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ExxonMobil in talks to divest French refining, retail business Esso

ExxonMobil has started exclusive talks with Canadian fuel retailer North Atlantic over the sale of its stake in its French subsidiary Esso, including its Gravenchon oil refinery, the company announced on May 28.

A statement from ExxonMobil said it is negotiating with North Atlantic France over the acquisition of its entire 82.89% stake in the Esso business and its assets, including the 240,000 b/d refinery it operates in Normandy.

The companies are also discussing the sale of a 100% stake in ExxonMobil Chemical France, the statement said.

Subject to regulatory approval, the deal is expected to close in Q4 2025, after which North Atlantic will file a mandatory tender offer for the remaining shares of Esso SAF.

The Esso business is responsible for roughly 20% of the active refining capacity in France through its operation of Gravenchon and separate lubricants plant, according to its estimates.

Across the country, Esso also markets fuel and lubricants through a branded reseller network of around 750 sites.

In a new landing page on its website, North Atlantic set out aims to develop a “green energy hub” at Gravenchon with new low-carbon fuels and renewables projects, adding that the site is well-positioned to serve energy-intensive industries like data centers.

North Atlantic’s retail business in Eastern Canada and French territories Saint Pierre and Miquelon could also offer offtake certainty for the refinery, the company said, supporting strong utilization rates.

French divestments

For ExxonMobil, the Esso deal marks the culmination of a string of French divestments as it has concentrated on its US and Asian assets.

In 2024, the company began significantly downsizing its French downstream business, closing its chemicals operations in Gravenchon and later selling its 140,000 b/d Fos-sur-Mer refinery to a Trafigura-backed joint venture.

Completion of the Esso deal will leave ExxonMobil with just four remaining refinery stakes in Europe: Antwerp, Rotterdam, Fawley, and Germany’s MiRO.

Once a key asset for Exxon, Gravenchon attracted significant investment at the beginning of the decade, boosting yields of high-value products and helping it capture market share when rival Grandpuits stopped operating in 2021.

As France’s second-largest refinery, the site benefits from a direct pipeline connection to Paris airports and export flexibility from the nearby Le Havre terminal.

Nonetheless, the closure of the Gravenchon steam cracker signaled fading appetite from ExxonMobil to continue operating the site long-term, closing off the opportunity to capitalize on stronger petrochemicals integration as fossil fuel demand stalls.

In its statement, ExxonMobil said that the proposed sale aligns with its wider strategy, but stressed that Europe remains an “important region” for the business.

“ExxonMobil has been operating in France for over 120 years, and we plan to maintain a significant commercial presence with the Esso brand,” said Tanya Bryja, senior vice president of ExxonMobil Product Solutions.

Meanwhile North Atlantic CEO Ted Lomond called the acquisition a “pivotal moment” for the Canadian company to establish a European presence for the first time.

“We are eager to consolidate Gravenchon’s role as a vital center of French energy and industry for decades to come and grow North Atlantic into a premier transatlantic energy company,” he said.

European contraction

Analysts have warned that the exodus of IOCs from the European refining sector could precede a structural decline in margins around the turn of the decade.

According to an analysis by S&P Global Commodity Insights, ExxonMobil has already slashed its European refining capacity by around a third since 2000, mirroring downsizing by competitors such as Shell.

And as European producers eye rising operating costs and stalling oil demand, new global competitors in the Middle East, Latin America and West Africa promise to accelerate another wave of closures. Based on surplus capacity alone, the International Energy Agency sees at least 1 million b/d of European refining capacity at risk of closure by 2030.

After selling its Italian Augusta and Sarpom refineries and closing its 116,000 b/d Slagen site in Norway in 2021, ExxonMobil recently tried and failed to shed its stake in Germany’s largest refinery, MiRO, only to be blocked in court by co-owner Shell.

The exit of established refiners has encouraged smaller energy players and traders to venture into the sector, often with the aim of transforming assets to reduce their emissions.

Experts have warned that only investors with deep pockets, such as major commodity traders, will be equipped to properly fund billion-dollar decarbonization projects. However, Commodity Insights oil analyst Samy Tamarat said the transaction could signal a “potential lifeline” for Gravenchon.

