Politics, Geopolitics & Conflict
⢠Oil prices remained stable on the news that Donald Trump won the presidential vote in the U.S. So, now is the time to reflect on the geopolitical implications-and they may not be what you expect. For the purposes of this report, it's not important what Trump is; rather, what he is not. While domestically it is extremely unsettling to know that he is venerated by Nazi groups, fascist groups, the Ku Klux Klan-all of whom have twittered celebratory messages or left their stamps of approval in the form of graffiti-let's set this domestic danger aside for a moment and look at the geopolitical side of things. What Trump-with his lack of experience entirely in geopolitics-is not is a warmonger, that was the purview of Hillary Clinton. Things are probably about to get friendlier with Russia. This part, at least, was clear. The Kremlin hates Clinton, and vice versa. Cold War 2.0 is possibly going to be cancelled. The containment of China may be redesigned as more cooperative and less confrontational. The Middle East may temporarily cease to be a playground for empire-building. In short, the US may become more like Canada for a short time-minding its own business, which is something that George W. Bush and Hillary Clinton (of the same ilk) would never have condescended to in their elite empire-building (by any means) mentality. So, let's see what a buffoon can do. It might surprise us.
⢠Tensions between Egypt and its biggest…
Politics, Geopolitics & Conflict
⢠Oil prices remained stable on the news that Donald Trump won the presidential vote in the U.S. So, now is the time to reflect on the geopolitical implications-and they may not be what you expect. For the purposes of this report, it's not important what Trump is; rather, what he is not. While domestically it is extremely unsettling to know that he is venerated by Nazi groups, fascist groups, the Ku Klux Klan-all of whom have twittered celebratory messages or left their stamps of approval in the form of graffiti-let's set this domestic danger aside for a moment and look at the geopolitical side of things. What Trump-with his lack of experience entirely in geopolitics-is not is a warmonger, that was the purview of Hillary Clinton. Things are probably about to get friendlier with Russia. This part, at least, was clear. The Kremlin hates Clinton, and vice versa. Cold War 2.0 is possibly going to be cancelled. The containment of China may be redesigned as more cooperative and less confrontational. The Middle East may temporarily cease to be a playground for empire-building. In short, the US may become more like Canada for a short time-minding its own business, which is something that George W. Bush and Hillary Clinton (of the same ilk) would never have condescended to in their elite empire-building (by any means) mentality. So, let's see what a buffoon can do. It might surprise us.
⢠Tensions between Egypt and its biggest benefactor since the Arab Spring revolution, Saudi Arabia, have suddenly spiked. Last month, Riyadh suspended shipments of fuels to Egypt, which were agreed under a five-year, multibillion-dollar deal. Although initially the Egyptian side said the deal was in order and shipments would be resumed, this week it became clear Saudi Arabia has no intention of resuming them. The reason: Egypt has reportedly reached out to Iran for alternative oil and fuel supplies. The information was reported by an Egyptian government official and denied by both the Egyptian Energy Minister and the Iranians but apparently these denials were not enough to convince the Saudi side. If the pressure between these two countries continues to rise, there might be a new hot spot in a region already full of them. Geopolitical alliances are shifting in the Middle East, and this is always dangerously destabilizing.
Deals, Mergers & Acquisitions
⢠DONG Energy will sell its oil and gas business to focus exclusively on its renewables operations, which concentrate on wind power. The Danish company, which is building the world's largest offshore wind farm in the Irish Sea, said it will not just seek the business to anybody but that it would seek a buyer that would make the best of its oil and gas operations.
⢠OMV has agreed to sell its UK business to Siccar Point for up to $1 billion. The move is in line with cost-cutting efforts on the part of OMV: exploration in the North Sea is notoriously expensive. The deal will constitute an impairment of some $386 million on OMV's 2016 EBITDA in the form of lost revenues.
⢠Exxon and Sunoco have agreed to form a 15/85 joint venture combining some of their core logistics operations. The joint venture, Permian Express Partners, will expand the two companies' capabilities in the Permian Basin and position them better to reap the benefits of future production growth in the shale play.
Tenders, Auctions & Contracts
⢠Blackstone Group has quit its energy business in Southeast Asia due to the lack of lucrative opportunities. The investment firm had allocated $800 million to the venture, dubbed Tamarind Energy Ltd. and set up by former executives from Talisman Energy. However, in the two years of its existence the company failed to find deal opportunities that made sense and Blackstone Group got its money back.
⢠France's Total will develop, in partnership with CNPC, the Iranian sector of the South Pars offshore gas field. The company signed a $4.8-billion deal with Tehran for the project that should see daily output of 1.8 billion cu ft of natural gas.
⢠U.S. Genoil, a clean tech engineering company, has signed a $50-billion letter of intent to develop oil fields in Russia, and also build clean technology upgraders, refineries and pipelines in the country. The money will come from Chinese banks.
⢠Iran hopes to close several new oil and gas deals with Russian companies by the middle of next month. The companies in question include Rosneft, Gazprom, Lukoil, Gazprom Neft, Tatneft, and Zarubezhneft. Plans are to seal the deals at the meeting of the Russian-Iranian intergovernmental commission on trade and economic cooperation, which will take place on December 13.
⢠Ophir Energy and OneLNG, a JV between Schlumberger and Golar LNG, have sealed the deal for the development of the Fortuna LNG project, off the coast of Equatorial Guinea. The $2-billion deal will see first gas produced in 2020. Ophir has a 33.8% stake I the project and OneLNG holds the rest.
⢠Saipem, the Italian oilfield service provider, has been awarded two contracts for the development of three oil fields in the Persian Gulf by Saudi Aramco. The combined value of the deals is $1 billion.
Discovery & Development
⢠Libya has managed to resume gas production of around 12,000 barrels per day at its eastern Abu Tifl Field. Pumping is expected to restart next week, after the fields experienced a two-year shutdown over protests and blockages of the eastern ports. Gas from these fields will be pumped to the Zuetina port. In their heyday, these fields produced 75,000 bpd.
⢠Chevron has launched production at the Alder field, in the North Sea, four decades after it was discovered. Together with its partner in the venture, ConocoPhillips, Chevron reported first gas output from the field's single well earlier this week.
⢠Lukoil is prepared to curb its oil production should the Kremlin ask it to do so in tune with OPEC-Russia negotiations for a reduction of crude oil output to rebalance markets. If agreement is reached, Lukoil will shutter some old wells in West Siberia.
⢠Guyana, where Exxon earlier this year discovered a second major oil and gas deposit, cannot afford to build a refinery to process it. Such a facility would require construction investments of up to $4.4 billion, a figure three times higher than the country's foreign debt. The investment is particularly unattractive at the current international oil prices.
⢠Zimbabwe has run into problems in its attempts to exploit newly discovered coal bed methane reserves. According to a government official, Harare has trouble finding around $12 million to finance geological surveys that would prove the reserves. Estimates peg them at 40 trillion cu m potentially recoverable. If this is proven, it would turn Zimbabwe into the biggest source of gas in Sub-Saharan Africa.
Company News
⢠The Supreme Court of Yukon threw a wrench in the works of Exxon's planned acquisition of InterOil, an energy firm that the U.S. giant was about to buy for $2.5 billion. Initially, the court had greenlighted the deal, but the founder of InterOil and second-largest shareholder, Phil Mulacek, filed an objection on the grounds that the deal would not remunerate shareholders appropriately.