Markets & Geopolitics
While production was unaffected when Storm Daniel out of the Mediterranean hit land in eastern Libya, the country’s key oil export terminals were all temporarily closed last weekend amid a state of emergency. Though reopened by Tuesday and Wednesday, the closures helped put upward pressure on oil prices in combination with OPEC+ voluntary production cut extensions and indications of tighter supply and excess demand for the fourth quarter of this year. Storm Daniel wreaked havoc on the eastern port city of Derna, with the death toll now topping 11,000 and rising in the aftermath. The devastation served to further highlight the vulnerability and instability caused by rival governments (the eastern government in Benghazi and the western government in Tripoli), and there may be further politically destabilizing implications of the storm, which touched down only in the east.
OPEC’s MOMR showed that production rose in August for the group by 113,000 bpd, although Saudi Arabia made good on its promise to cut production. Saudi Arabia’s production fell by 88,000 bpd, but Nigeria and Iran saw their production climb.
Freeport LNG feedgas intake is still lagging behind capacity for nearly a week now, with analysts suspecting a continued outage. The plant’s draws have fallen to an average of 0.4 Bcf/d over the past five days, down from 1.8 Bcf/d last week. Cargoes have been canceled, including those for BP and Total. Freeport accounts for 20%…
Markets & Geopolitics
While production was unaffected when Storm Daniel out of the Mediterranean hit land in eastern Libya, the country’s key oil export terminals were all temporarily closed last weekend amid a state of emergency. Though reopened by Tuesday and Wednesday, the closures helped put upward pressure on oil prices in combination with OPEC+ voluntary production cut extensions and indications of tighter supply and excess demand for the fourth quarter of this year. Storm Daniel wreaked havoc on the eastern port city of Derna, with the death toll now topping 11,000 and rising in the aftermath. The devastation served to further highlight the vulnerability and instability caused by rival governments (the eastern government in Benghazi and the western government in Tripoli), and there may be further politically destabilizing implications of the storm, which touched down only in the east.
OPEC’s MOMR showed that production rose in August for the group by 113,000 bpd, although Saudi Arabia made good on its promise to cut production. Saudi Arabia’s production fell by 88,000 bpd, but Nigeria and Iran saw their production climb.
Freeport LNG feedgas intake is still lagging behind capacity for nearly a week now, with analysts suspecting a continued outage. The plant’s draws have fallen to an average of 0.4 Bcf/d over the past five days, down from 1.8 Bcf/d last week. Cargoes have been canceled, including those for BP and Total. Freeport accounts for 20% of all US LNG imports. Analysts suspect two of the plant’s three gas processing trains are idled. Freeport has yet to comment on the suspected outage.
BP is still searching for a new CEO after CEO Bernard Looney resigned without notice, being just the latest in a string of surprise CEO departures for BP. BP’s CFO Murray Auchincloss has been named interim CEO while the search continues.
WTI reached over $90 on Thursday - a level not seen for the U.S. benchmark since mid-November.
Washington has slapped sanctions on five Turkish companies and one Turkish individual involved is sanctions busting for Russia and labeled as supporting Moscow’s war on Ukraine. The sanctioned companies operate in target and trade, and specifically, they are accused by Washington of repairing sanctioned dual-use Russian Defense Ministry vessels. This is an interesting time in the dynamism of U.S.-Turkey relations, with Turkey constantly looking for leverage. It does have some leverage in the form of potentially holding up Sweden’s NATO membership bid, which the Turkish parliament will vote on next month. Sanctioning Turkish companies may appear to risk Ankara’s cooperation on Sweden; but what Turkey really wants is F16s from the U.S. Washington has already agreed to allow this but they won’t be shipped immediately. The understanding is that Turkey will vote to allow Sweden’s NATO bid in October, first. The sanctions are, then, a bit of a gamble that wagers Turkey is more interested in getting the F16s than anything else, and Erdogan is very interested in securing his status as the NATO protector of the Black Sea. At the same time, Turkey likely calculates that NATO can’t guarantee security in the Black Sea without Turkey.
Discovery & Development
Some of the world’s largest oil consortiums came out for Guyana’s recent oil licensing round, which included 14 offshore blocks. Eight blocks received bids, including from a consortium of Exxon, Hess, and CNOOC, and another made up of Total, QatarEnergy, and Petronas. Smaller bidders include Delcorp, Watad Energy, Arabian Drillers, Liberty Petroleum, Cybele Energy, International Group Investment, Montego Energy, and Sispro. The bids will be reviewed over the next few weeks and will award contracts by November 1. Guyana’s government said it was not disappointed with the results.
TotalEnergies will commence drilling operations at its Fenix field in Argentina in March of next year, with production set to begin in November 2024. The project is estimated to cost $700 million, with targeted production of 10 million cm/d of gas–or 8% of the country’s total gas production. The project will help Argentina decrease the amount of gas it currently must import. FID was taken last September.
PDVSA has restarted its Cardon refinery’s catalytic cracker to make gasoline after being out of service for five weeks. The refinery–Venezuela’s second largest–was taken out of service when it ran out of feedstock.
Nikola’s new hydrogen fuel-cell trucks have started to come off the production line, and it will begin selling the trucks near the end of this month after receiving 210 orders.
Woodside began commercial production from its Senzi North project in the U.S. Gulf of Mexico. Shenzie produces both oil and gas with a capacity of 100,000 bpd and 50 MMscfd. Woodside holds a 72% interest.
Deals, Mergers & Acquisitions
CrownRock is rumored to be in the early stages of gearing up for a sale, boasting a possible valuation of more than $10B, including debt. The potential deal could happen early next year and would be the largest merger in the oil and gas sector in years.
The U.S. has reached a deal with Iran over five American citizens detained in Iran after issuing a waiver for banks to transfer $6B in frozen oil funds. The U.S. has also reportedly agreed to release five Iranian citizens being held in the United States.
Azule Energy and Sonangol signed a deal over decarbonization initiatives in Angola, as Angola has been amping up its exploration efforts and fast-tracking work on recent discoveries.
