Politics, Geopolitics & Conflict
The legal dispute between Iraq and Turkey, which led in May to the halting of the Kurdistan Regional Government's (KRG) only oil export pipeline, taking 450,000 bpd off the market, could face further delays in restarting due to infighting in the Kurdish parliament. This week, 50 MPs resigned from Iraqi Kurdistan’s parliament in protest against a court decision that ruled a year-long election postponement was unconstitutional. Fighting amongst parliamentarians from the two leading parties (the KDP and the PUK) turned physical recently, with MPs throwing water bottles at each other and breaking out into fistfights. The Kurds are said to have lost some $2 billion since Turkey turned the pipeline off over an illegal dispute with the Iraqi federal government. In the meantime, reports have emerged that the Iraqi government has been sending KRG oil to Mosul (controlled by the federal government) rather than to Erbil (Iraqi Kurdistan) for refining. This oil is being redirected for domestic Iraqi consumption.
The situation in Libya is dangerously close to coming full circle for the oil industry, with the authorities in the east threatening another oil export blockade in protest against the use of energy revenues by Tripoli (the western authorities). The head of eastern-based House of Representatives (HoR), Osama Hammad, accused the Libyan National Oil Company (NOC) of definitively “siding” with the Government of National…
Politics, Geopolitics & Conflict
The legal dispute between Iraq and Turkey, which led in May to the halting of the Kurdistan Regional Government's (KRG) only oil export pipeline, taking 450,000 bpd off the market, could face further delays in restarting due to infighting in the Kurdish parliament. This week, 50 MPs resigned from Iraqi Kurdistan’s parliament in protest against a court decision that ruled a year-long election postponement was unconstitutional. Fighting amongst parliamentarians from the two leading parties (the KDP and the PUK) turned physical recently, with MPs throwing water bottles at each other and breaking out into fistfights. The Kurds are said to have lost some $2 billion since Turkey turned the pipeline off over an illegal dispute with the Iraqi federal government. In the meantime, reports have emerged that the Iraqi government has been sending KRG oil to Mosul (controlled by the federal government) rather than to Erbil (Iraqi Kurdistan) for refining. This oil is being redirected for domestic Iraqi consumption.
The situation in Libya is dangerously close to coming full circle for the oil industry, with the authorities in the east threatening another oil export blockade in protest against the use of energy revenues by Tripoli (the western authorities). The head of eastern-based House of Representatives (HoR), Osama Hammad, accused the Libyan National Oil Company (NOC) of definitively “siding” with the Government of National Unity in Tripoli and said outright that plans are afoot to create a “judicial guard” to stop exports and take control of some $16 billion in revenue. There were also unverified claims following this threat that the GNU forces carried out a drone strike on Russian Wagner mercenaries' positions at the Al Khadim airbase (Russia has long supported eastern strongman General Haftar).
Control of oil and oil revenues was at the heart of the last blockade by General Haftar, leading the Libyan National Army (LNA) from the east. Libya’s eastern government accuses Tripoli of misusing oil revenues and failing to provide any actual services to Libyans. Libya is now producing 1.2 million bpd and has recently unveiled plans to ramp up to 2 million bpd in 3-5 years, assuming it is not held hostage to another oil blockade/civil war (a repeat of 2020).
Discovery & Development
China’s most expansive deepwater oil and gas pipeline is in its second and final stage of development. The trunk pipeline is 115.5 km long, and 20” in diameter. The next step is cleaning the inside of the pipeline, pressure testing, and surveying seabed conditions along the pipeline’s route. It is the longest ultra-long, ultra-high, suspension-span submarine pipeline in China. Peak annual output for the Shenhai-I project will be 4.5 bcm.
Drilling success stories in Guyana continue to pile up, this time with Frontera and CGW, which have discovered oil at its Wei-1 well. Wei-1 is in the Corentyne block, and is the second well in that block. Samples are due to be verified by a third-party laboratory within the next few months. It is the next consortium after Exxon/Hess to move into the development phase following exploration.
Imerys will now mine for lithium in the UK’s Cornwall to the tune of 200,000 tonnes per year by the end of the decade. Imerys said the site could possibly supply lithium for 2/3rds of Britain’s EVs by 2030–or 500,000 EVs. Imerys said the project is a game changer and would reduce Europe’s reliance on imported lithium.
Serica Energy’s North Eigg prospect in the North Sea has been deemed non-commercial in a disappointing development for the company that thought the prospect could hold as much as 60 million barrels. Serica will head into its second license term for the project, but only so it can complete the abandonment process for the well.
Perenco has completed its 3,800 bpd South Kole Marine project in Cameroon’s Rio del Rey Basin. Perenco already produces 35,000 bpd in Cameroon before the SKM project.
Deals, Mergers & Acquisitions
Indonesia’s state-run Pertamina and Malaysia’s state-run Petronas will be jointly acquiring Shell’s interest in the Masela gas project in Indonesia as Shell looks to divest its 35% stake.
Italian Eni will partner with Var Energi (Eni’s Norwegian subsidiary in which it has a 63% stake) to acquire London-based Neptune Energy for $4.9 billion in an all-cash deal. This represents the largest oil and gas acquisition in Europe in years. Neptune’s assets are largely natural gas assets in the UK, the Netherlands, Algeria, Egypt, Indonesia, and Australia.
The UK’s Aston Martin luxury vehicle maker will partner with California-based Lucid EV maker (a sometimes-languishing EV producer backed by Saudi money) to create a luxury electric vehicle. The Saudi sovereign wealth fund (PIF) is also a major shareholder in Aston Martin (along with China’s Geely). Lucid will get a 3.7% share in Aston Martin in the deal.
TRP Energy is considering a potential ~$1.5-billion sale of Permian oil and gas operations, apparently hoping to capitalize on high demand for acreage in the Texas basin. Nothing has been announced officially, with Reuters citing unnamed sources.
On the lithium playing field, Bolivia has signed $1.4 billion in investment agreements with Russian state-run Rosatom and China’s Citic Guoan Group to develop the Latin American country’s massive, untapped battery metal resources. This is the second deal this year, after China’s CATL battery maker cut a deal with Bolivia.
