27th November 2024

A huge Happy Thanksgiving to all our American readers. I’ll also be taking a couple of days off so will be back in your inbox on Monday.

Here’s what hit the wires today in all things oil, gas, and energy:

• 🙏 Giving thanks to fraccing

• ⬆️ US crude reaches new highs

• 🎯 Canadian oil in the crosshairs

• 💸 Blackstone’s $3.5bn EQT JV

• ➕ plus hints of peace in the Middle East; OPEC+ likely delay; boom years for LNG; a North Sea rig crash; Repsol’s slap on the wrist; an barrels more.

Catch you later.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Blackstone’s $3.5bn EQT JV - the private equity giant is buying a minority stake in the newly formed midstream JV, which includes EQT’s Mountain Valley Pipeline, various regulated transmission and storage assets, and the Hammerhead Pipeline.

• Can’t stop, won’t stop - 2024 was supposed to the be year that US crude production plateaued but the EIA has just reported that output reached a new record of 13.4 mmb/d in August. Last year, production averaged 12.9 mmb/d, and its expected to average 13.5 mmb/d in 2025.

• No tariff exemption for Canadian & Mexican crude - the US’ northern and southern neighbors had hoped their oil (crucial for US refineries) would be spared from Trump’s sweeping 25% import tariffs. It seems that will not be the case.

• Say goodbye to Biden’s LNG moratorium - among the raft of energy policies Trump’s team is readying, an early priority is lifting the pause on new LNG export permits and speeding up their approvals.

• “A radical change is unlikely” - Exxon has again reaffirmed that Trump’s policies are unlikely to unleash a flood of oil “because the vast majority, if not everybody, is focused on the economics of what they’re doing”. Economics not politics drives US oil production.

• Golden Pass back on track - the $10bn 15 mtpa LNG terminal has reached a deal with new contractors to finish the project after the previous lead contractor went bust.

• Freeport LNG back to full tilt - two of the three trains were shut down last week due to various technical faults.

🏰 Europe

• North Sea rig collision - a supply vessel crashed into Harbour’s Valaris rig in the North Sea, causing an evacuation of 52 non essential personnel. No one was hurt and production wasn’t disrupted. Ooops.

• Repsol’s slap on the wrist - the UK North Sea authority said it issued a “historic” fine (albeit of £350k) to Repsol for behavior that led to the premature shut-in at the Flyndre field and reduced economic recovery of resources.

• Decom weighing on Waldorf - the UK indy has had to take a loan and get a waiver on its existing bond covenants to pay for higher than expected decom costs.

• Spirit winding up - the company plans to exit the UK by the end of the decade and is lining up decom contracts for 60 wells in Q1 2025.

🕌 The Middle East

• Tethy’s getting to work in Oman - the Swedish indy has received approval for its development plan for the onshore Block 56.

⛩️ Asia & Oceania

• Malaysia’s tech-enabled new exploration licencing round - Petronas is teaming up with Amazon Web Services to use advanced artificial intelligence and machine learning to improve the data offering for prospective participants. The round will take place in early 2025.

• Saipem lands big gig at Tangguh - the OFS has won a $1.2bn contract at BP’s newly sanctioned Tangguh gas project in Indonesia. They’re making it rain at Saipem - a couple of weeks ago they won a $1.9bn contract with Total in Suriname. Drinks on them.

• Vietnam panders to Trump - the country has an export surplus of ~$100bn per year with the US and so has promised to buy more goods from the US, including LNG, in the hope that they will avoid tariffs.

🦁 Africa

• Nothing much happening over here

🗿 Central & South America

• ¿Dónde está mi dinero? - a group of Mexico’s largest oil services providers have written a public letter to Pemex asking it to pay its overdue debts of ~$5.1bn, warning that their operations might soon suffer. Pemex has financial debt of ~$97bn and owes service providers another ~$21bn.

• Gran Tierra hits pay again in Ecuador - the company has made a seventh successful oil discovery in Ecuador.

🌍 GEOPOLITICS & MACRO

• Israel and Hezbollah sign peace deal - the ceasefire will come into effect today and Israel will start withdrawing its troops from Lebanon. I’m not sure there was much left of Hezbollah anyway after Israel obliterated them…

• OPEC+ unwind unlikely - trading heavyweights Vitol, Trafigura and Gunvor all expect OPEC+ to further delay planned production increases that are due in December. Releasing those barrels into today’s shaky market would be bedlam.

• A big decade ahead for LNG - Woodside’s CEO sees the LNG market growing by a whopping 50% in just the next 10 years, to add to the 50% it grew over the last decade. We’re well and truly in the golden era of LNG.

• But not all plain sailing - Equinor expects the next wave of LNG projects to be delayed by a year or two with many coming online in 2027, creating a tight market for the next couple of years. Giant LNG projects have been hampered by cost increases and a shortage of labor and equipment.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Norsk Hydro pulls plug on batteries and hydrogen - the Norwegian aluminium producer has become the latest in a long line of European businesses pulling back from low carbon investments. Economic reality eventually catches up with us all.

🛢️ BOTTOM OF THE BARREL

The US shale revolution changed everything. Economics. Geopolitics. Your quality of life.

All of it.

It’s hard to understate just how much of an impact it has had on the world.

Meanwhile, in places that haven’t embraced abundant energy…:

Energy IS the economy.

Enjoy your pumpkin pie and give thanks to hydrocarbons that make it all possible!

👋 BEFORE YOU GO

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

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