Why Putin Replaced His Top Military Commander

Politics, Geopolitics & Conflict

Russia’s top military commander for the “special operation” in Ukraine has been replaced. General Sergei Surovikin, charged with leading the attack on Ukraine’s energy infrastructure and appointed only three months ago, has been replaced by Valery Gerasimov. Surovikin has effectively been demoted to Gerasimov’s deputy, suggesting Putin is not satisfied with the lack of progress on the ground. There are fears that another change in leadership also suggests new preparations for another invasion, with Ukraine repeatedly warning of the potential for Belarus to serve as a launchpad. Russia is now claiming to have taken control of the Ukrainian salt mine town Soledar after months of battle. Ukrainian officials have countered Russian claims, saying that the announcement is further "information noise".

The controversial MoU that Turkey wrangled with Libya’s Government of National Unity (GNU) in 2019 on a new maritime border that has angered both Greece and Egypt is hitting a new phase of tension. Greece is now very loudly proceeding with exploration and drilling off the island of Crete, where Exxon is operating with the Greeks. This area overlaps with the “common” maritime claims of Turkey and Libya (at least, the part of Libya currently tenuously controlled by the GNU). The Greeks say Exxon is unphased by Turkey and Libya’s GNU and plans to accelerate exploration by a year. At the same time, on Tuesday, a Libyan court suspended an energy exploration deal the GNU signed with Turkey last year as the cold war over the Mediterranean gained momentum. Egypt is also angered by the “common maritime border” deal between Libya’s GNU and Turkey, as it encroaches on its own EEZ. Turkey bought this deal with military aid in the fight against General Haftar’s forces from Libya’s east. It was a great deal for Turkey, which does not share a maritime border with Libya, and cannot without encroaching on Greek and Egyptian EEZ territory. Furthermore, the fact that a Tripoli court has sidelined this deal suggests, once again, that Haftar is gaining momentum with Dbeibah and something is about to give.

Brazil’s far-right supporters of Bolsonaro seem to have lost steam after storming Congress last week, which led to a hard-handed security response. Protesters were claiming fraud in the October 30 elections that led leftist Lula back to the throne. Bolsonaro, who is hiding out in Florida, has fomented protests with warnings that Lula will impose communism.

On Monday, a surge of protests that led to clashes between supporters of former president Pedro Castillo and security forces in Peru ended in 17 deaths and an investigation into President Dina Boluarte’s regime on charges of “genocide”. Following what was the worst night of violence in the country since Casillo was arrested in December, authorities have implemented an overnight curfew in the southeast of the country.

Deals, Mergers & Acquisitions

The Frontline-Euronav merger has turned into quite a debacle. Frontline pulled the plug on the deal earlier this week–the $4.2 billion deal would have created the world’s largest publicly traded tanker company. Euronav is now disputing Frontline’s decision to end the merger and could consider arbitration or even litigation. Frontline remains steadfast in its decision to not go forward.

Norway awarded 47 offshore oil and gas exploration permits in its latest licensing round the country’s oil minister announced this week. Permits were issued to 25 oil and gas firms. The ministry issued 29 permits for the North Sea, 16 in the Norwegian Sea, and 2 in the Arctic Barents Sea. Equinor was the single biggest winner, coming away with 26 licenses–for which it will be operator in 18. The country’s Petroleum Directorate expects the country’s oil output to increase by 6.9% this year.

A massive $21B renewable energy project known as Sun Cable in Australia is now in voluntary administration after shareholders failed to agree on the direction and funding of a plan that would send power to Singapore using a 2,600-mile submarine cable. The company could now look at recapitalization or the sale of the entire business.

New offshore Gulf of Mexico lease sales will take place this quarter now that the BOEM has issued its final environmental impact statement for lease sales #259 and #261. Hundreds of tracts will be up for grabs. The last lease sale was in the fourth quarter of 2021.

Exxon has agreed to sell to Bangchak Corp its controlling stake in Thailand’s local refinery and retail company Esso. Esso and Bangchak are competitors. The sell-off is in line with Exxon’s continued focus on the domestic U.S. market and lower-emissions fuels. Exxon held a 66% stake in Esso. Bangchak will also make an offer for the remaining 34% after regulator approvals are secured.

South Korea’s Hanwha Qcells will invest $2.5 billion in solar panel manufacturing in the United States in what would be what the Biden Administration called the largest solar investment in U.S. history. The project would be able to take advantage of the Inflation Reduction Act, which gives tax breaks for solar power. Hanwha Qcells will expand its operations at its Dalton, Georgia plant and build a new one in Cartersville.

Egypt has awarded Exxon Mobil oil and gas exploration rights to two offshore blocks in the Nile Delta, with Exxon’s Egyptian subsidiary set to operate both blocks, holding 100% interest, and subject to regulatory approval. The blocks cover 11,000 square kilometers.