It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
U.S. oil majors Exxon Mobil Corp and Chevron Corp—along with France's TotalEnergies, are taking a long, hard look at upping their investments in India's oil and gas exploration and production sector, India's oil minister said in a Friday speech, carried by Reuters.
ExxonMobil said back in December that its 2023 spending plans include $23 billion - $27 billion in capital investments to maintain its current production level of 3.7 million boepd. Longer-term, ExxonMobil said it would spend between $20 billion and $25 billion on growing the U.S. supermajor's production by 500,000 boepd within the next four years—with 70% of that capital being put into the U.S. Permian Basin, Guyana, Brazil, and LNG projects, and $17 billion of it into lower-emissions investments.
U.S.-based Chevron increased its capex for 2023 by 25%, with $17 billion planned on capital projects this year. Chevron said that $8 billion of this would go to developing U.S. oil and gas production assets—about half of which would be thrown into the Permian. $2 billion would be sunk into its other U.S. assets, and 20% of its upstream capital would be spent on projects in the GoM. Another $2 billion was earmarked for lower-carbon projects. It also set aside money for its projects in Kazakhstan and its chemicals JV with Phillips 66 in Texas.
India is the world's third-biggest oil importer, leaving the nation to purchase 84% of all the oil it consumes, according to Retuers. It has been taking advantage of discounting Russian crude oil since Russia's invasion of Ukraine but has been looking to develop its own reserves to move away from its heavy reliance on costly imports.
"India is ready to explore opportunities for joint development production of oil and gas assets for mutual benefit and also invites investment in our domestic E&P sector," Hardeep Singh Puri said on Friday.
JP Morgan CEO: The U.S. Must Revamp Its Domestic Energy Policy
Jamie Dimon, CEO of JP Morgan, has warned of the danger Russia’s war in Ukraine poses to the global energy system going forward.
Dimon said that the U.S. needs a comprehensive policy regarding energy that includes pipelines and permits for all energy sources.
As well as oil and gas, Dimon said that even getting permits to build solar was difficult, and regulations need to be improved
The United States needs permitting for oil and gas drilling and pipelines, and a streamlined permitting process for renewables in a comprehensive new policy, JP Morgan’s chief executive Jamie Dimon told Fox Business in an exclusive interview.
Dimon doubled down on his previous comments that banks shouldn’t cut off investments in oil and gas supply despite the ongoing criticism toward financiers of fossil fuel projects.
“So if I can stop financing a good oil company, that isn’t going to help. What we need is pipelines, permits. We can’t even get the permits to build solar,” Dimon told the ‘Mornings with Maria’ program on Fox.
“We need very comprehensive policy, and I don’t think we have that right yet.”
According to Dimon, the permitting process, even for renewable projects such as offshore wind, take five or seven years, and this shouldn’t be the case with the regulatory system in the U.S.
“I think we’re spending too much time just yelling and screaming at each other as opposed to what we need to accomplish these very important goals of climate sustainability and resiliency, and efficient and effective oil price and delivery,” JP Morgan’s CEO said.
During a congressional hearing in September, Dimon said that cutting off investments in fossil fuels would be the road to hell for the United States.
The energy crisis gripping Europe could get much worse over the next years as the fallout from Russia’s war in Ukraine extends over time, Dimon warned in an interview for CBS last month.
“The danger of this war is extraordinary,” Dimon told CBS, adding that it could last for years.
“But this oil and gas thing, it looks like the Europeans will get through it this winter. But this oil and gas problem is going to go on for years. So if I was in the government or anywhere else, I’d say, I have to prepare for getting much worse. I hope it doesn’t. But I would definitely be preparing for it to get much worse,” the chief executive of JP Morgan also said.
NOT GREEN NOT SUSTAINABLE
The Global Mining Boom Will Only Accelerate In 2023
As the global energy transition accelerates, demand for the metals and minerals involved in clean energy technology is only going to increase.
In 2022, the growth of the global metals and minerals industry was hindered by price swings, high production costs, and supply chain disruptions.
There will likely be greater market stability in 2023, but several challenges will persist due to the global financial crisis, energy insecurity, and concerns over the environmental impact of mining.
