Oil Daily | Transocean and Seadrill Eye Merger Amid Growing Offshore Oil Investments

【Oil-Producing Countries Dynamics】

Mexico's state-controlled Pemex aims to boost reserves through deepwater exploration under new President Claudia Sheinbaum. The company seeks new business models to attract investments, shifting from former President Lopez Obrador's stance. Despite support, Pemex's production has been declining, with crude output at historic lows. Sheinbaum faces challenges with Pemex's high debt.

Harbour Energy plans to sell stakes in North Sea oilfields and seeks a U.S. listing amid upcoming UK tax hikes. The new Labour government aims to finance renewable projects with oil and gas revenues. Harbour Energy is also diversifying through acquisitions, including Wintershall Dea's assets, to reduce North Sea exposure.

【Industry News】

Transocean and Seadrill explore a merger to leverage growing offshore oil and gas investments. Recent discoveries in offshore regions like Guyana and Namibia are driving interest. Offshore investment has surpassed shale due to stable recovery rates and lower costs. The merger could strengthen their market position.

Shanxi, China, produced 933.66 million tons of coal in the first nine months, accounting for over a quarter of China's output. September saw record production, despite marginal annual growth. While domestic demand rises, China reduces new coal generation capacity approvals, balancing existing capacity and a potential move from coal.

America's refiners are expected to report lower Q3 profits due to declining refining margins amidst weak fuel demand and increased supply. Analysts anticipate significant drops in earnings per share for major refiners like Valero, Marathon Petroleum, and Phillips 66 compared to last year. The industry is seeing the end of a profit supercycle.

【Company News】

Shell Energy North America will acquire RISEC Holdings, expanding its ISO New England power market presence. The acquisition enhances Shell's market opportunities. Meanwhile, Nigeria rejected Shell's sale of assets in the Niger Delta, a setback after selling similar assets elsewhere. Nigeria remains a challenging market with persistent oil issues.

Renewable energy utility NextEra Energy reported strong Q3 earnings, boosting its stock. The company saw a 10% increase in adjusted earnings per share and significant revenue growth. Continued investment in Florida Power & Light drove performance, with expectations of further earnings growth in the coming years.

【Others】

Equinor's Sleipner B platform shutdown does not impact gas commitments despite recent smoke issues. Emergency measures were implemented, with a tentative shutdown until October 28. Despite this, Norway's gas supply to Europe remains stable, with EU storage levels high. European gas prices have risen amid Middle East tensions.

Rosneft's challenge against Shell's stake sale in a German refinery was rejected. The Düsseldorf court found no legal grounds for Rosneft's complaint. Shell plans to sell its stake to Prax Group, with Germany extending trusteeship over Rosneft's assets in anticipation of a possible sale to Qatar.