1 tcf.

🗿 Central & South America

• First gas for Fast LNG - New Fortress Energy’s Fast FLNG project in Mexico has received and re-gassed its first gas. The company highlighted that it was “the fastest large-scale LNG project ever developed”, without actually mentioning how long it took. FLNG’s are helping to unlock new demand markets for LNG.

🌍 GEOPOLITICS & MACRO

• Biden bails - it had been coming ever since he was set up to fail at the debate with Trump a few weeks ago but now Biden has officially announced he won’t be seeking reelection. He has endorsed Kamala Harris, who the party’s heavy hitters are all now rallying around, but who has of course not been voted for to be the party’s nominee. How very democratic of the Democrats…

• China and Philippines ease the tension with South China Sea deal - the two countries have been frequently clashing in recent months (involving water canons, rammed ships, and severed thumbs) around a shoal in the fiercely contested sea. The details of the deal have not been disclosed but the hope is that it will mark a period of deescalation in this particular hot spot.

• The energy war continues - Russia’s largest oil refinery on the Black Sea, Tuapse, has been damaged by a Ukrainian drone attack that set off a fire. The two countries have been going tit-for-tat on energy infrastructure, targeting refineries, power stations, and loading ports, in an attempt to hit each other where it hurts. Energy is the economy, after all.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• PetroChina joins OGDC methane pledge - the group of oil & gas producers which is committed to reducing methane emissions now comprises 42% of global oil production. Methane, which leaks into the atmosphere all along the oil & gas value chain, is a more potent greenhouse gas than CO2.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO 

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

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