29th January 2025

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’s power bet

• ⚡ DeepSeek rocks energy companies

• 😬 The case against a climate emergency

• 🌐 A new mini OPEC?

• ➕ plus service providers feel the squeeze; Venture’s rocky start; OPEC sticking to its guns; Greenland not for sale; Vermilion raises $400m; preserving Nord Stream 2; Snam sells UAE pipelines; Petronas closes problematic pipeline; and barrels more.

Let’s take a look…

📈 THE NUMBERS

Oil prices continued their recent slide on the off chance that OPEC may grant Trump’s request to increase production.

🗞️ WELL-HEADLINES

 🗽 North America

• Gas producers steady after DeepSeek sell-off - shares in large US gas producers including EQT and Antero have stabilized after falling by ~10% earlier in the week on the news that a new Chinese AI model called DeepSeek may require far less energy than existing AI platforms. The broad sell-off saw shares in tech and power stocks get hammered.

• Service providers feeling the squeeze - US oilfield service companies are battling with lower prices and less demand as upstream shale companies keep getting more efficient.

• Ventures rocky start to listed life - the US LNG developer’s share price has now fallen by ~20% since it made its debut on the NYSE last week. In better news, the company has got approval to start injecting gas into the seventh block of its giant 20 mtpa Plaquemines LNG facility.

• Vermilion issues $400m bond - the E&P company said it would use the proceeds to repay existing debt and to help fund its acquisition of acquisition of Westbrick Energy.

• Relaunching the Citgo sale - the auction process to find a buyer for the Venezuelan-owned refinery in the US is starting again after the previous attempted sale price was rejected as too low by creditors last year.

• Stonehenge and UGI acquire Superior Midstream - Superior owns a bunch of gas gathering systems in Pennsylvania. The deal is worth ~$120m.

• LyondellBasell shutting Houston refinery - the 265 kb/d facility is closing its doors after failing to find a buyer, with the loss of ~400 jobs.

🏰 Europe

• Preservation work to start on Nord Stream II - a few days after Poland called for the sabotaged gas pipeline to be dismantled, Denmark has announced that it is starting work to preserve it. I still can’t get over how wild this whole story is - can’t wait for the movie.

🕌 The Middle East

• Snam sells UAE pipeline interest - Snam is divesting its 6% stake in Adnoc Gas Pipelines - which has lease rights to 38 pipelines across the UAE - to Abu Dhabi based investor Lunate. The value of the deal was kept hush.

⛩️ Asia & Oceania

• Petronas shutters ill-fated gas pipeline - the $1bn gas Sabah-Sarawak pipeline, once seen as a critical piece of infrastructure in Malaysia, has been plagued with leaks and fires over the past decade and is now set to be decommissioned.

• JERA inks major gas supply deal - the Japanese utility is locking in three years of gas supplies from the UAE’s ADNOC. The gas will come from the 6 mtpa Das Island facility.

🦁 Africa

• Loading resumed after disruptions at Libya oil ports - protesters had disrupted operations at the two ports in the east of the country which export ~450kb/d of crude.

🗿 Central & South America

• A new mini OPEC+? - Guyana has been asked to lead a group of new oil producing countries including Suriname, Namibia, and Ghana. It’s not clear exactly what the group is for but I’d guess it’s to share expertise and collaborate on things like policy and technical matters.

🌍 GEOPOLITICS & MACRO

• OPEC likely to stick to its guns - despite calls from President Trump to ramp up output, the group is widely expected to maintain its current production strategy (start the gradual phase-out of 2.2 mmb/d of voluntary output cuts from April) when it next meets on February 3rd.

• Greenland not for sale - 85% of Greenlanders have said they don’t want to join the US, according to a poll. Trump has repeatedly said that Greenland was vital to US security and Denmark should give up control of the strategically important island.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Chevron to build gas power stations for AI - the major is teaming up with GE Vernova and Engine No. 1 to build gas plants next to data centers in the US, as energy demand to support the growth of artificial intelligence is expected to boom.

• Total’s 15-year renewable power supply deal - the French major is providing a semiconductor company STMicroelectronics with 1.5 TWh of wind and solar power over the duration of the contract.

• Nigeria looking for $15bn to shore up decrepit grid - despite being a major energy producer, Africa’s most populous country often suffers from blackouts due to a lack of investment into its power infrastructure.

🛢️ BOTTOM OF THE BARREL

This article below is well worth a read, courtesy of The Spectator.

“OK, apocalypticism has become a genre of entertainment. But this time the stakes are enormous with spiraling energy costs and the destruction of manufacturing, nothing less than western economic collapse. We keep crossing ostensible red lines beyond which all is lost, and then. embarrassingly. we're fine. So the catastrophisers just draw a new red line.”

👋 BEFORE YOU GO

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

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