Wednesday, 13 November, 2024 / Edition 33

With the election victory by former President Trump, the world is anticipating what decisions he might make in the next four years and how these decisions could impact the oil and gas industry. In the December issue of AAPG Explorer, I shall share what I think may be coming. You can access it here any time after December 1.

For now, let’s dig into two pieces of upstream news from last week.

Shangyou Nie

Editor, Well Read

ENI Sells Upstream and New Energy Assets

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Italian major ENI announced two sales over the past week. It completed its sale of two producing assets in Alaska for $1 billion to Houston-based Hilcorp last week. Then, on Monday, ENI sold additional shares of its new energy business Plenitude to Energy Infrastructure Partners (EIP) for $222 million.

Upstream assets ENI sold:

• ENI sold the Nikaitchuq and Oooguruk oil fields in offshore Alaska, 100-percent owned assets, to Hilcorp Energy Co., a leading private producer in Alaska and five other states focused on legacy producing assets.

• The two fields produced 22,000 barrels per day collectively, according to Hilcorp.

• ENI still holds upstream assets in the Gulf of Mexico, as well as energy transition projects and biofuels in the United States.

New energy business ENI sold:

• EIP, a New York-based private equity firm, paid ENI about $222 million to earn additional shares in Plenitude.

• EIP would own 10 percent of Plenitude with the latest capital injection, a total of $960 million. This will imply a total valuation for Plenitude of $10.6 billion.

• Plenitude is one of ENI’s satellite businesses, focusing on solar, wind, and energy storage. It has active business in eight countries, including the USA, Kazakstan, and six European countries.

ENI leverages external financing:

• ENI said that it aims to generate $8 billion in proceeds from divestment or dilution between 2024 and 2027 to help execute its growth strategy.

• There would be three sources of its divestments/dilution: non-core upstream assets, high-equity holdings from its exploration discoveries, and its satellite business.

• Last month, ENI sold 25 percent of Enilive to KKR for $3.2 billion.

What to watch:

• Which company might join ENI for its oil discovery Baleine, located in offshore Ivory Coast?

• ENI has 83 percent equity for the $10 billion project, but it was reported in June that ENI planned to divest up to 30 percent equity in the project.

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South America Might Gain Two LNG Exporting Countries: Guyana and Suriname

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Guyana and Suriname could become two new LNG exporting countries within 10 years, according to a recent analysis by Wood Mackenzie. If it happens, this development will be particularly significant to Latin American LNG customers.

The latest:

• According to Wood Mackenzie, between Guyana and Suriname, international operators have discovered more than 13 trillion cubic feet of non-associated gas.

• These include the Haimara cluster in Guyana and the Sloanea gas field in Suriname.

• The two neighboring countries have a collective potential for 12-mtpa-LNG-producing capacity at a competitive price.

Joint development:

• According to local press outlets, the two governments met in Guyana recently to discuss potential joint development for the gas discoveries, as they are located near the border area.

• Venezuela, on the other hand, threatened to annex a disputed region near the Venezuela-Guyana border.

• If joint gas development can proceed, it would set a good example for the region.

Major IOCs and NOCs in Suriname and Guyana:

• Leading IOCs, including ExxonMobil, TotalEnergies, and Shell are operating in Guyana and Suriname—two of the world’s newest oil-producing countries.

• Asian NOCs Petronas, CNPC, and CNOOC also have blocks in Guyana and Suriname.

• ExxonMobil and partners Hess and CNOOC are producing 645,000 barrels of oil per day in Guyana, which will grow to 900,000 barrels per day by the end of 2025, according to U.S. Energy Information Administration.

• TotalEnergies (operator, 50-percent equity owner) took FID in October with equal partner APA Corp. for the $10 billion GranMorgu project in Block 58 in Suriname.

• In May, Malaysian national oil company Petronas announced its third discovery in Block 52, the Fusaea oil field, after discovering Sloanea (gas) and Roystonea (oil) fields. Petronas is the operator and owns a 50-percent interest with equal equity partner ExxonMobil.

• In August, there was report that Petronas and ExxonMobil were evaluating a potential stand-alone floating LNG project in Suriname.

Why it matters: “Guyana and Suriname can offer a new cost-competitive LNG supply source… holding shipping costs advantage to address Caribbean and South American demand,” said Amanda Bandeira, Research Analyst, Latin America Upstream for Wood Mackenzie.

What’s next:

• If Suriname and Guyana become LNG exporters, they will help fill an anticipated supply shortage in early 2030s.

• Associated gas from oil fields could also be used for LNG production and export in the future.

• Related finances and regulations need to be in place for Guyana and Suriname to ensure timely delivery of these LNG aspirations.

• Some analysts suggest that Suriname could be faster than Guyana to bring LNG to market first.

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