4th September 2024

Hello, hello. Back in your (in)box with all that matters today in oil, gas, and energy:

• 🐻 Bears assembling

• 📊 AI and oil prices

• 🇺🇸 The LNG superpower

• ✅ The solution to nuclear waste

• ➕ plus Turkey’s gas hub ambitions; Perenco bulks up in the Caribbean; Total’s Indian solar bet; EOG ramping up in Utica; Saipem wins big in Saudi; tough times for Transocean; CCS start up at Ravenna; and barrels more.

Here goes…

📈 THE NUMBERS

Brent tumbled by~5% yesterday to below $73/bbl, a year low, before stabilizing this morning.

Even a major Libyan shutdown and the fractious situation in the Middle East haven’t been enough to outweigh the prospect of returning OPEC+ barrels and spluttering economic growth in China.

Meanwhile, US gasoline futures fell below $2/gallon, to their lowest levels since July 2022.

Careful out there. The bears are on the move...

🗞️ WELL-HEADLINES

 🗽 North America

• EOG ramping up in the Utica - the company has doubled its activity in the Utica year-on-year, operating on 445,000 acres. It "absolutely has the opportunity to be a foundational play”, CEO Jeff Leitzell said.

• Transocean sells two rigs for ~$350m - the assets were sold to unknown buyers and the proceeds will be used to pay down debt. The sale, however, resulted in the company booking a writedown of ~$630m, and its share price fell by ~9% on the news.

• Voyager picks up some P66 natgas assets - the gas gathering and processing assets are in Panola, Rusk and Harrison counties in Texas and Caddo parish in Louisiana. The value of the deal was kept under wraps.

• The global LNG superpower - North America’s LNG export capacity is on track to more than double by 2028, according to an EIA report. Crazy to think that not too long ago the US was building LNG import terminals before US shale change everything.

🏰 Europe

• Towards Turkey’s gas hub ambition - Turkey has signed a major LNG supply deal with Shell for 4 mtpa for 10 years from 2027. Turkey’s prime location between Europe and the Middle East makes it perfectly suited to act as a hub for international gas flows. Even more so now that Russian piped volumes are on their way out of Europe.

• Germany extends trusteeship of Russian assets - Gazprom’s assets in Germany, namely the large Schwedt refinery, which were effectively sized in 2022, will be held onto by the German state for another 6 months. Gazprom is reportedly in talks with Qatar to sell the facility.

• First oil at Tyrving - AkerBP’s 25 mmboe Norwegian North Sea oilfield is tied back to existing infrastructure at East Kameleon and to the Alvheim FPSO.

🕌 The Middle East

• Saipem wins big in Saudi - the Italian firm has secured two EPC contracts worth a combined $1bn for work at the offshore Marjan, Zuluf and Safaniyah fields.

⛩️ Asia & Oceania

• An $8.3bn Indian refinery - ONGC is considering developing the 9 mtpa facility in in the state of Uttar Pradesh in northern India. Last week we wrote about how Bharat is also spending billions on refinery expansion in the country. India’s midstream sector is hotter than a beef Vindaloo right now.

• Santos supplying Singapore - the Aussie company has agreed to sell 0.5 mtpa of LNG to Glencore Singapore over 3 years from 2025.

🦁 Africa

• South Africa rethinking its approach - after Total recently abandoned some promising gas discoveries in the country, South Africa’s Energy minister has said the government needs to work closer with IOCs to attract much-needed investment into its O&G sector.

🗿 Central & South America

• Perenco bulks up in the Caribbean - the indy has acquired four mature gas assets and undeveloped resources from BP in Trinidad and Tobago. Perenco hopes to apply its mature asset expertise and squeeze out some extra resources from these fields that have been producing since 1993. Shout out to my buddy BK who’s been working hard on this one!

🌍 GEOPOLITICS & MACRO

• Is AI bearish for oil prices? - Goldman Sachs seems to think so. The technology could boost supply by reducing costs via improved logistics and increasing the amount of profitably recoverable resources. “We believe that AI would likely be a modest net negative to oil prices in the medium-to-long term as the negative impact from the cost curve (c.-$5/bbl) – oil’s long-term anchor – would likely outweigh the demand boost (c.+$2/bbl)”.

• More tankers whacked in the Red Sea - the US military has confirmed the Saudi-flagged Amjad and the Panama-flagged Blue Lagoon I tankers, both full of oil, were hit by ballistic missiles in the Red Sea, calling the attacks "reckless acts of terrorism". Both were able to continue on their way.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Total pumps $444m into Indian solar JV - the French major is doubling down on its partnership with Adani Green Energy under a new deal that will see it own 50% of 1.15 GW of operational and under construction solar installations in India.

• VW mulling historic German closures - the mighty German car manufacturer is considering shutting factories as part of a cost cutting drive needed to compete with Asian rivals. Europe’s sorry deindustrialisation in action.

• Eni fires up Italian CCS project - the Ravenna CCS project, the first CC in Italy, will take CO2 from Eni gas treatment plant near Ravenna and transport it offshore via pipeline for permanent sequestration in the depleted Porto Corsini Mare Ovest gas field.

• UK dishes out more renewables subsidies - the latest capacity auction awarded contracts to 131 renewable projects with a combined capacity of 9.6GW. Orsted’s Hornsea 3 and Hornsea 4, which will be “Europe’s largest and second largest windfarm projects”, were among the winning projects.

• The solution to nuclear waste - starting in 2026, Finland plans to take the waste, seal it in copper, and then bury it 400 meters underground into solid bedrock where it will sit for 100,000 years. The thing about nuclear waste is that there’s hardly any of it, so a solution like this is a viable way to solve this non-problem once and for all.

🛢️ BOTTOM OF THE BARREL

This gumby is running the UK’s energy policy.

If you’re British, DO NOT click the post below to watch the video. Unless despair is your thing.

If you’re not British. Lucky you.

👋 BEFORE YOU GO 

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

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