Those of us in Houston survived below freezing conditions last week. We hope you are keeping warm in the winter, if you live in the northern hemisphere.
Let’s review two pieces of energy news from last week.
Shangyou Nie
Editor, Well Read
Trump Issues Executive Orders That Impact the Upstream Sector
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Trump issued a series of new executive orders and rescinded 78 issued by the Biden Administration. The following seven executive orders most directly relate to the energy industry:
Withdrawing the United States from the Paris Climate Accord. “Climate extremism has exploded inflation and overburdened businesses with regulation,” said Trumps’ executive order.
Trump thinks the Paris Climate Accord is “unfair and one-sided.” “The United States will not sabotage our own industries while China pollutes with impunity,” Trump is quoted saying in Reuters.
The United States will notify the United Nations of its intention to withdraw. It will take one year for the withdrawal to become effective, the same way it did when Trump withdrew from the agreement in 2017.
Declaring a national energy emergency. “The policies of the previous administration have driven our nation into a national emergency, where a precariously inadequate and intermittent energy supply, and an increasingly unreliable grid, require swift and decisive action,” the executive order states.
Resuming processing LNG export permits. “The Secretary of Energy is directed to restart reviews of applications for approvals of liquified natural gas export projects as expeditiously as possible,” the order says.
This ends the permitting pause that the Biden administration enacted in January 2024.
Re-opening ANWR for oil and gas leasing. This executive order is to “rescind the cancellation of any leases within the Arctic National Wildlife Refuge,” and “initiate additional leasing … for the exploration, development, and production of oil and gas from leases within the Arctic National Wildlife Refuge.”
It will immediately “reverse the punitive restrictions implemented by the previous administration that specifically target resource development on both State and Federal lands in Alaska.”
Re-opening federal offshore areas for oil and gas leasing.
This executive order revoked Biden’s Presidential Memorandum of March 13, 2023, “Withdrawal of certain Areas off the United States Arctic Coast of the Outer Continental Shelf from Oil and Gas Leasing.”
Removing EV-related subsidies. Trump instructed through this order: “All agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 or the Infrastructure Investment and Jobs Act, including, but not limited to, funds for electric vehicle charging stations.”
The policy is set in motion “to eliminate the EV mandate” and “promote true consumer choice,” by ensuring a level regulatory playing field for consumer choice in vehicles.
Withdrawing offshore wind leasing. Trump ordered “withdrawal from disposition for wind energy leasing all areas within the Offshore Continental Shelf,” effective on 21 January 2025.
Join Wood Mackenzie’s webinar on 11 February and listen as their leaders explore the outlook for the subsurface sector in 2025 and offer an opportunity to ask your key questions directly to the experts.
Leading U.S. LNG exporter Venture Global (ticker symbol VG) went public last Friday on the NYSE, at a price significantly lower than planned. VG share price has decreased 16 percent since the first day of trading and has a market cap of $48 billion.
About the IPO:
In an SEC filing early in January, VG projected a market cap of $110 billion, according to the WSJ.
VG offered 70 million shares, or 2.9 percent of total shares, of its Class A common stock. It raised about $1.75 billion—below the $2–2.3 billion planned.
As of 28 January, VG was down 16.3 percent from its IPO price.
About VG:
Arlington, Virginia-based VG has two LNG export terminals in Louisiana.
VG is co-founded by Mike Sabel, a former investment banker, and Robert Pender, an energy lawyer, who controls 84 percent of the company, according to the Financial Times.
VG has marketed itself as a “disrupter,” using dozens of smaller, modular units to build LNG plants cheaper and faster.
VG’s first facility, Calcasieu Pass, started producing LNG in 2022, with “at least 10 million tonnes per annum” of capacity. Its second facility, Plaquemines LNG, started producing in December 2024, with “at least 20 million tonnes per annum” of capacity.
According to VG, it is also developing three new projects in Louisiana—CP2, CP3, and Delta—with a combined additional capacity of more than 70 million tonnes per annum.
VG has stated it is also constructing and developing more than 100 million tonnes per annum of LNG export capacity.
VG has said that all its LNG terminals have CCS projects.
Potential reasons for VG’s lower-than-planned performance:
The $110 billion target price, higher than that of BP, was a surprise to some. For comparison, Cheniere Energy, the largest LNG exporter in the United States, has a market cap of $51 billion.
Trump’s lifting of the LNG export permit ban is good news for VG, but it also opens up space for more competitors: An estimated 40 percent of new U.S. LNG projects are waiting for approval to non-FTA countries.
Ongoing legal cases VG has with its customers, including Shell and BP, may have also affected the IPO.
An over-supply of global LNG might be developing and take effect in the later part of the decade.
Investors might start to weigh in on the potential end to the Russian-Ukraine war and gas prices may drop in Europe in the near-to mid-term.
What they are saying:
Sabel downplayed the revised IPO plan, telling the Financial Times that the outcome was an “extremely successful raise” at a “great transaction price.”
“The pre-launch excitement for Venture Global evaporated when management persistently pushed for a valuation nearly double its peers,” said Miachel Alfaro, chief investment officer of hedge fund Gallo Partners.
Enverus’ Andrew Gillick said the initial pricing was “aspirational,” and the new valuation is more “realistic,” based more heavily on near-term opportunities.
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