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The United States has announced the launch of a multinational force to protect trade in the Red Sea after attacks by Yemen’s Houthi rebels forced at least a dozen shipping lines to suspend operations.

US Defense Secretary Lloyd Austin said on Monday that Bahrain, Canada, France, Italy, the Seychelles and the United Kingdom would be among the countries joining the 10-nation “multinational security initiative”.

“Countries that seek to uphold the foundational principle of freedom of navigation must come together to tackle the challenge posed by this non-state actor,” Austin said in a statement, describing the attacks as an issue that “demands collective action”.

The announcement comes after the US and UK navies said over the weekend that their destroyers had shot down a total of 15 drones in the waterway.

The Iran-aligned Houthis have ramped up drone and missile attacks on vessels in key shipping lanes since the start of the war in Gaza, targeting ships alleged to have links to Israel or Israelis.

The rebel group said on Monday it had attacked the Norwegian-owned Swan Atlantic and the MSC Clara using naval drones to show solidarity with Palestinians in Gaza.

Swan Atlantic’s owner, Norway’s Inventor Chemical Tankers, said in a statement the vessel had no link to Israel and was managed by a Singaporean firm.

There were no injuries reported by either vessel.

Mohammed al-Bukhaiti, a senior Houthi official and spokesperson, told Al Jazeera on Monday that the group would confront any US-led coalition in the Red Sea.

More countries to be included

The coalition might also include Egypt and Jordan as additional Arab nations to Bahrain, as they have a vested interest in ensuring the safe passage of ships, said Al Jazeera’s Sara Khairat, reporting from occupied East Jerusalem.

“It is still not clear whether they will join the fold later. Egypt and Jordan, as well as some of the GCC [Gulf Cooperation Council] countries, including Saudi Arabia, are part of the Combined Maritime Forces, which the coalition will be under the umbrella of,” Khairat reported.

“Reading between the lines, it’s a very difficult situation for some of these Middle Eastern countries. You have Saudi Arabia, which is very close, it seems, to signing a deal with the Houthi rebels in Yemen,” she added.

“You have Egypt, which doesn’t want to be seen as going against the Houthis’ message on Gaza – which is for Israel to stop the war on the enclave.”

US Secretary of State Antony Blinken held a call with Saudi Arabian Foreign Minister Prince Faisal bin Farhan Al Saud on Monday on the issue, discussing the ways to avoid further conflict.

Blinken “condemned continued attacks by the Houthis on commercial vessels operating in international waters in the southern Red Sea and urged cooperation among all partners to uphold maritime security”, the US Department of State said in a statement after the call.

Austin, who was visiting Israel, is scheduled to hold talks in Bahrain and Qatar on Tuesday.

Companies avoid Red Sea

At least 12 shipping companies, including the Italian-Swiss giant Mediterranean Shipping Company, France’s CMA CGM and Denmark’s AP Moller-Maersk, have suspended transit through the Red Sea due to safety concerns.

UK oil giant BP on Monday became the latest firm to announce it would avoid the waters.

“In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea,” the company said in a statement.

“We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”

Houthi attacks have effectively rerouted a significant portion of global trade by forcing freight companies to sail around Africa, imposing higher costs and delays for energy, food and consumer goods deliveries.

About 12 percent of global trade passes through the Red Sea, which connects to the Mediterranean Sea via the Suez Canal, including 30 percent of container traffic.

US Defence Secretary Lloyd Austin says coalition will include Bahrain, Canada, France, Italy, UK and other countries.

​

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Croatia’s Krk LNG terminal has received its 80th liquefied natural gas cargo since the launch of operations in January 2021.

The 2010-built 170,000-cbm, Methane Julia Louise, arrived at the 140,000-cbm FSRU on December 18, according to a short statement by state-owned LNG terminal operator LNG Croatia.

Methane Julia Louise’s AIS data provided by VesselsValue shows that the LNG carrier delivered the cargo to the FSRU from Cheniere’s Sabine Pass plant in Louisiana.

GasLog’s LNG carrier serves a charter deal with LNG giant Shell that also has a long-term contract for volumes from the Sabine Pass plant.

