Song of Oil and LNG

🇮🇹 Impact of ESG Pressure on Western Oil and Gas: Eni's Strategic Moves Despite the pressure from ESG and energy transition activists, Western oil and gas companies continue to operate, exemplified by recent developments in Italy. The energy group Eni is considering allocating stakes in several oil and gas projects, including those in Indonesia and Côte d'Ivoire, to secure financing for their development. This tactic is part of Claudio Descalzi's broader strategy to divide Eni's operations into distinct entities or satellites. This restructuring allows investors interested specifically in oil and gas, and those focused solely on low-carbon activities, to invest with clarity about their involvements. Essentially, while the core operations remain unchanged, this strategy facilitates more agile investment management and risk sharing. It also enhances reputation management by highlighting low-carbon energy achievements in markets that value them more than traditional brownfield investments, all the while sustaining or expanding fossil fuel operations. #Italy #ENI @songofoil

🇩🇪 Record High in Germany's Solar Power Production Last week, solar power plants in Germany achieved a new milestone by generating more than 60% of the country's electricity for several hours each day. Data from LSEG reveals that these solar power plants produced 17,531 MWh of electricity in the week leading up to May 13, marking a 40% increase from the previous week and nearly 50% more than the long-term average for the same week. The recent spell of clear and sunny weather contributed to a significant surge in solar energy production, which typically peaks between 12 PM and 1 PM. According to Electricmaps.com, at 1 PM on May 13, solar assets were responsible for generating 43.8 gigawatts (GW) out of the total 72.4 GW of electricity produced in Germany at that time. This substantial output from solar energy accounted for nearly two-thirds of the total electricity generated during that hour, significantly outpacing other sources such as wind farms, which contributed 17%, and coal and gas-fired power plants, which together accounted for 12%. #Gremany #solar @songofoil

🇮🇳 Rising Oil Consumption in India: A Major Driver of Global Demand India is rapidly becoming a pivotal force in global oil consumption dynamics and is poised to surpass China as the leading contributor to oil demand growth by 2030. In the initial four months of 2024, India's oil consumption increased by 3.7 million tons, marking a 4.8% rise compared to the same timeframe in 2023, based on government statistics. This upswing in domestic oil usage translates to an added 220,000 barrels per day (bpd), which is close to the increases observed in the previous years—235,000 bpd in the early months of 2023 and 241,000 bpd during the same period in 2022. The Organization of the Petroleum Exporting Countries (OPEC) projects that India will represent 10% of this year's global growth in oil demand, making it the second largest contributor after China. A significant portion of India’s oil consumption, two-thirds, is concentrated in just three products: diesel (39%), gasoline (16%), and liquefied petroleum gas (LPG) (13%). Other lesser contributors include petroleum coke (9%), naphtha (6%), bitumen (4%), jet fuel (4%), and various other products. Notably, the gasoline sector experienced the most rapid growth, with an average annual increase of 8%, fueled by rising household incomes and a surge in motorcycle and car ownership. #India #oil @osngofoil

🇨🇳🇮🇶China Begins Active Expansion in Iraq's Oil Industry Chinese companies have won four bids to explore Iraqi oil and gas fields, Iraq's oil minister announced on Sunday. The oil and gas licenses for 29 projects are mainly aimed at boosting production for domestic use, with more than 20 companies, including European, Chinese, Arab, and Iraqi groups, pre-qualified. Chinese companies were the only foreign players to win bids, with nine oil and gas fields acquired since Saturday. Iraqi-Kurdish company KAR Group took two. Notably, no major U.S. oil companies were involved, Reuters writes. China's CNOOC Iraq won the bid to develop Iraq's Block 7 for oil exploration, which stretches across the country's central and southern provinces of Diwaniyah, Babil, Najaf, Wasit, and Muthanna. ZhenHua, Anton Oilfield Services, and Sinopec won tenders to develop the Abu Khaimah oil field in Muthanna, the Dufria field in Wasit, and the Leto field in Muthanna, respectively. Iraq is OPEC's second-largest oil producer after Saudi Arabia. #China #Iraq @songofoil

🇹🇷 Turkey Dreams of LNG Wealth The Turkish Parliament has authorized Turkish companies to export liquefied natural gas (LNG). This opportunity may materialize in the coming years, according to sources in the government, as reported by the Turkish newspaper Türkiye. Sources indicate that the Turkish authorities plan to build several new infrastructure facilities, including liquefaction plants, in the coming years. While Turkey produces gas in the Black Sea, these volumes are needed for domestic consumption. For LNG exports, the country intends to buy pipeline gas from its neighbors and then resell it as LNG on the world market at more favorable prices. Pipeline gas could come from Russia, Azerbaijan, and Iran. However, Turkey currently lacks its own liquefaction facilities, and it remains unclear who will build such facilities. Creating a transportation hub, including a gas hub, is a long-standing dream of President Erdogan. Currently, Turkey is a gas importer and, at the end of last year, purchased 50.5 billion cubic meters of gas, of which 30% was LNG. The idea of creating a gas hub in Turkey was proposed by Russian President Vladimir Putin in 2022. Although actively discussed since then, it has yet to reach practical realization. #Turkey #LNG @songofoil

