The Revival Of Venezuela's Oil Industry Is Emboldening Maduro

Politics, Geopolitics & Conflict

Amid an easing of sanctions on Venezuela and Chevron's return to production, Maduro is taking advantage of the situation to quash his opponents. This week, he issued an arrest warrant for opposition leader Juan Guaido, whom he has accused of embezzling state oil money. Guaido is living in exile in Miami at present and is recognized by Washington as the rightful leader of Venezuela.

As the push and pull continues, however, now that certain doors have been opened, Brazil's state-run Petrobras is also said to be looking into possibilities of a Chevron-style return to Venezuela's collapsing oil industry.

Discovery & Development

Petrobras has received a permit to begin drilling offshore in the Potiguar Basin in the northeast of Brazil after months of back and forth with the country's regulator, Ibama. Drilling is set to begin in November, and the area will be surveyed to assess the area's economic viability following a discovery made a decade ago at the Pitu well. Two exploratory wells will be drilled in block BM-POT-17. Petrobras is hoping the basin holds similar reserves to the riches found in Guyana.

A consortium made up of TotalEnergies, Eni, and QatarEnergy has bid on exploration licenses for two blocks in the Lebanese Exclusive Economic Zone. The bids for Blocks 8 and 10 would give the consortium all blocks at the southern end of the economic zone if their bid is successful, as it is already exploring the bottom part of Block 9.

Eni has made a successful gas discovery from the Geng North-1 exploration well in North Ganal PSC off the coast of Indonesia. Initial estimates are for 5 Tcf of gas in place, with condensate estimated at 400 Mbbls. A well production test has already been performed, allowing for an estimated well capacity of up to 80-100 mmscfd and 5-6 kbbld of condensate. The discovery could be worthy of a new production hub that could be connected to the Bontang LNG facilities. Geng North is located next to the Indonesia Deepwater Development area, where Eni already has participating interests.

Iraq is giving international companies until January to submit letters of intent in its 5th+ and 6th licensing rounds, which will include 30 new oil and gas projects. The licensing rounds will include profit-sharing arrangements and lower royalty rates. Some of the projects offered in the 5th+ licensing round are projects that didn't get awarded in the 5th round. Iraq is looking to increase its nat gas production to cut down on imports, much of which comes from Iraq. Iraq currently flares a large share of its gas because it doesn't have the infrastructure to process it.

Deals, Mergers & Acquisitions

Talos Energy has completed the sale of 49.9% interest in Talos Mexico Grupo Carso subsidiary Zamajal for $74.85 million in cash on closing. Another $49.90 million is due upon first production from the giant Zama oilfield, of which Talos Mexico owns a 17.4% interest. Talos now owns 50.1% of Talos Mexico. Pemex is the operator of the Zama development.

ExxonMobil has decided to sell its majority stake in its Adriatic LNG import terminal in Italy to BlackRock. QatarEnergy and Italian grid operator Snam S.p.A. own the rest of the stake in the terminal. Snam still has the first right of refusal and could choose to exercise that right. The deal is thought to be valued at about $880 million.

Canada's Brookfield will purchase UK-based Banks Group's renewable energy division, which encompasses mining as well. The deal has been estimated at $1 billion. The deal would include 11 onshore wind farms across Scotland and the north of England and includes other solar and wind projects that are currently in development.
India has asked TotalEnergies to bid on oil exploration rights across 1 million kilometers of blocks across India as the large importer looks to lessen its dependence on foreign oil. India's oil minister also discussed with Total's CEO how the country's foreign LNG project in Mozambique could be expedited. Total currently holds a 26.5% stake in the Mozambique project.

Gina Rinehart's Hancock Prospecting Pty has purchased another chunk of lithium miner Liontown, bringing her stake to 14.67%. Albemarle has been eyeing Liontown, but Rinehart's move to repeatedly snap up more shares of Liontown could prevent the $4.2 billion takeover.

Norway has given ConocoPhillips the green light to start up its Tommeliten A gas field, which Conoco now says should come online later in October. Conoco expects 150 million boe could be recovered from the field, which begins in Norway's Block 1/9 and goes all the way to Block 30/20 in the UK. The project will include 11 development wells, with 7 of those to be completed at start-up, and the remaining wells complete in Q1 2024.