Back in 2020, Shell signed a six-year deal with Hungary to supply the country with LNG via the Croatian terminal.

The Croatian FSRU mainly receives shipments from the US, but it also received cargoes from Qatar, Nigeria, Egypt, Trinidad, Indonesia, and reloads from European terminals.

Hungary’s MFGK and a unit of Switzerland-based trading firm MET are some of the users of the facility.

From the start of commercial operations, the LNG terminal has regasified more than 10.8 million cubic meters of LNG and shipped more than 6.52 billion cubic meters of natural gas into the Croatian system, according to LNG Croatia’s website.

Due to high demand, LNG Croatia is currently working to boost the capacity of its FSRU-based Krk LNG terminal.

Earlier this year, Finland’s Wartsila won a contract to supply one regasification module for the FSRU.

Under the contract, Wartsila Gas Solutions, a unit of Wartsila, will build the regas module with a maximum capacity of 250,000 m3/h. The firm recently awarded the module contract to China’s CIMC SOE.

The current three LNG regasification units have a maximum regasification rate of 451,840 m3/h.

Following the upgrade, the Krk LNG facility will have a capacity of about 6.1 bcm per year in 2025.

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World Oil

(Bloomberg) — Permian Basin operator Callon Petroleum Co. is considering strategic options amid takeover interest from rival oil and gas players, people familiar with the matter said, as dealmaking accelerates in the U.S. energy industry.

The Houston-based company has been working with an adviser to study possibilities including a potential sale, said the people, who asked to not be identified because the information is private. Callon shares rose 2.9% to $32.59 at 11:15 a.m. in New York, giving the company a market value of about $2.2 billion. They’re down 12% for the year.

No final decision has been made and Callon could opt to remain independent, they said. Representatives for Callon couldn’t immediately be reached for comment.

Oil and gas companies have been increasingly looking to consolidate in order to add scale and cut costs, underscored by ExxonMobil Corp.’s $60 billion deal for Pioneer Natural Resources Co.

Like Pioneer, Callon is active in the Permian of West Texas and New Mexico, the biggest and most productive oil field in the country. The Permian has long been ripe for consolidation because it’s highly fragmented thanks to the scores of shale upstarts that have begun drilling there in the past two decades.

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Nasdaq

Goldman Sachs trimmed its price expectation for Brent crude in 2024 by $10 per barrel to between $70 and $90, saying strong production from the United States would moderate any upside in oil prices.

“We still look for range-bound prices and only moderate price volatility in 2024. Elevated spare capacity to handle tightening shocks should limit upside price moves,” its analysts said in a note dated Sunday.

The investment bank now expects Brent to recover to a peak of $85 per barrel in June 2024, and to average at $81/$80 in 2024/2025 compared to $92 previously.

Brent LCoc1 was trading around $77 as of 0526 GMT on Monday, down 20% from multi-month highs hit in September. U.S. West Texas Intermediate crude was around $72 a barrel. O/R

Continued supply from non-Organization of the Petroleum Exporting Countries (OPEC) sources, led by the U.S, shows that several tailwinds to the U.S. production are likely to persist in 2024, Goldman Sachs added.

Analysts said they expect U.S. Lower 48 crude output to reach 11.4 million barrels per day (mb/d) in the fourth quarter of next year, and hiked U.S. total liquids supply 2024 growth forecast to 0.9 mb/d from 0.5 mb/d earlier.

However, OPEC decision to rein in supply, a recovery in China, restocking in the U.S. and modest recession risk should limit downside risk to oil prices, the bank noted.

“Saudi Arabia is unlikely to ‘flush’ the market in 2024”, Goldman analysts said, adding “we expect full extensions of the OPEC+ cuts announced in April 2023 (1.7 mb/d) through 2025, and of the additional 2.2 mb/d package through 2024Q2.”

“We adjust our OPEC range trade to a short $70 put, long $80/90 call spread option on Brent Jun24, and still recommend long summer 2024 gasoline margins,” they added.

(Reporting by Tina Parate and Brijesh Patel in Bengaluru; Editing by Varun H K)

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World Oil

(Bloomberg) — Tokyo Gas Co. said its subsidiary Tokyo Gas America Ltd. will purchase Haynesville shale operator Rockcliff Energy II LLC for about $2.7 billion in a move to expand its U.S. shale gas operations.

