23rd July 2024

Good morning crew. Today’s highlights from the industry that makes the world go round:

• 🤔 What does Kamala think of O&G?

• 🐷 Pigs can fly

• 💰 $584,000 a day

• 🍃 Eni selling ~$2bn biofuel stake

• ➕ plus FID at Katlan; Archrock buys TOPS; unshackling America’s energy approval process; Russia’s dark LNG tanker fleet; UK’s measly exploration plans; no plastic in the White House.

Let’s dive in.

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Unshackling America’s energy approval process - two senators have introduced long-awaited legislation to speed up permitting of power transmission, mining and LNG projects. “For far too long, Washington’s disastrous permitting system has shackled American energy production and punished families across our country,” said Senator John Barrasso.

• Oxy raising $5bn of debt to fund CrownRock buy - the new bonds will help pay back a $10bn bridge financing facility that Oxy has with a group of banks led by Bank of America.

• Refinancing and selling Trans Mountain - now the long delayed and over budget $25bn pipeline is finally up and running, the Canadian government (which owns the project) is looking to refinance some of the project’s debt before selling it. The huge cost overruns mean the government may never breakeven on the project.

• Archrock acquires TOPS for $983m - the cash and stock deal arms Archrock with one of the leading contract gas compression services in the Permian Basin.

🏰 Europe

• Is Russia building a dark LNG tanker fleet? - Russia already uses “dark” oil tankers (tankers with disabled tracking responders to conceal their whereabouts and avoid sanctions), and now the FT suggests Russia may be starting to do the same with LNG tankers.

• Drilling starting at the UK’s first exploration well in 2024 - it’s nearly August and this is the first exploration well! The politically driven demise of the UK North Sea is a sad sight indeed. There are a total of 8 exploration wells planned in the UK this year, vs 49 across the watery border in Norway.

🕌 The Middle East

• Energean takes FID at Katlan - the offshore Israel field holds 229 mmboe of 2P reserves in Phase 1, which will be produced via an FPSO in a $1.2bn development.

⛩️ Asia & Oceania

• New Australian exploration permits hope to plug a supply gap - amid concerns over impending gas supply shortages in the country, Australia has announced new offshore exploration permits in the east and west. Our renewable-obsessed Aussie friends are finally seeing the light.

• Woodside shares fall as Scarborough costs rise - the costs for the offshore gas development in Australia have climbed by a further $500m to $12.5bn.

🗿 Central & South America

• Russia building in Cuba - uh oh! - the old comrades are in talks for Russia to build an oil refinery on the island nation. We all know what happened last time Russia put something significant in Cuba…

• BP in a hurry to ink Venezuela deal - the major is hoping to conclude an agreement with PDVSA and Trinidad and Tobago’s National Gas Company over the development of the Cocuina-Manakin gas field before Venezuelan elections on July 28th. The field is on the maritime border between Trinidad and Venezuela, and contains about 1 tcf of natural gas.

• $584,000 a day - that’s how much Equinor will be paying Valaris to lease a drillship for the Raia project in Brazil. The new contract is worth about $500m in total across nearly three years.

🌍 GEOPOLITICS & MACRO

• Kamala is no friend of oil & gas - the likely Democrat nominee has previously revealed her energy illiteracy by saying “there’s no question I’m in favor of banning fracking.” She’s also said she’d ban offshore drilling. Then again Biden has said something similar, and so has Hilary Clinton. Not to worry, eventually their ignorance crashes against the sharp rocks of reality. It always does.

• Israel retaliates against Yemen - responding to Houthi drone attacks on Tel Aviv, Israel launched airstrikes on energy infrastructure at Yemen’s Red Sea port of Hodeidah. Refining, storage, and power facilities were hit, delivering a blow to Yemen’s already decrepit energy system.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• No plastic forks in the White House - the US administration announced plans to phase out single-use plastics from all federal operations by 2035. While a sensible policy on the surface, the alternatives to plastic are not always environmentally better. And is there anyone in the world who appreciates soggy paper straws?

• Pigs can fly - the Brazilian meatpacking giant, JBS, is supplying animal waste from its operations to create sustainable aviation fuel. Over the past two years, the company has directed 1.2 million metric tons of beef tallow and pork lard for this purpose. If you’re wondering why your next flight smells like bacon….

• KKR in talks to acquire $2bn Enilive stake - the private equity firm is after a 20%-25% stake in the Eni subsidiary that focuses on biorefining, biomethane production, and smart mobility solutions.

• $4.2bn in US climate grants - the government has awarded the cash to 25 unnamed projects across the country that it says will reduce the country’s GHG emissions by 2% by 2030. Are the Democrats spending all they can before they get turfed out of office later this year?

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO 

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

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