Happy Wednesday! 👋

This week, I'll share my thoughts on two ongoing developments with you: One covers how our often unique and creative French colleagues are expanding their U.S. operations, and the other examines recent business moves by UAE and ADNOC—a nation and company commanding attention in the energy transition.

Let’s take a closer look…

Shangyou Nie

Editor, Well Read

The French are Coming

TotalEnergies CEO Patrick Pouyanné speaks at CERAWeek, Courtesy of CERAWeek by S&P Global

Last week, global oilfield services company SLB announced a $7.8 billion deal to acquire chemical service company ChampionX. 

SLB’s U.S. headquarters are in Houston, but it was founded in Paris. This deal follows fellow French energy major TotalEnergies’ series of expansion deals and partnerships over the past 12 months.

What’s new:

• SLB made an all-stock offer of $40.59 per share to completely take over ChampionX. This was a 14.7 percent premium over the market price.

• ChampionX is based in The Woodlands, Texas, specializing in well construction and drilling, EOR, and digital monitoring.

• SLB CEO Olivier Le Peuch said that the acquisition of ChampionX would help it grow internationally, too.

• ChampionX has more than 7,300 employees across more than 60 countries.

A French fury:

• In March 2024, TotalEnergies acquired Talos Low Carbon Solutions for CCS in the U.S. Gulf Coast.

• Last November, TotalEnergies also bought three gas power plants in Texas to grow its integrated power business.

• A month earlier, Total and partners signed a 25-year agreement with the state of New York to supply 1.4 GW of offshore wind power to New York and New Jersey. It also started commercial operations for a solar power plant in Texas.

What TotalEnergies is saying:

• “We used to think that we were disadvantaged in the USA and Texas,” TotalEnergies CEO Patrick Pouyanné said during CERAWeek last month.

• TotalEnergies SVP Vincent Stoquart said: “Given the advantages that IRA tax exemptions are generating, TotalEnergies will develop a 25 GW power portfolio in the USA.”

• Leaders claim TotalEnergies wants to grow in the USA, especially in Texas, to build a more diversified portfolio—partly to balance significant investment in LNG projects in Russia.
• Pouyanné called for a two-system approach to traditional and new energies at CERAWeek: System A for the traditional energy mix dominated by fossil fuel, and System B for one dominated by renewable energy. 

Why it matters:

• Trend alert: Stable oil prices are also spurring the Japanese and other international players to grow their energy business in the U.S. Other countries have been expanding more piecemeal—doing small or medium-size deals here and there. French companies are leading this wave of expansion into the USA. 

• Opportunity abounds: American (and other international) oil companies should keep a close eye on French and other international investors for partnership opportunities.

• Long-term growth: Investments from these French and international companies should bring more job opportunities for geoscientists and engineers, despite near-term job losses from market consolidation.

Dive deeper: Read more about the latest SLB deal here.

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A Middle East Major Goes Big on Gas

Main entrance at Abu Dhabi National Oil Co, Shutterstock

ADNOC, United Arab Emirates’ national oil company, will spend $13 billion over the next five years to grow its gas arm, ADNOC Gas. The spending will be funneled toward domestic and international growth opportunities.

By the numbers:

• ADNOC Gas has a market cap of $65 billion.

• The company has 5 percent equity traded in the Abu Dhabi Stock Exchange, after combining its Gas Processing, LNG, and Industrial Gas units.

Major league play for UAE and ADNOC:

• While hosting COP28 as the event’s president last November, ADNOC CEO Sultan Ahmed Al Jaber announced plans to grow LNG production capacity by 20 percent over the next five years.

• ADNOC Gas emphasized its strategic location to reach Asian and European markets.

• This gas growth comes in addition to UAE’s ambitious target to grow oil production from 3 million b/d to 5 million b/d by 2027, 3 years ahead of its previous target.

What they are saying: “We aim to expand internationally by acquiring new positions in the gas value chain, targeting opportunities in Europe, India, China and Southeast Asia if they add value to our business”—ADNOC Gas CEO Ahmed Mohamed Alebri

Why it matters:

• Countries in the Middle East used to attract mostly oil workers. Now, those with gas specialties are needed, too.

• Look out for potential job and partnership opportunities with ADNOC Gas and its sister company Mubadala, which focuses more on overseas oil growth.

What to watch: Will ADNOC Gas acquire equity interest in the USA?

Dive deeper: Learn more about ADNOC Gas’ growth targets here.

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