Politics, Geopolitics & Conflict
Libya continues to unravel, quietly, with indications mounting that rival governments are regrouping for something big. Earlier this week, aided by US intelligence, Italian authorities intercepted a cargo ship suspected of bringing Russian weapons to General Khalifa Haftar in eastern Libya. It is not without reason that his rival, interim prime minister Dbeibah in Tripoli has been growing increasingly nervous-quite publicly. Russia is arming Haftar in return for allowing Moscow to build a port on the Mediterranean coast, which would give it a base with Italy directly in its sites.
On the Russia-Ukraine war front, Ukraine launched a drone attack on a military base in Russia housing Iranian flight instructors. Three people were reportedly killed in the attack. "Red lines" are being crossed on a weekly basis at this point. The Biden administration appears to be moving closer to allowing military contractors to deploy to Ukraine (much like Russia's Wagner), ostensibly to help Ukraine maintain and repair US weapons. After Putin's pomp-and-circumstance visit to North Korea, media was abuzz with news that North Korean troops would be deployed to Ukraine-which was never actually announced by Pyongyang (and this all remains unverified, at best). The U.S. plans to confront Russia at the UN on Friday for supplying arms to North Korea.
A failed coup in Bolivia on Wednesday led to the arrest of more than a dozen military and intelligence…
Politics, Geopolitics & Conflict
Libya continues to unravel, quietly, with indications mounting that rival governments are regrouping for something big. Earlier this week, aided by US intelligence, Italian authorities intercepted a cargo ship suspected of bringing Russian weapons to General Khalifa Haftar in eastern Libya. It is not without reason that his rival, interim prime minister Dbeibah in Tripoli has been growing increasingly nervous-quite publicly. Russia is arming Haftar in return for allowing Moscow to build a port on the Mediterranean coast, which would give it a base with Italy directly in its sites.
On the Russia-Ukraine war front, Ukraine launched a drone attack on a military base in Russia housing Iranian flight instructors. Three people were reportedly killed in the attack. "Red lines" are being crossed on a weekly basis at this point. The Biden administration appears to be moving closer to allowing military contractors to deploy to Ukraine (much like Russia's Wagner), ostensibly to help Ukraine maintain and repair US weapons. After Putin's pomp-and-circumstance visit to North Korea, media was abuzz with news that North Korean troops would be deployed to Ukraine-which was never actually announced by Pyongyang (and this all remains unverified, at best). The U.S. plans to confront Russia at the UN on Friday for supplying arms to North Korea.
A failed coup in Bolivia on Wednesday led to the arrest of more than a dozen military and intelligence officials already on Thursday. The coup was plotted in May and led by a former army chief. Military troops moved toward the main square in the capital city on Wednesday. After attempting to ram the presidential palace doors down, and failing, the arrested coup leader claimed that he had been acting on the president's orders-a scenario that addresses the fact that the coup failed so spectacularly.
Iranian elections are officially underway. If there is no clear majority after Friday's vote, the top two candidates will face off in a second round on July 5.
Discovery & Development
Exxon Mobil Corp. has initiated its seventh oil project in Guyana, aiming to expand crude output into the 2030s. The Hammerhead project, pending approval, is expected to produce up to 180,000 bpd by 2029, significantly boosting Guyana's production capacity to nearly 1.5 million bpd. This project underscores Exxon's commitment to Guyana, a critical region for its post-pandemic recovery, despite environmental criticism.
Also on the Guyana front, CGX Energy and Frontera Energy have formally notified Guyana's government of a potential commercial interest in the Wei-1 discovery located in the offshore Corentyne Block. The Wei-1 well, drilled last year as part of their joint venture, fulfilled Phase 2 obligations and also served as an appraisal for the Kawa-1 program. Supported by investment bank Houlihan Lokey, CGX and Frontera are actively exploring strategic opportunities to unlock the full potential of the block, marking a significant step in their offshore exploration and development efforts in Guyana.
Vår Energi has announced the successful Cerisa oil and gas discovery in production license PL 636 offshore Norway, with estimated gross recoverable resources ranging from 18 to 39 MMboe. Located near the Gjøa platform, this discovery marks the fourth consecutive find in the area, adding to a combined resource potential of up to 110 MMboe when integrated with previous discoveries like Gjøa North and Ofelia/Kyrre. The exploration well and three appraisal wells were drilled by the Deepsea Yantai rig, confirming the absence of an oil-water contact and suggesting potential upside to the resource estimates. Vår Energi plans to integrate Cerisa into existing infrastructure for rapid development, aligning with their strategy to enhance the North Sea as a significant production hub.
