Pressure Builds On Erdogan Following Turkey's Tragic Earthquake

Politics, Geopolitics & Conflict

As the Russia-Ukraine war enters its second year, Washington is under pressure on another front as well - China, more so after the shooting down of a Chinese spy balloon last week, which U.S. officials believe to be part of a wider Chinese surveillance program. Three other UFOs shot down may or may not have been connected to this.

Attempting to change the narrative of his leadership following the devastating earthquake that has so far killed more than 35,000 people in Turkey (and nearly 6,000 in Syria), Erdogan has started mass arresting building contractors for violating codes. This attempt to shift the blame from a leader whose rise to power was helped by a tragic earthquake in the 90s appears to be falling on deaf public ears. Video evidence is now emerging of Erdogan using the same new buildings that crumbled in the quake to boost his 2019 election campaign, listing the new buildings at the epicenter of the earthquake as one of his top achievements as a leader. He even boasts about the "zoning amnesties" he gave out to contractors that allowed them to get housing built quicker by bypassing earthquake safety codes. In the meantime, Turkish authorities are arresting scores of journalists and social media users for spreading "disinformation" about the earthquake. On Wednesday alone, reports are that 78 people had been arrested for "sharing provocative posts" on social media. This is made possible through a law passed in October that sets jail time of up to three years for journalists or social media users charged with spreading "disinformation".

Markets

Devon Energy reported Q4 2022 earnings that fell short of expectations, sending share prices lower. The earnings missed analyst forecasts on higher expenses and lower production after a fire at a key gas compression station in Texas. Production is expected to remain lower for the rest of Q1.

Marathon Oil Corporation (NYSE: MRO) reported Q4 net income of $525 million ($0.82/diluted share) with adjusted net income coming in at $563 million. MRO reported full year 2022 net income of $3.6B ($5.26 per diluted share). Full-year adjusted net income was $3.1B, with $3.978B in free cash flow. MRO returned 55% of CFO to shareholders last year, beating its commitment, and executed $2.8B in share buybacks during Q4.

Kazakhstan will be halting oil exports for four months beginning on Feb 18. The ban includes refined oil products, including gasoline, diesel, and other petroleum products. According to the government, the export pause is intended to protect domestic energy supply.

India is cracking down on renewable power companies that miss project completion deadlines. India said that if any renewable energy project isn't completed by the contractual date, its "bank guarantee should be encashed and the developer blacklisted". The blacklisting will last between 3 and 5 years. No one has been blacklisted yet. India has a goal of installing 40GW of renewable capacity each year to reach its total renewable capacity of 500GW by 2030.

Citi is canceling its relationship with Rosneft's German unit, Deutschland GmbH by closing its business account. Germany had taken over via a temporary trusteeship the local unit last September. The temporary trusteeship is scheduled to last until March 15.

Deals, Mergers & Acquisitions

Spanish Enagas has canceled its acquisition of a 20% stake in the BBL gas pipeline from Germany's Uniper after BBL shareholders exercised their right of first refusal. The pipeline runs from the Netherlands to Britain. The acquisition was set at $80 million.

Vital Energy has purchased Midland Basin oil production assets for $128 million in cash and 1.58 million shares of Vital. The deal was struck to purchase the assets from Driftwood Energy. The assets span 15,500 acres and expand Vital's existing presence in the area.

BP is purchasing truck stop franchise TravelCenters of America (TA) for $1.3B ($86/share). BP America said it was part of the company's preparation for a future with alternative fuels. TA has been trying to sell for quite some time.

Greece and Bulgaria are mulling over a revival of their pipeline project that would carry crude from Alexandroupolis on the Aegean Sea to Bulgaria's Burgas port in the Black Sea. The pipeline would help Bulgaria bring in crude oil that isn't Russian in origin for its sole refinery on the Black Sea by a way other than the congested Bosphorus Strait.

Sources have said that ADNOC plans to put 4% of its business up for sale in an IPO, with an official announcement expected sometime on Friday. ADNOC is looking for a $50B valuation.

Discovery & Development

Israel has shipped its first-ever oil for export from the Energean Power FPSO unit used in developing the Karish gas field. The development is located on the border between Israeli and Lebanese waters and had been a source of tension between the two nations until last October when the two parties agreed on a demarcation line that split up the development into the Karish gas field on one side, and the Qana gasfield on the other. Extra security measures for exporting are being taken, including switching off the tanker's tracking device as it departs.

Shell Argentina and its partners have started up a critical $100 million oil pipeline that will take Vaca Muerta shale and carry it to refineries and for export. The giant formation was at risk of maxing out its pipeline takeaway capacity.

Eni and Repsol have met with Venezuelan government officials to ask for greater operational control over their PDVSA joint operations. The two companies are now reviewing their contracts.

Shell Offshore Inc is now producing at its Vito floating production facility in the U.S. GoM. The production facility is expected to have a peak production of 100,000 boepd. Shell holds 63% of Vito as operator. Equinor holds the remaining stake.