9th December 2024

Good morning team. Here’s what went down over the weekend in all things oil, gas, and energy:

• ♚ The great game of geopolitical chess

• 👍 More relief for Permian gas 

• ⭕ Qatar to Europe gas pipeline?

• 👋 BP’s turn to step away from wind

• ➕ plus tragedy in Italy; Devon’s CEO retiring; Bolivia’s gas hopes; rig count climbs; Flowco IPO; Trump’s top trolling; and barrels more.

Here goes…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• New gas export capacity for the Permian - Energy Transfer has given the go ahead for the construction of the 400 mile 1.5 bcf/d Hugh Brinson (formerly named Warrior) gas pipeline that will carry gas from the Permian to export markets. The Permian is drowning in gas, much of which is associated gas from oil production, but a lack of gas pipeline capacity has often pushed gas prices in the basin negative.

• Devon CEO stepping down - Rick Muncrief is retiring in March next year and will be replaced by COO, Clay Gaspar.

• Flowco files for IPO - the US services company is hoping that it will be valued at around $2bn when it lists on the NYSE. IPOs are seeing a revival as US equity markets hit all-time-highs.

• Rig count pops up - the US oil rig count rose by 5 last week to 482 in an unusually large increase for recent months. Meanwhile, the gas fleet rose by 2 to 102.

🏰 Europe

• Fatal explosion at Eni fuel depot - at least two people have died and eight were injured after a major explosion at the facility near Florence, Italy.

• Viaro boss wins court case - Taqa and Spirit Energy had accused Francesco Mazzagatti, CEO of Viaro Energy, of stripping value out of a UK partnership that owned the Brae oil & gas field.

🕌 The Middle East

• A Qatar - Europe gas pipeline? - Now that Assad is gone from Syria, a proposed pipeline connecting Qatar’s gas riches with the thirsty European market could be back on the table. The pipeline provides an alternative for Europe to Russian gas, which is why with Russian-allied Assad would likely never have allowed it to pass through Syria.

• Shell lands large Qatari LNG supply contract - Qatar will supply Shell with 3 mtpa of LNG for delivery to China, starting in 2025. China is the world’s largest LNG importer, and Qatar the third largest exporter behind the US and Australia.

⛩️ Asia & Oceania

• Indonesia’s 48 billion barrel potential - the country is offering 6 new exploration blocks in a new licencing round, with improved terms for oil & gas companies in a bid to attract more interest and investment.

• KUFPEC excited by Indo’s Natuna Sea - the Kuwaiti company, which already has operations in the region, is looking to make more investments in Indonesia’s gas rich waters.

🦁 Africa

• Equinor wraps up Nigeria and Azerbaijan exits - the IOC has completed the planned sales, which raised ~$2bn for the company, marking the end of over 30 years operations in the two countries.

🗿 Central & South America

• Bolivia’s gas hopes - state-owned company YPFB has started a drilling campaign that it hopes will reverse the country’s steadily declining gas output. The $78m programme is expected to last 330 days and is targeting potential resources of 1.05 tcf of gas.

🌍 GEOPOLITICS & MACRO

• The lightning fall of Assad - having held onto power for over a decade of civil war, Syria’s President Assad has been suddenly toppled in just a few days by an Islamist rebel force which has taken control of the capital, Damascus. It seems his allies in Russia and Iran who have helped him stay in power for so long were unable or unwilling to save him this time around, although he and his family have fled safely to Moscow. It’s anyone’s guess what happens now but things don’t tend to go too well after strongmen are toppled by “revolutions”, just ask Libya and Iraq.

• OPEC’s “reality check” - some comments from Saudi’s Energy Minister following OPEC+ decision to delay production hikes: “We honestly believe the market next year will be better than what is being projected…Primarily the decision to delay bringing these barrels to the second quarter is tied to the issue that the first quarter is not a good quarter to bring in volumes as it is known to be a quarter for building stocks”.

• Russia’s wrecked ruble - the costs of war and increasingly tight sanctions are really taking their toll on Russia’s currency which recently hit news low. A weak ruble pushes up the cost of imports, drives inflation, discourages investment, and generally causes economic instability and headwinds.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• BP and JERA form offshore wind JV - the two companies will combine their offshore wind portfolios into a new business called JERA Nex bp, creating one of the largest offshore wind developers in the world. They will invest a combined $5.8bn into new projects over the next 5 years but it is a clear sign that BP, like many other IOCs, is taking a step back from high cost, value destructive offshore wind.

🛢️ BOTTOM OF THE BARREL

Some sort of agreement between the US and Russia over Syria and Ukraine would explain why Russia stood by and let its highly strategic ally in Syria fall so fast after protecting it so staunchly for over ten years.

The great game of geopolitical chess is playing out in front of our eyes.

🤣🤣🤣

👋 BEFORE YOU GO

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

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