4th December 2024

Good morning all. Here’s what’s going on today in the world of oil, gas, and energy:

• 🤔 So now Biden gets tough on Iran

• ⚛️ Meta joins the nuclear party

• 🔻 Europe’s rapid gas withdrawals

• 🤝 Exxon’s new upstream boss

• ➕ plus Crescent’s Eagle Ford buy; $100bn for “renewable” projects; Iran’s lucrative smuggling; Europe missing climate goals; Petrobras is going big; Algeria’s gas investment plans; and barrels more.

Let’s dive in

📈 THE NUMBERS

Oil prices popped up by ~2% on rumours that OPEC will delay its production increases and as the Biden administration decided to finally ramp up sanctions on Iranian oil after 4 years in power…

🗞️ WELL-HEADLINES

 🗽 North America

• Exxon’s new upstream boss - Dan Ammann, who leads the company’s low carbon division, is replacing Liam Mallon who is retiring after 34 years at Exxon. Ammann was previously president of General Motors from 2015-2019 and his appointment is a rare break from habit from Exxon which usually promotes lifers to the top jobs.

• Crescent splashes $905m on Ridgemar assets - the cash and stock deal involves assets in the Eagle Ford basin with production of ~ 20 kboe/d, and Crescent may pay an additional $170m in contingency payments related to future oil prices.

• Williams lining up “very large lawsuit” against rival - the US gas pipeline company is suing rival Energy Transfer, claiming that it used dodgy tactics and defied industry norms to try and block Williams’ pipelines.

🏰 Europe

• Gas storage keeps sinking - Europe’s gas reserves are depleting at their fastest rate in 8 years as a cold winter draws in. Low temperatures, which drive demand for heating, and a lack of wind, are the key drivers behind the rapidly declining inventories. This could be a very painful winter indeed.

🕌 The Middle East

• Iran’s billion dollar oil smuggling network - the sanctioned producer has all sorts of tricks including blending its oil with Iraqi oil to pass it off as Iraqi oil, and forged documents to mask the oil’s origins. The elaborate system involving networks of companies, groups and individuals across the region moves ~150 kb/d of oil and generates $1bn a year for its masterminds.

• Aramco plans world’s largest CCS - the partners at the project have signed a key agreement to progress the CCS hub in Jubail, Saudi Arabia, which is due online in 2027 with a capacity of 9 mtpa of CO2.

⛩️ Asia & Oceania

• Asian players get stuck into Kazakhstan auction - five of six onshore blocks offered in the country’s latest hydrocarbon auction were won by Chinese and Singaporean companies. Previous auctions have been dominated by domestic players.

• Inpex farms into Sarawak Block - the Japanese company is taking over operatorship from Seascape at Block 2A in Malaysia which holds the multi-trillion cubic feet Kertang gas prospect.

• Exxon eyeing Singapore gas station sale - its 59 stations under the Esso brand are said to be worth ~$1bn and the sale would continue a trend of increasing focus on its core geographies and projects like Permian shale and offshore Guyana.

🦁 Africa

• Algeria’s spending big - Sonatrach has launched a $2.3bn project to maintain gas production from its giant Hassi R’Mel field that produces 188 mcm/d of gas and is a crucial source of supply for Europe.

🗿 Central & South America

• “As big as possible” - Petrobras’ new CEO has big plans for the Brazilian NOC, including becoming a vertically integrated energy company with investments across the board from offshore drilling, to biofuels and fertilisers. She is accelerating the reversal of a strategy under previous governments to largely exit areas outside deepwater E&P.

🌍 GEOPOLITICS & MACRO

• Oh so now Biden cares about Iranian oil - the US government has slapped sanctions on 35 entities and vessels that it says are enabling Iran’s illicit crude exports. Funny how they’ve waited 4 years to do this, just as they’re leaving office and so no longer care about keeping oil prices low.

• Trump fires loud warning shots - the incoming US president has said he’d slap 100% tariffs on BRICS countries if they try to ditch the US dollar for international transactions. So far, efforts to de-dollarise have been futile, and it sounds like Trump is about to make it even less likely.

• Bedlam in South Korea - out of nowhere, the South Korean president declared martial law (apparently in an attempt to clamp down on his political opponents) and troops stormed into parliament. He then rescinded it 6 hours later when he realised he had almost zero support for the move, but the damage had been done, and now politicians are trying to impeach him.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Meta joins the tech nuclear party - the owner of Facebook is looking to contract developers to build it 1-4 GW of nuclear power to be ready by the early 2030s. Meta joins a long list of tech companies who have realized that nuclear is the only way they can secure carbon free, reliable electricity for their power hungry data centers.

• Biden hits $100bn clean energy grants milestone - the money has been dished out to “renewable” energy projects across the country under the Inflation Reduction Act and the departing government is trying to get as much of the cash out before Trump moves into the Oval Office.

• Europe off track to hit 2030 climate goals - despite the huge sums Europe has invested into ineffective low carbon projects, and the accompanying economic pain, Bloomberg New Energy Finance estimates the continent will still produce 9% more CO2 in 2030 than it’s targeting.

• Total nearing $2.1bn renewables buy - the IOC is rumoured to be close to buying German-based renewable developer, VSB Group, which has a project pipeline of more than 10 GW across 10 countries, mostly in Europe.

• Eni and easyJet partner on SAF - Eni’s biofuel subsidy is supplying the airline with ~30,000 tons of sustainable aviation fuel with 20% purity and is blended with conventional jet fuel. 20%? Doesn’t sound like much to shout about.

🛢️ BOTTOM OF THE BARREL

Honest question, have any of the climate-related doomsday predictions ever come true?

The polar bears, the ice caps on Kilimanjaro, the global famines?

It’s hard to trust people who’ve been so consistently wrong for so long.

👋 BEFORE YOU GO

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

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