Oil Giants Compete for Shell

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Oil Majors and Traders Vye for Shell’s South African Assets

Highlights of the Podcast

00:00 – Intro

01:17 – Oil Majors and Traders Vye for Shell’s South African Assets

04:03 – Trump pledges to scale back use of sanctions

06:38 – A Fight Is Brewing Over Chinese Money in Norway

08:27 – UK Carmakers Face ‘Gargantuan’ Fines For Not Selling Enough EVs

10:18 – It’s Spreading: America’s Top Oil Field Terrorized By Armed Venezuelan Gangs

16:28 – Market Updates

18:5 7 – Rig Count Update

19:38 – Crescent Energy Prices $250M Notes

20:18 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into the Monday, September 9th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, oil majors and traders vie for Shell’s South African assets. Next up, Trump pledges to scale back use of sanctions. Interesting. Next up, a fight is brewing over Chinese money in Norway. They’re everywhere folks. Next up, UK’s carmakers face gargantuan fines for not selling enough EVs. That’s an interesting tongue twister right there. And then finally, it’s spreading America’s top oilfield. Terrorized by armed Venezuelan gangs. Stu, I will quickly cover what’s happening in the oil and gas markets. We saw some interesting stuff happen on Friday relative to where prices went. I’ll opine a little bit of where I think things will go this week. We’ll quickly touch on rig counts and then quickly talk about Crescent Energy needing to do a quick $250 million private placement to fund a recent acquisition, so it’s not getting any better for everyone else out there, folks. As always, I am Michael Tanner, joined by Stuart Turley. What do you want to begin? [00:01:16][66.4]

Stuart Turley: [00:01:17] Hey, let’s start with a little tiny company called Shell Oil Majors. Traders vie for Shell’s South African assets. Michael, do you remember when the shell and BP started selling off all their oil stuff and they started going to renewables? Yep. I’m not sure that they’re done being stupid yet. Shell is divesting from its downstream operations in South Africa, attracting interest from major oil traders. Saudi Aramco, down oxy, Trafigura and many others are looking to play in this ball game. Michael, let’s take a look here, shell said earlier this year it’s preparing to divest from downstream operations in South Africa as a result of their internal portfolio review. So this is really looking at the gas stations downstream and taking a look in that total area. [00:02:10][53.2]

Michael Tanner: [00:02:10] Yeah, I mean I think I wouldn’t read too much into this as they’re trying to move into renewables. They clearly came out and said that they’re going to continue to hold a majority interest in the Or they’re going to retain all of their upstream assets, which aren’t even planning on drilling an ultra deepwater well there. So that’s big bucks there. You know, shell and BP have come out recently, have sort of done a 180 on the whole renewables thing. I think this is what you’re seeing is it’s becoming harder and harder to be as vertically integrated Exxon’s of the world of Chevron. So it’s hard to own upstream, downstream and midstream and make them all profitable because they all run on different stuff. You know, technical expertise becomes a thing. If you can’t do upstream, right? Why are you trying to do downstream? So I think this is a little bit this I’ll take at a little bit more face value of what they’re saying is a little bit of a right sizing. I think it’s interesting the companies who are interested in purchasing Saudi Aramco being one of them. [00:03:03][52.3]

Stuart Turley: [00:03:03] I will come in about your opinion on that. [00:03:06][2.5]

Michael Tanner: [00:03:06] Yeah I’ll be Oman Trading and then also Trafigura. We know Trafigura is big in the south in in South Africa specifically with their Puma energy organization. There. Also we did see that the largest gas station network, Exxon, was sold last year to Vito Energy, which is a subsidiary of one of the world’s largest oil traders, Vitol. So there is a little bit of precedent here for some of these larger oil traders to come in. We’ve seen a lot of these independent traders been trying to snap up all of these different refineries, mainly so that they can, you know, as part of what, you know, this article would say is a, quote, strategic portfolio realignment. Basically, if you can gain direct access relative to your market, you have an easier chance of going and setting up and shipping your crude and having ability to kind of make those margins look better. So I think it’s in their best, these traders best interests, though, I think when you’re bidding against Saudi Aramco. Yeah it’s tough. [00:04:01][55.4]

Stuart Turley: [00:04:02] Yeah. Retro. Hey let’s take a look at Trump here. Trump pledges to scale back sanctions. About time. Economic curbs imposed by the U.S. and other countries are harming the dollar. The Republican candidate just said bad time some. And I want to use sanctions as little as possible, explaining there’s a problem with the extensive reliance on such penalties by the U.S. ultimately, it kills your dollar and kills everything that dollar represents. Holy smokes. I wish the Biden we can only hope Kamala reads this and wants to do the same. [00:04:40][38.0]

