The energy sector is set for a higher start, supported by strength in the crude complex despite weakness in the major equity futures. U.S. stock index futures slipped as oil prices climbed and investors weighed developments around the Russia-Ukraine conflict, while Boeing shares fell after a 737-jet crashed in China.
WTI and Brent crude oil is up in early trading as European Union nations considered joining the United States in a Russian oil embargo and after a weekend attack on Saudi oil facilities. Executives from the U.S. oil and other industries were invited to the White House on Monday for discussions with officials amid soaring gas prices and rising inflation, sources told Reuters. Oil prices moved higher ahead of talks this week between European Union governments and U.S. President Joe Biden in a series of summits that aims to harden the West’s response to Moscow over its invasion of Ukraine. Additionally, Saudi Arabia said it would not bear responsibility for any shortages in oil supplies to global markets after Yemen’s Iran-aligned Houthis fired missiles and drones at Saudi energy and water destination facilities.
Natural gas futures fell this morning on forecasts for slightly warmer weather and lower heating demand than previously expected. The FT reports Germany has signed a long-term gas supply deal with Qatar as it moves to break its dependence on Russian supply.
BY SECTOR:
US INTEGRATEDS
Union workers were removed from a Chevron oil refinery near San Francisco hours ahead of a deadline to begin the first labor strike at the gasoline producing plant in more than 40 years.
Chevron Products Company, a division of Chevron U.S.A., introduced Delo 400 XSP SAE 15W-40 with ISOSYN Advanced Technology, a new full synthetic, high-performance engine oil engineered to help maximize engine protection and to minimize oil consumption, specifically formulated for heavy duty diesel engines operating on and off highway.
The U.S. Senate Commerce Committee said Friday it is inviting Exxon Mobil, BPAmerica and Pioneer Natural Resources to testify at an upcoming hearing on the surge in petroleum prices.
An appraisal drilling for hydrocarbons off Cyprus has reaffirmed a reservoir of high quality gas in an area licensed to ExxonMobil and Qatar Petroleum, the island’s energy ministry said.
INTERNATIONAL INTEGRATEDS
Aramco’s net income increased by 124% to $110.0 billion in 2021, compared to $49.0 billion in 2020. The increase in net income reflects higher crude oil prices, stronger refining and chemicals margins, and the consolidation of SABIC’s full-year results. Aramco declared a dividend of $18.8 billion for the fourth quarter, to be paid in Q1 2022. The Board of Directors also recommended that $4 billion in retained earnings be capitalized and bonus shares be distributed to shareholders, subject to required Extraordinary General Assembly and regulatory approvals. Under the recommendation, shareholders would be granted one bonus share for every ten shares owned. As a result, the total dividend for 2021 is $75 billion in cash, in addition to bonus shares.
Yemen’s Iran-aligned Houthi group fired missiles and drones at Saudi energy and water desalination facilities, causing a temporary drop in output at a refinery but no casualties, the Saudi energy ministry and state media said. Drone strikes hit a petroleum products distribution terminal in the southern Jizan region, a natural gas plant and the Yasref refinery in the Red Sea port of Yanbu, the ministry said in a statement. Aramco CEO Amin Nasser told a call about the firm’s earnings there was no impact from the attacks on its supply to customers.
An attack on Aramco’s petroleum products distribution plant in Jeddah caused a fire in one of the tanks but this was controlled and did not result in any casualties, Saudi state media said on Sunday, citing the Saudi-led coalition fighting Yemen’s Houthis.
Saudi Arabia’s state oil company Aramco, under pressure from the West to boost output amid soaring prices, pledged on Sunday to hike investments by around 50% this year as it reported a doubling in 2021 profits.
Air Liquide and Eni have entered into a collaboration agreement aimed at assessing decarbonization solutions in the Mediterranean region of Europe, focused on hard-to-abate industrial sectors. The two companies join forces combining their well-established expertise and know-how to enable CO2 capture, aggregation, transport and permanent storage.
Eni said it had lifted a force majeure on exports of Nigerian Brass River crude oil after it finished repairing a pipeline that had been damaged by a blast.
Eni and Algerian state-energy company Sonatrach said they had made an important oil and gas discovery in Algeria’s eastern Berkine basin.
HSBC upgraded Eni to Buy from Hold.
Equinor has shut its Snorre B oil platform as a precautionary measure following an earthquake in the North Sea, financial news website E24 reported, citing a company spokesperson.
Shell announced it has applied for a license from Brazil’s environmental agency Ibama to generate offshore wind power in six areas in the country.
Australia’s offshore petroleum watchdog has cleared the way for Shell to restart its Prelude floating liquefied natural gas (FLNG) site off northwestern Australia, after a power outage forced a shutdown in December.
HSBC downgraded TotalEnergies SE to Hold from Buy.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
APA’s Apache announced that it has amended its previously announced cash tender offers to purchase up to $500 million in aggregate principal amount of its outstanding notes made pursuant to Apache’s Offer to Purchase, dated March 14, 2022, to increase the Maximum Purchase Amount from $500 million to $1,103,610,000. All other terms and conditions of the Offers set forth in the Offer to Purchase remain unchanged. The Offers expired at 5:00 p.m., New York City time, on March 18, 2022.
