22nd January 2025

Moooorning ladies and gents. Here’s what’s what today in the industry that makes the world go round:

• 🇺🇸 An American energy overhaul

• 🎉 Middle East discovery bonanza

• 😬 Orsted gets hammered, again

• 🥦 A “healthy” oil market

• ➕ plus YPF and India’s mega deal; more Mozambique LNG delays; big freeze disrupts US energy; Russia and Iran gas deal; EnQuest bags Habour Vietnam; net-zero exodus continues; and barrels more.

Let’s take a look.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• An American energy overhaul - here are the key energy-related orders that the new president has signed in his first days in office:

  • Repealed the LNG permit moratorium imposed by the Biden administration.

  • Declared an “energy emergency” giving himself powers to reduce environmental restrictions on energy projects and ease permitting for new infrastructure.

  • Withdrew from the Paris Climate Accord, as he did before in his first term. “The US will not sabotage our own industries while China pollutes with impunity", he said.

  • Suspends new offshore wind leasing - “We're not going to do the wind thing"

  • Repealed ban on O&G drilling on certain federal lands and waters.

  • Said he intends to fill the strategic oil reserve "right to the top". That would involve a purchasing a whopping ~300 mmbbls.

  • Revoked a 2021 Biden target to have 50% of all new vehicles sold by 2030 be electric.

• Big freeze hits North Dakota and Texas - the nationwide cold has knocked off about 125 kb/d of oil production in the Bakken and Texas’ power regulator has issued a “weather watch”, warning of surging power demand and strained supply.

• Buffet’s oil trading business closes - Warren Buffet’s Pilot Co is shutting down. That’s a relief to hear he does actually make mistakes like the rest of us.

• Infinity Natural Resources targets IPO - the Appalachia focused E&P is getting involved in the US energy IPO party and is hoping for a valuation of ~$1.25bn.

🏰 Europe

• Russia readying Iran gas shipments - Moscow plans to eventually supply as much as 55 bcm per year to help Tehran tackle an energy shortage (ironic given how much O&G Iran has). There is no direct pipeline between Iran and Russia and so the deal would likely involved a gas swap via Azerbaijan.

• Shell’s Tomcat well disappoints - the large exploration prospect near Shell's large Ormen Lange gas field in the Norwegian Sea has come up dry.

🕌 The Middle East

• Iraq makes 2bn barrel find - Iraq’s state-owned Midland Oil Company has made a new oil discovery in central Iraq, with potential reserves of 2 bnbbls. I’ve said it before and I’ll say it again, there’s just so much oil still out there to be found.

• Kuwait hits the jackpot too - Kuwait Oil Company has made a discovery at its Al-Jlaiaa offshore field of an estimated 800 mmbbls of oil and 600 bcf feet of associated.

⛩️ Asia & Oceania

• Santos cancels Dorado - the $2bn O&G field development offshore Western Australia was due to be developed via an FPSO. No more. Santos was a bit vague on the reasons why, but they presumably have better projects to invest their capital into.

• EnQuest bags Harbour’s Vietnam assets - the UK based indy has acquired Harbour’s operated 53% interest in the Chim Sao and Dua assets, offshore Vietnam, for $84m.

🦁 Africa

• Total delays Mozambique mega project, again - the troubled $20bn LNG project in Mozambique, one of Africa’s largest energy projects, has been plagued by security concerns. The development has been on hold since 2021 following violent attacks in the region which forced Total to remove its staff from the project.

🗿 Central & South America

• YPF and India’s mega LNG deal - the Argentinian company has signed a memorandum of understanding with three Indian players to potentially export up to 10 mtpa of LNG. YPF and Shell are building a huge LNG project in Argentina to export gas from the country’s large Vaca Muerta shale play.

🌍 GEOPOLITICS & MACRO

• Aramco’s views on global oil demand - CEO Amin Nasser said he sees the market as “healthy” and expects demand to grow by 1.3 mmb/d in 2025 to reach 106 mmb/d. He also commented on the possible impact of new sanctions on Russia, saying that Saudi is keeping an eye on the situation and is “always looking at balancing the market”.

• Trump forcing Putin to the negotiating table - the new US president has made stopping the war in Ukraine a key goal of his and is threatening further sanctions on Russia to get them to engage in peace talks. What might “peace” look like? I’d expect Ukraine to have to give up some land currently under Russian control, and agree to not join NATO for a long time. Would that be palatable to the people of a war torn Ukraine? Who knows.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Orsted gets hammered, again - the offshore wind giant’s shares fell by 15% after it announced it was booking a $1.7bn writedown, mostly due to higher costs and delays at its Sunrise Wind project in the US. It highlighted problems caused by higher borrowing costs, serving as a reminder that the renewables boom was only enabled by the phenomenon of near-zero interest rates between 2009-2022.

• Net zero exodus continues - four of Canada’s biggest banks have followed their US counterparts by quitting the Net Zero Banking Alliance. The group had aimed to accelerate climate action among financial institutions but, following all these departures, is all but done.

• China smashes its own renewable installation record - in 2024 it added 277 GW of solar capacity, far surpassing its 2023 figure of 217 GW. It also added 80 GW of wind. The pace is expected to slow in the coming years due to delays to grid infrastructure upgrades and limited land availability.

🛢️ BOTTOM OF THE BARREL

Nothing to do with energy but too funny not to share.

That’s Facebook’s CEO, Zuck, caught red handed…errr…taking a look at the Amazon CEO’s missus at Trump’s inauguration.

Busted.

👋 BEFORE YOU GO

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

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