9th February 2024

When banks forget the S in ESG | Exxon on the warpath | A new dawn for Libya? | Putin’s long history lesson

Happy Friday ladies and gents. Here’s your final installment of the week:

😵‍💫 When banks forget the S in ESG
💪 Exxon on the warpath
🌅 A new dawn for Libya?
😴 Putin’s long history lesson
➕ plus the Nigeria exodus continues; Devon bids for Enerplus; US refiners cashing in; Venezuela threatens Exxon.

Catch you Monday.

As of 05:30ET on 09/02/2024. N.B. prices for JKM LNG and uranium can be delayed by a day or two.

US natural gas prices keep sinking…They’re practically giving the stuff away.

Devon bids for Enerplus - the US shale producer is rumoured to have made an offer for the Bakken-focused Canada-headquartered Enerplus which is worth ~$3bn. Enerplus produces about 100 kboe/d. M&A mania in the US shale patch ain’t over yet.
Exxon under pressure to drop lawsuit - religious investors have urged Exxon to drop its case against activist shareholders saying that it “risks alienating shareholders and harming Exxon’s reputation”. Meanwhile, the CEO of Norway’s sovereign wealth fund has said that Exxon’s decision to sue Follow This and Anjuna capital is “very aggressive”. Exxon is on the warpath and I’m totally here for it. It’s high time the industry stood up for itself.
Challenges refilling the SPR - the US Energy Department is hurrying to refill the heavily depleted SPR but is running into some challenges related to the crude grades. It has a preference for heavier crude, but a lot of US shale oil is light. The US government recently cancelled a $108m contract for Eagle Ford oil for this reason.
US refiners raking it in - Marathon, Phillips 66, and Valero have all reported strong earnings thanks to solid refining margins and predicted that profits will continue to rise thanks to global demand growth.

Australia looking to the US for LNG - it might seem strange given that Australia is the world’s third largest exporter of LNG, but Woodside is in talks with Energy Transfer for LNG supply from the under-development Lake Charles project in the US. It’s unlikely these volumes would ever make their way to Australia but would instead become part of Woodside’s global portfolio.

A new dawn for Libya? - ONGC has become the latest IOC to start plans to renter Libya. Many international players exited the oil rich country in 2011 when the civil war kicked off but several, including Equinor and OMV, have announced plans to return.
Total joins Nigeria onshore exodus - following a similar decision by Shell, Total is looking to sell its interest in its large onshore Nigerian JV. Total’s CEO said it was “because producing this oil in the Niger delta is not in line with our Health, Security and Environmental policies, it's a real difficulty”. Exxon, Equinor, and Shell have all sold Nigerian assets in recent years, often citing security challenges.
Exxon saying goodbye to Equatorial Guinea - after nearly 30 years operating in the small West African OPEC member, Exxon has announced plans to leave and will transfer its assets in the country over to the government.

Venezuela riled by Exxon Guyana drilling - Venezuela has said its response will be “proportional, forceful and rightful” to Exxon’s plans to drill exploration wells in the disputed Essequibo region off the coast of Guyana. Exxon doesn’t seem too bothered and has said it will go ahead with its plans.

Xi and Putin reject US “interference” - the two strongmen had a chat over the phone and spoke of creating a "multipolar, fairer world order". Meanwhile, US journalist Tucker Carlson has interviewed Putin for two hours in Moscow. You can watch on it Twitter here if you fancy. There’s lots of dull talk of Russian history and little of the probing questions that you’d hope for, though.
Barclays further restricts O&G lending - the UK’s largest lender to the O&G industry has said it will no longer finance new O&G fields and generally tighten up hydrocarbon lending. Interesting that banks are happy contributing to energy shortages that hit the world’s poorest the hardest. When it comes to energy, ESG always seems to ignore the ‘S’.

Progress in the quest for nuclear fusion - a new record has been set for the amount of energy produced in a nuclear fusion experiment. There’s lots of hype about fusion but it will be a long time before it becomes commercial (if ever) and, in nuclear fission, we already have a proven source of zero carbon, limitless power. Fusion, in my opinion, is a bit of a distraction.

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