The U.S. to Call for an Immediate Ceasefire in Gaza

Politics, Geopolitics & Conflict

With his campaign for re-election in full swing, Venezuela's Nicolas Maduro has managed to get lawmakers to approve the creation of a new state out of Guyana's oil-rich Essequibo region, where ExxonMobil and partners have discovered 11 billion barrels of oil to date. This is likely another empty campaign stunt on the part of Maduro. Maduro also stepped up his campaign to destroy the opposition ahead of elections, ordering the arrest of nine more opposition figures this week, making the total of arrests now at 30. All nine were staffers for opposition presidential candidate Maria Corina Machado, who has been barred from running. The trumped-up charges against those arrested are related to an alleged criminal conspiracy to plot a coup.

After unsurprisingly winning elections last weekend, Putin this week launched Russia's biggest missile attack on Kyiv to date. It was the first take on Kyiv in well over a month. While garnering plenty of headlines, however, the attack led to no casualties (that we know of so far) but wounded more than a dozen people and caused damage to various buildings, including residential. Ukraine claimed to have shot down all incoming missiles, blaming the damage on debris from the defense action. At the same time, Kyiv is increasingly dealing with cracks in its global support network, which this week led to rumors that Zelensky is preparing to scrap his blacklist of companies still working in Russia and paying taxes that are used to finance the war on Ukraine. Unnamed sources told Reuters this week that China and France have been pressuring Zelensky to remove the list, which has proved an embarrassment to dozens of companies indirectly helping Russia to fund its war. Additionally, there are signs that Russia has been successful at forming new reserves to fight in Ukraine, which means, on the surface, that a long, drawn-out war is within the Kremlin's capabilities; however, those reserve forces will likely act more like cannon fodder than they will present a united front on the battlefield.

The Houthi campaign to target vessels traversing the Red Sea continues unabated. Most recently this week, two previously stranded oil tankers (also carrying toxic waste) raised international concern as their position is now in the line of fire between the U.S.-led forces in the area and the Houthis. While the Houthis are not targeting the stranded vessels, a toxic spill could result if the vessels are struck by a stray missile. Meanwhile, U.S. Central Command said on Thursday that Russia and China were being given safe passage by the Houthis, which is being viewed as a move by Iran to use the Houthis in a proxy side battle to bolster Russia and China shipping through the Red Sea. 

After rallying heavily last week, oil prices pared some of those gains this week-first on concerns that the Fed on Wednesday would reduce its 2024 rate cut plans (it did not, in the end) and then on the potential for a ceasefire in the Israel-Hamas conflict after the Biden Administration changed course and demanded that Netanyahu halt his plays to enter Rafah (southern Gaza Strip). While Netanyahu remains insistent that he will completely defeat Hamas and that the Rafah operation is necessary, Biden insists otherwise. The U.S. will now bring a UN Security Council resolution to a vote on Friday calling for an immediate six-week ceasefire in Gaza. This is a significant change in tone from the Biden Administration and has given a slight boost to the possibility of a ceasefire.

Deals, Mergers and Acquisitions

Savannah Energy will buy the remaining 49% stake of the Stubb Creek oil and gas in Nigeria for $61.5 million. The deal comprises $52 million in cash for the stake currently held by Sinopec International Petroleum Exploration and Production Corporation and $9.5 million for the stake held by Jagal Energy. When the deal is concluded, Savannah Energy will own 100% of the project. Savannah will use the gas for its Nigerian gas processing and distribution subsidiary, Accugas Limited, which supplies gas to Nigeria's power plants. 

Diversified Energy has reached a conditional $386 million deal with Oaktree Capital Management LP to expand its interest in stakes already owned in Oklahoma, East Texas, and Louisiana, adding 122 MMcf/day to its production this year-80% of which is natural gas. This figure represents a 15% increase to the company's overall production.

Africa Oil Corp has increased its stake in the Venus discovery in Namibia's Orange basin, after making an offer to purchase 8% of issued shares from minority shareholders in Impact oil and Gas Limited. The deal is worth $64 million. Africa Oil currently holds a 31.1% of Impact.

Discovery & Development

Amid the kerfuffle between Exxon and Chevron over Chevron's buyout of Hess, Exxon scored a different kind of win in Guyana when it discovered even more oil at Bluefin in the hot Stabroek block. With drillship Stean Drillmax, the Bluefin well encountered 197 feet of hydrocarbon-bearing sandstone in 4,244 feet of water. Bluefin is 8.5km east of Sailfin-1. 

CNOOC Limited made a major discovery known as Qinhuangdao 27-3 in the north-central Bohai Sea, adding 100 MMtoe of proved in-place volume. The field has been tested to produce 742 bopd from a single well. 

Galp Energia and partners have made another discovery in Namibia-this time with the Mopane 2X well in the Orange Basin. Its partners are NAMCOR and Custos Energy. The drilling operation confirms the lateral extension of the well, and includes the AVO-3 exploration target, the AVO-1 appraisal target, and another deeper target. The rig will now return to Mopane 1X for a drill stem test. The project falls under license PEL 83.

Equinor has completed its appraisal well and sidetrack for Heisenberg discovery wells 35/10-11 S and A in the North Sea, and proven oil in its Hummer prospect. Heisenberg is a new shallow play in the northern Norwegian North Sea, is estimated to hold recoverable volumes between 24 and 56 MMboe, and lies within tieback range of Troll B, Kvitebjorn, and Gjoa. Studies are now underway for fast-track development.

Petrobras announced plans to invest $7.5B over a five-year period in oil and gas exploration offshore Brazil.