Politics, Geopolitics & Conflict
Leaks discovered Monday in the Nord Stream 1 and 2 pipelines, which carry natural gas to Germany, have been determined by authorities in Europe to have been caused by underwater explosions in the Baltic Sea they suspect were the result of sabotage. There are two leaks, miles apart from each other, which suggests it is not a random occurrence. Investigations are underway, with the West accusing Russia and Russia accusing the U.S. of what would amount to a false flag operation to force Europe’s hand into tougher, more unified action against Moscow. The pipelines were not transmitting any natural gas at the time of the explosions/leaks, as Gazprom had cut off flows indefinitely. The German navy has been deployed to investigate, and Norway is deploying its military for security. Ships in the area are on high alert. Expect a high level of rhetoric and saber-rattling to roil oil markets as this further unfolds.
Earlier this week–and before the Nord Stream pipeline explosions–Norway had warned oil and gas companies that it had seen unidentified drones flying around oil and gas fields in the North Sea. On Thursday, Total said it, too, had witnessed additional unauthorized drone activity around Halfdan B, a Danish oil and gas field in the North Sea. Total spotted the drones on Wednesday. Total did not specify how many drones it witnessed, nor the activity of the drones.
Russia’s sham referendums held in the occupied Ukrainian areas…
Politics, Geopolitics & Conflict
Leaks discovered Monday in the Nord Stream 1 and 2 pipelines, which carry natural gas to Germany, have been determined by authorities in Europe to have been caused by underwater explosions in the Baltic Sea they suspect were the result of sabotage. There are two leaks, miles apart from each other, which suggests it is not a random occurrence. Investigations are underway, with the West accusing Russia and Russia accusing the U.S. of what would amount to a false flag operation to force Europe’s hand into tougher, more unified action against Moscow. The pipelines were not transmitting any natural gas at the time of the explosions/leaks, as Gazprom had cut off flows indefinitely. The German navy has been deployed to investigate, and Norway is deploying its military for security. Ships in the area are on high alert. Expect a high level of rhetoric and saber-rattling to roil oil markets as this further unfolds.
Earlier this week–and before the Nord Stream pipeline explosions–Norway had warned oil and gas companies that it had seen unidentified drones flying around oil and gas fields in the North Sea. On Thursday, Total said it, too, had witnessed additional unauthorized drone activity around Halfdan B, a Danish oil and gas field in the North Sea. Total spotted the drones on Wednesday. Total did not specify how many drones it witnessed, nor the activity of the drones.
Russia’s sham referendums held in the occupied Ukrainian areas of Donetsk, Luhansk, Kherson, and Zaporizhzhia have allegedly turned out in favor of joining Russia. The questionable vote of Russia’s proxies opened on Sept 23rd and closed on Sept 27 and “official” figures cited by Russia show that 98% of voters in Luhansk supported joining Russia, and 99% in Donetsk, with only slightly lower numbers in the other two regions. While the Russian Federation parliament must ostensibly approve their integration, since this is a political show of force, the Kremlin is already saying they will be formally integrated on Friday (Sept 29). The referendums, which come shortly after Russia suffered devastating losses to a Ukrainian counteroffensive in Kharkiv, have sparked backlash in Brussels, which has threatened additional sanctions on Russia.
In the Czech Republic, another mass protest on Wednesday saw thousands gather in Prague to challenge the government on rising energy costs—again—and on the country’s EU and NATO relations. An overall theme of the protests seemed to be a desire to maintain good relations with Russia in order to obtain cheap gas, while simultaneously withholding support for Russia’s war on Ukraine. This is a dangerous and escalating development in the Czech Republic that is not in line with Europe’s plans for energy independence and combatting Russia’s use of natural gas as a weapon.
Saudi King Salman has named his son Crown Prince Mohammed Bin Salman as prime minister (he was previously deputy prime minister). All ministers will now report directly to MbS.
Italy’s general elections on Sunday saw the Brothers of Italy, a party rooted in fascism and led by Giorgia Meloni, win the most votes. That makes Meloni likely to become the new prime minister heading up a far-right coalition, which will still take a while to form. The concern for Brussels as it fights Russia’s weaponization of energy amid the occupation of Ukraine is that Italy will side with Viktor Orban’s Hungary and chip away further at European unity, playing directly into Moscow’s hands.
Three rockets hit Baghdad’s Green Zone on Wednesday as the Iraqi parliament was preparing to vote on the resignation of the parliamentary speaker, while protesters loyal to influential Shi’ite cleric Moqtada al-Sadr clashed with security forces as they attempted to infiltrate parliament.
Discovery & Development
The first unit of Iraq’s new 140,000 bpd Karbala oil refinery is now receiving crude oil, with trial operations commencing this week. Iraq’s refining industry was degraded during the war with the Islamic State, and it has relied heavily on imports of gasoline and gas oil ever since. Iraq currently imports 90,000 bpd of gasoline and 20,000 bpd of diesel. Iraq spent more than $3 million on importing refined products last year, and Q1 refined product imports were $1.55 billion. Iraq’s current refining capacity without Karbala stands at about 1 million bpd.
BP’s Toledo refinery may remain shut throughout the rest of this year and part of early next year after a fire that killed two took it offline earlier this month. The refinery’s capacity was about 160,000 bpd. The refinery was formerly owned by BP and Huskey, but Canada’s Cenovus took over after it merged with Huskey, and Cenovus then agreed to buy BP’s 50% stake, becoming the sole owner.
Deals, Mergers & Acquisitions
Total signed onto another $1.5 billion deal with Qatar for a natural gas expansion project. Total will pick up a 9.3% stake in its North Field South gas project. Total is just the first foreign partner in that part of the project–more partners will be announced later. Total is already a partner in the North Field East project. Total said it would be more than happy to snap up a bigger chunk in Qatar’s LNG projects if it could, as Europe is looking to buy more LNG–at higher prices, even–to secure energy supplies.
Hammerhead Resources is planning to merge with Decarbonization Plus Acquisition Corporation IV, and as such will be listed on the Nasdaq, in a $1.02 billion deal. This means that a Canadian oil and gas producer will be listed in the U.S. The new company will trade under HHRS.
Papua New Guinea’s state-run oil company, Kumul Petroleum, has made an offer to Santos to purchase another 5% interest in the PNG LNG project for $1.4 billion. Santos has wanted to reduce its 42.5% stake in the project. Kumul already holds a 26.6% interest.
Shell and Exxon have launched a sale of multiple offshore nat gas assets in the southern UK and Dutch North Sea. The sale could generate $2 billion.
Chevron is moving its California headquarters into a smaller building and relocating more of its California employees to Texas as the company continues its slow migration out of California that began in 2019. Chevron said it would remain headquartered in California, despite years of media speculation that it plans to relocate to Houston.
Enbridge sold an $840 stake in seven northeastern Alberta pipelines to indigenous investment agency Athabasca Indigenous Investment, which comprises 23 tribes.