“While the company’s low-carbon fuels ambitions will require significant investment, it will ensure the site has a future in a market where demand for traditional refined oil products is declining,” he said.

The completion of the Esso deal will include conditions to ensure continuous crude oil supply for Gravenchon and lasting purchase agreements for ExxonMobil, the company statement said. The deal valued Esso shares at Eur 149.19 ($168.86) per Esso share, before adjustments for changes in inventory value, cash payouts and other changes.

By Kelly Norways , Spglobal / May 28, 2025

Saudi’s refining boom helps it weather oil price war

 Saudi Arabia has been cranking up oil refining operations to capture strong profit margins, helping the kingdom offset revenue lost from declining crude prices and exports.

The world’s top oil exporter has in recent years invested heavily in expanding and modernizing its refining and petrochemical capacity at home and overseas to meet growing demand for fuel and plastics while also securing outlets for its crude oil.

Saudi Arabia has nine local refineries with a combined capacity of 3.33 million barrels of oil per day (bpd), accounting for roughly 3% of global demand, which are configured to process its domestically produced crude oil. It operates another 4.3 million bpd of refining capacity abroad, including in China, the United States and Malaysia.

The kingdom’s domestic refineries processed 2.94 million bpd in March, the highest-ever volume for that month and only a smidgen below the record high of 2.96 million bpd in April 2024, according to data from the Joint Organizations Data Initiative (JODI).

The 12% monthly increase in refining crude intake in March was 23% above the 10-year average for the same period. It correlates with a 12% month-on-month drop in Saudi crude exports to 5.75 million bpd in March, according to the data, highlighting the kingdom’s flexibility between directly selling crude to other refiners and refining it itself.

Saudi refinery rates likely declined by around 200,000 bpd in April due to planned plant maintenance, but should remain at elevated levels ahead of peak summer demand season, according to Keshav Lohiya, CEO and founder of analytics firm Oilytics.

Saudi’s refined product exports, which include diesel, gasoline, jet fuel and fuel oil, rose to a record 1.58 million bpd in March, before declining to 1.48 million bpd in April and 1.42 million bpd so far in May, according to data from ship tracking firm Kpler, likely reflecting refinery turnaround.

FLEXIBILITY

This integrated strategy offers Saudi Aramco (2222.SE), opens new tab, the country’s national oil company, an effective way to manage oil price volatility as refining margins – the profit made by processing crude oil into transportation fuels and chemicals – typically rise when feedstock prices decline.

By Ron Bousso / May 27, 2025

Commodity Traders are the Market Makers of a New Era

As geopolitical instability, sanctions, and supply chain shocks become commonplace, physical commodity traders have emerged as indispensable agents to maintain the flow of energy, food, and raw materials.

By leveraging political and commercial networks, as well as centuries of collective trading experience, they act as the market’s shock absorbers – responding to disruptions in real time, frictionlessly reallocating supply where it is needed. Fragmented global trade, regional rivalries and resource nationalism have not diminished their relevance. On the contrary, commodity traders are now more important than ever.

Arbitrage is a core function for traders and plays an important market stabilizing role. When volatility occurs through supply glut, shipping bottlenecks, or panic, traders smooth the curves by injecting liquidity, rerouting cargoes or drawing on inventories. If Brent crude drops due to excess North Sea production while American WTI holds firm amid constrained US supply, traders seize the spread and, in doing so, nudge prices closer together. When shipping routes are upended – say, by Houthi missile attacks in the Red Sea or insurance premiums surging around the Strait of Hormuz – savvy operators reroute cargoes, adjust freight bookings and ensure the crude still reaches a willing refinery, albeit at a different margin.

Contango, where future contract prices exceed spot, has become increasingly common amid uncertainty over demand and storage availability. Traders with secure access to storage terminals are well placed to benefit. By purchasing commodities at current deflated rates and selling them forward at a premium, they effectively monetize time. While financially savvy, these strategies also temper price swings that would otherwise send markets into panic. By storing excess supply now, they reduce glut; by releasing it later, they prevent scarcity.