Michael Tanner: [00:04:40] Yeah, I mean, he did. And at least he he he goes on to note that he was a big user of sanctions in his first term, but they were really strategic. [00:04:48][7.9]

Stuart Turley: [00:04:49] Wow. [00:04:49][0.0]

Michael Tanner: [00:04:50] Okay. One man’s strategic action is another person’s word. [00:04:53][3.0]

Stuart Turley: [00:04:53] Well, let me let me explain this. When you make that comment, I’m going to say this Iran was strategically surgically sanctioned and they were busted and broke. Then you had the weaponization and the sanctions under the Biden administration and under the Biden. Administration. They did not enforce the sanctions, and they obliterated all these sanctions everywhere. And the Iran got rich. So be careful how you phrase that one. [00:05:21][27.9]

Michael Tanner: [00:05:21] I just there’s there’s always, you know, though, the one thing that I think President Trump that I like about him is the fact that he’s willing to change his mind and examine knowledge in his foreign policy in his first term wasn’t great. I mean it, we can admit that. But the beautiful part is he’s willing to change his mind. And this is a great learning lesson. I mean, he and Bobby, he had John Bolton in his staff nonetheless. You know, you can’t tell me John Bolton isn’t part of the deep state. Okay. [00:05:47][25.6]

Stuart Turley: [00:05:47] Oh, John. [00:05:47][0.3]

Michael Tanner: [00:05:48] Bolton, all the other people he had in initial. Okay. So all I’m saying is the beautiful part is that he’s willing to change his mind. And I think this is a great step to say, look, I use sanctions. Yeah, you’re strategic. But I also now see the importance of allowing. And really what he’s talking about is the is the strength of the dollar if it’ll pull back. Well here, if we lose the dollar’s the world’s currency, I think it would be the equivalent of losing a war. And that would make us a third world country and we cannot let it happen. So I. [00:06:14][25.8]

Stuart Turley: [00:06:14] Love that. Now, I also love Rubber of Kennedy Junior when he said the Trump and had a personal discussion with him and said Trump made a lot of mistakes and he’s going to be a different guy this time because everybody was throwing people at him to put it in places like Bolton, that should have never been anywhere near power. [00:06:33][18.7]

Michael Tanner: [00:06:33] We can only hope. We can only hope. [00:06:35][1.8]

Stuart Turley: [00:06:35] We can only hope. [00:06:36][0.7]

Michael Tanner: [00:06:36] Hey. All right, what’s next? [00:06:37][0.7]

Stuart Turley: [00:06:38] Let’s go to China. Our buddies up there in Norway, a fight is brewing over Chinese money. In Norway. This one is really pretty much. There’s about three other sub stories in this one. And that is the Arctic reach. This little town up in there, the the good old days of globalization and Norway. For some reason, a small town needs an investor in a piece of infrastructure. Cosco is really looking at this for Kirk Jorgensen, the director of the Port of Kirk Kirk. And he’s Norwegian broadcaster. And his message the Arctic coastal town is located a mere 20 minute drive from Russia, and its deepwater port is 53 nautical miles from Russia’s port of Pangea, making it a potentially critical site in any conflict with Moscow. This is around the Arctic to LNG, which is just down the road. You know, where they got their LNG shipments going on. Holy smokes. This is even though this is over a port, it’s port infrastructure, but it’s got natural LNG written all over it. [00:07:49][71.6]

Michael Tanner: [00:07:50] Yeah. I mean, this is a you know, I love this. It’s back to the good old days of globalization in Norway. I like it it’s a good quote there. I think it’s interesting. Clearly China is attempting to use their influence economically in ways that not only benefit other countries, but ultimately benefit them because they strike a lot of these deals that on the surface, well, it’s great for Norway. What’s the downside? Well, the downside is they’re controlling you when the time is necessary to use that infrastructure. [00:08:18][28.6]

Stuart Turley: [00:08:19] Oh, in fact, they make The Sopranos look like a teddy bear. [00:08:23][4.1]

Michael Tanner: [00:08:23] Hey, hey. [00:08:24][0.7]