As energy companies worldwide expand their renewable energy portfolios, in a bid to ensure their longevity in the global green transition, an increasing number of firms are investing heavily in metals and minerals to support their green energy output. More extensive mining for metals and minerals is vital for an eventual shift away from fossil fuels to renewable alternatives; with the demand for lithium, zinc, and other resources growing rapidly as electric batteries and renewable energy technologies become more commonplace. The industry grew in many parts of the world in 2022, and this trend is just beginning, with several major mining developments planned around the globe for 2023.
While the metals and minerals industry experienced growth in 2022, it was also hindered by price swings, high production costs, and ongoing supply chain disruptions. An end-of-year report from Fitch Solutions suggests that the mining and metals industry will be more stable in 2023 as these challenges settle. Although the ongoing Russian-Ukraine conflict will likely cause longer-term energy insecurity, which will affect inflation levels worldwide.
The ongoing global financial crisis means that metal prices could be slightly lower in 2023, but the commodities market is expected to achieve greater price stability. The metals and minerals market is expected to grow steadily over the next decade, as demand continues to rise in line with the adoption of renewable power and related technologies. Disruptions to mining caused by the pandemic are gradually being overcome and activities are expected to pick up across several global locations over the next decade. The Surface mining market is expected to achieve a value of $39.7 billion by 2030, with a CAGR of around 3.20 percent.
China continues to be the world’s biggest consumer and producer of most minerals and metals. Its ‘zero-Covid’ policy, which has only recently been lifted, had a detrimental effect on the supply and demand of these resources in 2022, with greater stability expected for the coming year. Demand in China is expected to pick up in line with the re-opening of several key industries, although this could be challenged should another break-out of Covid take place.
Several countries are developing new policies around mining and the security of their metals and minerals markets. This is largely in response to the greater nationalization of these resources, as seen in Mexico, and the pressure to decrease reliance on certain world powers, such as Russia, for the supply of high-demand metals and minerals. Some of these policies include the U.S.’s Inflation Reduction Act, the U.K.’s Critical Minerals Strategy, and several Lithium triangle agreements between Argentina, Bolivia, and Chile. Many countries are establishing roadmaps to ensure the development of strong supply chains, as some metals and minerals remain scarce and can only be mined in specific regions of the world.
An analysis from S&P Global foresees supply constraints across critical commodities as early as 2024, due to the anticipated sharp uptake of electric vehicles (EVs), the shift to renewable energy technologies, and related transmission and distribution requirements. Due to concerns about the scarcity of metals and minerals needed to support a green transition, governments worldwide are likely to offer greater funding and incentives for new mining developments, to ensure the necessary supply to meet the growing global demand.
In the case of nickel, Indonesia is increasing its supply to meet the rising demand, which is expected to delay the anticipated deficit until 2026. Nickel is a vital component in batteries, and the demand for nickel for use in batteries is expected to increase from 7.1 percent in 2021 to 17.6 percent in 2026. The S&P analysis also demonstrates how the global demand for lithium and cobalt will likely outstrip supply by as early as 2025 or 2026. While the supply of iron ore and zinc is expected to remain stronger than demand. However, copper demand is expected to rise more rapidly than new mining projects become operational.
Discussions around mining for a green transition being at odds with the environmental degradation and destruction of ecosystems associated with this mining will continue in 2023 as new projects emerge. Worldwide efforts to decarbonize will see the demand for metals and minerals increase sharply over the next decade, as governments and energy firms accelerate plans for renewable energy operations. In addition, ESG will likely be a major consideration in the development of new projects, paying greater attention to the effect of mining on the local environment. Further, companies will have to take more consideration over the social aspect of projects, particularly working conditions, due to the greater risk of strikes due to rising inflation and increasing consumer costs.
The metals and minerals mining industry is set to continue growing throughout 2023 and beyond, as the global demand for these resources increases in line with the green transition. While there will likely be greater market stability in 2023, several challenges will persist; with mining companies continuing to battle with uncertainties due to the global financial crisis, energy insecurity, and concerns over the impact of mining operations on climate change.