Related: The Case Against Fixing the Grid (Again)

Natural gas markets, particularly liquefied natural gas (LNG), have showcased this dynamic more vividly than any other. Europe’s scramble to replace Russian pipeline gas in 2022 created arbitrage windows so wide that traders with proper infrastructure reaped windfalls. LNG cargoes enroute to Asia were diverted mid-ocean to European terminals offering triple the price. When prices normalized, contango set in, and traders stored gas for seasonal release. This provided not only commercial benefit but also strategic breathing room for European governments. In one emblematic case, Trafigura signed a multi-billion-dollar agreement to supply German utilities with American LNG, effectively substituting Russia’s Gazprom. While governments passed legislation and held emergency meetings, it was trading desks that delivered energy where it was needed.

Recent Middle East instability, coupled with rising demand for natural gas across Asia, has amplified the premium placed gas market flexibility. Firms with access to deep storage and shipping capacity have found themselves well placed to respond. BGN, a well-known mid-market trader, has grown into a significant player in both LPG and LNG and its operations considerably reduce gas market volatility. It is also eyeing new gas developments in Africa as the continent experiences a gas demand boom thanks to growing economies.

“Across major African economies — South Africa, DRC, Nigeria, and Egypt, for example — there’s a clear and immediate demand for cleaner transition fuels like gas and LPG. As booming populations and rising economies put real pressure on inefficient, polluting biomass, we’re hearing louder and louder calls from Africa’s growing middle class for cleaner and more efficient fuels,” said BGN’s CEO, Rüya Bayegan.

BGN’s sprawling infrastructure footprint – spanning major production and demand hubs – enables it to absorb cargoes during oversupply and release them when and where demand increases. Well-positioned trading firms are positioned not only to reduce global gas disruption impacts, but to profit from their efforts.

The same applies to oil. Whether due to OPEC supply cuts or increases, embargoes or conflict – it is often traders who step in. Redirection of Russian oil following Western sanctions could have sparked a supply crunch. Instead, commodity traders sourced appropriate replacements for Europe. In more precarious environments, traders venture where major oil companies or state firms hesitate.

In metals and minerals, the narrative is similar. As the energy transition gathers pace, critical minerals such as cobalt, lithium, and rare earths have become strategic commodities. China’s recent curbs on mineral exports exposed the fragility of global supply chains. In response, commodity traders have moved swiftly to source alternatives. Trader Glencore, for instance, has forayed into cobalt in the Democratic Republic of Congo, operating two cobalt and copper mines that offer Western clients an alternative to Chinese-backed supply. Another example of traders entering territory where government are hesitant to enter. Traders’ agility and willingness to assume political risk ensures that vital inputs for batteries, solar panels, and semiconductors continue to circulate. As the West furthers its strategy to pivot away from Chinese-controlled critical mineral deposits, resource-rich African nations will likely open their doors to transparent and compliant traders and help launch news economic booms. 

Traders thrive in volatility. But in profiting from arbitrage, they prevent far worse outcomes: empty supermarket shelves, blackouts, and soaring petrol and diesel prices. Their gains are the cost of resilience. Traders act without public mandate, but often with great speed and precision. Their absence would expose markets to greater fragility. As long as the world depends on natural resources to prosper, commodity traders will remain the quiet architects of stability in an otherwise unruly system.

By Jose Chalhoub, Oilprice – May 12, 2025

Morgan Stanley Predicts Slump in Big Oil Profits

Earnings at the biggest international oil companies are set to slump later this year and in 2026, threatening the pace of buybacks, as a substantial oil market surplus would weigh on prices.  

Last week Morgan Stanley joined other major investment banks in slashing oil price forecasts amid expectations of a larger market surplus later this year as OPEC+ plans to raise output much more than previously expected.

Morgan Stanley cut its oil price forecasts for the remainder of the year, anticipating a bigger glut. The bank revised down its projection of Brent Crude prices to $62.50 per barrel in the third and fourth quarters of this year, down by $5 per barrel from the previous forecast. 

