30th July 2024

Hello, hello, hello. Here’s your daily dose of oil, gas, and energy news:

• 💀 “Game over” for UK oil & gas

• 💪 BP sanctions complex new GoM hub

• ☭ Shooting your way out of communism

• 📉 Shale costs still falling

• ➕ plus more bad news for Germany; quakes in the Permian; Post Oak goes shopping; crude prices still sliding.

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📈 THE NUMBERS

Brent dips below $80/bbl…

🗞️ WELL-HEADLINES

 🗽 North America

• BP sanctions new GoM production hub - the Kaskida hub will be BP’s sixth operated hub in the US GoM and will have the capacity to produce up to 80 kb/d once it fires up in 2029. The project is one of its most difficult ever: high-pressure, high-temperature, ultra-deep water.

• Shale costs to fall by 10% this year - Wood Mackenzie estimates that, thanks to a drive for efficiencies, drilling in the US shale patch will get about 10% cheaper this year before stabilizing. Further reductions will be tough, however, as services companies look to protect their own margins.

• Post Oak splashes $475m in the Permian - the company announced it has made 10 acquisitions since the start of 2024 including over 28,400 net royalty acres and totaling $475m.

• More top ups for the SPR - the US is acquiring an additional 4.65 mmbbls for the depleted SPR, taking its total of recent purchases to 43.35 mmbbls. Over 250 mmbbls were drained between 2020-22.

• Flurry of earthquakes in the Permian - the Railroad Commission of Texas is investigating after dozens of tremors were registered close to oil & gas operations in Texas. Underground injection of waste water by E&Ps is believed to cause earthquakes.

• Efficiencies weighing on job counts - the Texas Oil & Gas Association has noted that upstream E&P employment has fallen for five out of six months this year, largely driven by “operational efficiencies [that] are driving strong production with fewer rigs”.

🏰 Europe

• “Game over” for UK O&G - the new Labour government has imposed additional taxes on the oil & gas industry, taking the tax rate to 78% and removing other investment incentives. “The Chancellor has chosen to tax the industry into oblivion”, said an industry representative, “This decision will result in £20 billion lost in Treasury revenues, increased reliance on imported oil and gas—which is worse for the planet and the economy—and the potential loss of tens of thousands of jobs.” What a bunch of self-destructive morons.

• BP hikes dividend and beats profit expectation - the results beat expectations despite previous warnings that weak refining margins and lower oil trading results would hit the firm’s second-quarter results.

🗿 Central & South America

• Brazil output marches on - Petrobras’ oil production grew by 2.6% to 2.16 mmb/d in Q2. Volumes are set to keep climbing this year as the large Mero field in the pre-salt Santos Basin beings operations shortly.

🌍 GEOPOLITICS & MACRO

• US ponders new Venezuela sanctions, protests engulf Caracas - after Maduro claimed victory in Sunday’s presidential election. Opinion polls prior to the election and exit polls had both pointed to a landslide win for the opposition, which claims it won with 73.2% of the vote. A US gov’t official said the election had no credibility and that the US would consider its response.

• More bad news for the German economy - I feel bad constantly reporting on how terrible the German economy is doing but it was, and still is, entirely avoidable, if they abandon their suicidal green ideology. The once-mighty industrial nation saw its GDP contract by 0.1% in Q2 while the rest of the Eurozone grew by 0.3%.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• China’s Three Gorges releases excess water - the 22.5GW hydroelectric damn in China, the world’s largest, has been discharging excess water after heavy rainfall on the upper reaches of the Yangtze River. High hydro output in China puts downwards pressure on coal prices as it reduces China’s need for coal in power generation.

• Saudi eyes up Chile lithium investment - the kingdom is hedging its bets through its ambition to become a hub for EV and battery manufacturing. Lithium is a key component of most batteries and there’s tons of the stuff in South America.

• Spain greenlights $18.5bn of low carbon projects - the government has authorized the construction of nearly 300 projects, mostly solar, with a total capacity of over 28GW. Enjoy your higher bills, amigos.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO 

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

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