27th October 2023

Happy Friday team. Welcome back to Both Barrels. Here’s what hit the wires today in all things oil, gas, and energy:

• 💰 Buffet going even longer oil

• 🥳 Another big find in Guyana

• 📉 The ESG bubble is bursting

• 🤡 IEA “no longer credible”

• ➕ plus Conoco ready to swoop, old rigs and marine life, EU majors undervalued.

A big thanks to all you champs who got stuck into our new referral program yesterday. Keep it up!

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Buffet going even longer oil - Warren Buffet’s Berkshire Hathaway has picked up another $240m of Oxy shares, taking its ownership in the US indy to 25.8% (worth a casual ~$14.4 billion). The Oracle of Omaha doesn’t get many things wrong and clearly sees a long, bright future for oil. That’s good enough for me.

• Conoco after CrownRock - more rumors are circulating that Conoco is set to make a big acquisition of its own. CrownRock, a private Permian player, is said to be worth $10-15 billion.

• US court blocks GoM lease sale - a judge has further delayed Lease Sale 261 on the grounds it’s a threat to the endangered Rice’s whale. More legal back and forth is due on this issue in the coming months.

• Calcasieu Pass LNG gets approval - US regulators have given Venture Global permission to start units at its Calcasieu Pass LNG facility, although Venture says it’s not ready to start commercial operations. Venture is in dispute with customers including Shell, BP, and Repsol, over its failure to deliver them cargoes from the facility.

• What to do with California’s ageing rigs? - a government plan wants the 23 offshore platforms fully removed. Environmentalists mostly agree. But others argue the platforms have created vibrant artificial reefs, and removing them would destroy these habitats.

🏰 Europe

• Total not joining the M&A party - CEO Patrick Pouyanne has said the French major wouldn’t be splashing out on any big deals, unlike its American counterparts. Total will instead focus on optimizing its existing portfolio. Booooring.

• Total / Qatar’s LNG is flexible - the destination for the cargoes in Total’s 27-year mega LNG supply deal with Qatar can be flexible if need be. The volumes are set to be delivered to France but could be diverted to non-European countries. Typically, LNG supply deals have destination clauses which means the cargo must unload at the pre-agreed port to prevent the buyer from selling the LNG elsewhere at a profit on the spot market.

• Some Q3 earnings highlights - Eni beat expectations and is accelerating buybacks; Aker BP’s “robust” quarter; Total’s production up 5% year on year; Valero’s refineries operating at 95%.

⛩️ Asia & Oceania

• Japan’s gas supply ready for winter - JERA, Japan’s largest utility, said it has secured enough LNG for the peak winter demand season, easing concerns of a supply crunch as temperatures start to drop in the Northern Hemisphere.

🦁 Africa

• All eyes on Venus - Total is beginning critical production tests in the coming days at its much-hyped multi-billion barrel Venus discovery, offshore Namibia.

🗿 Central & South America

• Another “significant discovery” in Guyana - Exxon’s exploration well at the Lancetfish-2 well on the prolific Stabroek block has struck black gold. The find is the fourth offshore discovery in the booming province this year, and brings the total number of discoveries in Guyana since 2015 to 46.

• Guyana’s first competitive auction - unsurprisingly, a bunch of IOCs including Total, Exxon, and Petronas, have bid on various shallow-water oil and gas blocks in Guyana's first competitive auction. But Exxon isn’t happy with the contractual terms offered by the government.

🌍 GEOPOLITICS & MACRO

• Biden’s message to the Ayatollah - in a rare occurrence, a direct message has been sent from the US President to Iran’s leader warning Iran against targeting US personnel in the Middle East. Meanwhile, the US military has struck several Iranian facilities in Syria in response to recent attacks on US bases which caused “traumatic brain injuries” for numerous troops. Let’s all just take a breather, OK?

• US economy going strong - GDP grew at an annualized rate of 4.9% in Q3, its fastest rate in two years, driven largely by high consumer spending. Recession? What recession?

• IEA “no longer credible” - Alberta’s Premier has joined the growing list of people who believe the agency is full of crap. Referring to the IEA’s recent forecast of peak hydrocarbon demand before 2030, she said it no longer does analysis, but points to outcomes it wants and outlines paths to get there. Couldn’t agree more.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• The ESG bubble is bursting - Siemens Energy share price closed 35% down yesterday (70% since June) after the announcement that the struggling wind turbine manufacturer was in talks with the German government for a bailout. Meanwhile, Equinor has just booked a $300m impairment on its US offshore wind portfolio after New York authorities rejected its request for more subsidies. Higher interest rates and supply chain costs have wrecked already-dubious offshore wind economics.

• BP and Tesla supercharger deal - Tesla is supplying BP with $100m of EV superchargers to deploy at its locations across the US. The deal is a first of its kind as it will make Tesla superchargers available at third party fueling stations.

🛢️ BOTTOM OF THE BARREL

Aker Solutions shared a video of it demolishing its 18,000 tonne Gyda topside, complete with explosives, moody trance music, and close-up camera shots:

👋 BEFORE YOU GO 

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Thanks for reading. Have a top weekend.

Harry 🛢️🛢️