SOCIAL DEMOCRATIC ECOCIDE
Venezuela’s Dilapidated Oil Industry Is An Environmental Catastrophe
PDVSA has stopped releasing data about oil spills since 2016.
The volume of oil spills in the crisis-torn Latin American country is expanding.
The OEP claimed 86 oil spills occurred in Venezuela during 2022.
The collapse of Venezuela’s once prolific oil industry has triggered an economic and humanitarian crisis that accelerated in 2019 after U.S. President Donald Trump implemented strict sanctions cutting the Maduro regime off from international energy markets. It isn’t only Venezuela’s economy and people which have suffered from a foundering hydrocarbon sector and corroding energy infrastructure, tremendous damage has occurred to the environment. Oil spills, leaking pipelines and storage facilities, noxious discharges from ramshackle intermittently operating refineries and toxic tar like slicks are commonplace in Venezuela. The OPEC member’s collapsing petroleum industry, along with precious metals and other mining, is a key culprit of the significant environmental damage occurring in the near-failed state.Since national oil company PDVSA ceased releasing incident data in 2016 it is extremely difficult to reliably track the number of oil spills, the volume of oil released into the environment and the damage that occurs. This is particularly worrying when it is considered that Venezuela is ranked as the eleventh most biodiverse country globally. While the lack of official data makes it difficult to track the volume of environmental incidents concerning Venezuela’s oil industry there are non-government organizations tracking oil spills and other environmentally damaging incidents. Two organizations which provide regular reports and updates regarding the substantial environmental degradation occurring because of the petrostate’s oil industry are the Venezuelan Observatory of Environmental Human Rights (OVDHA – Spanish initials) and the Venezuelan Observatory of Political Ecology (OEP – Spanish initials).
The OVDHA published a report (Spanish) in March 2022 which shows 199 oil spills in Venezuela for the period of 2016 to 2021. In that document, the observatory noted a worrying trend; the volume of oil spills in the crisis-torn Latin American country is expanding. The data collated by the OVDHA showed only 12 incidents during the first two years of the period covered and then a whopping 68 events, or more than five times that number, during 2021 alone. Oil spills continued during 2022 with the observatory counting 35 incidents during the second half of 2022, although the OVDHA believes the actual number of spills to be far higher. An example is that for 2010 to 2016 NASA, from various news, humanitarian organizations and environmental groups, counted 40,000 to 50,000 oil spills across Venezuela.
In a December 2022 OVDHA article (Spanish), Eduardo Klein, coordinator of the Center for Marine Biodiversity of the Simón BolÃvar University, states, “There is hardly a single day where you do not see a spill, not counting Lake Maracaibo where every day there is”. Klein further that on the Paraguaná Peninsula in Falcon State, the location for many of Venezuela’s refineries, spills are persistent saying, “those pipelines are continuously dumping and over the years, the frequency has increased considerably." Those statements indicate oil spills are far more common than the number reported by the OVDHA with them being nearly daily occurrences while Lake Maracaibo, at the epicenter of Venezuela’s oil industry suffers multiple spills nearly every day.
During September 2021, NASA released a satellite photo of Lake Maracaibo, considered by some commentators to be the largest natural lake in South America, showed excessive pollution, primarily from leaking crude oil that had formed large slicks. This is no surprise when it is considered that the body of water is situated in the middle of one of the world’s largest hydrocarbon producing regions and has been at the center of Venezuela’s oil industry since the first well was drilled in 1914. That oil discovery, in as little as three decades, transformed Venezuela from an impoverished near-feudal agrarian state into the world’s third largest oil producer and exporter. The ensuing oil boom catapulted Venezuela onto a path of rapid modernization, which saw it become Latin America’s wealthiest country and a leading regional democracy.
The Maracaibo Basin contains 15% of Venezuela’s copious oil reserves, which at 304 billion barrels are the largest globally, and is responsible for around two-thirds of the OPEC member’s hydrocarbon production. As a result, the lake contains thousands of drilling platforms, miles of pipelines which in many cases are unmapped and scores of storage facilities as well as other industry infrastructure. Most facilities are more than half a century old and heavily corroded because of their age and an endemic lack of crucial maintenance. The OVDHA estimates up to 1,000 barrels of crude (Spanish) are being discharged into Lake Maracaibo every day due to ongoing low-level leaks from heavily corroded petroleum pipelines, storage tanks and other decaying infrastructure. Local communities, as well as scientists who study the lake, claim oil slicks are regular occurrences and are commonly found coating the shoreline. The situation is so grim fishermen frequently complain of petroleum fouling nets and catches while heavy rains cause oily slicks to from the ground to flood streets, parks and homes in nearby communities.
