Oil Prices Up Following Halt of Kurdistan Oil Exports
SECTOR COMMENTARY:
The energy sector is set for a higher start, supported by strength in the crude complex and the major equity futures. U.S equities are trading higher in the pre-market after a buyout deal for the deposits of Silicon Valley Bank eased nerves about potential bank failures.
WTI and Brent crude oil futures are up following a halt of Kurdistan oil exports this weekend and as efforts continue to contain the banking crisis. On Saturday, about 450,000 bpd of crude exports stopped flowing from Kurdistan to Turkey after a victory in an arbitration case confirmed Baghdad’s consent was needed to export oil. Banking concerns were moderately alleviated after First Citizens BancShares announced it would acquire the deposits and loans of failed Silicon Valley Bank. Geopolitical tensions are also lending support, as Russian President Vladimir Putin announced plans to station nuclear weapons in Belarus, which prompted a meeting within the U.N. Security Council.
Natural gas futures are trading lower on warmer weather forecasts in key consuming regions.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
Aramco has signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical for RMB 24.6 billion ($3.6 billion at current exchange rates), in a deal that would significantly expand its downstream presence in China.
Aramco and joint venture partners NORINCO Group and Panjin Xincheng Industrial Group plan to start construction of a major integrated refinery and petrochemical complex in northeast China. Huajin Aramco Petrochemical Company (HAPCO), a joint venture between Aramco (30%), NORINCO Group (51%) and Panjin Xincheng Industrial Group (19%), is developing the complex that will combine a 300,000 barrels per day refinery and a petrochemical plant with annual production capacity of 1.65 million metric tons of ethylene and 2 million metric tons of paraxylene.
Aramco's Jizan refinery is set to increase output of ultra-low sulphur diesel (ULSD) and reduce exports of vacuum gasoil (VGO) as it ramps up production in the second quarter, industry sources said.
Arko offered to buy truck stop operator TravelCenters of America for $1.4 billion, it said, trumping BP's $1.3 billion offer. Arko's offer of $92 per share, which it said it made on March 14, is $6 higher than BP's offer made in mid-February, which TravelCenters of America has accepted.
The Petroleum Safety Authority (Ptil) has given Equinor consent to use Transocean Encourage for production drilling on the Åsgard field.
Petrobras informed that it has signed a contract with Toyo Setal Empreendimentos to conclude the works on the Natural Gas Processing Unit (UPGN) of the Itaboraí Gaslub Cluster, which had been halted since June 2022.
Petrobras, regarding the pieces of news published in the media, informed that no decision has been made by the Executive Board or the Board of Directors in relation to the Braskem divestment process.
Sri Lanka's cabinet has approved granting licenses to China's Sinopec, Australia's United Petroleum, and U.S. firm RM Parks, in collaboration with Shell, to enter the fuel retail market, the energy minister said.
The Canada Infrastructure Bank (CIB) has concluded the financing on its first project from its low-carbon fuels, carbon capture utilization storage and hydrogen initiative with support for a biorefinery and the country's largest electrolyzer. Under the terms of the agreement, the CIB will provide a loan of $277 million to a joint-venture partnership between Shell, Suncor, Proman and the government of Québec that will enable construction of Canada's largest biorefinery, based on a technology platform developed by Enerkem.
Energy One has entered into a long-term framework agreement with Shell Energy Australia to use Energy One’s solutions for its growing portfolio of battery, demand response, renewable and other generation assets.
The TotalEnergies' 240,000 barrel-per-day (bpd) Gonfreville refinery, the company's largest refinery, has been stopped, a company spokesperson said, as the industrial action against the government's pension reforms continued.
Reuters reported that 32% of operational staff at TotalEnergies' French refineries and depots are on strike Monday, according to a company spokesperson.
CANADIAN INTEGRATEDS
According to Reuters, Suncor Energy is carrying out planned equipment shutdowns for maintenance work starting March 27, lasting about 7 weeks at Montreal refinery in Canada.
Suncor Energy reported that refinery personnel are responding to an incident at Commerce City, Colorado refinery.
U.S. E&PS
ConocoPhillips announced through its Australian subsidiary that it plans to become upstream operator of Australia Pacific LNG (APLNG) following the closing of EIG’s transaction with Origin Energy. In connection with this announcement, ConocoPhillips has agreed to purchase up to an additional 2.49% shareholding interest in APLNG for $0.5 billion, subject to customary adjustments. ConocoPhillips currently holds a 47.5% APLNG shareholding interest and will own up to 49.99% of APLNG upon closing. Both the assumption of upstream operatorship and the shareholding acquisition are dependent on EIG closing its transaction with Origin. EIG’s transaction with Origin and ConocoPhillips’ shareholding acquisition are subject to Australian regulatory approvals and other customary closing conditions.
According to the WSJ, ConocoPhillips Chief Executive Ryan Lance was only a budding oilman when he first set foot in Alaska. Nearly four decades later, his company reigns supreme over the U.S. Arctic. With most of its competitors abandoning the state, ConocoPhillips is forging ahead with drilling there, emboldened by President Biden’s approval this month of a robust, new project.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Baker Hughes announced it has been awarded an order by Bechtel to supply two Main Refrigerant Compressors (MRCs) for Sempra Infrastructure’s Port Arthur LNG Phase 1 project in Jefferson County, Texas, following the positive Final Investment Decision (FID) announced March 20.