Chevron and Equatorial Guinea's GEPetrol have finalized a $2 billion deal through two PSCs for offshore blocks EG-06 and EG-11. These blocks, adjacent to the productive Block B hosting the Zafiro field, aim to rejuvenate Equatorial Guinea's offshore oil and gas sector amid declining production from mature fields. Previously operated by ExxonMobil, the blocks include potential resources from the Acestruz-1 discovery, setting the stage for an intensive exploration and production program that aligns with Equatorial Guinea's strategy to attract investment.
Murphy Oil Corp. aims to commence drilling its first offshore well in Côte d'Ivoire by summer 2025, pending final negotiations with government officials. The company holds significant interests in five deepwater blocks in the Tano basin, covering approximately 1.5 million gross acres, including the Paon discovery previously appraised by Anadarko Corp. Murphy is actively engaging with Ivorian authorities to expedite seismic data acquisition and finalize field development plans ahead of schedule. With high interest from industry players due to adjacent major discoveries, Murphy anticipates favorable terms for potential partnerships to advance its offshore operations in the region.
Deals, Mergers & Acquisitions
Quantum Capital Group has agreed to acquire Caerus Oil and Gas for $1.8 billion, highlighting increased private equity activity in the oil sector post-Covid. Caerus, backed by Oaktree Capital Management, Anschutz Investment Co., and Old Ironsides Energy, operates over 7,400 wells and extensive infrastructure in Colorado and Utah. This acquisition exemplifies the ongoing trend of buyouts in the energy sector, contrasting with the usual corporate buyers of private equity-backed assets. The deal reflects the robust recovery and heightened interest in oil and gas investments driven by rising energy prices.
Abu Dhabi National Oil Company (ADNOC) is advancing negotiations to acquire Covestro, a German polymer producer, with an improved offer of $12.5 billion. This move underscores ADNOC's strategic shift towards specialized chemicals amid the fear of declining demand for traditional fuels. Covestro, known for its polyurethane and polycarbonate products, has 50 production sites and saw a significant sales decline in 2023. ADNOC's interest in European chemical firms reflects a broader trend of oil majors diversifying into resilient chemical sectors
Sempra (SRE.N) has signed a non-binding agreement with Saudi Aramco to supply LNG from Phase 2 of its Port Arthur project in Texas. Aramco plans to purchase 5 million tonnes of LNG annually for 20 years and will invest 25% in the project's equity. This deal marks Aramco's strategic move to expand its global LNG portfolio, enhancing its role in the LNG market amid increasing demand for lower-carbon energy sources. The Port Arthur LNG Phase 2 expansion is part of Sempra's broader strategy to bolster global energy security by exporting U.S. natural gas. With the potential to add up to two additional LNG trains capable of producing 13 Mtpa, the facility aims to become one of the world's leading LNG export hubs.
California Resources Corp., based in Long Beach, is on the cusp of completing its $2.1 billion acquisition of Aera Energy LLC pending final regulatory approvals. This acquisition would position California Resources as California's largest oil producer and significantly boost its carbon storage capacity in Kern County. To fund this strategic move, the company recently closed a $600 million debt offering, with most of the proceeds earmarked to repay Aera's existing debts. Additionally, California Resources is advancing plans to establish a major underground carbon storage facility, anticipating approvals from Kern County and the EPA later this year to support its long-term sustainability goals amid the transition away from fossil fuels.
SM Energy Co. and Northern Oil and Gas Inc. have announced a joint acquisition of assets in Utah's Uinta basin from XCL Resources LLC for approximately $2.6 billion. SM Energy will hold an 80% stake, amounting to a net payment of $2.04 billion, while Northern Oil will acquire a 20% interest for $510 million. This acquisition allows SM Energy to expand its operations into the Uinta basin, known for producing a unique type of waxy oil used in lubricants, complementing its existing presence in the Eagle Ford and Midland basins in Texas. The transaction reflects ongoing consolidation in the U.S. oil and gas sector as companies seek to enhance their drilling portfolios amidst favorable market conditions.
Mitsui & Co., Ltd., through its U.S. subsidiary Mitsui E&P USA LLC, has completed the acquisition of the Tatonka unconventional gas asset in Texas, USA from Sabana, LLC and Vanna, LLC. Spanning approximately 46,500 acres, Tatonka is strategically located near the Gulf Coast industrial area, facilitating access to LNG export terminals and ammonia plants. Mitsui plans to evaluate well performance, develop, and operate the asset with a focus on safety, community engagement, and environmental stewardship, aiming for full-scale development post-2026. This acquisition aligns with Mitsui's strategy to strengthen its natural gas and LNG businesses globally, supporting energy transition initiatives and promoting sustainable development through low-carbon solutions like CCS.