Oil Daily | Shell, TotalEnergies Boost Nigerian Output; Iraq Increases Production Amid OPEC Easing

【Oil-Producing Countries Dynamics】

Shell and TotalEnergies are set to increase oil and gas production in Nigeria by 2027. Shell's Bonga North and TotalEnergies' Ubeta gas field are central to this plan. They anticipate final investment decisions on new projects like Bonga Southwest-Aparo and IMA gas field, boosting Nigeria's production capacity. The Nigerian government has urged collaboration to meet OPEC quotas.

Iraq's Dhi Qar Oil Company increased production by 80,000 barrels per day across three southern fields, supported by OPEC's easing of output cuts. This production boost is critical for Iraq's economic stability, as oil constitutes a significant portion of its revenue. The move reflects Iraq's focus on optimizing existing fields rather than launching new projects.

【Latest Oil Policies】

The U.S. Department of Energy warns of a potential increase in blackouts due to a mismatch in electricity supply and demand. As older baseload power sources retire and new ones lag, the DoE highlights the need for reliable power sources. The report stresses the implications of this mismatch on America's energy stability and industrial growth.

【Industry News】

China is avoiding LNG purchases on the spot market despite increased demand for air-conditioning. This decision is due to high spot LNG prices, with China relying more on pipeline imports from Russia. Analysts expect China's LNG imports to decline in 2025, affecting the global market dynamics, especially benefiting European importers.

Chevron plans to finalize the acquisition of Hess Corporation, pending a court decision on Exxon's right of first refusal. The acquisition focuses on Hess's stake in the Stabroek Block, Guyana. Despite the legal hurdles, Chevron is confident of a favorable outcome and is already preparing for integration.

China's refiners face weak margins due to oversupply in jet fuel as road fuel demand declines. The switch to jet fuel was driven by increased aviation demand, but supply now exceeds consumption. Chinese refiners are seeking export markets to manage the oversupply and stabilize margins.

【Company News】

Shell anticipates lower trading results for Q2, citing reduced gas and LNG production. The company expects lower earnings for the Chemicals & Products segment, with overall upstream production affected by maintenance and asset sales. Shell's full Q2 results are due on July 31, reflecting market volatility and its impact on earnings.

【Others】

The government of Cyprus announced a new natural gas discovery in Block 10, operated by ExxonMobil and QatarEnergy. The discovery in Pegasus-1 well needs further evaluation for commercial viability. This marks another significant find in Cyprus's bid to become a regional gas export hub, though development faces challenges.

A Greek-operated bulk carrier was attacked in the Red Sea, marking the second Houthi strike on commercial shipping within 24 hours. This raises security concerns in a vital oil transit corridor, impacting insurance premiums and geopolitical stability. The attacks reflect growing tensions in the region.

Indonesia plans to sign a $34 billion memorandum of understanding with U.S. companies, including ExxonMobil and Chevron, for commodity purchases. This agreement includes commitments to buy U.S. agricultural products and energy sources, amid trade negotiations with the U.S. to avoid high tariffs. Indonesia aims to diversify its fuel imports and reduce reliance on Singapore.

A UK government-backed fund is investing over £2 million in the Peak Cluster carbon capture project. This initiative aims to capture emissions from the cement and lime industry, storing them under the Irish Sea. The investment is expected to create jobs and support the UK's transition to clean energy.