Sweden To Join NATO After Historic Summit

Politics, Geopolitics & Conflict

In a sudden twist in developments late on Monday, Turkey dropped its objections to Sweden joining NATO, just a day after conditioning Sweden's membership in the military alliance on Turkey's EU membership. Erdogan's decision to drop the conditions and previous objections to Sweden's NATO bid came on the eve of the NATO summit on Tuesday in Lithuania. Sweden will now become NATO's 32nd member (after Finland was sworn in earlier this year). NATO is also set to make a decision on Ukraine's potential for membership in the military alliance, with the White House determined to wash this under the table by giving the country a "path" to NATO membership, but no actual membership, which would not be considered until there is an end to the war. Russia responded to the NATO moves with a drone attack on Kyiv in a fair amount of saber-rattling following the NATO summit. Moscow also said it would consider Western-supplied F-16 fighter jets for Ukraine as a "nuclear" threat given their capacity to carry atomic bombs.

Reports have emerged out of Moscow that despite the failed mutiny launched by Wager's Prigozhin, companies linked to him have been awarded over 1 billion rubles in government contracts this month, all of them in catering services. At the same time, it remains unclear where Prigozhin is, with a US military source vaguely mentioning that he is likely traveling between Belarus and Russia. In the meantime, while there is no additional confirmation, the Wall Street Journal cites sources claiming that 13 senior Russian military officers have been detained, while another 15 have been suspended or fired in the wake of Wagner's failed mutiny.

Iraq signed a deal with Iran this week in which it would barter oil for gas. For Iraq, the deal means getting its hands on critically-needed gas to ease a severe electricity crisis. This puts Iraq in a defensive position with Washington due to potential sanctions violations. Baghdad is forced to balance relations with Tehran and Washington, both of whom vie for power in Iraq. The new deal would replace a previous deal in which Iraq was buying gas from Iran with US dollars-a deal Washington refused to sign off on with a sanctions waiver. When that version of the deal failed and Iraq was unable to pay for Iranian gas, Iran cut supplies to Iraq-hence, the worsening electricity crisis. Iraq owes Iran some $11 billion for gas. While Washington has in the past given Iraq a sanctions waiver with regard to Iranian gas, it has not yet agreed to waive sanctions on this new deal.

Discovery & Development

Norway's DNO ASA has made a gas and condensate find in the Norwegian North Sea that is the largest hydrocarbon discovery in a decade. DNO ASA holds a 30% interest in the prospect known as Carmen. Initial evaluation of the data from the discovery well suggests gross recoverable resources somewhere between 120 million and 230 mmboe. Hitting the midpoint of that range, 175 mmboe, would make it the largest discovery on the continental shelf since 2013. Carbon would be DNO's sixth discovery in the area in the last two years and is near existing infrastructure. Wellesley Petroleum, Equinor, and Aker BP are partners.

Deltic Energy has reassessed the Pensacola gas field in the North Sea, which is now thought to contain twice as many hydrocarbons-at 99 mmboe, which includes 320 billion cubic feet of gas. Shell is operator. Deltic said it would consider selling part of its 30% stake in the field. Shell declined to comment on the re-evaluation, saying it was still undertaking technical evaluations. The find is significant as it points to possible successes in the North Sea as the oil and gas output there has been on a steady decline in recent years.

TotalEnergies has secured two marine concessions for wind farms, N-12.1 and O-2.2 at an auction in Germany. N-12.1 is 170 km off the coast in the North Sea, while O-2.2 is in the Baltic Sea 40 km off the coast. The concessions will run for 25 years, with a possible extension of another 10 years. N-12.1 will have a capacity of 2GW. O-2.2 will have a capacity of 1 GW. The electricity produced will be the equivalent to the consumption of 3 million homes. Total will pay Germany 582 million euros for the concession.

In the same auction, BP secured awards for two wind projects of its own totaling 4GW of capacity. Power generated from BP's projects will be used to produce green hydrogen and biofuels, and to power BP's EV charging network. BP expects returns from the project between 6% and 8%.

Deals, Mergers & Acquisitions

Berkshire Hathaway has purchased Dominion's stake in the Maryland LNG export project for $3.3 billion. Berkshire will then own 75% of the terminal, with Brookfield Infrastructure Partners owning the remaining 25%.

ExxonMobil will purchase Denbury for $4.9 billion to increase its low-carbon business. Denbury specializes in enhanced oil recovery and carbon sequestration. The purchase gives Exxon Denbury's carbon dioxide pipeline network in Texas, Louisiana, and Mississippi. The deal will close in Q4.