Markets
OPEC+ production is still lagging, but a new S&P Platts survey shows OPEC+’s December production was up 310,000 bpd, which is more than Reuters’ figures. Of that, OPEC’s production was up 190,000 bpd of its 235,000 share, and OPEC’s allies' production was up 120,000 bpd. Most of the production increases were from Venezuela, Kazakhstan, Saudi Arabia, Iraq, and Angola.
Iraq says it can increase its oil exports by as much as 250,000 bpd starting in Q2, to 3.45 million bpd, after it finishes the installation of pumping stations at its Gulf Ports. The work on the pumping stations began in 2020 but was delayed from the pandemic.
Natural gas futures jumped 14% on Wednesday, with February futures up 30% since the start of the year as cold weather hit the East Coast and forecasters predict that the colder weather is here to stay. Weather is king, and frigid temps are set to hit the United States on Friday. The last two weeks of the month are also set to be particularly cold. This has led to a scrambling of short coverings.
The newly elected Czech Republic government plans to create conditions for a phase-out of coal mining by 2033. The nation’s coal commission had previously recommended a 2038 phase-out date.
Deals & Discovery
Eni received 5 exploration offshore and onshore licenses from Egypt, four of which it will be an operator for. Eni’s new licenses cover 8,410 km2 and are in proved petroleum systems. Eni produces 350,000 boepd…
Markets
OPEC+ production is still lagging, but a new S&P Platts survey shows OPEC+’s December production was up 310,000 bpd, which is more than Reuters’ figures. Of that, OPEC’s production was up 190,000 bpd of its 235,000 share, and OPEC’s allies' production was up 120,000 bpd. Most of the production increases were from Venezuela, Kazakhstan, Saudi Arabia, Iraq, and Angola.
Iraq says it can increase its oil exports by as much as 250,000 bpd starting in Q2, to 3.45 million bpd, after it finishes the installation of pumping stations at its Gulf Ports. The work on the pumping stations began in 2020 but was delayed from the pandemic.
Natural gas futures jumped 14% on Wednesday, with February futures up 30% since the start of the year as cold weather hit the East Coast and forecasters predict that the colder weather is here to stay. Weather is king, and frigid temps are set to hit the United States on Friday. The last two weeks of the month are also set to be particularly cold. This has led to a scrambling of short coverings.
The newly elected Czech Republic government plans to create conditions for a phase-out of coal mining by 2033. The nation’s coal commission had previously recommended a 2038 phase-out date.
Deals & Discovery
Eni received 5 exploration offshore and onshore licenses from Egypt, four of which it will be an operator for. Eni’s new licenses cover 8,410 km2 and are in proved petroleum systems. Eni produces 350,000 boepd in Egypt and is Egypt’s most prolific producer.
Iraq has approved a crude oil pipeline running from Basra, Iraq to the Aqaba port in Jordan that will allow Jordan to purchase 150,000 bpd from Iraq. The $7-$9 billion pipeline is capable of transporting a million barrels per day. The agreement was struck back in 2013, but Iraq has drug its feet on the deal to make sure it struck the best deal. One other consideration in the earlier stages of the deal was to run the pipeline to Egypt instead of Aqaba.
ExxonMobil is selling 27,000 acres worth of shale gas properties in the Appalachian basin in Ohio as part of its plan to divest billions in U.S. assets while it focuses on Guyana, Brazil, and the Permian. The sale will include 61 wells capable of producing a total of 81 million cubic feet per day equivalent of nat gas, and another 274 wells that are operated by other companies. The sale could fetch $200 million based on current nat gas prices. No buyer has yet been identified. The Ohio properties produced 250 mmcfd in 2017. In similar Exxon news, the oil major is also looking to sell XTO Energy Canada–a 9,000 bpd crude oil and 140 million cubic feet/day nat gas shale producer, also as part of its consolidation efforts.
Aramco has plans to purchase a stake in the refining subsidiary of Polish oil company Lotos, Lotos Asfalt, from PKN Orlen. Orlen has also made a deal to purchase between 200,000 to 337,000 bpd from Aramco. The deal will see Saudi Arabia supply half of Poland’s oil–giving it a toehold where Russia customarily has both feet.
Spanish Repsol is bailing on its Russian business by selling its last two Russian assets to Gazprom Neft. Repsol will sell two upstream companies in Russia, Evrotek-Yugra and ASB GEO. The deal should close in the first quarter of this year and will allow Repsol to streamline its business. Repsol also purchased $222 million in US assets from Rockdale Marcellus in Pennsylvania.
Australian mining company BHP will buy a minority stake in a Tanzanian nickel project, regarded as the world’s largest development-ready nickel sulfide deposit. The project is estimated to have more than 1.52 million tons of nickel and will start production in 2025. Nickel is one of the key raw materials in lithium-ion batteries needed to power electric vehicles (EVs).
Novatek has finalized two separate long-term agreements to supply Chinese firms with LNG. Russia’s second-largest natural gas producer will supply independent firm ENN with 600,000 t/yr of LNG over 11 years and with Zhejiang Energy Gas for 1mn t/yr in a 15-year deal.
The DoE said that it sold 18.1 million barrels of crude to Valero Marketing and Supply, Phillips 66, Motiva, Marathon Petroleum, Gunvor USA, and Exxon Mobil.
Russia will auction off 25-year exploration and development licenses for five hydrocarbon blocks in the Yamal region–three of which are on the Yamal Peninsula. Gazprom and Novatek are expected to take an interest, as they already hold acreage there.
Shell struck oil on its Graff-1 wildcat well offshore Namibia in the Orange Basin. Graff-1 is in close proximity to Total’s Venus-1 ultra-deepwater well that it is currently drilling. Shell’s find could turn the area into a whole new play for Africa.
Regulations
Oil workers in Gabon are now on indefinite strike as of Tuesday, in protest of Covid measures including rising PCR test costs and the establishment of a health pass as a requirement to work. Gabon currently produces about 185,000 bpd.
The Biden Administration is planning to curtail oil and gas leasing on federal lands in Alaska, with the Bureau of Land Management returning the management of the NPR-Alaska to a plan established during Obama’s term, leaving just 11.8 million acres open for leasing–or 52%. The BLM under the Trump administration sought to increase that to 18.6 million acres–or 82%, but environmental groups sued.
The EU has rejected the merger between shipbuilding Hyundai and Daewoo, alleging that a tie-up between two of the world’s largest names in the shipbuilding industry would give the merged entity too much control over the price of LNG carriers with a 60% market share. EU companies account for almost half of all LNG carrier orders.
