Politics, Geopolitics & Conflict
While the battle rages on in Sudan between the military and a paramilitary group called the Rapid Support Forces (RSF), the big question for oil market observers is whether the fighting will negatively impact land-locked South Sudan’s oil exports. For now, this remains secure because the two fighting sides need it to be so, and they have largely divided up these spoils indirectly, with the RSF said to control one of the country’s two refineries (Al Jaili), while the Sudanese military controls the other. The RSF seized this reinsert in late April, along with a major power plant next door. There is no desire to disrupt South Sudan’s oil. The goal is to control the energy resources for leverage.
Russia and Iran have signed a deal to build a railway as part of a transport corridor the two countries say could rival the Suez Canal. The deal for the financing and construction of the North-South part of what has been named the Rasht-Astara railway will connect India and Azerbaijan to Iran and Russia via both rail and sea; hence the veiled threat to Western oil markets that this would rival the Suez Canal. This comes as tensions heat up in the Persian Gulf with tit-for-tat seizures of oil tankers by Iran and the U.S. Earlier this week, Iran seized a third tanker while Washington worked to boost its naval presence in the Gulf region.
Rival prime minister Fatih Bashagha’s days are numbered. This week, Libya’s…
Politics, Geopolitics & Conflict
While the battle rages on in Sudan between the military and a paramilitary group called the Rapid Support Forces (RSF), the big question for oil market observers is whether the fighting will negatively impact land-locked South Sudan’s oil exports. For now, this remains secure because the two fighting sides need it to be so, and they have largely divided up these spoils indirectly, with the RSF said to control one of the country’s two refineries (Al Jaili), while the Sudanese military controls the other. The RSF seized this reinsert in late April, along with a major power plant next door. There is no desire to disrupt South Sudan’s oil. The goal is to control the energy resources for leverage.
Russia and Iran have signed a deal to build a railway as part of a transport corridor the two countries say could rival the Suez Canal. The deal for the financing and construction of the North-South part of what has been named the Rasht-Astara railway will connect India and Azerbaijan to Iran and Russia via both rail and sea; hence the veiled threat to Western oil markets that this would rival the Suez Canal. This comes as tensions heat up in the Persian Gulf with tit-for-tat seizures of oil tankers by Iran and the U.S. Earlier this week, Iran seized a third tanker while Washington worked to boost its naval presence in the Gulf region.
Rival prime minister Fatih Bashagha’s days are numbered. This week, Libya’s eastern-based parliament voted to suspend him and install finance minister Osama Hamada in his place. Bashagha, who was appointed PM last year but then never managed to take the capital, Tripoli, and oust rival interim prime minister Dbeibah, has outlived his usefulness in Libya’s political jockeying. Bashagha initially had the support of Libyan strongman General Khalifa Haftar of the east. What does this now mean for the Government of National Unity (GNU) in Tripoli, currently led by Dbeibah? That remains unclear at this time. The deal that led to the suspension of Bashagha was brokered by the UAE, and this venue remains a game of external control. What is clear is that this does not remove the east-west rivalry. Bashagha was merely a useful pawn for Haftar and his allies. Using Bashagha, they managed to get Dbeibah in Tripoli to oust long-time National Oil Company (NOC) chairman Mustafa Sanalla from his post and install a more friendly figure, among other things.
Deals, Mergers & Acquisitions
More Permian deals. Vital Energy has struck a $540 million deal to purchase Forge Energy II Delaware assets in the Delaware Basin, strengthening VItal’s position in the Permian. Vital Energy is purchasing a 70% stake, while the remaining 30% stake will be purchased by an unnamed third party. When complete, Vital Energy will hold leases for nearly 200,000 acres in the Permian. Forge Energy II Delaware is a portfolio company of EnCap.
QatarEnergy awarded an EPC contract worth a whopping $10B to a JV comprising Technip Energies and Consolidated Contractors Company for the development of the North Field South gas reserves. The deal will include two LNG trains with a combined 16 MTPA. The LNG trans and the North Field East expansion will boost Qatar’s production to 126 MTPA, up from 77 MTPA now. The project also includes one of the largest carbon capture and sequestration facilities.
Discovery & Development
BP is drilling a wildcat well off the coast of Canada in a remote location. BP is increasing its activity for exploring and drilling in frontier prospects in order to stop hemorrhaging oil and gas output. For years, BP has focused its attention on renewables and cutting carbon emissions. Oil and gas prices have been tempting for oil companies, and a further industry shift away from focusing on climate issues and toward energy security has made it even more tempting.
Libya’s NOC and Russia’s Tatneft have found oil in Area 82 of Block 4 just south of Tripoli. It is the third discovery made in the Block. The achieved flow rate is estimated at 1,870 barrels per day. Tatneft is operator with 10.5% interest, with NOC holding the remainder. Tatneft signed a PSA with NOC for the block in 2005.
Petrobras made a find in an exploratory well in the offshore Santos basin in the Aram block from well 3-BRSA-1387D-SPS in water 1.2 miles deep. Petrobras claims the well samples to be of excellent quality with low levels of contaminants, but says they are being analyzed for further information.
Regulatory Updates
The Biden Admin completed its court-ordered review of a law that will allow the Nevada huge Thacker Pass lithium mine in Nevada to be constructed. The mine has drawn the ire of conservationists and tribal leaders. The ruling allows construction to begin while the Bureau of Land Management provides proof that the company has the mineral rights that will allow it to dump waste rock and tailings onto adjacent federal land.
