Daily Energy Report
Guyana crude to Europe, Chevron buys Hess, SLB drilling strong, Oman LNG expands, EV mandate vs reality, Canadian crude, Algeria oil plants trees, Asia biofuels a flop, and more.
Chart of the Day: Guyana replaces some Russian crude in Europe!
Summary
Given the news of the Chevron Acquisition of Hess, and the grand prize for Chevron is Guyana, we decided to post this chart. Figure (1) above shows the oil exports of Guyana by destination. It shows how exports jumped from nothing in 2019 to about 400,000 b/d now. One thing is clear: most of Guyana’s oil exports are going to Europe, replacing Russian oil. While the October data is not complete and the amount under “others” is large, most of the oil is going to the UK, France, and Poland.
EOA’s Main Takeaway
It’s clear most of Guyana’s oil exports are going to Europe to replace Russian oil. While the October data is not complete, and the amount under “others” is large, most of that is going to the UK, France, and Poland, as indicated by data from Kpler.
Story of the Day (About the Future of LNG)
BNN: Oman Boosts LNG Production & Exports with International Agreements
Summary
In a move that signals the growing global interest in Oman's energy resources, the state-owned company, Oman LNG, has inked shareholding and gas supply agreements with several international firms. This move underscores the country's potential as a significant player in the global LNG market. One deal involves French oil company Total, which has sealed an interim deal with Oman's Ministry of Oil and Gas. This arrangement, which includes seismic acquisition and drilling commitments, is part of Total's efforts to fortify its presence in Oman.
EOA’s Main Takeaway
LNG is the craze! LNG is the future. For Oman, it is the only way it can monetize its gas resources. Why?
Natural gas is the default fuel, not only as a backup but also because of the failure of some green policies.
International gas pipelines are out of favor after the politicization of Russian piped gas supplies to Europe, the halt of NordStrean 2, the sabotage of Nordstream 1, and the recent sabotage of the pipeline between Lithuania and Finland. The war in Gaza and the closure of the Tamar gas field ended any hope for a pipeline from the Eastern Mediterranean gas fields to Europe.
Russia has chosen to shift to LNG production and exports
China does not want to depend heavily on piped Russian gas. The alternative is LNG.
While LNG is the answer, floating LNG technology enables countries that use gas seasonally to import LNG.
News of the Day
WSJ: Chevron to Buy Hess for $53 Billion
Reuters: Chevron to Buy Hess Corp for $53 Billion in All-Stock Deal
Summary
Chevron plans to acquire Hess in a $53 billion all-stock deal. This comes after Exxon Mobil announced last week it was buying Pioneer Natural Resources. This acquisition gives Chevron access to significant oil discoveries in Guyana, U.S. shale assets in North Dakota, and Hess's ventures in Southeast Asia. The deal values Hess at $171 per share, with the overall transaction, including debt, totaling $60 billion.
EOA’s Main Takeaway
We sent you a short note in the early morning hours. The main point is that the Chevron acquisition of Hess is way better than the ExxonMobil merger with Pioneer. However, this acquisition has its own risks, especially in Guyana. Here is the link:
Chevron Announces Agreement to Acquire Hess
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Financial Times: Interview with Chevron’s Mike Wirth
Summary
Chevron's CEO challenges the IEA’s prediction that fossil fuel demand will peak before 2030, emphasizing the need to allocate capital based on real-world demands. Despite environmental concerns and criticism, Chevron, a $300bn US oil and gas giant, is thriving. After taking the helm, he cautiously steered the company, making strategic decisions that have since paid off, especially with the rise in oil prices after Russia's Ukraine invasion. Under his leadership, Chevron has seen significant financial gains, outperforming many European competitors.
EOA’s Main Takeaway