9th April 2025

Hello, hello. This is all you need to know in oil, gas and energy today:

• 🥊 China will “fight to the end”

• 🐻 Low oil prices rocking Russia

• 🚢 Trump’s EU energy demand

• 🥂 Drinks on Darren

• ➕ plus “triple frac”; first oil at Dover; LNG Canada nearing start-up; futile attempts to save US coal; Galp reveals Mopane resources; Venezuela / T&T licences revoked; China plays the rare earth card; Aramco’s Rio Grande deal; and barrels more.

Let’s take a look….

📈 THE NUMBERS

More red on the screens today. Lots more. WTI has sunk to $57/bbl and Brent is at a four year low of $60/bbl as recession fears weigh on demand prospects for oil.

🗞️ WELL-HEADLINES

 🗽 North America

•  First oil at Dover - Shell has begun production at the Gulf of Mexico field that is expected to reach peak production of ~ 20 kb/d. Dover was first discovered in 2018 and is now tied back to the Appomattox hub.

• Aramco signs Rio Grande LNG supply deal - the Saudi NOC has agreed to buy 1.2 mtpa of LNG from Train 4 of NextDecade’s giant under-development export facility in Texas.

• “Triple-frac’ to cut costs - Chevron is planning to increase the use of the technique, which involves fraccing three wells at a time, to cut the time and cost of shale oil production. The company says the method reduces cost per well by 12%.

• LNG Canada cooling down to start-up - Canada’s first LNG export facility is in the final stages of preparation before it ships its first cargo in mid 2025. The 14 mtpa facility finally gives Canadian gas an alternative export route as the US is currently its only outlet.

• P66 fights back against Elliott - the refiner has sent a letter to shareholders asking it to reject activist shareholder Elliott’s board nominations, saying that Elliott’s approach is shortsighted and based on unrealistic assumptions.

• Drinks on Darren - the Exxon CEO took home a cool ~$44m last year, an increase of 19% from 2023.

🏰 Europe

• Perenco completes UK’s first CO2 injection trial - the test is a step towards the 40 mtpa Poseidon CCS project, with the first 1.5 mtpa phase expected to launch in 2029.

🕌 The Middle East

• These guys are chilling while the rest of the world loses its mind.

⛩️ Asia & Oceania

• China resells US LNG cargoes - Chinese buyers of US LNG are reselling cargoes to Europe after China’s reciprocal 34% tariffs on US imports pushed up the price of the gas. Already this year, Chinese offtakers of US LNG have resold into Europe about 70% of what they resold in all of 2024.

• Back to the drawing board for Dorado - Santos and partners are investigating alternative options for developing Australia’s largest undeveloped oilfield after Santos recently decided against purchasing the FPSO that was going to be the foundation of the development.

🦁 Africa

• Eni’s big ambitions for North Africa - the Italian heavyweight said it would invest ~$26bn in Algeria, Libya and Egypt over the next four years to help boost energy production. Eni is already a major player in the region.

• Galp reveals Mopane resource estimate - the offshore Namibia discovery holds contingent resources of 875 mmboe, which is an estimate that is likely to grow once data from recent wells is processed.

• Libya’s first bid round in 18 years - after years of conflict, the North African producer is ready to offer 22 new onshore and offshore blocks for exploration and development.

• Chinese oil workers evacuate South Sudan - amid heightened concerns that the country may again descend into civil war.

🗿 Central & South America

• Venezuela / T&T gas licence revoked - the US government has revoked its sanctions exemptions for Shell and BP to develop the Dragon and Manakin-Cocuina offshore gas fields which straddle the Venezuelan and Trinidad & Tobago maritime borders. Bad news for T&T which is in desperate need of more gas supply.

• Exxon has more targets in Guyana - after recently focusing on development wells, the supermajor is back to drilling exploration wells in the booming new oil South American oil patch.

• Borr Drilling bags new contracts - three of Borr’s idle jack-up rigs in Mexico have been called into action in Mexico, and it also reported new contracts in Vietnam and West Africa.

🌍 GEOPOLITICS & MACRO

• 104% tariffs on China - after China refused to cave into yesterday’s deadline from the US to lift its retaliatory tariffs, the US imposed huge new tariffs of 104% on Chinese imports. China said it would “fight to the end”…jeeez, looks like this isn’t ending anytime soon.

• Buy $350m of US energy to remove tariffs - this is the demand Trump has made of Europe after rejecting Europe’s offer of zero-for-zero tariffs. Trump is clearly hoping that the EU will agree to mop up some of the huge volumes of new US LNG coming online in the next few years. “"A lot of people say, 'Oh, it doesn't mean anything having a surplus.' It means a lot, in my opinion. It's almost like a profit or loss statement," Trump said

• Turning up the heat on Iran - US Energy Secretary has said to “expect very tight sanctions on Iran” if they do not reach an agreement with the US on its nuclear program. With oil prices where they are, Trump has extra wiggle room to squeeze Iranian oil exports. Iran has said that it is ready for talks if the US stops its military threats - e.g. Trump said Iran would be in “great danger” if the talks fail...

• Low oil prices rocking Russia - Russia’s central bank has warned that low crude prices and tariffs pose a risk to the country’s economy. Russia’s flagship Urals crude has fallen to ~$50/bbl for the first time in nearly two years. It’s hard to fund a war when your economy is rattled - might low oil prices push Russia to the negotiating table?

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• China plays the rare earth card - in retaliation to tariffs, China is restricting exports of some rare earths, crucial minerals used in the making of microchips and vital for new energy technologies. China’s produces ~90% of global rare earths so has a choke hold on supply. Turns out renewables don’t quite mean energy independence after all.

• Trump tries to save US coal - the president has signed various executive orders in an attempt to support the domestic coal industry, including measures to help prolong the life of retiring coal plants and increasing coal leasing on federal lands. With natural gas so cheap and abundant in the US, coal’s days are numbered regardless of policy.

• Sorry outlook for US wind - consultancy Wood Mackenzie has cut its 5-year expectation of new US wind capacity by 40% in light of the new US government’s policies.

• Co-locating data centers with energy facilities - under the plan by the US Department of Energy, the US hopes to “leverage our domestic resources to power the AI revolution. Makes sense. Data centers are hugely energy intensive and its a lot easier to move data than energy so might as well build the data centers as close to the energy as possible.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO

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

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