1st February 2024

What’s up team? Here’s your daily dose of all things oil, gas, and energy:

• 🌎 Hard truths about climate change

• 🆙 Big hikes to oil demand forecasts

• ⛔ Woodside shareholders souring on Santos

• 🇺🇸 US House to vote on LNG pause

• ➕ plus US coal exports hit highs; Shell hikes dividends; Greta in court; Nebula acquires AG&P stake.

Let’s dive in.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Silver Hill acquires Liberty Resources’ North Dakota assets - the assets include 13 kboe/d of net production and the midstream facilities consist of a 30 mmcf/d gas processing plant and 33 miles of gas gathering lines. The consideration was not disclosed.

• P66 gas pipeline fire - the fire at the natural gas pipeline in the Oklahoma Panhandle has now been extinguished and no injuries were caused. This is the third similar incident at Phillips 66 assets in less than a year. Its HSSE department is gonna be on the rampage.

🏰 Europe

• Some earnings highlights - Shell boosts dividends and share repurchases after posting large profits; OMV marginally beats estimates.

• Serica’s CEO to step down - after 6 years in the role, Mitch Flegg will be replaced by Chairman David Latin on an interm basis.

• Eni completes Neptune takeover - the $4.9bn takeoever of the North Sea indy was announced last year.

⛩️ Asia & Oceania

• Large Woodside shareholder doesn’t like the Santos deal - Allan Gray Australia, which owns a ~$460m stake in Woodside, said that Woodside should walk away from the deal rather than pay a premium for the smaller company. Bluffing negotiating tactic or honest truth? Price has been a key sticking point over the proposed merger.

• Nebula acquires stake in AG&P LNG - the US investor has spent $300m buying the majority stake in the South Asian LNG infrastructure player. AG&P LNG’s portfolio includes 6 LNG terminals in development with a proposed capacity of 25 mtpa and an operational LNG import terminal in the Philippines.

• Santos and Kumul amend the terms of PNG LNG deal - the $576m cash deal for a 2.6% stake in the project was agreed last year and Kumul has paid $352m to date. The amendment gives Kumul more time to raise the remaining funds. Kumul’s CEO warned in December of an "environment where the appetite for funding of any hydrocarbon project is becoming increasingly scarce"

🌍 GEOPOLITICS & MACRO

• Rystad’s big oil demand upgrade - “We have revised our short-term oil demand forecast for 2024 and 2025 up by 0.6 mmb/d and 1 mmb/d respectively, compared to our December outlook." the company said in its latest oil market report. The energy consultancy now sees growth of 1.4 mmb/d this year, and 1.7 mmb/d next year. Oil demand remains resilient.

• U.S. House of Reps to vote on Biden’s LNG pause - the Republican controlled House will likely support overturning the policy, although it may face strong opposition in the Democrat controlled Senate.

• Nigeria devalues naira, again - the central bank has sharply devalued its official currency FX rate for the second time in eight months as it seeks to attract more international investment. The naira fell by 40% against the USD.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Stellantis CEO warns of EV “bloodbath” - the boss of the major European automotive company has said that a “race to bottom” when it comes to pricing for EVs will be extremely damaging for the auto sector. He highlighted Renault’s recent cancellation of plans to IPO its EV and software business as an example of the troubles the sector faces with a mass market EV strategy.

• Greta Thunberg in court - the activist is being charged for disobeying police while protesting outside the Energy Intelligence Forum in London last year. The judge should simply ban her from being a customer of all the oil and gas companies she claims to hates so much.

• US and Europe rushing to boost uranium output - many Western countries are dependent on uranium imports, including from Russia, and so are scrambling to increase their domestic production as demand for nuclear energy ramps up. Russia controls ~40% of the global uranium processing facilities and 46% of the world’s total enrichment capacity.

• US thermal coal exports hit 5-year high - a key driver behind the increase has been a decline in coal use for domestic power generation. Coal’s share of power generation in the US has fallen from 39% to 19% between 2013-2023. India is by far the largest destination for US coal.

🛢️ BOTTOM OF THE BARREL

Here are a couple of facts they don’t tell you about climate.

1 - Climate related deaths have fallen by 95% in the past century thanks to technologies like early weather warning systems, heating and cooling, and improved disaster response systems. All of which have been made possible by the abundance of energy from hydrocarbons.

2 - According to Lancet, one of the most prestigious peer reviewed scientific journals in the world, 9x more people die every year from the cold than they do from the heat.

A warming planet is actually saving more lives every year than it is taking.

To be clear, I don’t doubt the problematic impact of man-made CO2 emissions on the climate, but I do take issue with the one-sided, hysterical climate alarmism that dominates most of the mainstream media narrative.

And I also take issue with an approach to climate change where the cure (energy shortages, economic malaise, mining demands etc) will be worse than the disease.

👋 BEFORE YOU GO 

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