Now the bank expects Brent prices to fall below $60 per barrel by the first half of 2026 due to tariff-driven demand weakness and supply growth from OPEC+ and non-OPEC+ producers, according to a more recent note cited by Reuters. 

Due to the expected weaker prices, Morgan Stanley expects buybacks at Big Oil to be reduced by between 10% and 50%, with net debt at the international majors rising. 

Shell is the top pick of Morgan Stanley among the European majors, while BP was downgraded to “underweight” from “equal-weight”, as its debt ratio leaves it more vulnerable to changing macro conditions. 

TotalEnergies, the French group, could see lower volatility in earnings, due to its higher integration along the value chain, according to Morgan Stanley. 

During the first-quarter earnings, the majors maintained their dividend and shareholder distribution policies as most met or exceeded analyst expectations of first-quarter profits. 

BP and Chevron reduced the pace of their share buybacks for the second quarter, but the others, Exxon, Shell, and TotalEnergies, maintained their guidance on repurchases despite the slump in oil prices at the start of the second quarter. 

By Tsvetana Paraskova for Oilprice.com

Due to the expected weaker prices, Morgan Stanley expects buybacks at Big Oil to be reduced by between 10% and 50%, with net debt at the international majors rising. 

Shell is the top pick of Morgan Stanley among the European majors, while BP was downgraded to “underweight” from “equal-weight”, as its debt ratio leaves it more vulnerable to changing macro conditions. 

TotalEnergies, the French group, could see lower volatility in earnings, due to its higher integration along the value chain, according to Morgan Stanley. 

During the first-quarter earnings, the majors maintained their dividend and shareholder distribution policies as most met or exceeded analyst expectations of first-quarter profits. 

BP and Chevron reduced the pace of their share buybacks for the second quarter, but the others, Exxon, Shell, and TotalEnergies, maintained their guidance on repurchases despite the slump in oil prices at the start of the second quarter. 

By Tsvetana Paraskova for Oilprice.com / May 12, 2025

Warren Buffett Is Selling Apple Stock and Buying This Magnificent Oil Stock Instead

Warren Buffett finally did it. After making a monster investment in Apple (NASDAQ: AAPL) many years ago and watching it appreciate by multiples of his cost basis, the legendary investor is trimming Berkshire Hathaway’s (NYSE: BRK.B) stake. According to filings with the SEC, Buffett has sold approximately half of Berkshire’s stake in Apple, raising around $80 billion in cash. Yes, that’s how big a winner Apple was for the company.

What is he doing with all this cash? The largest stock purchase for Berkshire Hathaway in the second quarter was Occidental Petroleum (NYSE: OXY). Here’s why he is selling Apple and buying this oil stock instead.

Expanding Apple valuation

Apple has made its investors a fortune over the last few decades. After releasing the revolutionary iPhone — perhaps the most successful single product in history — its stock has generated huge returns for shareholders. Total return in the last 10 years alone is close to 1,000%.

While that is all fine and dandy, today the company is seeing stagnating revenue growth amid market saturation for smartphones. Revenue has essentially been flat over the last few years as fewer people have upgraded to new iPhones, which is the only true needle mover for the company. It has struggled to innovate and convince people to buy new phones while battling a consumer recession in China. Recent products such as the Apple Vision Pro look like flops so far, and the company has fallen behind in artificial intelligence to competitor Alphabet.

Stagnating sales are coupled with an expanded earnings multiple. Apple’s price-to-earnings ratio (P/E) is now closing in on 35, which is wildly expensive for a low-growth business. Given Buffett’s intense focus on valuation in his investment process, it is no surprise to see him unloading his shares in the iPhone maker. The upside doesn’t look too appetizing at these levels.

A cheap oil stock?

Buffett’s biggest purchase last quarter was in Occidental Petroleum. Berkshire Hathaway owns a whopping 27.25% of Occidental’s outstanding shares, making it the largest shareholder by far in the company.

Why is Buffett attracted to the stock? First and foremost is the valuation. Oil and gas companies have been neglected by investors for years as they focus on exciting technology companies. Occidental Petroleum trades at a P/E of 12.6, which is around one-third that of Apple. The company is one of the largest oil producers in the United States, with over 82% of its production coming from domestic sources. This makes it less risky than other oil companies that have to deal with adversarial foreign governments.

