Oil Daily | Petrobras Boosts Reserves, ExxonMobil Expands in Guyana, US M&A Activity Peaks

【Company News】

Brazil's Petrobras reported an increase in oil and gas reserves by 500 million barrels, totaling 11.4 billion barrels in 2024. The company plans to spend $111 billion from 2025-2029 on exploration, with $77 billion allocated for oil and gas activities. Petrobras aims to boost production and diversify its portfolio.

Suriname's GDP is set to rise significantly when offshore block 58 becomes operational in 2028. The IMF forecasts a 55% annual growth, aided by a $10.5 billion investment. Suriname's crude production will peak at 73 million barrels in 2030-2031 before declining. This growth mirrors Guyana's recent economic expansion.

ExxonMobil and partners have produced 500 million barrels from Guyana's offshore Stabroek block. The consortium aims for 1.3 million barrels per day by 2027, with six projects online. The Stabroek block generated $6.33 billion in 2023, contributing significantly to the partners' revenues.

Mergers and acquisitions in the U.S. upstream oil and gas industry reached $105 billion in 2024, the third-highest total ever. Despite high activity post-Russia's invasion of Ukraine, deal-making is expected to decline. Scale remains crucial for smaller companies amid rising break-even costs and shareholder demands.

The five largest international oil majors are poised to report their lowest quarterly earnings in three years due to weaker margins and lower oil prices. ExxonMobil, Chevron, BP, Shell, and TotalEnergies may face pressure on share buybacks and dividends, potentially leading to more borrowing or cost-cutting.

Shell led the voluntary carbon market by retiring the most carbon credits in 2024. The company relied on carbon credits to meet net-zero goals as investments in renewables were scaled back. Shell retired 14.9 million credits, twice that of the next energy company, Italy's Eni.

【Oil-Producing Countries Dynamics】

Native American landowners in North Dakota seek changes to a tax-sharing agreement with the state, as oil production on the Fort Berthold Reservation has surged. The disbursement of oil and gas taxes is paused until the agreement is modified, amid decreasing Bakken crude production and rising costs.

【Latest Oil Policies】

The Alberta government aims to increase its wealth fund from C$24.3 billion to C$250 billion to lessen dependency on oil and gas revenues. A new corporation will manage the fund, with a goal to boost returns to 9% by 2050. Alberta's finances heavily rely on oil and gas revenues.

【Industry News】

The IEA faces criticism for its "pro-transition bias" in reports, potentially leading to misleading energy transition outlooks. A report titled "Energy Delusions" urges the IEA to focus on monitoring the oil market. The IEA rebuts the criticism, citing errors and misrepresentations in the report.

North Dakota denied Summit Carbon Solutions' proposal to build a CO2 pipeline from ethanol plants to aid Bakken oil recovery. This decision challenges the state's goal of stabilizing oil production through carbon capture and utilization, which is crucial for maintaining output levels.

International lenders, including the World Bank and African Development Bank, committed $8 billion to a $48-billion initiative to connect 300 million Africans to electricity by 2030. This project aims to address the electricity deficit in Africa, with several development banks pledging financial support.

【Others】

Ukraine conducted drone attacks on Russian oil refineries, targeting facilities supporting the Russian military. The strikes resulted in fires and disrupted operations, highlighting vulnerabilities in Russia's energy sector. These attacks have affected fuel supply and crude processing rates in Russia.

Poor returns led to record withdrawals from the EU’s strictest ESG funds in late 2024. Article 9 funds saw $7.6 billion in outflows, attributed to lower returns compared to conventional strategies. Despite global inflows into sustainable funds, U.S. funds faced outflows due to poor returns and backlash against ESG investing.