26th August 2024

Happy Monday. Let’s get at it, fellow oil men and women. Here’s what went down over the weekend:

• 🖐️ Libyan oil blockade?

• 🔥 Blazing tanker in the Red Sea

• 💣 Israel & Hezbollah trading blows

• 🤣 Another wind turbine disintegrates 

• ➕ plus Equinor investing big in Norway; Eni’s “game changer” in Indo; China’s impressive renewables build out; a century of coal in Russia; energy reality bites in New Zealand.

Here we go…

📈 THE NUMBERS

Brent’s back above $80/bbl (Middle East mess) and Henry Hub’s back below $2/mmBtu (summer cooling demand slowing).

🗞️ WELL-HEADLINES

 🗽 North America

• SPR top ups reach 47 mmbbls - the US is steadily making inroads towards refilling the Strategic Petroleum Reserve after the government drained it of ~250 mmbbls in 2022 in an unprecedented (and reckless) political move to keep gasoline prices lower and mid-term voters happy.

• Oil rig count flat - Baker Hughes reported that the number of operational US oil rigs remained the same at 483 last week. Gas rigs fell by one to 97.

🏰 Europe

• Equinor’s high hopes for its back yard - the company’s CEO commented that it sees strong demand for its oil in the years ahead and so will keep investing $6.5bn a year into offshore Norway O&G until 2035 to ensure amply supply. It’s looking to drill 20-30 wildcats per year for the next decade. Based.

🕌 The Middle East

• Kuwait signs Qatar LNG supply deal - despite being oil-rich, Kuwait needs to import gas for power generation, and even schedules power outages every so often when gas is in short supply. The new deal is for 3 mtpa over 15 years.

⛩️ Asia & Oceania

• Eni gets approval for “game changer” Indo gas project - the $17.5bn Northern Hub ultra-deepwater project offshore Indonesia will develop ~6.5 tcf of gas reserves. Two fields will be developed via a newly built FPSO with the gas being fed into local markets and to the Bontang LNG facility for export.

• First gas from giant Kasawari field - the Petronas field offshore Sarawak in Malaysia is aiming to ramp up production to 545 mmscf/d. The field was discovered in 2011 and holds ~10 tcf of gas reserves.

• Energy reality bites in New Zealand - as domestic energy prices spike due to shortages, New Zealand is pushing through laws to reverse a ban on offshore O&G exploration, and take urgent steps to remove regulatory hurdles to import LNG. Take note, other western countries letting ideology dictate energy policy.

🦁 Africa

• Libyan politician threatens oil blockade - the speaker of Libya’s eastern government in Benghazi (the country has two opposing governments!) has threatened to blockade oil production from the country over an order given by the other government in Tripoli to remove the country’s central bank governor. Libya currently produces ~ 1.2 mmb/d of oil and exports ~1 mmb/d - that would be a significant volume of barrels taken off global markets…

• Namibia, Africa’s new oil patch - the west African country plans to reach 500 kb/d of oil production by 2035, via four FPSOs, after a series of large offshore discoveries by IOCs found an estimated 11 bnbbls of oil resources.

🌍 GEOPOLITICS & MACRO

• Israel and Hezbollah trading blows - in a major escalation, over 100 Israeli jets have struck various military targets in Lebanon in a “preemptive” strike to thwart a large scale rocket attack. The offensive was Israel’s largest against Hezbollah since the full-scale war between them in 2006. Hezbollah said it still managed to fire over 320 rockets and drones at Israel, killing a soldier.

• Fear of environmental disaster at blazing oil tanker - a Greek oil tanker which was attacked by Houthi missiles in the Red Sea could spill 1 mmbbls of oil, four times the size of the Exxon Valdez disaster, warned the US State Department. The ship’s crew has been evacuated and it is now drifting, ablaze. Wild.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• China hits wind & solar target 6 years early - Xi Jinping wanted 1,200GW of wind and solar capacity by 2030, but it surpassed that amount last month. No matter what you think of China and renewables, the speed and scale with which they build infrastructure is impressive. In the UK it takes a decade to fix a pothole.

• Another wind turbine blade disintegrates - US turbine maker GE Vernova has suffered its second blade failure in a month after an incident at the Dogger Bank A offshore wind farm in the UK. GE Vernova also made the blade that broke in July at the Vineyard Wind project offshore US. Ooops.

• A century of coal - Russia has announced that it has coal reserves of 273 billion metric tons, enough supply for over 100 years at current levels. And I’m sure it has every intention of producing them all.

• Equinor abandons Vietnam offshore wind plans - the exit of the Norwegian IOC deals another blow to Vietnam’s offshore wind ambitions after Orsted paused its operations in the country last year. Equinor previously said that Vietnam’s shallow waters and strong winds means it has the “best wind resources in Asia”.

🛢️ BOTTOM OF THE BARREL

👋 BEFORE YOU GO 

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

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