Wednesday, 30 April, 2025 / Edition 56

Thanks to those who attended last week’s AAPG Academy Webinar, Upstream Market Trends: Opportunities, Challenges, and Job Implications. Your enthusiastic participation and insightful questions made it a successful event. For those who missed it, register here to watch it free on-demand.

Also, I wanted to briefly congratulate and recognize AAPG’s new executive director, Tom Wilker. He will begin leading the Association on 5 May. Read more about Wilker’s career here.

Now, let’s look at some energy newsbytes.

Shangyou Nie

Editor, Well Read

ExxonMobil and Equinor Win Arkansas Lithium Extraction Rights

Public Domain/Created by USGS

Last week, the Arkansas Oil and Gas Commission granted ExxonMobil the right to establish a large lithium production unit in the Smackover Formation, despite objections from rival Occidental Petroleum. Commercial production is planned to begin in 2028, though royalty rates are TBD.

The latest:

• The Arkansas Oil and Gas Commission held a hearing on 22 April, and awarded Saltwerx, an ExxonMobil subsidiary, the right to establish a 56,000-acre lithium production unit.

• According to the Financial Times, Occidental argued that it owns minerals rights in the area and stated it has plans to produce lithium.

• ExxonMobil estimates that it can produce 165,000 barrels of lithium brine daily and generate $27 million in annual profit.

• In the same hearing, the commission also approved an application from Smackover Lithium, a joint venture between Equinor and Standard Lithium, to establish a separate lithium production unit in southwest Arkansas, called Reynolds Unit.

  • This second project is also planning to start production in 2028.

  • Equinor and Standard Lithium aim to produce 22,500 tonnes per year of battery-quality lithium carbonate during full commercial production.

About the Smackover Formation:

• A 2024 joint study between USGS and the Arkansas Department of Energy & Environment suggests that the Smackover Formation extends across Arkansas, Louisiana, Texas, Alabama, Mississippi, and Florida.

• The area represents a relic ancient sea with extensive, porous, and permeable limestone, with brines containing large amounts of lithium.

• The U.S. Geological Survey estimates between 5 and 19 million tonnes of lithium are contained in the southwest Arkansas portion of the Smackover Formation.

  • The USGS report indicates the Smackover brine in southwestern Arkansas has the highest levels of lithium concentration.

  • The low-end estimate is equivalent to more than nine times the International Energy Agency’s estimate for lithium demand for EVs in 2030.

A three-horse race:

• ExxonMobil, Equinor, and Occidental are among the leading companies to develop lithium extraction and processing for the Smackover Formation.

• ExxonMobil started drilling appraisal wells in the Arkansas area in November 2023. By August 2024, ExxonMobil had completed eight appraisal wells totaling 82,000 feet and collected roughly 1,000 feet of core samples.

• Occidental has been picking up lithium extraction leases in Arkansas. It also formed a joint venture with Berkshire Hathaway’s subsidiary BHE Renewables in June 2024 for lithium extraction.

• Equinor and its partner Standard Lithium received a $225-million grant from the U.S. Department of Energy for their Southwest Arkansas lithium project in January 2025.

Planned extraction method: ExxonMobil hopes to utilize the direct extraction method. The method is said to be “66 percent less carbon intense than rock mining” and requires a smaller land footprint than other methods in the lithium industry. Learn more about how it works here.

What they are saying: “Attempts to delay progress could jeopardize economic growth for Arkansas and undermine U.S. efforts to reduce dependence on foreign critical minerals,” said an unnamed ExxonMobil spokesperson.

What to watch:

• Using upstream and downstream expertise to collect and produce lithium represents a new growth direction for the oil and gas industry.

• The lithium royalty rates will be the subject of a May hearing.

• The SW Arkansas area represents about 10 percent of the total area mapped out by the USGS in the six states. Will the other five states pick up the pace for lithium extraction?

• How will Occidental respond?

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ENI Takes FID for CCS Project in Liverpool Bay, United Kingdom

Dmitry Kovalchuk/Shutterstock.com

Italian major ENI recently announced it has taken final investment decision on the Liverpool Bay CCS project with the U.K. government. The decision follows the U.K. government’s funding allocation of some 21.7 billion British pounds, or $29 billion, over a 25-year period for two CCS projects within the country.

About the Liverpool Bay CCS project:

• The project is owned and operated by ENI subsidiary Liverpool Bay CCS Limited.

• It will collect CO2 from the HyNet North West industrial decarbonization cluster in northwest England and northern Wales—near Liverpool and Manchester—then transport and store the CO2 in ENI-operated, depleted gas fields under the Liverpool Bay.

• The project will have an initial storage capacity of 4.5 million tonnes of CO2 per year during the first phase. Its capacity could increase to 10 million tonnes of CO2 per year after 2030.

• The project will also utilize existing offshore platforms and gas pipelines and will construct a new onshore CO2 pipeline and spur pipelines to link industrial emitters.

• This Liverpool Bay CCS project is the second of two priority projects that aim to help the United Kingdom reach its storage target of 20–30 million tonnes of CO2 per year by 2030.

Economic impact: The project will create 2,000 jobs across northern Wales and northwestern England, according to Sir Keir Starmer, Prime Minister of the United Kingdom.

Liverpool Bay CCS project timeline:

• October 2021: The U.K. government selected HyNet as one of two priority CCUS projects.

  • The other main CCS project in the United Kingdom is the East Coast Cluster, being developed by the Northern Endurance Partnership (NEP), including BP, Equinor, and TotalEnergies.

• March 2023: Leaders selected five priority emitters to supply CO2 to HyNet.

• October 2023: ENI signed a Heads of Terms with U.K. authorities.

• December 2023: The U.K. government guaranteed the first phase of CO2 storage capacity at 4.5 million tonnes.

• 2025: Construction planned to begin.

• 2028: Operations planned to commence.

What they are saying: “Today we keep our promise to launch a whole new clean energy industry for our country,” said Ed Miliband, the United Kingdom’s Secretary of State for Energy Security and Net Zero.

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.