Page 11 - NorthAmOil Week 17 2021

NorthAmOil INVESTMENT NorthAmOil

Vitol reportedly nears Permian deal

PERMIAN BASIN COMMODITY trader Vitol is reportedly close website, the company is seeking “quality assets,
to a deal to buy Hunt Oil’s oil wells in the Per- with stable and successful long-life production”.
mian Basin. Citing sources familiar with the This approach was confirmed to Bloomberg by
matter, Bloomberg reported this week that such Vitol’s CEO, Russell Hardy, this month.
a deal could be announced in the coming days. “We remain of the view that those conven-
The sale may fetch more than $1bn, according to tional assets have got a role to play,” he said. “The
one of the sources. US export market is an important market and it’s
If this deal is finalised, it would mark the still a sensible area for us to invest in.”
first major acquisition of US production assets “Equally, we’re putting a lot of effort into the
by Vitol. The report comes after Vitol set up renewables space and the transitional space,”
Vitol’s focus in the Houston-based Vencer Energy last year with a Hardy continued. However, Vitol does not
US is on mature mandate to acquire oil and gas assets in the US. expect demand for crude to peak until 2030, and
conventional wells. Exports of US oil and gas – in the form of LNG anticipates that this demand will rebound later
– are booming and it comes as no surprise that this year and into 2022 as the pandemic is beaten
the commodity trader is interested in bolstering back.
its position there. It is already one of the largest Vitol handles about 7mn barrels per day
exporters of US oil. (bpd) of crude and fuels. It also has major
Interestingly, while the Permian Basin has upstream investments in Ghana, as well as
become best known for its unconventional smaller investments in Russia and other former
output, Vitol’s focus in the US is on mature con- Soviet states such as Azerbaijan, Kazakhstan
ventional wells. Indeed, according to Vencer’s and Ukraine.™

PERFORMANCE

US gas exports to Mexico hit new highs

US-MEXICO US natural gas exports to Mexico recently rose to
record highs and are poised to move even further
upwards over the next few months, according to
industry observers.
Delivery volumes are already running high,
as rising temperatures have boosted demand
for gas among Mexico’s thermal power plants
(TPPs). S&P Global Platts said earlier this week
that warmer weather had brought US gas deliv-
eries to an all-time peak of nearly 7bn cubic feet
(198.2mn cubic metres) per day on average ear-
lier in April. More than 65% of the total, or 4.6
bcf (130.3 mcm) per day, went to TPPs, Platts
stated. TPH’s forecast is more conservative, as it sees
Other sources have painted similar pictures, US gas shipments averaging 6.2 bcf (175.6 mcm)
with Mexico City-based Gadex reporting on per day in the second and third quarters of 2021.
April 23 that import volumes averaged 6.993 bcf The consultancy said last week, though, that it
(198 mcm) per day in the five-day period ending would continue to monitor market conditions,
April 21. Likewise, Houston-based Tudor, Pick- since its modelling appeared to be “materially
ering, Holt & Co. (TPH) noted last week that low at this point.”
daily import volumes had hit an all-time high of UK-based Wood Mackenzie, meanwhile,
7.1 bcf (201.1 mcm) on April 14. has said it believes Mexico will take delivery
Mexican demand for US-produced gas is of 6.7 bcf (189.7 mcm) per day of US gas on
set to remain strong in the near term, industry average between April and October of this
observers believe. Platts’ model shows delivery year. “This figure is 0.4 bcf [11.33 mcm] per
volumes averaging 6.5 bcf (184.1 mcm) per day day higher than what was projected in our Feb-
in the third quarter of the year, and the number ruary review, right after the weather-triggered
could go higher if temperatures remain high and US gas supply shock,” said Wood Mackenzie
if residents of Mexico forego social distancing. analyst Nicole McMurrer.™

Week 17 29•April•2021 www. NEWSBASE .com P11