Occidental can also play as a hedge for oil prices. Rising oil prices can be inflationary and affect other parts of the economy and the Berkshire Hathaway portfolio. If oil prices rise, Occidental Petroleum will benefit, but likely hurt the earnings power of Berkshire’s railroad subsidiary by increasing input costs. This way, Berkshire Hathaway is playing both sides of the situation. No matter what happens, it comes out on top.

Even better for Buffett, Occidental trades at a cheap P/E when oil prices are falling. The current level for crude oil is $68 a barrel, which is well off the highs of around $100 a barrel or higher in 2022. If the price of oil starts to rise again, Occidental’s earnings power will rise too.

A lesson in the risk-free rate

With his selling of Apple and buying of Occidental Petroleum, Buffett is giving investors an important lesson in the risk-free rate and how it can affect your investing decisions.

Today, Berkshire Hathaway has a cash pile approaching $300 billion sitting in short-term U.S. Treasury bills. These bills earn around 5% in yield every year and can be considered the risk-free rate for investors. Why? Because you can compare them to the earnings yield of other stocks in your portfolio.

An earnings yield is the inverse of the P/E and tells you how much in earnings you are yielding each year from a company, based on the current stock price. Apple’s earnings are not growing, and it has a P/E of close to 35. Invert that P/E, and you have an earnings yield of 2.9%. Buffett is saying he would rather own Treasury bills than get a 2.9% yield owning Apple stock.

But what if we look at Occidental Petroleum’s earnings yield? Take one divided by 12.6, and its earnings yield is 7.9%. That is much higher than the current Treasury yield. While it’s not the entire story for any stock, comparing the earnings yield to the risk-free rate is a good way to gauge whether you should buy the stock. This likely came into consideration when Buffett was selling Apple and buying shares of Occidental Petroleum.

By: Brett Schafer for The Motley Fool / October 03, 2024.

China’s cracker expansion to drive LPG storage growth

China’s LPG storage capacity is expected to expand again in 2025 after it continued to grow in 2024, the latest Global LPG Storage Survey finds. But whereas the expansion of the past five years has been driven by the country’s investment in propane dehydrogenation (PDH) projects, next year’s increase is supported by facilities built to serve new ethylene steam crackers.

China’s PDH capacity reached 22.6mn t/yr by the end of September, up 237pc from 6.7mn t/yr at the end of 2019. This has necessitated a significant increase in propane imports as well as domestic refrigerated LPG storage capacity for VLGC deliveries, which rose 159pc to 5.7mn t from 2.2mn t. The number of import terminals that can be served by VLGCs has grown to 41 from 23 since 2019.

China’s PDH expansion is expected to slow next year owing to sustained negative production margins. Yet the country’s LPG storage capacity is yet again on course to rise, by 330,000t to 6.1mn t, backed by projects tied to new crackers. Domestic petrochemical producers believe LPG will be more competitive than naphtha in terms of cost over the long term, and are consequently building crackers designed to use the feedstock, including ExxonMobil’s 1.6mn t/yr cracker in Huizhou, and BASF’s 1mn t/yr cracker in Zhanjiang.

Ethane imported from the US is likely to be even more competitive than LPG or naphtha, resulting in a crop of new ethane-fed cracker projects as well as conversions of existing units, supporting the development of ethane import terminals and storage capacity. Huatai Shengfu’s 600,000 t/yr cracker in Ningbo will switch one of its propane furnaces to ethane use by the end of this year, converting its VLGC terminal into an ethane dedicated one. The 320,000 b/d Shenghong Petrochemical and 800,000 b/d Zhejiang Petroleum and Chemical integrated refineries also plan to develop new ethane terminals in the medium term. China’s ethane storage capacity is forecast to rise by 320,000t to 760,000t by the end of 2025 as a result.