Stuart Turley: [00:08:25] Hey, you owe me. Yeah. Okay. I’m done. Let’s go on to the next one. Electric cars in the UK. Tesla. Let’s say UK carmakers face gargantuan fines for not selling enough EVs. You can’t get. I mean, okay, the UK, answer me this. If you make a lot of profits, you get a windfall profit tax. If you don’t sell enough then you get a gargantuan fine. The 15,000 fine on the non EV sales was first introduced by the conservative government last year. Keir Starmer’s new labor government then pledged to reinstate the 2030 as they buy. Sales of new petrol and diesel cars will be banned altogether, reversing the five year concession by the Tories. I don’t get them. I do not understand what’s going on over in the UK. [00:09:14][48.8]

Michael Tanner: [00:09:14] Well, I mean, I’m not going to pretend to know what’s going on in the UK anyway. I’m glad to say I’m not living there again. It’s interesting, obviously, that windfall profits tax was specifically on upstream oil. [00:09:24][9.6]

Stuart Turley: [00:09:25] It was. [00:09:25][0.1]

Michael Tanner: [00:09:25] But they’re they’re they’re these rules, you know this EV fine that they’re talking about which you know, let’s I mean let’s break it down a $15,000 fine on non EV sales was first introduced. By who. The conservatives are too conservative. [00:09:40][14.4]

Stuart Turley: [00:09:41] But now they they to do UK. [00:09:42][1.6]

Michael Tanner: [00:09:43] They did. And then they pulled the ejector seat and bounced and now are able I mean it’s it’s pretty unbelievable what they’ve got here. You know. [00:09:50][7.0]

Stuart Turley: [00:09:51] And then they’ve destroyed the grid with their energy policies. So their energy grid is going to be so expensive. One of our other stories was covering about how all of the people that are in retirement are leaving the country and coming back in boats so they can pretend to be illegals coming into. The country so they can get free energy. [00:10:10][19.5]

Michael Tanner: [00:10:11] That’s what. That’s my plan. I’m just kind of in a circle around the border. So. All right, what’s next? Speaking of illegals. [00:10:17][6.0]

Stuart Turley: [00:10:18] Speaking of illegals, it’s a bit of spreading to America’s top oil field, terrorized by armed Venezuelans and gangs over in a place that you and I in. Like the Aurora Venezuelans taking over that apartment complex. It’s only going to get worse from here is the Biden-Harris administration’s disastrous open border policies. Now, come to a neighborhood near you said we saw armed Venezuelan gangs from trend. They are going to on members terrorized northern Denver suburb of Aurora. According to the libs of Tik Tok, Texas based oil and company issued a memo to employees informing them that the police and the FBI have armed Cuba and Venezuelan migrants are committing thefts in the Permian Basin. Here’s the memo. Organized crime activity and even as a picture, one of the tattoos on their. [00:11:08][50.4]

Michael Tanner: [00:11:08] Yeah, I mean it’s it’s it’s pretty unbelievable what’s going on there. I will say this funny. Now we’re getting our news from libs of Tik Tok from Twitter, which is, you know. [00:11:17][8.6]

Stuart Turley: [00:11:17] Hey, I’ll tell you what, I love me some Twitter on on the news front. [00:11:21][3.6]

Michael Tanner: [00:11:21] Oh well, trust me, anybody who follows you on Twitter knows you love Twitter. Holy smoke. But no, this is pretty unbelievable. This bulletin that was put out is is pretty unbelievable in terms of, you know, do we know what oil company this was by chance. [00:11:35][13.7]

Stuart Turley: [00:11:35] Yeah I mean you no not at the okay. [00:11:39][3.4]

Michael Tanner: [00:11:39] That’s okay. Well that stands for West Texas. Is that really the name of the oil company? [00:11:42][3.0]

Stuart Turley: [00:11:43] Oh, I thought it was my my bad. [00:11:44][1.6]

Michael Tanner: [00:11:45] Just just wondering. [00:11:45][0.5]

Stuart Turley: [00:11:46] I’m not sure. Yeah. It’s West Texas operation that areas. [00:11:48][2.4]

Michael Tanner: [00:11:49] Oh okay. Okay. Cool. So west I mean hey this is what happens all around the globe. I mean, we know ISIS was making a lot of money by stealing oil from pipelines. It’s only a matter of time before this was going to happen here. I mean, it’s it’s pretty unbelievable. And, you know, what’s nice is here in Texas, they’re going to do something about it. And people are armed to be able to do something about it. [00:12:09][20.5]

Stuart Turley: [00:12:09] Right. Well, here’s the problem with oilfield. Oilfield guys, if you’re operating as an oilfield hand on a on a big rig, guns are not allowed on on facilities or on on drilling sites. However, many carry them in their gun in their truck. So it would be after hours. [00:12:28][18.3]