The ongoing gas leak at a ConocoPhillips site in Alaska occurred at seven different wells and cracks in a drilling pad, a state regulator said on Friday.
Kosmos Energy announced in November 2021 that it had received notice from Tullow Oil plc and PetroSA that they intend to exercise their pre-emption rights in relation to the sale of Occidental Petroleum’s interests in the Jubilee and TEN fields in Ghana to Kosmos, announced October 13, 2021. After execution of definitive transaction documentation and receipt of required government approvals, Kosmos and Tullow have now concluded their pre-emption transaction. For PetroSA, the process is ongoing and remains subject to execution of definitive agreements and required government approvals.
Murphy Oil Corp reiterates Q1 production and 2022 production/capex guidance and increased its debt reduction target to $600M to $650M from $300M.
W&T Offshore Inc enters ATM equity distribution agreement for up to $100M with Stifel and Roth Capital.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Baker Hughes has announced it is acquiring Altus Intervention, a leading international provider of well intervention services and down-hole oil & gas technology with 40 years of industry experience. The acquisition complements Baker Hughes’ existing portfolio of oilfield technologies and integrated solutions by enhancing the company’s life-of-well capabilities as operators look to improve efficiencies from mature fields.
Baker Hughes announced it has suspended new investments for its Russia operations. The Company is continuing to comply with applicable laws and sanctions as it fulfills current contractual obligations.
Enerflex announced that S&P Global Ratings and Fitch Ratings Ltd. have each provided an initial credit rating for the pro forma combination of Enerflex and Exterran. On January 24, 2022, Enerflex and Exterran announced an intention to combine in an all-share transaction, creating a premier integrated global provider of energy infrastructure. Upon closing, Enerflex will acquire all of the outstanding common stock of Exterran on the basis of 1.021 Enerflex common shares for each outstanding share of common stock of Exterran, resulting in approximately 124 million Enerflex common shares outstanding, representing an implied combined enterprise value of approximately US$1.5 billion. The Company continues to progress all matters that need to be addressed to close the Transaction, including the filing of necessary regulatory approvals. Enerflex expects to file, during the second quarter of 2022, an information circular with respect to the shareholder approvals that are required for the Transaction. Enerflex recently completed the syndication of a new senior secured revolving credit facility for a 3-year term subject to annual extension. RBC Capital Markets, TD Securities, and The Bank of Nova Scotia served as Joint Bookrunners and Co-Lead Arrangers for the facility which was significantly oversubscribed. With the support of the lenders, Enerflex elected to upsize the facility size from US$600 million to US$700 million to provide enhanced liquidity.
U.S. oilfield services companies Halliburton and Schlumberger said they have suspended or halted Russia operations in response to U.S. sanctions over Moscow’s invasion of Ukraine.
KBR announced it has been awarded a $640 million Ground Systems and Mission Operations-3 (GSMO-3) contract to support more than 10 NASA exploration missions, including continued efforts on the James Webb Space Telescope, Lunar Reconnaissance Orbiter and Earth Observing System.
Weatherford International plc announced the following update to its Russia operations. Girish Saligram, President and Chief Executive Officer, commented, “Since the crisis began, we have continued to evaluate our operations and have taken a number of actions in response. Following the implementation of sanctions on February 24, 2022, we placed a hold on shipments and immediately suspended making any new investments or deploying new technology in Russia. We have no active joint ventures or partnerships in Russia.”
DRILLERS
No significant news.
REFINERS
According to Reuters, executives from the U.S. oil and other industries were invited to the White House on Monday for discussions with officials amid soaring gas prices and rising inflation, sources told Reuters. The Marathon Petroleum refining company was among the expected guests, as were representatives from the agriculture and food industries.
MLPS & PIPELINES
As per SEC filing, Holly Energy Partners LP filed for a shelf offering of 21 million common units by selling shareholders.
Williams announced it will utilize Context Labs’ Decarbonization as a Service (DaaS) technology solution to support the gathering, marketing and transporting of responsibly sourced gas from well-head to end-user. This clean energy technology provides verified emissions profiles and captures the progress of greenhouse gas (GHG) mitigation across the natural gas value chain, enhancing clean energy supply and delivery for Williams and its customers.
MARKET COMMENTARY
U.S. stock index futures were lower as fighting in Ukraine raged on with no sign of a ceasefire even as diplomatic efforts continued. European equities were mixed in choppy trading, while Asian shares mostly closed in the negative territory. The dollar edged higher, with investors awaiting remarks from Fed chair Jerome Powell later in the day. Oil prices jumped as European Union nations considered joining the U.S. in a Russian oil embargo and after a weekend attack on Saudi oil facilities. Spot gold prices were in the green. Nike is expected to report quarterly results after the closing bell.
Nasdaq Advisory Services Energy Team is part of Nasdaq’s Advisory Services – the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner.
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Source: Nasdaq
