Page 11 - FSUOGM Week 29

FSUOGM NRG FSUOGM

On a brighter note, Brazil has succeeded in
boosting crude oil exports by 36.8% y/y in the
first half of 2020. According to government data,
the country exported 38.98mn tonnes – equiva-
lent to about 1.56mn bpd – of oil worth $10.3bn
between January and June. China remained the
primary destination for Brazilian oil, absorbing
about 70% of all exports.
In other news, Emilio Lozoya, the former
head of Mexico’s NOC Pemex, has been extra-
dited from Spain to face corruption charges.
Lozoya stands accused of receiving $10mn
worth of bribes from a Brazilian construction
firm that has acknowledged making payments to
politicians in several Latin American countries.

If you’d like to read more about the key events shaping
the Latin American oil and gas sector then please click
here for NewsBase’s LatAmOil Monitor.

Middle East: Cuts remain in vogue Noble’s Israeli assets will help weigh Chev-
As OPEC+ announced that cuts would be eased ron’s portfolio more towards gas – and are also
from August 1, Iraq’s State Oil Marketing Organ- expected to help act as a springboard in the East-
ization (SOMO) stated that shipments to Asian ern Mediterranean region.
and European refineries would be reduced in The deal’s price-tag values each Noble share
order to ensure compliance with the country’s at $10.38 – a 7.5% premium to its closing price
quota. on July 17. However, the company’s share price
For years, Baghdad has struggled with OPEC had fallen more than 60% between the start of
compliance, and just as other member countries the year and July 17, and thus the deal may still be
prepare for the easing of restrictions, Iraq agreed seen as a bargain. This is also the super-major’s
to implement compensatory cuts to make up for first significant acquisition since it walked away
historic non-compliance. This will see an addi- from Anadarko Petroleum last year, having been
tional reduction of 70,000 bpd in July, another outbid by Occidental Petroleum.
314,000 bpd in August and 313,000 bpd in Like Anadarko, Noble comes with acreage
September. in the Permian Basin. However, it is the East-
Meanwhile, Oman noted its “100% commit- ern Mediterranean assets that are thought to be
ment to the OPEC+ alliance” as it announced Noble’s main attraction.
that it would produce 161,000 bpd below its There are hopes that a new wave of merg-
OPEC quota from September. ers and acquisitions (M&As) will follow, with
Aside from the OPEC+ agreement, Bahrain deep-pocketed majors potentially leading the
has been talking up its plans to create a state charge to snap up indebted companies at bar-
holding company for the island’s oil and gas gain prices.
assets, and eyeing international investors to take Indeed, the same day as the Chevron deal,
part in a potential IPO. However, given the com- commodity trader Vitol announced that it was
parative paucity of resources, market volatility forming a new company, Vencer Energy, which
and the array of more attractive options avail- would seek to buy mature, producing oil and gas
able, such an initiative may struggle to garner assets in the US.
significant interest. For some struggling companies, being taken
over may be an attractive option while others
If you’d like to read more about the key events shaping are pushed into bankruptcy protection. Indeed,
the Middle East’s oil and gas sector then please click two US producers – Bruin E&P Partners and
here for NewsBase’s MEOG Monitor. California Resources – have announced over
the past week that they are filing for Chapter 11
North America: M&A boost bankruptcy protection. They join a long list of
Chevron announced this week that it had struck US oil and gas company bankruptcies from the
a deal to buy Noble Energy in a deal worth $5bn, past few years that is anticipated to grow even
or $13bn including debt. This is the first major larger in the coming months.
energy industry transaction since the oil price
downturn began in March. If you’d like to read more about the key events shaping
The deal is also notable because it will make the North American oil and gas sector then please click
Chevron the first super-major to enter Israel. here for NewsBase’s NorthAmOil Monitor.

Week 29 22•July•2020 www. NEWSBASE .com P11