Politics, Geopolitics & Conflict
- A missile that hit Poland, near the border with Ukraine, killing two people this week has been walked back from the point of no return, with NATO determining that the missile was not Russian and that there was no intentional Russian attack on Poland–a scenario that evoked the specter of WWIII. NATO, Biden, and Polish leaders have all suggested the missile was Ukrainian. That, however, has been disputed by Ukrainian President Volodymyr Zelensky, who claims they were not of Ukrainian origin.
- No group has claimed responsibility for a blast on a busy Istanbul street that killed six people and wounded dozens of others last Sunday. Turkish authorities are investigating the incident as a “terrorist attack” and blaming the Kurdistan Workers Party (PKK); however, the PKK denies any involvement. A woman–a Syrian national–was believed to have planted the bomb and Turkish authorities claim she confessed to having been trained by the PKK.
- The results of the U.S. midterm elections largely mean that Biden will push ahead with his desired foreign policy goals, which are far easier to push through than policies on the domestic front. It will mean a continuation of the momentum in aiding Ukraine against Russia, for one. Containment of China will likely be kept on a low burn and focus more on dialogue, and there is not likely to be any repairing of relations with Saudi Arabia, while Israel–which…
Politics, Geopolitics & Conflict
- A missile that hit Poland, near the border with Ukraine, killing two people this week has been walked back from the point of no return, with NATO determining that the missile was not Russian and that there was no intentional Russian attack on Poland–a scenario that evoked the specter of WWIII. NATO, Biden, and Polish leaders have all suggested the missile was Ukrainian. That, however, has been disputed by Ukrainian President Volodymyr Zelensky, who claims they were not of Ukrainian origin.
- No group has claimed responsibility for a blast on a busy Istanbul street that killed six people and wounded dozens of others last Sunday. Turkish authorities are investigating the incident as a “terrorist attack” and blaming the Kurdistan Workers Party (PKK); however, the PKK denies any involvement. A woman–a Syrian national–was believed to have planted the bomb and Turkish authorities claim she confessed to having been trained by the PKK.
- The results of the U.S. midterm elections largely mean that Biden will push ahead with his desired foreign policy goals, which are far easier to push through than policies on the domestic front. It will mean a continuation of the momentum in aiding Ukraine against Russia, for one. Containment of China will likely be kept on a low burn and focus more on dialogue, and there is not likely to be any repairing of relations with Saudi Arabia, while Israel–which has now gone very far right–will be closely monitored and recognized as a “new” kind of Israel that may dangerously rock some boats in the Middle East.
- A drone attack on an oil tanker off the coast of Oman was likely intended as an Iranian message to the Israelis following the election of a far-right government and a return to the PM throne of Benjamin Netanyahu. Israel claims that the attack, which it squarely blamed on Iran, was linked to the World Cup in Qatar–a theory we find lacking in feasibility. The tanker targeted was flying a Liberian flag but was affiliated with Israel and transporting oil and gas. No major damage was caused–this was a message.
- Oil giant Kazakhstan will hold presidential elections this weekend, ahead of which authorities say they have thwarted a coup, arresting seven people allied—allegedly—with exiled opposition figure Mukhtor Ablyazov. The incumbent, Tokayev, survived a coup attempt in January this year, with help from Russia. That worked to help solidify his power, despite the fact that he was really only a puppet leader of former long-time Kazakh president Nursultan Nazarbayev. Russia sided with Tokayev and quashed the rebellion, which started initially over fuel price hikes. Nazabayev has been sidelined to a great extent, while Tokayev has consolidated the government and stymied opposition.
Sanctions, Regulations & Assets
- An Italian court has rejected an appeal filed by energy companies against the windfall tax, on the grounds that the court had no jurisdiction in this case. The windfall tax in Italy is 25%, the proceeds of which will be used in part to insulate families and businesses from skyrocketing energy prices.
- The White House is mulling over instituting minimum inventories for diesel to prevent heating oil shortages and keep prices down. Short-term, efforts to fill up storages at a time when diesel inventories are at record lows could trigger further price hikes.
- Poland is set to take over Gazprom’s assets in Poland, specifically, Gazprom’s 48% stake it holds in Europolgaz. Europolgaz happens to own Poland’s segment of the Yamal pipeline. Poland said this takeover will ensure the security of its critical infrastructure used for gas transit. Poland sanctioned Gazprom in September, freezing its assets.
- Germany has also moved to nationalize Gazprom’s subsidiary in Germany, Gazprom Germania–which will now be called Security Energy for Europe GmbH, or SEFE. SEFE controls Germany’s largest gas storage facility in Rehden. The takeover was made possible through an EU Commission aid package for $233 million. Similar to Poland, Germany cited energy security as the main reason for nationalization. Gazprom Germania has been under German control since April.
- Rosneft has delisted its global depository receipts (GDR) from the LSE following sanctions, after announcing its intention to do so last month. GDR holders can convert their securities into deposited shares of Rosneft.
Deals, Mergers & Acquisitions
- Chevron Phillips Chemical and QatarEnergy have reached FID to build an $8.5 billion polyethylene facility in Texas that will be up and running by 2026. It is Qatar’s largest petrochem investment ever. This is the pair’s second partnering, after forming Golden Triangle Polymers Company together in Qatar. This deal is a prime example of energy companies moving toward the plastics side of the oil business, and away from the energy side, in a look to what they see as the brightest future for oil.
- Saudi Aramco is making a huge $7 billion investment in a South Korean petrochemical steam cracking project in Ulsan, called Shaheen. It is Aramco’s largest investment in South Korea. It is the second major petrochemical project in the news this week as oil majors look to tap into a different market for the future.
Discovery & Development
- Freeport LNG has provided this week a root cause for the June 8 incident at its liquefaction facility. Freeport identified the direct cause to a piping segment with cryogenic LNG without proper overpressure protection. The LNG warmed and expanded, boiling the liquid, which expanded and ruptured the pipeline. What everyone wanted to know, however, was not what caused the incident, but when the facility would be back online. This information was absent from the update, and no date has yet been provided as to when the facility will be back up. There were reports this week that some LNG vessels have turned away from the Freeport LNG export plant over the last few days on the expectation that the facility’s restart will be delayed until at least December and possibly later.
- Mozambique has shipped its first LNG this week, produced by Coral South FLNG–Africa’s largest FLNG project, and the world’s second-largest FLNG project. Coral South FLNG is part of Mozambique’s Area 4 mega gas project–a JV with Eni, ExxonMobil, CNPC, ENH, Galp, and KOGAS. Coral South has a capacity of 3.4 million tonnes of LNG per year. The nat gas project will be marketed through BP for 20 years.
- Neptune Energy has discovered hydrocarbons in its Calypso prospect in the Norwegian sea, drilled on the PL938 license. It is not yet known whether the find is commercial. OKEA, Pandion Energy, and Var Energi are partners in the well.
Earnings Beat
- Suncor Energy raised its quarterly dividend by 11% to $0.52 per common share on the back of operational improvements across its asset base, realization of free funds flow improvements, capital discipline, and share buybacks. The dividend will be payable December 23 for holders as of December 2.
