Oil Daily | BP Net Debt Rises Amid Divestments; Saudi Boosts Oil Exports to China Amid Price Cuts

【Company News】

BP anticipates lower gas trading results and reduced gas output for Q1 as it refocuses on core oil and gas operations. Oil production is slightly up, but gas and low-carbon output are down due to divestments in Egypt and Trinidad. Despite higher refining margins, BP's net debt is expected to rise $4 billion due to working capital effects. BP aims to reduce its net debt to $14-$18 billion by 2027 and is launching new projects to increase upstream production. Shell and ExxonMobil also reported trading updates indicating varied Q1 earnings results.

Mubadala Investment Co has acquired a 24% stake in SoTex HoldCo LLC, marking its entry into the U.S. natural gas sector. This aligns with UAE's $1.4 trillion investment in the U.S. across various sectors. The acquisition includes involvement in a shale gas field and an LNG terminal in Louisiana, with plans for expansion. Mubadala Energy, focusing on gas production, reflects UAE's strategy to engage more globally in energy deals. ADNOC is also exploring U.S. gas ventures, indicating a shift towards broader international partnerships.

【Oil-Producing Countries Dynamics】

Kazakhstan is negotiating with oil companies to potentially reduce output and comply with OPEC agreements after exceeding its production quota. The country's crude oil and condensate output hit a record in March, surpassing its OPEC limit. Despite commitments to OPEC, Kazakhstan's increased production is fueled by Chevron's expansion at a major oilfield. This highlights Kazakhstan's ongoing challenge of balancing its production levels with OPEC agreements.

【Latest Oil Policies】

The U.S. Department of the Interior increased its estimates of oil and gas reserves in the Gulf of Mexico, now termed the Gulf of America. The revised reserves total over 7 billion barrels of oil equivalent, a 22.6% increase from previous estimates. This adjustment is part of the Trump administration's efforts to streamline permitting and expand access, asserting the Gulf's vital role in domestic energy supply and national security.

【Global Oil Supply and Demand】

Saudi Arabia plans to significantly boost crude oil exports to China, increasing shipments from 35.5 million to 48 million barrels next month due to substantial price cuts. The move is in response to ongoing trade tensions, particularly with U.S. tariffs affecting global oil prices. Saudi Arabia remains a key supplier to China amid fluctuating market dynamics.

The U.S. Energy Information Administration revised its global oil demand growth projections down due to trade tensions and tariffs. The forecast for 2025 reduced from 1.2 million to 900,000 barrels per day. Tariff conflicts between the U.S. and China, including reciprocal tariffs on U.S. goods, threaten global economic growth and oil consumption. Analysts predict oversupply concerns due to recent OPEC output increases and rising U.S. crude stockpiles.

【Others】

Google announced collaboration with PJM Interconnection on AI tools to enhance grid management. This initiative aims to optimize energy source connections to PJM's grid, advancing electricity reliability and affordability for its 67 million users. Google's AI application marks a significant step in creating a robust energy system, reflecting growing utility demand for innovative solutions to meet increasing power capacity needs.