Tokyo Gas America will acquire all the shares of Rockcliff, a portfolio company of Quantum Energy Partners, through its ownership interest in TG Natural Resources, the Japanese company said in a statement. The deal was signed on Dec. 15 and is scheduled to close on Dec. 29, it said.

The purchase comes amid a wave of multi-billion dollar deals in the global energy industry as oil and gas producers figure out the best way to deploy windfall profits from rising resource prices.

Recent activity includes Occidental Petroleum Corp.’s deal to buy Texas shale driller CrownRock LP, Exxon Mobil Corp.’s $60 billion purchase of Pioneer Natural Resources Co. and Chevron Corp.’s $53 billion agreement to buy Hess Corp. Woodside Energy Group Ltd. is also in preliminary talks with Santos Ltd. on a tie-up that would create a dominant liquefied natural gas exporter.

LNG terminals

The construction of new LNG export terminals in the US is set to boost gas demand, the company said. Tokyo Gas is seeking to expand shale operations and has looked for assets around existing ones in Texas and Louisiana, it said.

After this acquisition, the production volume of gas and natural gas liquid held by TG Natural Resources will increase by about four times to 1,300 million cubic feet per day, the company said. “The outcome from TGNR will become the base of overseas earnings,” it added.

While acknowledging the risks associated with resource prices, Takashi Nakao, senior general manager at Tokyo Gas’s global business development department, said “it is cheap” in an online press conference Saturday.

TG Natural Resources and Rockcliff have mining claims in adjacent areas, and Nakao believes they can survive in changing market conditions because they can improve their competitiveness by lowering production costs.

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India’s liquefied natural gas (LNG) imports rose in November compared to the same month last year, according to the preliminary data from the oil ministry’s Petroleum Planning and Analysis Cell.

The country imported about 2.34 billion cubic meters, or about 1.8 million tonnes of LNG, in November, a rise of 5.3 percent compared to the same month in 2022, PPAC said.

During April-November, India took 20.09 bcm of LNG, or some 15.4 million tonnes, up by 12.4 percent, PPAC said.

India paid $1.2 billion for November LNG imports, down from $1.5 billion last year, it said.

As per India’s natural gas production, it reached 3.04 bcm in November, up by 7.1 percent compared to the corresponding month of the previous year.

During April-November gas production rose by 5.1 percent to about 24 bcm, PPAC said.

At the moment, India imports LNG via seven facilities with a combined capacity of about 47.7 million tonnes.

India’s Adani and France’s TotalEnergies started supplying natural gas in April to the grid from their 5 mtpa Dhamra LNG import facility located in Odisha, on India’s east coast. In August, the partners completed the first truck loading operation at the facility.

During April-October, Petronet LNG’s 17.5 mtpa Dahej terminal operated at 95.1 percent capacity, while Shell’s 5 mtpa Hazira terminal operated at 37.1 percent capacity, PPAC said.

The Dhamra LNG terminal operated at 26 percent capacity, it said.

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Daily Standup Top Stories

Woke Duke Energy Jacks Up Electric Rates to Pay for ESG, Zero Carbon Mandates

EXCLUSIVE: Conservative State Files First-in-the-Nation Lawsuit Against BlackRock Over Deceptive Climate Policies

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The COP28 UN climate conference in Dubai ended last week with a flurry of self-congratulatory commentary about the “historic” nature of the final agreement in which parties, for the first time, overtly backed a process of “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner.”

The final language was an enormous relief to many on the far left. Early in the conference, COP President Sultan Al Jaber shocked and offended that faction when he reminded participants that moving away from fossil fuels too quickly would “take the world back into caves.”

For those who haven’t attended a COP, think of it as the world’s largest trade show (80,000 people attended COP28) and copy-editor Survivor where high officials negotiate stilted prose over almost two weeks. COP statements have no binding authority on participating countries, but all participants and observers invest considerable time and energy in shifting the Overton Window toward their preferred policies and worldview.

