Page 8 - NorthAmOil Week 29

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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
As OPEC+ announced that cuts would be eased
from August 1, Iraq’s State Oil Marketing Organ- Chevron the first super-major to enter Israel.
ization (SOMO) stated that shipments to Asian Noble’s Israeli assets will help weigh Chev-
and European refineries would be reduced in ron’s portfolio more towards gas – and are also
order to ensure compliance with the country’s expected to help act as a springboard in the East-
quota. ern Mediterranean region.
For years, Baghdad has struggled with OPEC The deal’s price-tag values each Noble share
compliance, and just as other member countries at $10.38 – a 7.5% premium to its closing price
prepare for the easing of restrictions, Iraq agreed on July 17. However, the company’s share price
to implement compensatory cuts to make up for had fallen more than 60% between the start of
historic non-compliance. This will see an addi- the year and July 17, and thus the deal may still be
tional reduction of 70,000 bpd in July, another seen as a bargain. This is also the super-major’s
314,000 bpd in August and 313,000 bpd in first significant acquisition since it walked away
September. from Anadarko Petroleum last year, having been
Meanwhile, Oman noted its “100% commit- outbid by Occidental Petroleum.
ment to the OPEC+ alliance” as it announced Like Anadarko, Noble comes with acreage
that it would produce 161,000 bpd below its in the Permian Basin. However, it is the East-
OPEC quota from September. ern Mediterranean assets that are thought to be
Aside from the OPEC+ agreement, Bahrain Noble’s main attraction.
has been talking up its plans to create a state There are hopes that a new wave of merg-
holding company for the island’s oil and gas ers and acquisitions (M&As) will follow, with
assets, and eyeing international investors to take deep-pocketed majors potentially leading the
part in a potential IPO. However, given the com- charge to snap up indebted companies at bar-
parative paucity of resources, market volatility gain prices.
and the array of more attractive options avail- Indeed, the same day as the Chevron deal,
able, such an initiative may struggle to garner commodity trader Vitol announced that it was
significant interest. forming a new company, Vencer Energy, which
would seek to buy mature, producing oil and gas
If you’d like to read more about the key events shaping assets in the US.
the Middle East’s oil and gas sector then please click For some struggling companies, being taken
here for NewsBase’s MEOG Monitor. over may be an attractive option while others
are pushed into bankruptcy protection. Indeed,
North America: M&A boost two US producers – Bruin E&P Partners and
Chevron announced this week that it had struck California Resources – have announced over
a deal to buy Noble Energy in a deal worth $5bn, the past week that they are filing for Chapter 11
or $13bn including debt. This is the first major bankruptcy protection. (See: Two more producers
energy industry transaction since the oil price file for bankruptcy protection, page 13) They join
downturn began in March. (See: Chevron to buy a long list of US oil and gas company bankrupt-
Noble in first major post-crash deal, page 9) cies from the past few years that is anticipated to
The deal is also notable because it will make grow even larger in the coming months.™

P8 www. NEWSBASE .com Week 29 23•July•2020