Oil Daily | Putin Eases Gas Payment Sanctions; Trafigura Faces $1.1B Loss Amid Fraud, Legal Woes

【Oil-Producing Countries Dynamics】

Hungary and Bulgaria are navigating U.S. sanctions on Gazprombank, affecting Russian gas payments. Hungary claims a "legal-financial solution," while Bulgaria considers an unspecified "option." Russia remains essential for Hungary, with PM Orban meeting Putin. Bulgaria may halt gas transit if payment issues persist, aiming for energy security without geopolitical tension.

【Latest Oil Policies】

Russian President Vladimir Putin allowed European natural gas payments outside Gazprombank, easing market concerns. This change followed U.S. sanctions on Gazprombank. The impact on long-term buyer uncertainty remains debated among experts.

Moldova declared a 60-day state of emergency, anticipating a halt in Russian gas supplies by January 2025. With historical reliance on Gazprom, Moldova seeks alternative routes to reduce Russian influence, particularly in the Transdniestria region. Moldova's PM aims to end energy dependency threats from Russia.

【Industry News】

Trafigura reported a $1.1 billion loss in 2023/2024 due to misconduct in its Mongolian oil business, resulting in a 62% profit decline. The company remains strong operationally and plans leadership changes. An ongoing external investigation focuses on isolated fraud cases, and past financial results have been restated.

Trafigura is also on trial in Switzerland for alleged bribery concerning Angolan oil contracts, highlighting legal challenges for the company.

The International Energy Agency (IEA) suggests U.S.-developed fracking techniques could advance geothermal energy. Improved drilling and greater oil industry involvement could reduce geothermal costs, potentially meeting 15% of global electricity demand by 2050. The IEA forecasts significant cost reductions for geothermal, enhancing its competitiveness as a low-emission energy source.

【Company News】

Kosmos Energy is in preliminary talks to acquire Tullow Oil, potentially creating an Africa-focused oil entity. Kosmos, with assets in the U.S. Gulf and West Africa, emphasizes flexibility in transaction structuring. Tullow Oil has faced challenges in Africa, yet expects financial growth in late 2024.

Nigerian Seplat Energy completed its acquisition of ExxonMobil's onshore assets, aiming to revive idle wells. Regulatory approval finalizes the $1.3 billion deal, transforming Seplat. The company targets significant increases in production amid Nigeria's oil recovery efforts.

【Others】

The International Energy Agency (IEA) suggests U.S.-developed fracking techniques could advance geothermal energy. Improved drilling and greater oil industry involvement could reduce geothermal costs, potentially meeting 15% of global electricity demand by 2050. The IEA forecasts significant cost reductions for geothermal, enhancing its competitiveness as a low-emission energy source.