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Energy News Beat
This year has seen a flurry of oil mega-mergers worth more than $100 billion.
Big deal flow and rising US production point to industry forecasts of big demand for years to come.
The “inevitable” consolidation suggest oil companies are shrugging off peak demand concerns.

A string of multi-billion dollar mergers and acquisitions across the energy sector this year has coincided with a boom in US oil production, and together the trends point to an industry shrugging off peak oil demand concerns, with expectations of a healthy market for years to come.

Deals for companies active in the Permian basin, a key drilling region that stretches over a swath of west Texas and into New Mexico, have exceeded a record $100 billion in 2023, consultancy Wood Mackenzie said in a report published December 12.

Exxon Mobil’s $59.5 billion proposed deal for Pioneer Natural Resources — the largest oil and gas producer in the Permian basin — headlined those figures, in addition to Chevron’s $53 billion takeover of Hess, and Permian Resources’ $4.5 billion, all-stock acquisition of Earthstone Energy.

“Oil demand is expected to continue growing through the rest of the decade, hence consolidation in the US oil patch is a more measured approach to address this need via reduced costs and economies of scale,” Matt Smith, lead oil analyst for the Americas at Kpler, told Business Insider.

That contrasts to the boom-and-bust approach and “wildcatting” — or exploratory drilling — of the past.

“Continued consolidation within the shale industry is inevitable,” said Jesse Jones, head of North America crude production at Energy Aspects.

Jones told Business Insider oil production from private producers has ramped up faster than that of public companies over the last three years, and US oil production broadly has exceeded estimates.

This year, the US has averaged 13 million barrels a day of output. Some analysts have forecasted that will increase in 2024. US production hit a record 13.2 million barrels a day in September, which happened as OPEC+ leaders like Saudi Arabia and its allies like Russia struggled to get a handle on oil’s recent downward spiral.

“Upstream consolidation gradually ratchets down the growth potential from areas like the Permian, which is one reason we see US growth slowing appreciably next year,” Jones said. “But that should also result in healthier financial results over time as a larger portion of the operator universe is incentivized to exercise capital discipline.”

More confidence in demand than IEA

International Energy Agency executive director Fatih Birol in September forecasted the beginning of the end for global crude demand, but the oil and gas industry has effectively bet on the opposite.

A JPMorgan commodities strategist this week said demand for oil in emerging markets is vastly underestimated, and peak oil demand won’t be seen in our lifetime.

Jim Mitchell, head of Americas oil analysts for Refinitiv, said the surge in deal-making means corporations expect oil to be a major source of energy for a long time, and US firms are growing at a rate that allows them to compete on a bigger scale.

“For the biggest of oil and gas companies, the mergers mean they can compete on the world stage with oil companies owned by nations,” Mitchell told Business Insider. “For the mid-size and smaller oil and gas companies, the mergers give financial health in an environment where financing will continue to be difficult.”

The pace of merger and acquisitions next year will likely cool, in his view, but the oil market will remain strong.

“We’re seeing big players buying up smaller companies, as it is an easy way for them to add incremental production to their books,” Kpler’s Smith said. “It’s also an efficient way of them snapping up tried and tested assets and acreage.”

Meanwhile, notwithstanding recent declines in crude prices, Mitchell highlighted that a prolonged run of relatively higher prices has helped heal balance sheets from the “financial bloodbath that was COVID,” and provided capital for investments or returning money to shareholders.

“My opinion,” Mitchell said, “is that both the consolidation and the oil boom suggest demand will remain high and increasing at least through the remainder of this decade.”

Source: Finance.yahoo.com

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Duke Energy has thrown consumers under the proverbial (electric) bus to make their operations carbon neutral by 2050. As a result, electricity prices in North Carolina may increase by 19% over the next three years.

The company’s president, Lynn Good, receives more than $20 million annually in compensation financed in part by ensuring that consumers lower their carbon emissions.

Following the 2021 enactment of the Energy Solutions for North Carolina Act, the vertically integrated Duke Energy is attempting to decarbonize the Tar Heel State by 70% by 2030 and fully decarbonize by 2050. This misguided initiative will force everyday families to subsidize a complete overhaul of the state’s power grid at a total cost approaching $160 billion.