Michael Tanner: [00:12:28] Yeah. I mean, still in Texas. Trust me, they ain’t going to let that happen. I promise you. [00:12:32][3.6]

Stuart Turley: [00:12:32] That. You’re not going to wait for the Hell’s Angels to possibly show up and try to evict them. [00:12:37][5.3]

Michael Tanner: [00:12:38] No. Absolutely not, absolutely not. [00:12:41][2.7]

Stuart Turley: [00:12:41] All right. We. Hey, Michael, are you going to watch the the the thing Tuesday night. Tomorrow night. [00:12:46][5.4]

Michael Tanner: [00:12:47] Oh the debate. Yeah I’ll be. [00:12:48][1.0]

Stuart Turley: [00:12:48] Watching. That’s going to be a hoot. [00:12:49][1.2]

Michael Tanner: [00:12:50] Yeah. I mean it’ll be interesting. I don’t know how much we’re going to we’re going to learn about either one. I think it’s going to be a lot of bickering back and forth. It’ll probably be more lively considering at least Tom was alive as a Bulls, but it’ll be interesting to see what happens with all sides again. I think it’ll be interesting to see what they talk about in terms of energy policy, because I think that’s one of the big things that she hit on. [00:13:10][20.0]

Stuart Turley: [00:13:10] I’m not sure I’m not sure who I’m going to be rooting for over there. [00:13:13][2.6]

Michael Tanner: [00:13:13] No one’s got any, you know, no idea who you are. But I think it’ll be interesting to see how much time they spend on energy policy, because Kamala Harris is really flip flop on where she stands on fracking. And I think a lot of people in the oil business are wondering, I mean, that I mean, again, the funny part is you can’t ban fracking on private land. You can only banning on federal lands. And if you actually do ban fracking, prices actually go through the roof. So part of me wonders, maybe it’d be nice for six months, have $300 oil, we all think a decent amount of money and then it end up getting repealed because they realize, oh, this is a horrible idea. I think the difference is cheap. They’re not going to ban fracking, right? One because they just there’s people aren’t that stupid. They’re not. [00:13:52][38.2]

Stuart Turley: [00:13:52] Yeah, they are they. The Biden administration banned the LNG export. And then they had the Chevron difference. And then they appealed when they lost against it so that they can go back. And then they banned more fracking in Alaska on federal land. So no, they are that stupid. [00:14:09][17.4]

Michael Tanner: [00:14:10] To still man the I don’t want to you will get into finance. But the steel man the LNG export facility the case for the ban. I think it’s I don’t agree with it. But if I were to steal man and I would say, why were we shipping our LNG overseas and we should use it here? [00:14:25][15.4]

Stuart Turley: [00:14:25] Well, the Jones Act, Jones. [00:14:27][1.1]

Michael Tanner: [00:14:27] Act just has to do with that use of chips. So I, I, I agree lng no let the free market decide what’s going on. But from a national security perspective, if we’re sitting here banging the table saying energy is national security, energy is national security, why are we shipping? What could what is our biggest national security thing? Oh, it’s just the thought. [00:14:46][18.7]

Stuart Turley: [00:14:46] Two reasons pipelines in Jones Act. [00:14:48][2.1]

Michael Tanner: [00:14:49] Why if we had. [00:14:50][1.3]

Stuart Turley: [00:14:50] Prime pipelines, we wouldn’t have to worry about the Jones Act. But because we don’t have pipelines and they won’t put in pipelines, we can’t even sell our own LNG to bust. [00:14:59][8.6]

Michael Tanner: [00:14:59] No, I mean, again, that’s where again, I’m just trying to steal me on the other side of the argument of like, you know, in theory, it’s not a horrible idea. The problem is the implementation. And at the end of the day, you have to let the free market do what it does. All right. Let’s go ahead and jump in. The finance guys we got a lot to talk about. Before we do that we have to pay the bills. As always, the news and quote unquote analysis you just heard is brought to you by the world’s greatest website, www.EnergyNewsBeat.com. I should say not funded by Russia. We are. We have been raising Putin for 18 months and not gotten a dime of. And now here you come to find out they’re they’re throwing millions of dollars around to people. And we couldn’t get a dollar of that. I mean, we, we’re, we’re, we’re loving on Aramco. We’re loving on. And we can’t get a dollar from anybody. Whoever our ad people are. Fire them. Fire. That’s all I’m saying. That’s all I’m saying. But as always again guys energy newsbeat.com. The best place for all your energy and oil and gas news doing the team do a I guess an okay job. Consider we’re not getting any of that Russian money on that website. Up to speed with everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. You can also check us out on Substack. The Energy News [email protected]. Hit that description below for all the links to the timestamps linked to the articles. Also check out Invest in Oil.Energy News beat.com for access to our exclusive direct working interest program that we’re partnering up with Pecos Country Operating and our good friends over at The Crude Truth. [00:16:27][87.9]

