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Posts Tagged ‘oil and gas’

Gulf of America oil and gas lease sale BBG2 will be held tomorrow. The Notice of Sale is attached.

Although Big Beautiful Gulf 1 (BBG1) was rather lackluster, BBG 2 is unlikely to match it in terms of the number of bids and their sum. Prior to BBG1, there had been no lease sale for two years. BBG 2 is being held only 3 months later.

Given the short duration between sales, the bid evaluations for BBG1 are not yet completed. However, the sale notice advises that any block which received a bid in BBG1 is excluded from BBG2.

Will the recent increase in oil prices influence bidding? Probably not given the longer term nature of offshore development and expectations that the current price spike will be of short duration. Onshore shale oil production is more responsive to price fluctuations.

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The results of today’s Cook inlet oil and gas lease sale are disappointing, but not surprising.

BOEM: At this time, no bids have been received. In accordance with OBBBA, we will continue to hold leasing opportunities for Cook Inlet so that industry has a regular, predictable federal leasing schedule that ensures we achieve President Trump’s American Energy Dominance Agenda.

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Expectations are low for tomorrow’s Cook Inlet oil and gas lease sale. The last Cook Inlet sale (2022) attracted only one bid (Hilcorp – $63,983).

The final sale notice is attached. The terms are favorable, most notably the 1/8 royalty and 10 year primary lease term.

Hopefully, we’ll be pleasantly surprised by the results.

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The sale was beautifully conducted by BOEM, and Leslie Beyer – Assistant Secretary for Land and Minerals Management, Dept of the Interior – and Matt Giacona, Acting BOEM Director, delivered strong messages in support of the OCS oil and gas program.

However, as a colleague commented just after the sale, it was beautiful but not big. He and I expected more given the time since the last sale and the attractive terms.

Below is a comparison with the previous 3 Gulf sales. More to follow.

Sale No.257259261BBG1
date11/17/20213/29/202312/20/202312/10/2025
companies
participating
33322630
total bids223328423161219
tracts receiving bids214324422751181
sum of all bids
$millions
198.5309.8441.9371.9
sum of high bids
($millions)
101.7263.8382.2279.4
highest bid
company
block
$10,001,252.00
Anadarko
AC 259
$15,911,947
Chevron
KC 96
$25,500,085
Anadarko
MC 389
$18,592,086
Chevron
KC 25
most high bids
company
sum ($millions)
46
bp
29.0
75
Chevron
108.0
65
Shell
69.0
50
bp
61.0
sum of high bids ($millions)
company
47.1
Chevron
108
Chevron
88.3
Hess
61.0
bp
most high bids by independent14-DG Expl.13-Beacon
13-Red Willow
22-Red Willow14-Murphy

1excludes 36 leases improperly acquired for carbon disposal purposes; 2excludes 69 leases improperly acquired for carbon disposal purposes; 3excludes 94 leases improperly acquired for carbon disposal purposes

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BOEM informs (post below) that Wednesday’s BBG1 oil and gas lease sale will be streamed live here at 10 AM ET. Given that this is the first sale in two years and the first BBG sale, some dignitaries may be in attendance.

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From Oil Now Guyana:

In the evolving landscape of Guyana’s oil and gas industry, few have managed to carve out a niche quite like Koaito Grant. A name synonymous with corporate photography, Grant’s journey from discovering his passion for capturing moments to becoming a sought-after photographer within the oil and gas sector is as inspiring as it is instructive.

So true: “It’s the best feeling when a client reaches out and says you were very highly recommended by this or that person.” His professionalism and work ethic have been key differentiators. “I have a client that always asked if I was Guyanese because I’m always early for all projects and activities.”👍 💯

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The Minister is optimistic about the prospects for production offshore Barbados:

“I don’t want to go and give news now before it is ready to be given, but let us say the prospectivity is highly regarded,” he told a local academic forum in the Eastern Caribbean tourism paradise.

He also sends a message to “keep it in the ground” crowd.

 “Let’s be frank: All of the oil producers of the world, including Canada, speak the language of climate change and putting a stop to that, which is now being done by small entities or like those of us in Barbados who are contemplating finding natural gas, but the reality is, none of them is saying ‘I will not continue to produce the oil that I produce’ or ‘I’m shutting down all my wells,’” he said. “The Americans are not going to tell you that that’s what’s going to happen in Texas. The British, for all their partnership value, will not tell you that the North Sea will not be full of Brent crude. They’re not going to do that because they intend to produce for the next 50 years. Nobody is coming forward to say we are prepared to pay you to keep the natural gas and the oil in the ground.”

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… this New York state legislation is perfect.

NY State Senate Bill S9612 (proposed)

§ 328-a provides that no fossil fuel industry member, as that term is defined in the bill, shall knowingly or recklessly create or contribute to a condition that endangers the safety or health of the public by
extracting, storing, transporting, refining, importing, reporting, producing, manufacturing, distributing. compounding, marketing, or sale of a "qualified product".

328-b declares that a violation of the new article that results in any harm shall be deemed climate negligence regardless of when the underlying conduct occurred.

328-c prohibits governmental enforcement. (i.e. prohibits govt intervention on behalf of the accused company)

328-d provides that any person, firm, corporation, or association that has been damaged as a result of a fossil fuel industry member's acts or omissions in violation of this article shall be entitled to bring an
action for recovery of damages.

This non-attorney suspects that the legislation might conflict with the Commerce Clause of the US Constitution (Article 1, Section 8, Clause 3), which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” New York produces little oil, gas, or coal, so the legislation would largely affect operations that are conducted in other states, on Federal lands, or in foreign countries.

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This rather arrogant and condescending policy makes neither good business sense nor good social sense (unless you support energy poverty), but I’m sure the executive team is proud. That said, they do seem to have left themselves with a fair amount of wiggle room.

In line with the policy, we will no longer provide new lending or capital markets finance for the specific purpose of projects pertaining to new oil and gas fields and related infrastructure when the primary use is in conjunction with new fields.

We will continue to provide finance or advisory services to energy sector clients at the corporate level, where clients’ transition plans are consistent with our 2030 portfolio-level targets and net zero by 2050 commitment.

HSBC

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The dashed red line outlines China’s claim. Needless to say, Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam differ with China’s creative interpretation.

Map Source: CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, PERMANENT COURT OF ARBITRATION

In recent years, satellite imagery has shown China’s increased efforts to reclaim land in the South China Sea by physically increasing the size of islands or creating new islands altogether. In addition to piling sand onto existing reefs, China has constructed ports, military installations, and airstrips—particularly in the Paracel and Spratly Islands, where it has twenty and seven outposts, respectively.

Global Conflict Tracker

Never mind that Beijing’s claims are fundamentally incompatible with established international law on maritime boundaries, the United Nations Convention on the Law of the Sea, which China has ratified and by which it professes to abide. Never mind, as well, that the claims have been ruled fraudulent by an international tribunal in The Hague.

ForeignPolicy.com

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