We have been touring our home province of Jiangxi in southern China. I hope some of you get an opportunity in the future to visit the beautiful mountains here, such as Mt. Lushan and the Jinggang mountain range.
I also hope you take this opportunity to offer us some feedback on which topics you would like to see covered in Well Read. Please provide your input here.
Now, let’s look at two energy stories from the past week.
Shangyou Nie
Editor, Well Read
OPEC Forecasts Oil Demand Growing Beyond 2050
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Last Tuesday, OPEC published its World Oil Outlook (WOO) in Brazil, projecting that global oil demand will grow continuously during the next 26 years, reaching 120 million barrels per day by 2050.
This is in sharp contrast with lower projections by the International Energy Agency and some European IOCs (such as BP).
Global oil demand will grow from 102 million barrels per day in 2023 to 120.1 million barrels per day in 2050.
Petrochemicals, road transportation, and aviation are the three sectors with the highest projected demand growth at 4.9, 4.6, and 4.2 million barrels per day, respectively.
OPEC emphasizes that all energies are needed to address future energy demand and stresses the necessity of investment in all energies, except coal. OPEC projects a need for $17 trillion in oil investments alone.
India growth:
OPEC says India will drive the next phase of oil demand growth as its population and economy continues to grow. Between 2029 and 2050, oil demand in India will grow by 6.5 million barrels per day, or 3.2 percent annually.
India and other Asian, African, and Middle Eastern countries will grow 22 million barrels per day collectively from 2023–2050.
China’s growth and OECD decline:
China’s oil demand will only grow by 2.5 million barrels per day from 2023 to 2050—only 0.5 million barrels per day from 2029–2050, or 0.1 percent annually.
Organization for Economic Co-operation and Development (OECD) countries will see demand decline during the same period.
On renewables:
WOO 2024 underscores “that the fantasy of phasing out oil and gas bears no relation to fact.” Oil and gas make up more than 50 percent of the energy mix now, and OPEC says the same will be true in 2050.
OPEC Secretary General, Haitham Al Ghais of Kuwait, highlighted the significance of discussing WOO 2024 in Brazil, the host country for COP30 in 2025.
OPEC says “the world can only phase in new energy sources at scale when they are genuinely ready, economically competitive, acceptable to consumers, and with the right infrastructure in place.”
The WOO 2024 stresses that it is possible to reduce carbon emissions and increase oil production at the same time, using climate efforts such as CCUS and blue hydrogen in the oil and gas industry.
The most significant difference is with BP’s projection that global oil demand could peak as early as 2025.
The IEA forecasts peak oil demand at 106 million barrels per day by 2029.
The WOO 2024 projection is most similar with that of the DOE’s Energy Information Agency, which projects global oil demand will continue to grow till 2050.
TotalEnergies Acquires Second Set of Gas Assets From Lewis Energy Group in 2024
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TotalEnergies recently announced that it acquired a 45-percent equity stake in producing assets in Texas’ Eagle Ford Basin from Lewis Energy Group. This is the latest move for the French major to grow its integrated LNG position in the United States, from which it is targeting to export 15 MTPA by 2030.
Deal details:
Total bought a 45-percent stake in dry, gas-producing assets owned and operated by Lewis Energy Group.
The assets are in the gas and gas/condensate windows of the Eagle Ford and Austin Chalk plays.
No financial details were reported by the buyer or the seller.
The new assets have the potential to produce 400 million cubic feet per day by 2028.
In April, TotalEnergies acquired a 20-percent interest from Lewis Energy Group for leases in the Dorado Field in the Eagle Ford Basin majority, which are operated by EOG (80 percent).
TotalEnergies said the new Dorado assets would allow it to grow its gas production in the USA to 50 million cubic feet per day in 2024, with the potential to grow an additional 50 million cubic feet per day in 2028.
What they are saying: This new acquisition “contributes to our integrated LNG position with a low-cost upstream gas supply,” said Nicolas Terraz, president of exploration and production at TotalEnergies.
About Lewis Energy Group:
Lewis Energy Group is a San Antonio-based private company, focused on the Eagle Ford Basin, with assets on both sides of the U.S.-Mexico border.
Lewis Energy operates more than 2,500 wells and claims to have “thousands of locations left to drill in Texas.”
It also has oilfield services and midstream gathering businesses.
TotalEnergies’ upstream gas position in the United States:
TotalEnergies operates a production of roughly 500 million cubic feet (gross) in the Barnett Shale in Texas.
TotalEnergies claims to be “the largest exporter of U.S. LNG,” thanks to its 16.6-percent stake in Cameron LNG in Louisiana, operated by Sempra Infrastructure, and several long-term LNG purchasing agreements.
Cheniere Energy exported around 40 MTPA in 2023 and is clearly the top exporter for U.S. LNG. Perhaps, TotalEnergies means it is the largest European IOC exporting U.S. LNG.
What to watch:
TotalEnergies will aim to grow its U.S. LNG export capacity to 15 MTPA by 2030.
More gas-focused M&A deals might continue to happen in the USA, especially if there is more regulation certainty.
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