26th September 2023

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:

• 🇻🇪 Chevron ramping up in Venezuela

• 💯 Oil in 2123

• 🧠 Some sense on Wall Street

• 🍔 North Sea offshore workers are getting chunkier

plus a lot more. Let’s get to it…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Oxy output staying stable - the company has no plans to significantly increase production, despite the recent increase in oil prices. “There is a lot more discipline,” CEO Vicki Hollub said, “how to do it better and not get into an oversupplied market.”

• OFS cost inflation easing - Devon Energy has said that costs are beginning to ease for drilling rigs and steel after high inflation since 2021 pushed up some costs by ~50%. A tight labour market is still causing problems, however.

• Trans Mountain pipeline progresses - the Canadian regulator has approved a route deviation for the Trans Mountain oil pipeline expansion, helping to ease concerns about the length of delay of this mega and controversial project.

🏰 Europe

• Samos Energy splashing out - the new London-based E&P player is on a $1 billion spending spree, looking to snap up mature assets in Asia, Africa, and South America.

• Chips only once a week - offshore workers are struggling to shed the pounds, raising various concerns in the UK North Sea sector around lifeboat and helicopter capacities. The average offshore worker now weighs 99 kgs, up from 75 kgs back in 1975.
  

🕌 The Middle East

• Tragedy at Bandar Abbas - one person has died and four others were injured at an incident caused by an apparent gas leak that took place during emergency repairs at Iran’s large Bandar Abbas refinery. Production was not affected.

⛩️ Asia

• Indonesia keen for investment - the SE Asian country has opened up it’s 3rd tranche of exploration blocks this year for tender and says it is working to make conditions more attractive to foreign oil & gas investors.

📍Everywhere else

• Chevron ramping up in Venezuela - Chevron is due to add 65 kb/d of production in Venezuela by the end of 2024 in its first major drilling campaign in the country in years. Last November, the US authorized Chevron to expand its operations in Venezuela and restart oil exports to the U.S, ostensibly to help ease global oil shortages. Also, many of the specialized US Gulf Coast refineries need heavy, sour crude like that produced in Venezuela to operate.

• Getting a move on in Nigeria - in order to speed up investment and help revive the country’s declining oil sector, NNPC is shortening the time allotted to conclude contracts with IOCs from 3 years to 6 months.

• Eni aids Libya’s flood recovery - the Italian major is providing medical equipment, food, vehicles and shelter, as well as logistical support to help in the aftermath of the devastating floods.

🌍 GEOPOLITICS & MACRO

• Oil & gas in 2123 - Continental CEO Harold Hamm expects we’ll still be using oil & gas in one hundred years but also warned about the dangers of under investment into oil and a poorly managed energy transition. He also complained that dealing with volatile energy policy in Washington is like “riding a roller coaster”.

• Some sense on Wall Street - Goldman’s CEO has rejected calls from activists to stop supporting the oil & gas sector, saying that “traditional energy companies are hugely important to the global economy, they are hugely important to Goldman Sachs…we are all going to continue to finance traditional companies for a long time.”

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• IEA’s new Net Zero Roadmap - In its latest wishlist, the IEA says the world needs to invest $4.5 trillion in the energy transition per year to reach net-zero, up from ~$1.3 trillion in 2023. This includes a tripling of global wind and solar capacity in the next 6 years. Your energy bills will enjoy that.

• Saudi Arabia moving towards nuclear - the kingdom is allowing international inspectors access to its nuclear facilities. The move means that Saudi will be able to access supplies of fissile material and begin operating its first reactor.

• Tajikistan going big on hydrogen - the hydro-rich, oil-poor central Asian country wants to use its hydropower abundance to create 1 mtpa of hydrogen by 2040 that can be used to replace fossil fuel imports and for selling abroad.

• Coal to biomass in France - France plans to convert its two coal power plants to biomass as part of a new plan to reduce emissions by 5% every year to 2030 . Do people really still think that burning wood pellets shipped from North America is clean? When burnt, wood pellets emit more CO2 than coal per unit of power generated.

• Ireland rolling the dice - Northern Ireland is still planning on closing a large coal plant despite a delay in the arrival of the gas turbines that were set to replace it. Let’s hope it’s a mild winter for our friends in Ireland.
  

🛢️ BOTTOM OF THE BARREL

Some epic photos in this thread. Number 4 is my favourite:

👋 BEFORE YOU GO 

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Thanks for reading. Have a day out there. 🛢️