Granite Construction announced that its Board of Directors has declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on April 14, 2023, to all shareholders of record at the close of business on March 31, 2023.
NOW announced that Karen David-Green has been appointed to the Company’s Board of Directors effective March 24, 2023. Ms. David-Green’s term will expire at the 2023 annual stockholders’ meeting.
As per SEC filing, as previously disclosed, Weatherford International Ltd., Weatherford International, LLC, Weatherford Canada Ltd., as borrowers, and Weatherford International plc, as parent, entered into an amended and restated credit agreement with the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, on October 17, 2022. On March 24, 2023, the Borrowers, the Company and the Administrative Agent entered into the Third Amendment to Amended and Restated Credit Agreement, which permits unlimited prepayments and other Redemptions of indebtedness (which previously was limited to $500,000,000), subject to (i) the ratio of funded debt (net of unrestricted cash in excess of $400 million) to consolidated adjusted EBITDA not exceeding 2.50 to 1.00, (ii) no Default or Event of Default existing and (iii) Aggregate Liquidity equaling or exceeding $300,000,000 (which previously was $350,000,000). The material terms of the Amended and Restated Credit Agreement are otherwise unchanged by the Third Amendment.
DRILLERS
No significant news.
REFINERS
Calumet Specialty Products Partners, L.P. announced that its Montana Renewables subsidiary has been invited by the U.S. Department of Energy to submit a Part II Application for a $600 million loan guarantee through the Title XVII Innovative Clean Energy Loan Guarantee Program.
As per SEC filing, the Supply and Offtake Agreement, dated as of June 19, 2017, by and among Calumet Shreveport Refining, LLC, an indirect subsidiary of Calumet Specialty Products Partners, L.P., and Macquarie and the Supply and Offtake Agreement, dated as of March 31, 2017, by and among Calumet Montana Refining, LLC, an indirect subsidiary of the Partnership, and Macquarie include provisions that provide the Partnership and Macquarie with the right to terminate each agreement with nine months' advance notice provided to the other party. On March 20, 2023, Macquarie provided notice of Macquarie's election of its right to terminate the Shreveport SOA and the Montana SOA, in each case effective December 31, 2023. When the Shreveport SOA and the Montana SOA were entered into, the inventories associated with such agreements were taken out of the Partnership's revolving credit facility borrowing base. The Partnership intends to amend its revolving credit facility to re-include the inventories, subject to approval by the lenders under the revolving credit facility.
MLPS & PIPELINES
Following the fourth offshore wind tender launched in January 2021, the French Ministry of Energy Transition has chosen Eoliennes en Mer Manche Normandie, the project company owned by the EDF Renewables and Maple Power consortium, to design, build, operate and decommission the future offshore wind farm called “Centre Manche 1” (Normandy). This new offshore wind project will provide France a competitive and renewable electricity, contributing to the country's carbon neutrality objective. This is the fifth offshore wind project in France and the third in Normandy developed by EDF Renewables together with Maple Power and its shareholders – Enbridge and Canada Pension Plan Investment Board – as part of the fixed bottom offshore wind tenders launched by the French State since 2011.
Energy Transfer and Lotus Midstream LLC announced that the parties have entered into a definitive agreement pursuant to which Energy Transfer will acquire Lotus Midstream Operations, LLC in a transaction valued at approximately $1.45 billion from an affiliate of EnCap Flatrock Midstream. Consideration for the transaction will be comprised of $900 million in cash and approximately 44.5 million newly issued Energy Transfer common units. Lotus Midstream owns and operates Centurion Pipeline Company LLC, an integrated, crude midstream platform located in the Permian Basin. The transaction is expected to close in the second quarter of 2023, subject to regulatory approval and customary closing conditions.
As per SEC filing, on March 21, 2023, NuStar Logistics, L.P., a wholly owned subsidiary of NuStar Energy L.P., consummated a sale-leaseback transaction and entered into a lease agreement with NS San Antonio TX Landlord, LLC with respect to NuStar's headquarters located in San Antonio, Texas for a term of 20 years, with two options to extend the term for ten years each in accordance with the Lease Agreement. NuStar entered into a lease guaranty, whereby NuStar agreed to guarantee the obligations of NuStar Logistics under the Lease Agreement. Pursuant to the Lease Agreement, NuStar Logistics will pay an annual average base rent of approximately $8.2 million during the initial 20-year term.
MARKET COMMENTARY
Buyout deal of deposits and loans of Silicon Valley Bank by First Citizens BancShares buoyed stock futures higher calming the banking sector. European shares gained and Nikkei ended positive for the first time in three days as a weaker yen boosted sentiment in the exporter-heavy market. The dollar edged higher, whereas gold slipped. Oil prices were up amid Russia’s plans to place tactical nuclear weapons in Belarus.
Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services – the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner.
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