Good morning team - this is Both Barrels. Your daily dose of all things oil, gas, and energy, without the hot air.

Here’s what hit the wires today:

• 📈 Canadian oil output keeps climbing

• ⚡ Wind powered oil platforms

• 🤢 Is Xi Jinping unwell?

• plus much more

Let’s get to it…

📈 The numbers

Oil prices edged downwards on expectations of a draw in US crude stocks and economic concerns around China. Natural gas prices in Europe fell back today after sharp rises earlier in the week.

🗞️ Well-headlines

 🇺🇸 North America

• Canadian producers are ramping up oil output and the country is expected to reach 5.25 mmb/d in 2024, up from an average of 4.86 mmb/d in 2022. Oil sands producers Cenovus and CNR are leading the charge.

🇪🇺 Europe

• Ithaca Energy has announced production growth of 11% to 75.8 kboe/d in H1 2023. Free cash flow however declined by ~30% to $691m. The company warned that new UK oil & gas taxes has led to the deferral and cancellation of projects in 2023 and 2024. Well played UK Treasury, well played.

🇸🇦 The Middle East

• Saudi Aramco has cancelled three contracts with McDermott, worth $1.8bn, involved in the expansion of the offshore Zuluf field. The move is apparently because of McDermott’s inability to present bank guarantees that Aramco requires from winning bidders.

📍Everywhere else

• Santos Energy has announced its H1 earnings. Free cash flow fell by 34% to $1.1bn, driven by lower oil & gas prices compared with 2022 and a production decline of 13% to 45 mmboe.

• Cheiron has made a new oil discovery in the Geisum and Tawila West Concession in the Gulf of Suez, Egypt. The concession currently produces 23kb/d.

• Elsewhere in Egypt, Neptune has begun drilling an exploration well in the North West El Amal Concession in the southern Gulf of Suez. It is the first operated well to be drilled by Neptune in Egypt.

🌍 Geopolitics & macro

• Markets are gearing up for the US Fed’s annual gathering in Jackson Hole later this week. With inflation easing but still well above targets, observers will be on the lookout for clues about upcoming interest rate policy. To raise or not to raise? Inflation or economic growth?

• Chinese President XI Jinping unexpectedly pulled out of delivering a speech at the BRICS summit in South Africa, leading to speculation around his health. A minister carrier it out instead, using the opportunity to criticize the US for “crippl[ing] emerging markets and developing countries”.

💨 Carbon, Climate & other energy stuff

• Equinor and partners have inaugurated the world’s largest floating offshore wind farm, Hywind Tampen, in the Norwegian North Sea. The 11 turbines are expected to provide 35% of the annual power demand for five platforms at the Snorre and Gullfaks oil and gas fields.

🛢️Bottom of the barrel

More people live inside of this circle than outside of it…

When politicians and activists in the West talk about a global Energy Transition they should probably ask what Asia thinks first.

👋 Before you go

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