Politics, Geopolitics & Conflict
The beginning of this week saw a drone attack in the center of Moscow, near the Russian Defense Ministry building, just a day after Ukraine said it would retaliate for Russia’s missile attack on the Black Sea port of Odesa. There were no casualties in the Moscow drone attack and it caused no serious damage, according to Russian reports, but was likely intended as a show of force (and prestige) on the part of Kyiv.
Further to our warning about the fragility of peace in Libya, the UN’s Libya mission clearly is on edge, warning all parties against “unilateral” actions over the creation of a new interim government (to pave the way for elections that appear impossible with the oil revenue issue unresolved).
It is now more than 100 days since fighting between the military and a paramilitary faction erupted in Sudan, with violence now resurfacing in Darfur (in a repeat of the ethnic slaughter of two decades ago). With each passing day, Sudan comes closer to all-out civil war and failed-state status.
Deals, Mergers & Acquisitions
TC Energy Corp, a Canadian pipeline giant, will sell a 40% stake in 2 pipelines—Columbia Gas Transmission and Columbia Gulf Transmission—to Global Infrastructure Partners for some ~$5 billion. The company has also announced plans to spin off its pipeline business.
Saudi Aramco has completed its $3.4-billion purchase of a 10% stake in China’s downstream Rongsheng Petrochemical Co.…
Politics, Geopolitics & Conflict
The beginning of this week saw a drone attack in the center of Moscow, near the Russian Defense Ministry building, just a day after Ukraine said it would retaliate for Russia’s missile attack on the Black Sea port of Odesa. There were no casualties in the Moscow drone attack and it caused no serious damage, according to Russian reports, but was likely intended as a show of force (and prestige) on the part of Kyiv.
Further to our warning about the fragility of peace in Libya, the UN’s Libya mission clearly is on edge, warning all parties against “unilateral” actions over the creation of a new interim government (to pave the way for elections that appear impossible with the oil revenue issue unresolved).
It is now more than 100 days since fighting between the military and a paramilitary faction erupted in Sudan, with violence now resurfacing in Darfur (in a repeat of the ethnic slaughter of two decades ago). With each passing day, Sudan comes closer to all-out civil war and failed-state status.
Deals, Mergers & Acquisitions
TC Energy Corp, a Canadian pipeline giant, will sell a 40% stake in 2 pipelines—Columbia Gas Transmission and Columbia Gulf Transmission—to Global Infrastructure Partners for some ~$5 billion. The company has also announced plans to spin off its pipeline business.
Saudi Aramco has completed its $3.4-billion purchase of a 10% stake in China’s downstream Rongsheng Petrochemical Co. Ltd this week, and also signed a deal with Pakistan for a $10-billion refinery in the Southeast Asian nation.
Abu Dhabi’s state-owned ADNOC oil company and Austrian state-owned OMV are in merger talks for what—if it goes through given the complexities of an unprecedented nature—would create a $30-billion dual-state-owned behemoth.
Discovery & Development
Hess has announced an oil discovery in the U.S. Gulf of Mexico, in the Pickerel-1 well (Mississippi Canyon Block 727). This discovery would tie back in to Hess’s producing platform, Tubular Bells. Tubular Bells deepwater oil and gas field is over 57% owned by Hess and over 42% owned by Chevron. Drilling encountered 90 feet of net pay in the high-quality, oil-bearing, Miocene reservoir. Hess says it expects first oil mid-next year
Earnings Snapshot
It’s the beginning of earnings season, and big oil–as expected–is starting to report losses...
Shell’s earnings came in at (adjusted) $5.1B for the quarter, missing analyst expectations of $6B. It also increased its quarterly dividend by 15% to $0.33 per share, along with $3 billion in buybacks over the next three months, give or take.
Chevron (which ended up reporting partial earnings early in a surprise move) beat expectations, but saw earnings per share drop 47% to $3.08 (expectations were for $2.91).
Exxon missed earnings estimates, with profits falling 56% year-over-year. The losses were driven by lower natural gas prices and weaker refining margins.
Weaker refining margins also saw Valero Energy report that its income slumped to $1.9 billion, or $5.40 per share in Q2, compared to $4.7 billion, or $11.57 per share, for the second quarter of 2022. They still beat Wall Street estimates, however.
Norway’s Equinor reported earnings down 57% YoY (to $7.54B from $17.6B) for Q2, but kept its same dividend and buyback program.
