29th September 2023

Happy Friday team. This is Both Barrels, your daily dose of all things oil, gas, and energy, without the hot air.

Today’s highlights:

• 🇺🇸 Meager US offshore lease plan

• 🥴 Granholm catches up

• 💦 The gusher at Spindletop

plus a lot more. Let’s get to it…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Meager US offshore lease plan - The US government’s five-year plan for offshore oil and gas leasing will not include any sales in 2024 and just three in the final four years, the lowest number of auctions in the history of the program. Most of the previous five year plans have had 15 to 20 leases. Oil execs who have recently been calling for more government support for domestic production will be disappointed.

🏰 Europe

• Russia’s fuel export ban sticking around - Russia’s energy minister said that markets shouldn’t expect its fuel export ban to be lifted anytime soon. Russia is the world’s second largest diesel exporter but banned exports of most fuels last week in an apparent attempt to keep a lid on domestic prices.

• Norwegian gas ready for European winter - after a spate of maintenance works reduced gas flows from Norway to Europe in recent months, the Gassco pipeline operator has assured that Norway will be ready to supply Europe with the gas it needs over winter.

• Equinor and OMV gas supply deal - the agreement is for 5 years and will see Equinor supply 12 TWh of gas per year to the Austrian company.

🕌 The Middle East

• A quiet day here. They’ve already got their feet up for the weekend.

⛩️ Asia

• Ditto!

📍Everywhere else

• Where’s my money? - Ecopetrol has asked a US judge to freeze certain assets of CB&I, a McDermott International subsidiary, over concerns CB&I won’t pay a $1bn debt. The payment was ordered by a court in 2016 following a dispute over costs during the renovation of an Ecopetrol refinery and failings by CB&I in an EPC contract.

• Nigerian O&G workers to join nationwide strikes - One of Nigeria's largest O&G unions is joining a nationwide strike starting on October 3rd to protest against government economic policies. Workers are angry at rampant inflation and rising living costs that are pushing more people into poverty. It’s not yet clear what impact this will have on oil & gas output.

• Not all rosy in Guyana - Exxon and Hess have withdrawn from the Kaieteur block offshore Guyana after disappointing exploration results. Don’t feel too sorry for them though, they’ve discovered over 11 bnboe of resources at the nearby Stabroek block.

🌍 GEOPOLITICS & MACRO

• China’s dominance of low carbon supply chains - the US Energy Secretary has said that China’s control of critical minerals mining and processing will make energy security in the energy transition “infinitely more complex”. No sh*t! The idea that low carbon techs will provide energy independence was always a myth. The resources and the players will change but it will be the same old geopolitical game.

• Saudi driving a hard bargain - in return for normalizing ties with Israel, Saudi Arabia is reportedly asking the US for guarantees that it would come to its defense should it be attacked, and that Israel offers major concessions to Palestinians. Saudi, US, and Israel are working on a peace deal that would initiate cooperation between the long standing Middle Eastern rivals.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Danish Pension Fund exits O&G - AkademikerPension has completed a $520m divestment of all oil and gas stocks from its $20 billion portfolio. Not only do “divest” campaigns not work, we also see them as nothing more than virtue signalling exercises that will ultimately hurt pensioners who miss out on lucrative O&G returns.

• Hailstorms vs solar panels - hailstorms in Texas are damaging solar panels. Earlier this year, a solar farm was wrecked by hail in Nebraska (see pic below).

• Blackouts in Cuba - Cuba is struggling with energy, food, and medicine shortages and has warned some of its population to expect no power for up to 10 hours a day. Cuba blames US sanctions for depriving it of foreign exchange needed to import most of its fuel.

• Hydrogen boost in France - The French government is investing €700m in hydrogen production in 2024. France is aiming for 6.5 GW of installed electrolyzer capacity by 2030, while the EU is targeting 10 mtpa year of green hydrogen production by that date, requiring over 80 GW of electrolysis.
  

🛢️ BOTTOM OF THE BARREL

A bit of a look back into history to end the week:

The photo below shows the gusher at Spindletop, Pennsylvania, January 10, 1901.

The gusher blew at a rate of ~100,000 b/d and marked the start of the Texas oil boom and arguably the modern oil age.

By the end of 1902, more than 500 companies had been formed and 285 wells were in operation in the region. Many modern giants like Exxon and Chevron can trace their roots back to Spindletop.

👋 BEFORE YOU GO 

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Thanks for reading. Have a great weekend. 🛢️🛢️