Of considerable concern, is considerable evidence that the frequency of oil spills and other environmentally damaging incidents concerning Venezuela’s oil industry is accelerating. The OEP, in a January 2023 report, claimed 86 oil spills occurred in Venezuela during 2022, which the observatory claimed was higher than the at least 73 spills it detected a year earlier. Most of those spills occurred in Falcon and Zulia states where a considerable portion of Venezuela’s oil refineries, pipelines, storage tanks and wells are located. In fact, Zulia has long been a hotspot for environmentally damaging incidents because it is where Lake Maracaibo and its surrounding sedimentary basis are situated. All evidence points to the size and frequency of oil spills in Venezuela continuing to multiply as industry infrastructure disintegrates further and Caracas pushes PDVSA to expand output regardless of the dire condition of various facilities.
Venezuela at the hands of its once mighty oil industry, which 70 years ago funded the country's economic miracle and rapid modernization, is suffering from an apocalyptic environmental catastrophe. The inability and unwillingness of a cash-strapped PDVSA, as well as the government in Caracas to clean-up spills, is magnifying the damage which in many areas is now irreversible. Crude oil is fouling waterways, contributing to deforestation, poisoning farmland and killing wildlife at an ever-greater rate. The environmental destruction will keep expanding as industry infrastructure deteriorates further and the authoritarian Maduro regime sets ever higher, and unachievable production targets. Nothing will change until PDVSA can access the tremendous capital required to rebuild ramshackle malfunction hydrocarbon infrastructure that regularly malfunctions and, in many cases, is damaged beyond repair. That is contingent upon Washington relaxing sanctions to such a degree that foreign energy majors are willing to invest in Venezuela.
U.S. Oil Major Looks To Recoup $10 Billion Debt By Selling Venezuelan Crude
U.S. oil and gas firm ConocoPhillips has held preliminary talks with PDVSA to potentially sell Venezuelan crude oil on behalf of Venezuela’s state-owned oil company as a way to recover part of the nearly $10 billion ConocoPhillips has yet to collect after leaving the South American country when its assets were expropriated.
ConocoPhillips left Venezuela in 2007 after the expropriation of its investments in the Hamaca and Petrozuata heavy crude oil projects under then-Venezuelan President Hugo Chávez.
In 2018, ConocoPhillips reached a settlement with PDVSA to recover the full $2-billion amount that an international court awarded it earlier that year for the expropriation of its oil assets in Venezuela. The U.S. firm has almost $10 billion in sums to collect from Venezuela, according to several court and arbitration rulings over the 2007 asset expropriation.
Now ConocoPhillips is in early talks with PDVSA to load, transport, and sell Venezuelan oil in the United States on behalf of the Venezuelan company, as a way to recover some of the money it is owed, The Wall Street Journal reports, quoting sources with knowledge of the talks between ConocoPhillips and Venezuela.
Despite the U.S. sanctions on Venezuela’s oil industry and exports, ConocoPhillips has a license from the U.S. Treasury’s Office of Foreign Assets Control (OFAC) to engage with PDVSA on debt repayment.
“Regarding PdVSA recovery efforts, ConocoPhillips is committed to pursuing all available legal avenues to protect our rights and obtain a full and fair recovery of the awards in recognition of our fiduciary responsibility to our shareholders,” the company said in a statement to the Journal, declining to discuss specifics of any deal with the Venezuelan state oil firm.
The Biden Administration has recently eased part of the sanctions imposed on Venezuela – initially slapped by former President Donald Trump – including granting U.S. supermajor Chevron, the only American company still operating in Venezuela, a six-month license that allows Chevron to import some Venezuelan crude oil to the United States for sale to U.S. refiners.
