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Vitol Group, the world’s largest independent oil trader, plans to spend half of its $2-billion capital expenditure on renewables, the group’s chief executive Russel Hardy said at the Energy Intelligence Forum in London on Tuesday.
“We've got a fair amount of capex going into the renewables and power business. Half of the company's capex, which is $2 bln so about $1 bln, is going into renewable business,” Hardy said at the event, as carried by Reuters.
Commenting on oil demand and oil prices at the forum, Hardy said that global oil demand is set to grow in 2024 and that he expects oil prices to be in the $80-$90 per barrel range next year.
This year, oil demand growth and tighter supply have led to oil price increases, Hardy said.
“For gas, demand has plummeted in Europe, with double-digit percentage reductions. We expect some of the lost demand to be permanent,” Hardy told the forum.
Commenting on the mergers and acquisitions in the U.S. upstream industry, Vitol’s CEO said that he expects there would be more consolidation in the U.S. shale patch, with the Permian likely to lead the trend.
Just last week, ExxonMobil announced a blockbuster deal to buy Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion, or $253 per share, based on ExxonMobil’s closing price on October 5, 2023. The implied total enterprise value of the transaction, including net debt, is around $64.5 billion.
Vitol itself completed earlier this year, via its unit VTX, the acquisition of Delaware Basin Resources and associated surface and water businesses.
Ben Marshall, Vitol Head of Americas said in March: “This represents our second scale acquisition in the US shale patch.”
“We believe the investment opportunity in upstream will remain attractive and are hopeful the VTX team can leverage our partnership to target new investment opportunities and build VTX into a sizeable producer.”
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com