6th November 2024

• 🇺🇸 Donald’s back

• ⚔️ Wind turbines and missiles

• 🌍 4.5 billion energy poor

• 💨 GoM braces for Rafael

• ➕ plus BP going back its roots; Equinor bites dust again in Newfoundland; Libya open for business; Aramco keeps printing cash; Total lands mega Chinese LNG deal; Diamondback swap; LNG from Guyana and Suriname; and barrels more.

Let’s have a look…

📈 THE NUMBERS

Oil prices fell on the news of Donald Trump’s emphatic election victory. Why?

Firstly, “drill baby, drill” means more supply, and secondly, markets anticipate a lower risk of an all out war between Israel and Iran with Trump in the Oval Office.

🗞️ WELL-HEADLINES

 🗽 North America

• GoM bracing for Storm Rafael - some estimates suggest the incoming storm could disrupt over 4 mmb/d. Chevron, BP, and others have started shutting in production and evacuating workers from facilities in the path of the storm which is expected to reach a Cat 1 Hurricane today.

• Equinor bites dust in Newfoundland - the wildcat at Cappahayden South was the second of two exploration wells in the offshore Canadian province. An earlier well at the Sitka prospect was also unsuccessful. A campaign to forget.

• Canadian E&P ordered to cut emissions - a new cap and trade system aims to reduce the oil and gas sector’s emissions by 35% below 2019 levels by 2030. Producers will have to start reporting their emissions from 2026 and will pay penalties for non-compliance. The industry has said the policy will push up energy prices.

• Diamondback and TRP make a swap - Diamondback is giving TRP Energy 3,000 net acres in the Delaware basin and $238m in cash to TRP Energy in exchange for 15,000 net acres in the Midland basin.

🏰 Europe

• Europe power prices spiking - electricity prices in Germany hit their highest levels since the energy crisis in 2022 due to almost no wind across Europe. This is the price of relying too much on weather for your energy…

• BP selling Dutch gas stations - the company owns 310 petrol stations across the country and did not disclose price expectations for the business.

🕌 The Middle East

• ADNOC’s $920m AI project - Jereh Group has signed a contract with ADNOC to roll out a well digitization project across O&G assets in the UAE. The project will cover more than 2,000 wells, and will enable real-time data transmission, monitoring, and analysis. Digitization holds large potential for E&Ps to reduce costs and squeeze out more volumes.

• BP “going back to its roots” - CEO Murray Auchincloss said the company was looking to increase its geographical diversification and so was eyeing up more opportunities in the Middle East where it was born as the Anglo-Persian Oil Company in Iran in 1909.

• Aramco keeps printing cash - the Saudi giant has reported Q3 profits of $27.5bn, 15% down from the same period last year due to lower oil prices. Aramco’s profits are greater than Exxon, Shell, Chevron, Total, and Eni combined.

• ME conflict delays Chevron developments - the ongoing conflict in the Middle East is delaying Chevron’s expansion plans for the offshore Leviathan and Tamar fields.

⛩️ Asia & Oceania

• Total lands mega Chinese LNG deal - the French IOC will supply Sinopec with 2 mtpa of LNG for 15 years from 2028. China is the world’s largest importer of LNG and majors like Total have made LNG a core part of their strategies in the coming decades.

🦁 Africa

• Libya re-opens for business - the war torn producer is preparing its first E&P tender since the 2011 civil war as it tries to convince IOCs that it’s a safe place to invest. Libya is targeting 1.6 mmb/d of oil output by the end of 2025, up from ~1.2 mmb/d today.

• Chevron to boost activity in West Africa - it’s “such a hydrocarbon rich part of the world and relatively under-explored compared to other jurisdictions”, said VP of Global Exploration.

• Breakthrough imminent for $42bn Tanzania LNG? - Shell and Equinor’s long delayed giant project may reach crucial fiscal and legal agreements with the government by the end of the year, which would help unlock the project, according to a gov’t official.

🗿 Central & South America

• LNG from Guyana and Suriname? - the oil patch’s hottest new kids on the block may soon get involved in the LNG game too, and could supply up to 12 mtpa of low cost LNG by the 2030s, according to Wood Mac.

🌍 GEOPOLITICS & MACRO

• Donald’s back - voters in the US have resoundingly come out in favour of Donald Trump in the US presidential election, and he is expected to win over 310 electoral college votes, the House, the Senate, and the popular vote. All swing states went his way, while Kamala Harris went to bed without saying a word….

• 4.5 billion still lack sufficient energy - according to Total’s Energy Outlook. “There are around 4.5bn people today with insufficient access to energy in the so-called 'global south'...If you add to that the expected growth in population to 2050 you would need to multiply current energy production by four to pull them out of energy poverty”. Affordable, abundant energy is crucial for dragging people out of poverty. Hydrocarbons offer exactly that.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• “Renewable” stocks take a battering - wind developers, Orsted and Vestas, both saw their share prices fall by ~9% this morning after staunchly anti-wind Trump won the US election. Trump is thankfully going to slash support for offshore wind after 4 years of subsidies from the Biden administration.

• Wind turbines and missiles - Sweden has rejected applications for 13 offshore wind farms because they would make it harder to detect and shoot down missiles. The country’s defence minister said the wind farms “could halve the time Sweden had to react to a missile attack to just one minute…the Swedish armed forces judge it would bring unacceptable risks”.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO

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

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