Politics, Geopolitics & Conflict
On Friday, Ukraine was entering its third day of a brazen ground-troop incursion across the border into Russia's Kursk region. Heavy fighting is forcing civilian evacuations and the need for humanitarian aid. Kyiv on Thursday claimed to have taken control of a Russian gas-metering station in Sudzha (Kursk region), the point where Russian gas flows into Ukraine and onto Europe.
In Libya, the NOC has announced a gradual reduction of output for the country's largest oilfield, Sharara, and declared force majeure over protests that have forced operations to start shutting down. As of Tuesday, production had reportedly been reduced from 300,000 bpd to 200,000 bpd. Output from Sharara has been disrupted many times, most recently in January-again, due to protests. On Wednesday, the Tripoli-based Attorney General's Office ordered the arrest of Oil Minister Khalifa Abdul-Sadiq on charges of corruption in connection to a reported 600,000 euros "for the benefit of a foreign company". While the prosecutor has ordered the "Oil Minister's" arrest, it has been unclear for some time who is actually Libya's oil minister in Tripoli. Abdul-Sadiq was only appointed as a temporary oil minister (he had been the deputy) when the Prime Minister suspended Minister Mohammed Oun from the position. After an investigation, Oun was cleared and the suspension was withdrawn. However, the PM then ordered Abdul-Sadiq to refuse to hand control back to Oun. Following…
Politics, Geopolitics & Conflict
On Friday, Ukraine was entering its third day of a brazen ground-troop incursion across the border into Russia's Kursk region. Heavy fighting is forcing civilian evacuations and the need for humanitarian aid. Kyiv on Thursday claimed to have taken control of a Russian gas-metering station in Sudzha (Kursk region), the point where Russian gas flows into Ukraine and onto Europe.
In Libya, the NOC has announced a gradual reduction of output for the country's largest oilfield, Sharara, and declared force majeure over protests that have forced operations to start shutting down. As of Tuesday, production had reportedly been reduced from 300,000 bpd to 200,000 bpd. Output from Sharara has been disrupted many times, most recently in January-again, due to protests. On Wednesday, the Tripoli-based Attorney General's Office ordered the arrest of Oil Minister Khalifa Abdul-Sadiq on charges of corruption in connection to a reported 600,000 euros "for the benefit of a foreign company". While the prosecutor has ordered the "Oil Minister's" arrest, it has been unclear for some time who is actually Libya's oil minister in Tripoli. Abdul-Sadiq was only appointed as a temporary oil minister (he had been the deputy) when the Prime Minister suspended Minister Mohammed Oun from the position. After an investigation, Oun was cleared and the suspension was withdrawn. However, the PM then ordered Abdul-Sadiq to refuse to hand control back to Oun. Following this interference by the PM, Abdul-Sadiq was then arrested on corruption charges. At the same time, it remains unclear whether Sharara was really shut down by protesters with local grievances or by General Khalifa Hafter, who seems to be hashing out some grievances of his with Spain's Repsol, one of the JV partners in Sharara. Just prior to the Sharara partial shutdown, Italian authorities had detained Haftar briefly in Rome on a Spanish arrest warrant related to arms smuggling charges.
The election standoff continues in Venezuela, with Maduro intensifying his campaign of oppression, rounding up activists by the hundreds, blocking social media platforms, and sending security forces door to door.
Discovery & Development
Brazil's state-run oil company Petrobras confirmed a significant natural gas discovery off Colombia's coast, bolstering its exploration efforts in the region. The discovery was made during the drilling of the Uchuva-2 well in the Tayrona block, following a similar find in the nearby Uchuva-1 well in 2022. This discovery could potentially supply Colombia's domestic gas needs and create export opportunities, underscoring the area's gas production potential. Petrobras, holding a 44.4% stake in the project, will continue operations with partner Ecopetrol to further assess the well's capacity by the end of 2024.
CNOOC Ltd. announced a significant gas discovery in the Lingshui 36-1 field in the South China Sea, with reserves exceeding 3.5 trillion cubic feet. The discovery reinforces the region's status as a trillion-cubic-meter gas area, a culmination of 40 years of exploration efforts. Despite geopolitical tensions and U.S. sanctions, CNOOC remains focused on expanding its resource base and contributing to low-carbon energy development.
Harbour Energy is set to begin appraisal drilling on the Kan discovery off Mexico's coast later this month. The UK-based company currently holds a 30% interest in the prospect, which will increase to 70% following the completion of its $11 billion acquisition of upstream assets from Wintershall Dea. The Kan prospect, located in the shallow waters of block 30 in the Salina basin, is estimated to hold 200-300 million barrels of oil equivalent (Mboe). This discovery is situated southwest of the larger Zama field, which is expected to produce up to 180,000 barrels per day at its peak.
Deals, Mergers & Acquisitions
Cheniere has secured a 20-year deal with Portugal's Galp to supply 500,000 metric tons per year of LNG, tied to the expansion of its Sabine Pass terminal in Louisiana. The agreement, linked to Train 8 of the Sabine Pass project, includes early cargo deliveries starting in 2027, with full deliveries expected in the early 2030s. This deal, which supports Cheniere's expansion plans despite regulatory delays, highlights the continued importance of U.S. LNG in Europe's energy landscape. The Sabine Pass expansion aims to add up to 20 million metric tons per year of capacity, reinforcing Cheniere's position as a key LNG supplier to Europe.
Dubai-based engineering firm Sidara has withdrawn its takeover bid for the UK's John Wood Group, citing increased geopolitical risks and market uncertainties. This decision follows Sidara's earlier offer in May, which was raised to 230 pence per share, a 52% premium over Wood's pre-bid price. Wood's board remains confident in its strategic direction and future prospects, emphasizing a focus on generating significant free cash flow. The withdrawal occurs amidst a global market sell-off, driven by fears of a U.S. recession and escalating conflicts in the Middle East.
Quantum Capital Group is set to acquire U.S. independent power producer Cogentrix Energy for approximately $3 billion from the Carlyle Group. This acquisition highlights the growing investor interest in utilities, driven by technological advancements like AI and data centers, which are significantly increasing power demand. Cogentrix, with 5.3 gigawatts of natural gas-fired power plants across key U.S. regions, will continue under its current leadership. The deal, reflecting a strategic bet on rising U.S. energy needs, is expected to be finalized between late 2024 and early 2025.
Harbour Energy is set to finalize its $11 billion acquisition of Wintershall Dea early in Q4 this year. Harbour Energy highlighted that progress on workstreams and approvals related to the acquisition has been excellent, with all necessary regulatory, anti-trust, and foreign direct investment approvals on track. A few remaining approvals, including those from Mexican regulators, are expected to be secured in Q3.
Talos Energy has acquired a 21.4% working interest in the Monument oil and gas discovery in the U.S. Gulf of Mexico for $32 million. Located in Walker Ridge blocks 271, 272, 315, and 316, Monument is a large Wilcox discovery with appraised reserves of around 115 MMboe. The field will be developed as a subsea tie-back to the Shenandoah production facility, with first production expected by late 2026 at a gross rate of 20-30 Mboe/d. The field's proved and probable reserves are valued at approximately $265 million, and there is potential for an additional 25-35 MMboe from adjacent drilling locations.
VAALCO Energy has secured a 25-year production-sharing contract for Block P offshore Equatorial Guinea, targeting over 20 million barrels of oil. The Venus field in this block is set for production by 2026, with peak output expected in 2028. VAALCO also acquired a 27.39% stake in the Baobab field offshore Ivory Coast for $66.5 million, boosting its African operations.