- Iran seized a U.S. oil tanker that had loaded in Iraq and was on its way to Turkey on Thursday. The act was one of retaliation for the U.S. seizure of a ship last year carrying what Washington said was Iranian oil for China in violation of sanctions. The vessel seized was the same vessel, under a different name, that was seized for carrying Iranian oil in 2023.
- The Houthis launched their biggest attack in the Red Sea yet on Tuesday this week, with the U.S. and UK shooting down 21 drones and missiles targeting merchant vessels near the Bab el Mandeb Strait. In a further significant development late on Thursday, the U.S. and the UK launched airstrikes against Houthi military targets in Yemen for the first time, risking a major escalation of the regional conflict. Oil prices were already on the rise ahead of the airstrikes on Houthi positions in Yemen, as a result of Iran’s seizure of a U.S. oil tanker earlier in the day, but the two incidents combined will create additional volatility for oil markets.
- Libya, which last weekend saw the shutdown by protests of its 300,000-bpd Sharara oilfield–the country’s largest–is now facing new protests to shut down oil processing facilities at the Zawiya refinery, which is connected to Sharara. These threats could take another ~130,000 bpd off the market (oil that flows through the Greenstream pipeline connecting to Italy). While the protests are about corruption, public services, jobs, and distribution of oil wealth overall,…
- Iran seized a U.S. oil tanker that had loaded in Iraq and was on its way to Turkey on Thursday. The act was one of retaliation for the U.S. seizure of a ship last year carrying what Washington said was Iranian oil for China in violation of sanctions. The vessel seized was the same vessel, under a different name, that was seized for carrying Iranian oil in 2023.
- The Houthis launched their biggest attack in the Red Sea yet on Tuesday this week, with the U.S. and UK shooting down 21 drones and missiles targeting merchant vessels near the Bab el Mandeb Strait. In a further significant development late on Thursday, the U.S. and the UK launched airstrikes against Houthi military targets in Yemen for the first time, risking a major escalation of the regional conflict. Oil prices were already on the rise ahead of the airstrikes on Houthi positions in Yemen, as a result of Iran’s seizure of a U.S. oil tanker earlier in the day, but the two incidents combined will create additional volatility for oil markets.
- Libya, which last weekend saw the shutdown by protests of its 300,000-bpd Sharara oilfield–the country’s largest–is now facing new protests to shut down oil processing facilities at the Zawiya refinery, which is connected to Sharara. These threats could take another ~130,000 bpd off the market (oil that flows through the Greenstream pipeline connecting to Italy). While the protests are about corruption, public services, jobs, and distribution of oil wealth overall, the key undercurrent is demands for the resignation of the chairman of Libya’s National Oil Company (NOC), Fatih Bengdara–a man who was muscled into the position by interim PM Dbeiba. The legitimacy of his position is currently being challenged in court on the basis that he is a dual citizen of the UAE. The nature of the protests, the persistent and extremely volatile political situation with rival governments, and the high-level uncertainty at the NOC make it very difficult for Libya to attempt to increase production this year or even maintain current production.
- The Vice-Chairman of China’s Evergrande New Energy Vehicle Group has been detained by the authorities and is now under criminal investigation after a failed deal for a Dubai-based company to acquire some $500 million in new shares in the struggling outfit. This is the Chinese EV company that had pledged to outperform Tesla, but instead is being squeezed out by the likes of China’s (and the world’s) EV darling, BYD. Evergrande is yet one more of China’s smaller EV producers who are losing the price war (China has some 100 EV producers).
- Oil-producing nation Ecuador is in the throes of an all-out war with gangs who stormed a TV station and took it over this week during a live newscast with explosives and guns in the opening salvo of a much wider conflict. That incident prompted the government to order security forces to wipe them out in an outright declaration of war. Thirteen suspects have been arrested in relation to the initial incident, and reports from on the ground say that schools and stores have been closed up, and security forces and tanks are patrolling the streets. The storming of the TV station followed the escape from prison of the leader of Los Choneros, one of the country’s biggest drug cartels. That escape saw the government mobilize the military, to which the cartel responded by declaring war on the state.
Deals, Mergers & Acquisitions
- Nigeria’s electricity regulatory body, NERC, is looking to sell Kaduna Electric–a power distribution utility–over a $130 million debt after a 2022 takeover failed to produce the profitability results hoped for. The Nigerian government still owned a 40% stake, but now NERC has appointed an administrator to manage the utility and ultimately sell it to the highest bidder. Nigeria has struggled to bring power to its people reliably.
- A boost to U.S. solar production is underway, with an agreement between South Korean solar manufacturer Qcells and Microsoft to supply the latter with 12 GW of American-made solar panels through 2032 made from Qcells’ $2.5B Georgia factory.
- Chesapeake Energy has agreed to purchase Southwestern Energy in an all-stock deal valued at $7.4B–creating the largest independent nat gas producer in the United States. The deal is expected to close in Q2. The agreement comes despite last year’s faltering nat gas prices. Last year, Chesapeake purchased Chief E&D for $2.5B.
Discovery & Development
- Tata Power Co has agreed to invest $8.5B in clean energy projects in Tamil Nadu, India. The preliminary deal calls for Tata to build 10 GW of renewable energy projects and increase an existing plan for solar manufacturing to 4.3 GW of capacity. The projects will include solar, wind, and hybrid power plants. Tata’s power generation capacity comprises 38% renewables, with plans to increase that to 70% by 2030 and 100% by 2045.
- TotalEnergies has increased its holding in Namibia’s Venus offshore oil discovery after a deal with Impact Oil and Gas. Impact is majority owned by Africa Oil and Hosken Consolidated Investments Limited. The deal will give Total another 10.5% interest in block 2913B (for a total of 45.25%) and another 9.39% interest in block 2912 (total 42.5%). TotalEnergies will share its additional interests in the two blocks with its JV partner, QatarEnergy.
- The news of TotalEnergies’ Namibia dealmaking comes right as Portugal’s Galp Energia confirmed a significant discovery of light oil in the Mopane-1X well in block PEL83–also offshore Namibia.
- Sinopec said it has found sizable oil and gas flows from the shale well Xingye-9 in the Liangping area of Chongquing–part of the Sichuan basin, and could lead to the discovery of 100 million metric tons of reserves.
- Beacon Offshore Energy said that several of its subsidiaries have made FID to develop the Winterfell discovery in the U.S. GoM, operated by BOE Exploration & Production. The discovery will be developed as a subsea tieback. Beacon holds a 35.41% working interest in the project, which is located in Green Canyon blocks 943, 944, 987, and 988. Winterfell was originally found in 2021. First oil is expected in early Q2, and gross production is expected to reach 22,000 boepd from the initial three wells.
