Oil Daily | Kenya Launches Oil Block Bidding, API Reports U.S. Crude Inventory Drop, ONGC Diversifies

【Oil-Producing Countries Dynamics】

Kenya plans to launch an oil and gas exploration round for 10 blocks, aiming to attract investors through a transparent process. The government is renewing efforts to develop its oil industry by offering tax incentives and investing in infrastructure. The stalled South Lokichar project remains a challenge after TotalEnergies and Africa Oil withdrew.

Russia stated it would not publicize details of the talks with the U.S. on Ukraine, raising doubts about progress. The discussions focused on technical aspects and were held after separate U.S.-Ukraine talks. Recent agreements to halt attacks on energy infrastructure have been fragile amid accusations from both sides.

China's trade with Venezuela stalled after President Trump threatened 25% tariffs on goods from countries buying Venezuelan oil. Chinese traders are cautious amidst U.S. sanctions. China opposes such unilateral sanctions and believes additional tariffs will harm American businesses and consumers.

Indian ONGC plans to diversify into refining, petrochemicals, LNG trading, and renewables due to expected lower oil prices from a global supply glut. ONGC is exploring LNG regasification capacity and refinery projects, alongside investing in clean energy with a target of 10 GW by 2030.

【Industry News】

The American Petroleum Institute reported a 4.6 million barrel decrease in U.S. crude oil inventories. Despite expectations of a smaller dip, inventories have risen over 16 million barrels this year. Gasoline inventories fell 3.3 million barrels, while distillate inventories dropped by 1.3 million barrels.

Glencore announced it would reduce coal output at its Cerrejon mine by up to 10 million tons due to unsustainable prices. Oversupply from India and China has impacted prices, and while coal demand may rise if natural gas prices increase, a full resurgence is uncertain.

More heat waves in India are expected to increase peak power demand by 9-10% this summer. Last year saw record-high electricity demand due to heat waves, driven by increased AC usage. India's electricity demand is projected to grow by 6.3% annually from 2025 to 2027, bolstered by rising air conditioner ownership.

【Company News】

Venture Global’s Calcasieu Pass LNG plant is set to officially commence operations, after selling LNG on the spot market. Long-term buyers like Shell and BP accused the company of avoiding contractual obligations for profits. TotalEnergies refused to sign long-term contracts due to distrust.

Shell is uncertain about the outcome of a $1.62 billion claim by Russia for unpaid gas deliveries. The claim relates to Shell’s withdrawal from Russia after the Ukraine invasion. Shell is unable to estimate potential payments, and the company faces uncertainty regarding future operations and financial impacts.

【Others】

Alaska is seeking Asian investment in its $44-billion LNG export project. Governor Mike Dunleavy discussed potential cooperation with South Korea. Despite interest from partners like Taiwan, Japanese firms are concerned about high costs due to Alaska's cold climate and pipeline requirements.