1. Can There Be a UK Oil Renaissance?
- The new UK government of Liz Truss might become one of the most pro-oil ones globally as she announced the opening up of some 130 license blocks in the North Sea as well as the controversial lifting of the ban on hydraulic fracturing in the country.
- The previous government of Boris Johnson suspended licensing activities in 2020 as the UK took on ambitious climate goals, whilst the ban on fracking was introduced in 2019 amid opposition from environmentalists.
- UK North Sea oil output has been declining for years and is currently at some 900,000 b/d (equivalent to 82% of its needs), in contrast to rising production in Norway’s offshore zone.
- Attesting to the weak drilling activity, there were only 5 exploration wells drilled in the UK in 2021, a record low, with a similar number expected this year, according to OEUK data.
2. Margin Calls Becoming the Bogeyman of Europe
- The pains of European trading companies have started to come to the surface with the past couple of days seeing a string of additional credit lines and bridge funding.
- What started off with a $10 billion credit line to Uniper, saw its continuation with a $4.1 billion extended credit line to the Swiss Axpo and another $2.3 billion to the Finnish utility company Fortum.
- According to Citigroup estimates, utility companies across the continent were forced to put up more than $100 billion of additional…