Politics, Geopolitics & Conflict
Erdogan had campaigned on free natural gas for homes shortly after production began of first gas in mid-April (just a few weeks before elections that he would win in a run-off) from the Sakarya field. In its first phase, Turkish officials said the field would supply 10 MMcm per day, peaking at 40 MMcm by 2027-28. Turkey’s current natural gas consumption is at about 53 Bcm per year, and the country is energy starved, spending some $97 billion annually on imports. Erdogan appears to have made good on this promise, giving households free gas for the month of May. But July came with a new surprise that counteracts any ostensible benevolence: This week, Turkey hiked its fuel tax by 200% to finance earthquake damages. This move is likely to worsen inflation, which is already at 38% (annual).
Russia has turned its sites on the port region of Odesa, on the Black Sea, in days of strikes. The attack began on Monday after Moscow quit the Turkey-brokered deal to allow Ukrainian grain exports through the Black Sea, and after Ukraine blew up a bridge in Crimea that serves as a main artery for Russian military cargo. Moscow has threatened to target any vessels attempting to enter Ukraine’s Black Sea port, and would consider all such vessels to be potential carriers of weapons.
The U.S. Senate passed a defense bill amendment this week that would ban sales of crude oil from the SPR to China. Although largely more symbolic than…
Politics, Geopolitics & Conflict
Erdogan had campaigned on free natural gas for homes shortly after production began of first gas in mid-April (just a few weeks before elections that he would win in a run-off) from the Sakarya field. In its first phase, Turkish officials said the field would supply 10 MMcm per day, peaking at 40 MMcm by 2027-28. Turkey’s current natural gas consumption is at about 53 Bcm per year, and the country is energy starved, spending some $97 billion annually on imports. Erdogan appears to have made good on this promise, giving households free gas for the month of May. But July came with a new surprise that counteracts any ostensible benevolence: This week, Turkey hiked its fuel tax by 200% to finance earthquake damages. This move is likely to worsen inflation, which is already at 38% (annual).
Russia has turned its sites on the port region of Odesa, on the Black Sea, in days of strikes. The attack began on Monday after Moscow quit the Turkey-brokered deal to allow Ukrainian grain exports through the Black Sea, and after Ukraine blew up a bridge in Crimea that serves as a main artery for Russian military cargo. Moscow has threatened to target any vessels attempting to enter Ukraine’s Black Sea port, and would consider all such vessels to be potential carriers of weapons.
The U.S. Senate passed a defense bill amendment this week that would ban sales of crude oil from the SPR to China. Although largely more symbolic than effective, the amendment managed to secure bipartisan support well above the amount required to pass it. Valero, Marathon Petroleum, Motiva Enterprises, Phillips 66, and Shell Trading have historically been the largest purchasers from the U.S. SPR, with Unipec America–a U.S. arm of China’s Sinopec–taking less than one-tenth of what Valero purchased when looking at data from 2017 onward. CNPC’s PetroChina International has also purchased a small amount of crude from the SPR. The move comes well after the U.S. already sold off more than 200 million barrels.
Deals, Mergers & Acquisitions
ADNOC Gas reached a $7B-$9B deal with Indian Oil Corp to supply 1.2 million metric tonnes of LNG per day for 14 years. The move will help India increase gas to 15% of its total energy mix by 2030, in line with its goals. India has six LNG import terminals totaling 42.5 million tpa, with plans to increase this to 66.5 million tpa. Deliveries are set to begin in 2026.
TotalEnergies also signed a long-term LNG deal with India. Under the terms of that deal, 800,000 tpa of LNG will be supplied to IOC under a 10-year deal, also beginning in 2026.
ADNOC and OMV AG are formally discussing a new petrochem entity through a merger of both of their holdings in Borouge plc and Borealis AG. The new company could be valued at as much as $30B.
Discovery & Development
Israel’s gas-rich offshore areas were a tempting offering, with four groups submitting bids as Europe’s thirst for gas continues to elevate the importance of the commodity. The four groups submitted a total of five bids, and are made up of nine individual companies which have yet to be named. Israel’s Energy & Infrastructure Minister Israel Katz has referred to the bidding round as part of his vision to turn Israel into a bridgehead connecting east and west. Bids will now be reviewed, with exploration licenses granted for an initial 3-year period during which the companies will examine the area’s potential for oil and gas.
The Biden Administration will invest $20B into clean energy projects, including installing EV charging stations, retrofitting homes to make them more energy efficient, and battery power for backup. Meanwhile, President Biden headed to Pennsylvania to try to convince unions that there would be room for union jobs in the new clean energy world order. The DOI also announced its first-ever wind energy lease sale in the GoM this week.
TotalEnergies has reached FID for Phase 1 of the Rio Grande LNG project in Texas. The project encompasses 3 liquefaction trains with 17.5 mtpa of total capacity. Capex is $14.8B, and plant commissioning is set for 2027. Total will offtake 5.4 mtpa for 20 years. Global Infrastructure Partners, NextDecade, GIC, and Mubadala are partners.
Wellesley Petroleum drilled a commercial gas-condensate and light oil discovery in the Norwegian North Sea in license PL1148 in the Carmen prospect. Wellesley said its drilling campaign of wells 35/10-10 S and 35/10-10 A has a proved developable gas-condensate accumulation of 60-100 mmboe.
