- Much to Turkey’s dismay, the EastMed gas pipeline project has been approved by the Cypriot cabinet, and studies are currently in progress. The consortium comprises Cyprus-Greece-Israel for the 1300-mile underwater pipeline project that will carry gas from the southeast Mediterranean to continental Europe. The consortium will now begin the process of lining up buyers for the Israeli gas. The project is expected to cut into Russian gas supplies and cut Turkey out of the deal (which is what makes Libya so important to Erdogan).
- The fourth Iranian fuel tanker has made its way into Venezuelan waters in a direct challenge to US sanctions on both countries. The first three tankers that Iran sent to Venezuela have already arrived and are in the process of unloading. The total deliveries from Iran to Venezuela are expected to be about 1.5 million barrels of gasoline and refining components that are critical to the nation’s oil industry survival. Venezuela has already nearly completely shut down all of its refineries, partly due to years and years of maintenance neglect and partly because it lacks the diluent to refine its ultra-heavy crude oil, which it used to import prior to the sanctions. There are five tankers total in the shipment from Iran. The lack of any response will play poorly against the Trump administration, which has allowed Iran to ride roughshod over foreign policy.
- In the midst of a massive humanitarian crisis, Nicolas Maduro is mulling…
- Much to Turkey’s dismay, the EastMed gas pipeline project has been approved by the Cypriot cabinet, and studies are currently in progress. The consortium comprises Cyprus-Greece-Israel for the 1300-mile underwater pipeline project that will carry gas from the southeast Mediterranean to continental Europe. The consortium will now begin the process of lining up buyers for the Israeli gas. The project is expected to cut into Russian gas supplies and cut Turkey out of the deal (which is what makes Libya so important to Erdogan).
- The fourth Iranian fuel tanker has made its way into Venezuelan waters in a direct challenge to US sanctions on both countries. The first three tankers that Iran sent to Venezuela have already arrived and are in the process of unloading. The total deliveries from Iran to Venezuela are expected to be about 1.5 million barrels of gasoline and refining components that are critical to the nation’s oil industry survival. Venezuela has already nearly completely shut down all of its refineries, partly due to years and years of maintenance neglect and partly because it lacks the diluent to refine its ultra-heavy crude oil, which it used to import prior to the sanctions. There are five tankers total in the shipment from Iran. The lack of any response will play poorly against the Trump administration, which has allowed Iran to ride roughshod over foreign policy.
- In the midst of a massive humanitarian crisis, Nicolas Maduro is mulling over the idea of charging its destitute citizens more for petrol. Petrol has been nearly given away to its citizens for years. These types of austerity measures are being considered in nearly all oil-dependent economies, including their OPEC brethren in the Gulf, although the Venezuelan people are unlikely to be able to deal with such austerity measures.
- A frigate of the French Navy has prevented a tanker from loading refined oil products at a Libyan port as part of a sale to a UAE-registered company (keeping in mind that the UAE is allied with General Haftar against the GNA in Tripoli). The tanker was stopped at sea as it was heading for the port of Tobruk in eastern Libya close to the border with Egypt. The tanker has been idling in the area for a week and hasn’t continued on its course to Tobruk
- The European Union is prolonging sanctions against Syrian President Bashar Assad and other top political officials, extending them until June 1, 2021. The sanctions ban oil imports, certain investments, technology transfer that could aid the regime in repression and freezes Syrian Central Bank assets inside the EU.
- In line with that, the Lebanese army has dismantled 30 meters of oil pipelines discovered to have been smuggling diesel oil into Syria near Akkar. The Army seized 215,000 liters of fuel oil in one week alone earlier this month.
Discovery
- Further to our top note, keep an eye on Apache (NYSE:APA) and French Total SA, which following two discoveries offshore Suriname this year, is now drilling its third well with Total, Kwaskwasi-1 on Block 58. This is approximately 6 miles from the Sapakara West-1 discovery.
- China’s state-run CNOOC confirmed this week that the new Kenli 6-1 oilfield discovery (Bohai Bay/Laizhou exploration area) has potential oil reserves of more than 100 million metric tons.
Deals
- ConocoPhillips has completed the sale of some of its Australia-West subsidiaries to Australia-based Santos for $1.39 billion. Conoco has already received $765 million for the sale in Q2, which comes at a convenient time for the books amid a squeeze on oil prices. Production with the sold assets averaged 46 Mboepd for Q1, and constitutes reserves of 17 MMboe at the end of last year.
- Russia’s state-run gas giant Gazprom may have overestimated its Power of Siberia capacity, and senior management at Gazprom may have kept technical setback details from the company, according to internal documents seen by Lenta.ru, as they tried to deliver on the $400-billion deal with China. Russia has been trying to tap the robust Asian market and beat US producers to the punch there, and the Power of Siberia was a massive undertaking designed to do just that. Gazprom may lose $20 billion in the deal as a result, and it may not be able to fulfill its contractual obligations under the deal forged with China. One of the overestimates by management was in one of its largest gas fields, Chayandinskoye.
- Sinopec has signed an investment contract to build a $2.8-billion LNG terminal in the Zhejiang province. The project, for which construction is expected to start next year, will have an annual LNG receiving capacity of 15 million tons.
- Spains’ Repsol has decided to withdraw from the process of forming a JV with Russian Gazprom and Shell to develop two Arctic oil blocks. The JV, in which Gazprom Neft would hold a 50% stake and Repsol and Shell each 25%, was to develop the Leskinsky and Pukhutsyayakhsky blocks on the Gydan Peninsula in northern Siberia.
Renewables
- The US commercial solar industry is ripe for consolidation, and it’s been taking a hit under the global pandemic, but one aspect of the business is positioned to do well: Virtual power-purchase agreements (PPAs), or corporate offtake agreements for utility-scale solar projects, according to WoodMac. This trend is businesses going solar via PPAs was gaining ground prior to the pandemic but is now set to become more of a trend.
- Renewables are getting more time to take advantage of tax relief in the United States, and in Europe, the European Commission is hoping to extend billions of euros in financial relief to both high tech and green investments as a strategy for coronavirus recovery. That lumps renewable energy into a basket along with 5G tech, AI, cybersecurity, and supercomputing.
Oh please, really?
Those horrible Iranians are running roughshod over the poor American's foreign policy? Do you formulate your opinion solely from Pentagon and DoD briefings?
Up to this point, the Iranians have been reacting for the last 40 years to an aggressive war by the West on many fronts. They have now grown strong enough to start responding back in asymmetrical manners that the US cannot process, nor respond to themselves. And this is because the US is a bully who cannot handle being hurt.