25th November 2024

Hello, hello. This is Both Barrels with your Monday musings on all things oil, gas, and energy, without the hot air:

• 🤷 What “crisis”?

• 🪐 Qatar takes another slice of Venus

• 📉 Europe’s gas inventories keep tumbling

• 🤑 A bold bet on Nord Stream II

• ➕ plus COP conclusions; Iran going back for more; ONEOK splashes $4.3bn; Russia drops some clues; Total halts Adani investments; rig count still stuck; bank Brent forecasts.

Let’s dive in…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• ONEOK splahes $4.3bn on EnLink interest - after buying 43% of the Permian-focused midstream company earlier in the year, ONEOK has gone back for seconds and acquired the remaining 57% in an all-stock deal.

• Oil rigs still stuck - the US rig count rose by just 1 last week to 479, continuing its months long trend around the 480 marker. Gas rigs slipped by 2 to 99.

• Conoco completes Marathon takeover - the $22.5 bn deal was announced in May, adding over 2 bnboe of reserves to Conoco’s portfolio, mostly in US shale plays. Conoco hopes to enjoy $1bn of annual synergies from the combination.

• Welcome to the S&P500, Texas Pacific - the company is not an O&G company exactly but is one of the largest landowners in Texas, with 873,000 acres in its portfolio, most of which are in the Permian basin.

🏰 Europe

• EU gas inventories keep falling fast - gulp…some frosty weather is starting to cause havoc in Europe’s vulnerable energy system. It’s a sad indictment of the state of affairs in Europe that in 2024 its people need to pray for warm weather to protect their grid and their wallets.

• Private bidder for sabotaged Nord Stream II - a Miami-based investor has reportedly asked US officials for permission to bid on the exploded pipeline. The apparent plan is to buy it for pennies on the dollar as a bet that gas flows between Russia and Europe might restart if Trump can negotiate an end to the war in Ukraine.

🕌 The Middle East

• A quiet weekend over here

⛩️ Asia & Oceania

• JGC bags $2.4bn BP gig - the Japanese engineering firm has secured the major contract for onshore works linked to BP's Ubadari CCS and enhanced gas recovery project in Indonesia.

🦁 Africa

• Qatar farms into the Orange Basin - Qatar Energy has acquired additional stakes of ~5% from Total in various blocks in Namibia’s prolific offshore basin. One of the blocks includes the giant Venus discovery, which is sub-Saharan Africa’s largest ever oil discovery holding an estimated ~3 bnbbls of recoverable reserves. The deal value was kept under wraps.

• Eni’s Ngyua FLNG delivered - the state-of-the-art 2.4 mtpa vessel is destined for the Marin XII block offshore Republic of Congo where it will tap into 198 bcm of gas when it becomes operational next year.

🗿 Central & South America

• SBM secures the dosh for new Guyana FPSO - the FPSO builder has raised $1.5bn from 16 international financial institutions to fund the construction of the 250 kb/d Jaguar FPSO which will be deployed at Exxon’s Whiptail development, offshore Guyana.

🌍 GEOPOLITICS & MACRO

• Iran going back for more - the Supreme Leader’s office has said the country is preparing “to respond” to Israel following attacks by Israel on Iran a few weeks ago, which themselves were in response for Iranian attacks, which were in response to…and so it goes on and on.

• Russia dropping some clues - in a small hint as to how OPEC+ might behave re output cuts, Russia’s Deputy PM Novak has said he sees the market as “balanced…thanks primarily to the actions of OPEC+ countries”. OPEC+ are next due to meet on Dec 1. Expect output cuts to be extended into next year.

• Brent at ~$75/bbl in 2025, according to the banks - oil price prediction is a mug’s game. No one has a clue. But Goldman’s think Brent will average $76/bbl in 2025, falling to $71/bbl in 2026, while JP Morgan sees $73/bbl in 2025. Make of that what you will. I’m old enough to remember the banks’ premonitions of “lower forever” in the 2014/15 bear market and haven’t paid any attention to their calls since.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• COP29 ends in a contentious deal - developed nations have pledged to contribute $300bn a year by 2035 (up from the current agreement of $100bn) to developing countries to help with building low carbon energy and climate adaption. If you ask me, that’s a lot of cash, but many complained it was “paltry”, “a travesty of justice”, and “stage managed”. They wanted over $1trn.

• Some other COP conclusions - delegates agreed on rules for trading carbon credits and “reaffirmed” efforts to transition away from fossil fuels. Although that was about as strong as the language got vi- a-vis fossil fuels. Oh and there was also an agreement about gender and climate.

• Total suspends Adani investments amid fraud allegations - Total has various low carbon JVs with the mega Indian conglomerate but has said it will not make any more investments into those companies until the accusations of fraud have been cleared up.

🛢️ BOTTOM OF THE BARREL

Now that another installment of the teeth-shatteringly stale UN COP climate talks has thankfully wrapped up, replete with the usual “last chances”, private jets, and photo ops with indigenous tribes, it’s a good time to reflect on what the whole palaver is about.

The climate crisis, you dummy!

You mean this “crisis”?

1 - Climate related deaths are down by >95% since the 1920s.

Hydrocarbons make a dangerous environment safe, not a safe environment dangerous:

2 - 9x more people die every year of extreme cold than they do extreme heat.

A warming world is saving a lot more lives than it’s taking.

3 - There has been no clear increase in the frequency or intensity of hurricanes in the US in over 150 years.

Nor is there much evidence of increasing global extreme weather events like droughts and heavy rainfall (as admitted by the IPCC themselves), despite what the sensationalist headlines would have you believe every time a village gets flooded.

Serious request: does anyone have any solid data proving a warming world is net negative for humanity and nature?

I don’t dispute the climate is changing and getting warmer.

But please, show me the “crisis”.

👋 BEFORE YOU GO

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

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