The North Carolina Utilities Commission report and Chapter 4 of Duke’s 2023 Carolinas Resource Plan encourage the exploration of using dynamic rate designs in order to raise prices just when consumers need to use power the most. Essentially, the plan would increase the prices for power in the dog days of summer and the depths of winter. Even everyday activities such as cooking dinner, watching a TV show, or doing the laundry in the late afternoons and evenings could be subject to rate increases.

Duke’s exclusive focus on environmental, social, and governance nonsense has led it to shut down 56 coal-powered generators since 2010. The company has abandoned meritocracy and has mandated that a quarter of its workforce be women and people of color, irrespective of ability. Additionally, it wants to reduce customer energy consumption by 24,000 gigawatt hours and lower peak summer demand by 7,000 megawatt hours by 2025.

This focus on fake frugality over providing value can already be seen in its corporate history.

Duke announced it would pay more than $200 million to clean up its leeched toxic coal waste that spilled into ground water in Indiana, but subsequently tried to illegally and retroactively raise rates on the very consumers it harmed to pay for it. Additionally, Duke shut off power to more than half a million residents of North Carolina on Christmas Eve of 2022. No warnings were given when it took 1,300 megawatts of coal and natural gas capacity offline, ruining many family gatherings as temperatures fell to the low single digits.

The North American Electric Reliability Corp. warned Duke and other operators in the South in its 2018 report that these power plants needed to be weatherized properly. Additionally, the largest factor leading to outages was Duke’s failure to purchase dedicated or firm gas supplies for Christmas Eve, the exact issue a 2019 report from the American Petroleum Institute addressed.

Perhaps Duke—which employs more than 26,000 people and serves almost 10 million customers with natural gas and more than 50,000 megawatts of electricity in North and South Carolina, Florida, Indiana, Kentucky, Ohio, and Tennessee—should refocus its efforts on providing electricity, rather than virtue signaling.

With an annual profit of $2.56 billion in 2022, Duke has ample resources to stabilize the grid without raising rates.

Instead, the quest to decarbonize North Carolina would cost between $140 billion and $160 billion through 2050, according to the John Locke Foundation’s analysis of Duke’s various carbon plans. The plans’ overemphasis on solar and wind and on unrealistic pricing of hydrogen come at the expense of “reliable, dispatchable power plants that would decarbonize at the lowest possible cost.”

Perhaps Duke is even aware of this, as it is trying to sell off its unregulated renewables division to Brookfield Renewable, which explicitly assumes carbon pricing in its investment process, despite the cost of carbon being far from settled. However, Duke is still pushing forward with its $150 million lease of the Carolina Long Bay for an offshore wind farm that will have the same inefficiencies, ecological damage, and tourism-destroying effects as New Jersey’s.

Even if the entire United States halted all fossil fuel emissions right now, global temperatures would only decline by 0.02 of a degree Celsius by the year 2100.

Despite the math not being in their favor, Democrats have weaponized ESG by imposing corporate environmental and social policy on companies that then in turn lobby legislatures, such as North Carolina’s, for decarbonization and massive tax subsidies.

Furthermore, the Federal Reserve has been indirectly backing the ESG wokeness that has pervaded corporate America, potentially leading to another banking crisis. North Carolina should repeal its law and join the ranks of the 31 state attorneys general who stand against woke investing.

Instead of continuing down the ESG path, North Carolina should take a page from South Carolina and explore electricity market reform.

The Brattle Group’s report for South Carolina suggested making a Southeast Transmission Organization with North Carolina and other Southern states to save each customer between $115 and $187 annually. Additionally, the benefits for South Carolina adopting such competitive investment reforms could be as high as $370 million a year if the state fully participates. Other states, such as North Carolina, could also see similar benefits, and it would further stabilize every state’s power grid.

If North Carolina wants to strengthen its economy and serve its residents, the state should deregulate the electricity market and foster a business culture encouraging economic development, regardless of ideology.

Renewables projects and their storage capacities that are economically viable should be able to compete against other sources without $160 billion in state subsidies or making consumers pay for the energy transition.

Certainly, North Carolina should not support policies that make electricity increasingly unaffordable to its residents and push them into poverty.

Source: Dailysignal.com

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