Seymour Hersh Investigation Unlikely To Change Narrative

Politics, Geopolitics & Conflict

U.S. journalist Seymour Hersh published an investigation this week into the explosions on the NordStream pipeline in September last year, claiming that American divers planted explosives under three of the four pipelines during a NATO Baltic Sea exercise in the summer, detonating them remotely. Hersh also claimed that Norway was complicit in the scheme. The U.S. has categorically denied the claims, which Hersh sources to unnamed "insiders", while Russia is hoping (futilely) that Hersh will testify in the Duma. While Moscow is relishing this media victory, we do not expect much damage to come as a result of the report. At this point, it is too late to sway Western public opinion in relation to Russia's war against Ukraine.

In a first-of-a-kind lawsuit, Shell's board of directors is being sued-personally-by ClimateEarth, allegedly for mismanaging climate risk by failing to implement an energy transition strategy that aligns with the Paris accord.

As Iran moves to increase its military presence in Latin America, Brazil-for one-has caved to pressure from Washington to deny the docking of two Iranian warships in Rio de Janeiro. This is a bit of a PR coup for Washington, following Tehran's rather loud announcements of its "flotilla" of warships headed for the Panama Canal in what was meant to be an indirect threat to the American backyard.

Deals, Discovery & Development

Houston-based APA Corp., the parent of Apache, has found oil at its Sapakara South-2 (SPS-2) appraisal well in Block 58 offshore Suriname, following disappointing results last November in its Awari well. TotalEnergies operates Block 58 with a 50% interest, with APA holding the other 50%. Morgan Stanley has estimated that the block contains 6.5 billion barrels of oil. Total and Apache have made five commercial discoveries in the block over the last two years, but have yet to reach FID for any of them. Apache had previously deemed the Sapakara discovery as the most important, with earlier estimates that it contains 400 million barrels or more of recoverable resources.

Vaar Energi-a subsidiary of Eni, has made an oil discovery near the Goliat field in the Arctic Barents Sea. A sidetrack well is being planned to better assess the size of the discovery. Vaar Energi is the operator with a 65% stake, with Equinor holding the remaining stake. Vaar Energi has long had plans to expand its operations in the Arctic Barents Sea.

Equinor made an oil discovery at the Troll field in the North Sea named Rover Sor. The discovery is estimated to hold between 17 and 47 million boe, most of which is crude. It is Equinor's 7th find in the area since 2019. Rover Sor will be tied back to existing infrastructure.

Redwood Materials-the creation of Tesla's cofounder J.B. Straubel, received a $2 billion loan commitment from the U.S. government to build enough critical battery parts to produce 1 million vehicles per day. Redwood Materials also announced it has started production of thin copper foil, which is used for battery anode. It is the first major production line for the foil in the United States.

Vivo Energy-a segment of Vitol Group-has agreed to acquire a 74% stake in South Africa's largest fuel-station chain, Engen Ltd, from Malaysia's Petroliam Nasional Bhd. No financial details have been disclosed.

Markets

The devastating earthquakes in Turkey continue to disrupt the market with BP saying this week that exports of Azerbaijan's oil from Turkey likely won't resume until late next week after sustaining control room damage-although no official restart date has been provided. Around 1 million bpd of crude goes through the Ceyhan export terminal, now shuttered-about 60% of it from Azerbaijan. At the same time, exports of crude have resumed from Northern Iraq to the Turkish port of Ceyhan after disruptions following a devastating earthquake that hit Turkey and Syria on Monday, killing some 20,000 people so far, with the death toll expected to rise. Exports were temporarily halted along this pipeline, for which the Kurdistan Regional Government in Northern Iraq relies on to get its ~400,000 bpd to market.

Kazakhstan has also seen its crude output fall by 200,000 bpd this week after some unplanned maintenance at its Tengiz field.

South Africa has declared a state of disaster over the energy crisis, with President Cyril Ramaphosa claiming the crisis posed an existential threat to the country's economy and society. Eskom, South Africa's state-run utility, has engaged in widespread rolling blackouts that are expected to slash 2 percentage points off the country's economic growth.