🇵🇱 Warsaw Has Had Enough: Gas Prices in Poland Will Soar by 45% The cost of electricity for ordinary consumers in Poland may increase by 29% from July 1 this year, and natural gas may rise by 45%. After the start of the military operation in Ukraine, Warsaw refused Russian gas ahead of schedule and accused Russia of blackmail after Gazprom cut off supplies to Poland. Now, Poles are receiving disheartening letters from PGNiG. #Poland #gas @songofoil

🌍 ⛽️ Global "Gas Oversupply" Postponed Indefinitely Numerous Western experts had predicted an oversupply of LNG by 2025, but delays in new projects have already pushed their launch dates back. Now, the expected timeline has shifted to 2026. In the U.S., building new export facilities on the Gulf Coast is taking longer than anticipated, impacting the timeline. QatarEnergy's Golden Pass LNG plant in Texas may not be operational in the first half of 2025 due to a shortage of workers. Russia's Arctic LNG-2 project aims to send its first shipment to China this summer as ice levels at the Northern Sea Route decrease. However, US sanctions are likely to prevent the plant from reaching full capacity. Australian exports are also projected to decline next year because of inherited production challenges, while Egypt and Indonesia face similar issues due to production decreases and rising domestic consumption. In contrast, BloombergNEF projects that LNG demand in Europe could rise by over 10% during the summer of 2025 compared to 2024. Meanwhile, Ukraine has declared it won't extend its Russian gas transit agreement past 2025. Consumption in Asia is also climbing. Buyers from developing nations will likely enter the market as Asian prices dip below $10 per million British thermal units. #gas #supply @songofoil

🇪🇺Kiev Consumes European Transformer Supply Amid EU Energy Transition Shortfall Europe is currently facing a shortage of transformers required for modernizing its power infrastructure. This modernization is crucial for expanding renewable energy capacity, but without transformers, the process cannot move forward. The issue arises because all available transformer "stocks" have been redirected to Ukraine. Since 2022, Brussels has sent over 2,700 transformers to Kiev. As a result, European companies now need to reserve this equipment for the coming years. The lead time for fulfilling new transformer manufacturing orders has extended to two years. The scarcity of step-down and step-up electrical equipment is delaying progress towards climate neutrality. In Germany, for instance, the transformer shortage alone has pushed the commissioning of wind generation facilities back by two years. #transformators #EU #enegry @songofoil

🇬🇧🇫🇷🇺🇸 Shell and TotalEnergies Weigh Move to Wall Street Shell and TotalEnergies are considering shifting their stock exchange listings to Wall Street, a decision that would impact the London and Paris markets. Shell currently holds the position of the second-largest company on London's FTSE 100 index, while TotalEnergies ranks as the fourth-largest in the CAC 40 index. Both companies have recently voiced dissatisfaction with the low valuation of their shares compared to U.S. NFPs and are exploring the possibility of relocating their share listings overseas, as reported by Bloomberg. U.S.-listed companies enjoy greater access to capital, and investors are more inclined to invest in European energy companies if they are part of the higher-value U.S. S&P 500 index. #Shell #Total @songofoil

🇸🇦 Saudi Aramco Loses Part of Profit Despite Higher Oil Prices Saudi Aramco, the world's largest oil company, saw its net profit for the first quarter drop by 14.5% year-on-year to $27.27 billion, according to its financial statements. Last year, the company reported a net profit of $31.9 billion in the same quarter. Despite the decline, the average realized oil price in the first quarter of 2024 was higher than the previous year, averaging $83 per barrel compared to $81 per barrel. Earnings before interest and tax (EBIT) also fell, decreasing by 9.1% to $53.7 billion. Additionally, free cash flow dropped from $30.9 billion to $22.8 billion. Capital expenditures rose to $10.83 billion, up from $8.75 billion in the January-March period of 2023. For the first-quarter base dividend, the company will allocate $20.3 billion and pay an additional $10.8 billion to shareholders. Saudi Aramco expects to declare total dividends of $124.3 billion in 2024, including base dividends of $81.2 billion and performance-linked dividends of $43.1 billion. Saudi Aramco adheres to Saudi authorities' decisions to reduce oil production. In the first quarter, Saudi Arabia cut its output by an additional 1 million barrels per day beyond its quota under the OPEC+ agreement. #SaudiAramco #oil @songofoil