By: Market: LPG, 02/10/24

Port of Rotterdam’s Throughput Drops Amidst Global Challenges

The Port of Rotterdam is feeling the impacts of global geopolitical and economic upheavals, posting a decline in total cargo throughput and recording a near-flat change in revenues last year. For Europe’s busiest port, Russia’s war in Ukraine and the resultant sanctions, changing energy needs dynamics in Europe, weakening economic growth and faltering global trade have conspired to create a slump in performance.

In 2023, Rotterdam recorded a 6.1 percent decline in total cargo throughput, moving 438.8 million tons compared to 467.4 million tons in 2022.

The fall was mainly seen in coal throughput, containers and other dry bulk. The port still had a “stable year financially” after revenue posted a marginal increase of 1.9 percent to $909 million.

For Rotterdam, the clouds of uncertainty that started gathering in 2022 continued last year. After demand for coal rose sharply in Europe due to concerns about energy security and large increases in gas prices in 2022, last year saw more stability and a transition to LNG.

Coal throughput at the port fell by 20.3 percent to 23.1 million tons, mainly because of low demand for coal for power production. Decline in coal had the biggest impact on dry bulk throughput, which plunged by 11.8% to 70.6 million tons compared to 80 million tons in 2022.

Slowing economic growth in Europe also hit the segment, causing a striking decrease of 49.4 percent in other dry bulk.

In liquid bulk, overall throughput was 3.4 percent lower last year, down to 205.6 million tons compared to 212.7 million the previous year. Crude oil fell by 1.4 percent with the discontinuation of ship-to-ship transshipment.

On the flipside, increase in LNG imports as Europe moved to replace pipeline imports of Russian natural gas saw throughput increase by 3.7 percent to 11.9 million tons from 11.4 million tons the previous year. The port also saw more LNG bunkering activity.

Container throughput was noticeably down. Owing to lower consumption, lower production in Europe and the discontinuation of volumes to and from Russia due to sanctions, the number of TEU handled fell by seven percent to 13.4 million, down from 14.4 million the previous year. Roll-on/roll-off traffic fell by five percent, with the weak UK economy and lagging consumption being the main causes.

“2023 saw ongoing geopolitical unrest, low economic growth due to higher interest rates and faltering global trade, all of which had a logical effect on throughput in the port of Rotterdam,” said Boudewijn Siemons, Port of Rotterdam Authority CEO.

Despite facing a turbulent year, which the authority expects to continue this year in what is already shaping up as unpredictable, Rotterdam is advancing investments to transition the port to a sustainable facility. Last year the Port Authority invested a total of $319.5 million on key projects. Key investments are also lined up for implementation this year, some of which are critical in Rotterdam’s energy transition ambitions

BY THE MARITIME EXECUTIVE / February 21, 2024

Occidental Petroleum Eases Permian Basin Focus As Warren Buffett Buys More Shares

Warren Buffett-backed Occidental Petroleum (OXY) reported a stronger-than-expected fourth-quarter performance late Wednesday. Shares inched higher in premarket trade.

Occidental Petroleum saw fourth-quarter earnings fall 54% to 74 cents per share, slightly better than FactSet consensus of 71 cents. Revenue dipped 12.7% to $7.172 billion. Analysts had predicted sales totaling $6.95 billion, according to FactSet.

Occidental Petroleum stock shed 0.5% Wednesday, ahead of earnings. In Thursday’s premarket action, shares edged a fraction higher. OXY stock has slumped below its 200-day and 50-day moving averages to begin 2024, after climbing to nearly 67 in October 2023.

U.S. oil prices eased slightly to $76.50 per barrel, as markets weigh ongoing tension in the Middle East and concerns over China’s economy.

Occidental’s results come after energy giants Exxon Mobil (XOM) and Chevron (CVX) both closed the door on 2023 with mixed earnings and revenue reports. Meanwhile, for the 2024 year, both supermajors forecast nearly flat oil production compared to 2023 levels with focus on shareholder returns.

Chevron increased its quarterly dividend 8% to $1.63, from $1.51 after buying back 5% of it stock in 2023. Exxon Mobil and Chevron handed out a combined $58.7 billion to shareholders last year and expect to continue this focus in 2024. Warren Buffett has a nearly 5.9% stake in CVX.

