I have been a soccer lover for life, and I was so excited to see the World Cup 2026 draw taking place last Friday. My family and I will get to cheer for four teams, the United States, the Netherlands, Switzerland, and Sweden. The first three are countries where we have lived and worked, and the fourth one being my son-in-law’s home country. It saddens millions of Chinese soccer fans that China will be absent—again—on the world’s biggest stage. But that is another story…
For now, let’s dig into two pieces of energy news from last week.
Shangyou Nie
Editor, Well Read
TotalEnergies to combine U.K. Business with Repsol
Frode Kopang/Shutterstock.com
TotalEnergies has become the latest major to merge its U.K. North Sea assets with Neo Next Energy, a company created after Repsol and private equity firm HitecVision combined forces. The new company will be called Neo Next+. It will be the largest independent oil and gas producer in the U.K. continental shelf.
About the merger:
TotalEnergies will own 47.5 percent of Neo Next+, HitecVision will own 28.9 percent, and Repsol will own 23.6 percent.
Neo Next+ will have a combined production of 250,000 barrels of oil equivalent per day (boepd) in 2026, almost doubling that of Neo Next.
TotalEnergies will retain its own decommissioning liabilities—estimated at $2.3 billion, according to Upstream. This is similar to what Repsol had agreed previously.
The deal is scheduled to close in H1 2026, subject to regulatory approvals.
About Neo Next+:
Neo Next was created in March 2025, following the merger of Repsol and HitecVision’s North Sea assets. Hitec Vision owned 55 percent, and Repsol owned 45 percent.
Repsol was trying to streamline its upstream business by focusing on fewer countries/regions. It exited a number of countries in preparation for an IPO in 2026 in the United States.
Neo Next is a private company based in Aberdeen, United Kingdom.
The stated strategy for Neo Next is “Resilience, Yield, and Growth.”
Since the completion of the merger with Repsol, Neo Next has acquired Gran Tierra Energy North Sea and BP’s Culzean interest.
Background:
The U.K. North Sea is a mature basin that started offshore oil production in 1975.
The U.K. North Sea is facing higher production costs, decreasing oil and gas discoveries, and a challenging fiscal environment.
Tax incentives:
Key drivers for these mergers include synergy building, cost reduction, and tax liability reduction.
Combined companies can offset income from previous losses to reduce tax payments.
The U.K. government introduced a windfall tax in 2022 due to high energy prices. It will remain in effect until 2030.
What they’re saying: “With this deal, we continue to optimize our global asset portfolio with a focus on high-margin projects to sustain business scale in the medium- and long-term and enhance shareholder value,” said Josu Jon Imaz, Repsol CEO.
What to watch:
Which other companies and assets will Neo Next acquire?
Will the U.K. government introduce new fiscal rules to discourage tax-driven M&A activity? Or will it introduce new incentives to encourage more investment and increase oil and gas in the North Sea, similar to what the U.S. government is trying to do for Gulf of Mexico (America)?
Which other mature basins will we see a similar industry consolidation to fend off growth challenges?
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TikTok to Invest $37 Billion in Brazil to Build a Wind-Powered Data Center
Algi Ferbi Sugita/Shutterstock.com
ByteDance, TikTok’s parent company, will invest $37 billion to build a large data center complex in Brazil, as the largest South American country positions itself to be the leading AI hub for the region. The data center will be located in the northeastern state of Ceará and will use power from wind energy parks.
The investment will be from 2026 to 2035 and create 4,000 jobs.
ByteDance’s TikTok will partner with two data center developers, Omnia and Casa dos Ventos. The latter is one of Brazil’s leading renewable energy companies.
The data center is also called the Pecém Project, which is close to a submarine cable system linking Brazil with Europe and Africa.
The data center will “fully rely on” clean energy from wind energy parks, according to Monica Guise, head of public policy, TikTok Brazil. It will be 100-percent powered by renewable energy.
China and Brazil are the founding members of the BRICS group, in addition to Russia, India, and South Africa.
The current Brazilian government has a testy relationship with the Trump administration, as President Trump is a strong supporter of former Brazilian President Jair Bolsonaro.
China and Brazil are both pushing an “all the above” energy strategy, producing more oil and gas, while simultaneously promoting rapid growth of renewable energy.
What they are saying: “I’m convinced this data center will be something extraordinary for the technological development of this country,” said President Lula.
What to watch:
As data centers require large amounts of power, inexpensive power sources are a critical piece of the investment decisions from high-tech companies.
In the United States, AI/data centers are considered a “main competitor” for LNG in terms of getting cheap gas supplies.
Go deeper: From 7-8 January, AAPG is hosting a “Subsurface Energy to Power” special conference in Houston. I am a co-chair for session 4 of the program, “Business and Financing for Energy Projects.” You can learn more about the event and register here. The workshop will also review the latest in powering data centers - get a sneak peek at the session here.
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