Michael Tanner: [00:16:28] Well, let’s look at markets here for a second. Stu overall S&P 500 not a great day over the weekend. Markets down 1.3% or 1.7 percentage points in the S&P 500, but 2.6 percentage points on Nasdaq. Two year yields down 2.5 percentage points, ten year yields only down a half a percentage point, and mainly due to the fact that we had a pretty mixed U.S. jobs report. US Treasury yields reacting pretty strongly to that. U.S. jobs missing estimates as has become somewhat par for the course. Bitcoin still down. Bitcoin had a pretty bad week. We’re down at $54,000, but up about a half percentage point this week in crude oil on Friday guys absolute tumble down $2 or 2.41 percentage points down to 6767. Does look to open here as we record this Sunday afternoon right before the Broncos game, I might add. So go donkeys markets do look to open somewhere some somewhere around that $68 mark. But obviously you know pretty pretty pretty massive tumble relative to where we would have expected things. Brant oil was down to 7185 actually held pretty flat on Friday. And again a lot of that movement downward was a reaction to that jobs report. And again, the overall United States economy kind of on on, on, on stilts from that point. We also saw natural gas did spike a little bit about one percentage point $2.27. Our Xlp contract, which is our kind of ENP average of all the oil and gas companies, that was down about 1.5 percentage points on the day. So not not good all around again, big reason. Down two percentage points on oil and gas. Mainly due again to the fact that we had some pretty pretty, you know, mixed jobs report. You know, while, you know, we did have a jaw, a drop in the jobless rate, we went to about 4.2 percentage point. We saw less jobs added than was expected, which absolutely hurt it. For the week. WTI was down a whopping eight percentage points. Brant was down ten percentage points. Pretty crazy. You know we’re back. If you’re reading Reuters on on to you know Chinese oil demand. Obviously that’s something that could say. We also did see on Thursday, U.S. crude stockpiles dropped by 9.6 million, which is pretty unbelievable. Not or 6.9 million barrel draw and prices go down. It’s obviously the fundamentals have shifted a little bit in. The speculation on where things are going is not really including stock, but that’s an absolutely incredible job. Remember we saw that on Thursday mainly because we had Monday off. We got a full week coming up here. We also did see breakouts drop. We can go right now. What the story up there. We saw one rig count or one rig shed week over week with. I think we’re going to see a few more of them come up as we dip into that. [00:19:04][156.6]

Stuart Turley: [00:19:04] The one the Venezuelans picked up. [00:19:06][1.4]

Michael Tanner: [00:19:07] It was it was the one they took over. But we did see a very interesting, you know, very I would say we’re going to see a lot more rigs, I think shed here as, as companies are now seeing the fact that 65, $67 oil is possible is a there there’s not as many 60 profitable $65 locations out there as there used to be at least 4 or 5 years ago. We also did see the US Commodity Futures Trading Commission announced that U.S. oil or U.S. money managers cut their net long crude futures positions week ending September 3rd. So everyone’s kind of lining up to be a little bullish. The only other thing I saw do is Crescent Energy. I happened to put out an additional $250 million private placement, a senior debt facility, mainly do fund their acquisition of Silver Bow, which looking now in the Eagle for it looks to be, you know, nothing like buying a gas heavy prospect over the over the turn. Now we’re oil price prices taken a turn. They’re looking to raise $250 million in that private placement of senior notes. $7.37 million are a percent on that annualized rate, payable and matures on January 15th. 2033, so nothing like having to dip into the debt markets to fund an acquisition. I’m sure that’ll look good on the balance sheet, but as always, I’m sure they will get away with it. All right, Stu, what are people watching for this week? [00:20:20][73.1]

Stuart Turley: [00:20:20] I’ll tell you what I’m going to be watching for the come out discussion with President Trump. This is going to be absolute hate to see. I would not want to be between Kamala and Hillary in the presidency. [00:20:32][11.4]

Michael Tanner: [00:20:33] And I don’t know. Absolutely. So I guys with that I we will let you get out of here, get back to work, start your full week. We appreciate everybody checking us out here on the world’s greatest podcast for Stuart Turley I’m Michael Tanner. We’ll see you tomorrow folks. [00:20:33][0.0][1193.4]

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