27th January 2025

Happy Monday all, let’s get at it. Here’s what went down over the weekend in all things oil, gas, and energy:

• 🤞 A Cypriot dream

• 😔 “If we go bankrupt no-one will care”

• ⏬ Rig count’s 3-year low

• ❌ Dismantling Nord Stream

• ➕ plus solar surpasses coal in EU; fire at Rumalia; a new European gas route; Diversified Energy splashes $1.3bn; Trump vs Colombia; Total on the hunt in Suriname; Repsol branches out; and barrels more.

Let’s go.

📈 THE NUMBERS

Oil prices slipped as Trump reiterated his calls for OPEC+ to increase production to bring down oil prices, hurt Russian finances, and help stop the war in Ukraine.

While most other Western leaders have been trying in vain to squeeze Russia through choking oil supply (which just pushes up prices), Trump is the the first to demonstrate some basic understanding of supply / demand economics that the best way to hit Russia where it hurts is to flood the market with oil.

🗞️ WELL-HEADLINES

 🗽 North America

• Diversified Energy bags Maverick Natural Resources - the deal cost Diversified about $1.3bn for the private-equity backed, Permian-focused US O&G producer that produces ~80 kboe/d. The US M&A frenzy isn’t over yet.

• A Keystone XL revival? Unlikely - Trump has removed a Biden directive that blocked the construction of the controversial 1,200 pipeline from Canada to Nebraska. It’s unlikely to get going anytime soon though as former developer TC Energy said it had “moved on” and most of the permits for the project have expired.

• Finally, a notable movement in the rig count - after months of little movement, the US oil rig count fell by 6 last week to 472, its lowest level in over three years. It’s just one week of data but is this further evidence that US shale oil growth is finally running out of steam?

🏰 Europe

• Exxon spins the drill bit at huge Cyprus prospect - the “highly promising” Electra-1 well is targeting an offshore prospect that could hold up to 30 tcf of gas. Cyprus has yet to produce gas unlike its Eastern Med neighbours Israel and Egypt, and is hoping that this well will change the country’s fortunes.

• A new European gas route? - Ukrainian president Zelensky has said that the country is ready to begin talks about a new gas transit route from Azerbaijan, through Ukraine, and into Europe. Ukraine was the major transit route for Russian gas to Europe but this has now ceased, leaving Europe scrambling to find new supplies.

• Poland wants to dismantle Nord Stream pipelines - to ensure that Europe never again becomes reliant on Russian gas, Poland’s president has called for the major Nord Stream pipelines from Russia to Europe to be removed. “I can only hope that European leaders will learn lessons from Russia's aggression against Ukraine and that they will push through a decision to never restore the pumping of gas through this pipeline," he said.

🕌 The Middle East

• Fire at Iraq’s huge Rumalia field - a blaze at a storage tank at the 1.1 mmb/d field has taken 300 kb/d of crude production offline for “a couple of days”. BP is involved at the field via its Basra Energy Company JV with PetroChina.

⛩️ Asia & Oceania

• Japan gets in line to buy more US LNG - following other LNG buyers like South Korea and Europe, Japan has also signaled it would buy more LNG from the US in an attempt to avoid the ire of Trump sanctions. Resource poor Japan is the world’s second largest LNG importer behind China, and ahead of South Korea.

🦁 Africa

• BW Energy holds is breath in Gabon - the company has started drilling a “very exciting” well targeting the 30 mmbbls Bourdon offshore prospect which it hopes it can tieback to its nearby Dussafu project.

• Perenco going shopping - the CEO of the Africa focused indy has said the company is looking to make more acquisitions of operated positions to keep its production around 500 kb/d.

🗿 Central & South America

• Total continues its Suriname hunt - the major is planning new exploration activity in the exciting but nascent offshore province, and is lining up a new drilling rig to help out. Total is already developing the $10.5 GranMorgu project but is clearly confident it can further beef up its returns in the South American country.

🌍 GEOPOLITICS & MACRO

• Trump vs Colombia - after Colombia turned away flights full of illegal Colombian migrants being deported from the US, Trump immediately slapped major tariffs onto the country which backed down in less than an hour and agreed to take the planes. This will send a very clear signal to any country in doubt about how the US president plans to go about his business and use American power.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Solar surpasses coal in EU power generation - For the first time, in 2024, the share of electricity generated from solar power overtook that of coal in the bloc’s electricity mix. The decline of carbon intensive coal is to be celebrated, but the rapid addition of intermittent, expensive solar is not, just ask broke European businesses and consumers.

• “If we go bankrupt no-one will care about the world's environment” - some rare signs of sense in European halls over power. These were the words of Donald Tusk, Poland’s PM, who is calling for a "full and very critical” review of the EU’s green energy policies.

• Volkswagen predicting $1.5bn in EU emissions costs - a perfect example of what Mr Tusk is warning about. The giant car manufacturer is having to grapple with huge additional costs that its international competitors do not. Go woke, go broke.

• Repsol investing $4.2bn in data centers - the Spanish oil company is rumoured to branching out into datacenters with a giant investment in its home country.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO

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

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