Occidental Petroleum: Oil Supply
The top Permian Basin outfit produced 1.2 million barrels of oil equivalent per day in Q4, about 7,000 bpd higher than in Q4 2023 and just above company guidance.

The company targeted Capital expenditures of between $6.4 billion and $6.6 billion. That included a $320 cut to shale and exploration spending, as well as idling two Permian Basin drilling rigs, while increasing spending in the Gulf of Mexico. Analysts had targeted capex of $7 billion.

Last week, OXY Chief Executive Vicki Hollub warned there could be an oil supply shortage by 2025 as the world fails to replace crude reserves.

“We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” Hollub told CNBC at the Smead Investor Oasis Conference in Phoenix, on Feb. 5.

Occidental Petroleum produced 1.22 million barrels of oil equivalent per day in Q3, up 3% compared to last year and exceeding the midpoint of its guidance.

In November, OXY slightly raised its full-year production guidance. This came after the company forecast average full-year production of 1.210 million barrels of oil equivalent per day at the end of Q2.

In Q1, OXY predicted full-year production to average 1.195 million barrels of oil equivalent per day. Management previously expected 2023 production to average 1.18 million barrels of oil equivalent per day, keeping production mostly flat compared to the 1.16 million in 2022.

Warren Buffett Keeps Buying OXY
Warren Buffett’s Berkshire Hathaway (BRKB) reported late Wednesday it had increased its stake in Occidental by 8.74% during the fourth quarter, adding more than 19.5 million shares.

In early February, ahead of earnings, Warren Buffett had also loaded up on Occidental Petroleum stock. Buffett spent around $245.7 million on more than 4.3 million shares of OXY between Feb. 1 and Feb. 5, with a price range of 56.75 to 57.98, according to a regulatory filing last week.

In December, Warren Buffett also spent $588.7 million on more than 10 million shares of OXY stock, with a price range of 55.58 to a fraction more than 57, in the days following the energy company’s $12 billion acquisition of Permian Basin producer CrownRock.

Through the latter half of 2022 Buffett loaded up on OXY, with the billionaire investor targeting shares in the $57-$61.50 price range. Warren Buffett’s Berkshire substantially increased its stake in the international oil play over the past year, putting OXY among Buffett’s top holdings.

MarketSmith charts show OXY stock finding price support around the 55-57 range, dating back to June 2022.

Buffett Bets On Big Oil
As of February, Berkshire Hathaway held a 28.3% stake in Houston-based Occidental Petroleum, according to FactSet. In August 2022, the Federal Energy Regulatory Commission granted Berkshire Hathaway approval to purchase up to 50% of available OXY stock.

However, Warren Buffett told shareholders in early 2023 he has no intention of taking over the company. Ahead of Occidental Petroleum Q3 earnings in early November, between Oct. 23-Oct. 25, Berkshire added 3.92 million OXY shares. Buffett made those OXY buys at a share price between 62.68-63.04, according to regulatory filings.

Occidental stock has an 18 Composite Rating out of 99. The Warren Buffett stock also has a 26 Relative Strength Rating and a nine EPS Rating.

By Investors / KIT NORTON , 02/15/2024.

Shell expects 50% rise in global LNG demand by 2040

Global demand for liquefied natural gas (LNG) is estimated to rise by more than 50% by 2040, as China and countries in South and Southeast Asia use LNG to support their economic growth, Shell said on Wednesday.

The market remains “structurally tight”, with prices and price volatility remaining above historic averages, constraining growth, the world’s largest LNG trader said in its 2024 annual LNG market outlook.

Demand for natural gas has peaked in some regions, including Europe, Japan and Australia in the 2010s, but continues to rise globally, and is expected to reach around 625-685 million metric tons per year in 2040, Shell said. That is slightly lower than Shell’s 2023 estimates of a global demand increase to 700 million tons by 2040.

“While things are relatively balanced and seemed relatively comfortable today, the market is still quite fragile,” Steve Hill, executive vice president for Shell Energy, told analysts on a call following the outlook report.

“We have a structurally tight market that’s been balanced by near-term market weakness for where we see fragility and volatility continuing,” Hill said.

CHINA DOMINANCE

Shell said that global demand for LNG is estimated to rise by more than 50% by 2040, as China and countries in South and Southeast Asia use LNG to support their economic growth.

China, which in 2023 overtook Japan as the world’s top LNG importer, is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas, the report said.

“China is the market that we are most bullish about this decade. And one of the reasons for that is the massive amount of new gas infrastructure that is coming on stream at the moment,” Hill told analysts.

China’s 2024 LNG imports are expected to rebound to nearly 80 million tons, from about 70 million tons in 2023, according to ICIS and Rystad forecasts, surpassing 2021’s record 78.79 million tons.

From 2030 to 2040, declining domestic gas production in parts of South Asia and Southeast Asia could drive a surge in demand for LNG as these economies need fuel for gas-fired power plants or industry.

Shell’s report predicted a balance between rising demand and new supply for those regions, but said significant investments would be needed in gas import infrastructure.

“In the medium term, latent demand for LNG – especially in Asia – is set to consume new supply that is expected to come on to the market in the second half of the 2020s,” the report said.

As supplies were ample last year as the world market started to recover from the major disruption linked to the onset of the Ukraine war in 2022, prices have eased.

Asian spot prices averaged around $18 per million British thermal units (mmBtu) in 2023, easing from an all-time high of $70/mmBtu in 2022.

Prices fell further this year and remain below $10/mmBtu, encouraging buyers from China to Bangladesh to lock in new term supplies from Qatar and the United States.

Hill said that long-term LNG contracts which Europe has signed so far will not fill a demand-supply gap for the rest of this decade, adding that there was a structural shortage of 50 million to 70 million metric tons a year for the rest of the decade or more that Europe needs to secure.

In the U.S. market, he said that an extended ban on new LNG export projects would have “quite an impact” on the fast-growing global market.

The ban “is probably okay if it lasts a year or so, but if it was a long-term ban, then it would have quite an impact on the market,” Hill told analysts.

By Reuters / Marwa Rashad, Emily Chow and Ron Bousso , February 14, 2024

BP readies green diesel refinery for take off as $10 billion sustainable aviation market looms

Plans by one of the world’s biggest oil and gas businesses to build a new biodiesel refinery in Kwinana have been lodged for development approval.

BP wants to revive the site of its old oil refinery with new green energy projects, including a potentially $1 billion plant to make green diesel and sustainable aviation fuel from vegetable oils, animal fats and other waste products. That could be followed by a hydrogen facility next door.

H2Kwinana, a green hydrogen project, is part of BP’s plans to transition its former oil refinery site in Kwinana into an energy hub. The project proposes the production of green hydrogen, sustainable aviation fuel (SAF), Hydrotreated Vegetable Oil (HVO), and integration of planned biorefinery and green hydrogen production facilities with BP’s operating import terminal and optimization of the existing site assets.

According to BP, H2Kwinana has secured government support and is now advancing to front-end engineering and design (FEED).

“We aim to install 100 MW of electrolyzer capacity fuelled by reclaimed water renewable energy. The green hydrogen produced could then be used to decarbonize the bio-refinery we’re planning and other industrial facilities in the area,” the company stated.

In April 2022, the Commonwealth Government granted funding of up to $70 million for the H2Kwinana green hydrogen project, and in 2023, BP began leveraging its site infrastructure and repurposing some redundant processing units to advance the biorefinery project.

BP also completed a concept development phase study into its energy hub H2Kwinana and identified two potential base case scenarios, with the hub producing either 44 tonnes per day of green hydrogen or 143 tonnes per day. The potential growth target of 429 tonnes per day was selected as the third and final case.

Following the study, engineering and technology company Technip Energies was awarded a contract for a hydrogen production unit at BP’s Kwinana biorefinery.

The contract covers the engineering, procurement and fabrication (EPF) of a modularized hydrogen production unit with a capacity of 33,000 normal m3/hour, using Technip Energies’ SMR proprietary technology.

The unit will be capable of producing hydrogen from either natural gas or biogas produced by the Kwinana biorefinery.

By Acapmag / Sourced Externally, February 14, 2024