Chevron Approves Leviathan Gas Expansion in Eastern Mediterranean

By Charles Kennedy - Jan 16, 2026

Chevron has approved a major expansion of the Leviathan natural gas field offshore Israel, doubling down on its role as a cornerstone supplier in the Eastern Mediterranean gas market.

The U.S. oil major said on Friday that its subsidiary, Chevron Mediterranean Limited, alongside its partners, has reached a Final Investment Decision (FID) to increase production capacity at the Leviathan offshore platform. The project is designed to raise total gas deliveries from the reservoir to around 21 billion cubic meters per year, up from current levels.

The expansion will involve drilling three additional offshore wells, installing new subsea infrastructure, and upgrading processing facilities on the existing production platform. First gas from the expanded capacity is expected toward the end of the decade, subject to project execution timelines.

Leviathan is one of the largest natural gas discoveries in the Mediterranean and plays a central role in supplying Israel’s domestic market as well as export volumes to Egypt and Jordan. Gas from the field is sent to Egypt via pipeline, where it is used both for domestic consumption and LNG exports to Europe and other markets.

Chevron framed the investment as a strategic move to strengthen regional energy security at a time of rising demand for reliable gas supplies. The company highlighted the role of natural gas as a transition fuel in the Eastern Mediterranean, particularly as countries seek to balance energy affordability, security, and emissions goals.

The Leviathan production platform is located roughly 10 kilometers offshore Dor, Israel. Chevron operates the field with a 39.66% working interest. Its partners include NewMed Energy with 45.34% and Ratio Energies with 15%.

The expansion comes amid sustained interest in Eastern Mediterranean gas assets, driven by Europe’s push to diversify supply following the loss of most Russian pipeline gas. While volumes from Leviathan are modest relative to global LNG trade, the field has become a critical supply hub for the region, supporting Egypt’s LNG export infrastructure and underpinning long-term gas contracts in Israel and Jordan.

Chevron has steadily expanded its footprint in the region since acquiring Noble Energy in 2020. In addition to Leviathan, the company operates the Tamar gas field offshore Israel and is developing the Aphrodite gas field offshore Cyprus. It also holds operated and non-operated exploration positions offshore Egypt.

For Israel, the Leviathan expansion reinforces the country’s ambition to remain a regional gas exporter while ensuring long-term domestic supply. For Egypt, additional volumes could help stabilize LNG exports, which have faced intermittent disruptions due to domestic demand pressures and upstream constraints.

The decision also reflects a broader trend among international oil companies to prioritize gas investments with strong regional fundamentals and existing infrastructure, particularly where projects can be tied into established markets rather than relying on greenfield LNG developments.

Chevron did not disclose the total capital cost of the expansion in its announcement.

By Charles Kennedy for Oilprice.com

 

Mitsubishi Enters U.S. Shale With $5.2 Billion Haynesville Gas Deal

By Charles Kennedy - Jan 16, 2026

Mitsubishi Corporation has agreed to acquire Aethon’s Haynesville shale gas business in a transaction valued at approximately $5.2 billion, marking the Japanese conglomerate’s first direct entry into the U.S. shale gas sector. The deal gives Mitsubishi ownership of upstream gas assets producing around 2.1 billion cubic feet per day across Louisiana and Texas, with clear links to U.S. LNG export infrastructure.

The acquisition covers all equity interests in Aethon III LLC, Aethon United LP, and related entities. Mitsubishi reached the agreement with Aethon Energy Management and its existing financial backers, including Ontario Teachers’ Pension Plan and RedBird Capital Partners. Closing is expected between April and June 2026, subject to regulatory approvals.

The Haynesville Shale has emerged as one of the most strategically important U.S. gas basins due to its proximity to the U.S. Gulf Coast and multiple LNG export terminals. Production from the basin is particularly attractive for LNG-linked strategies because of short pipeline distances, high deliverability, and growing export demand from both Asia and Europe.

Mitsubishi’s newly acquired assets currently produce roughly 2.1 Bcf per day, equivalent to around 15 million tonnes per year of LNG. The gas is sold into the southern U.S. market, with a portion under consideration for export as LNG, including shipments to Japan and European buyers.

The transaction builds on Mitsubishi’s existing North American energy footprint. The company already participates in upstream shale gas development in Canada through a partnership with Ovintiv, operates gas marketing and logistics via Houston-based CIMA Energy, and holds LNG exposure through LNG Canada and Cameron LNG in the United States. Mitsubishi also owns power generation assets through Diamond Generating Corporation.

Notably, the Haynesville assets sit close to Cameron LNG, where Mitsubishi already holds liquefaction capacity under a tolling agreement. This geographic and commercial alignment strengthens Mitsubishi’s ability to control gas molecules from wellhead to LNG cargo, a priority for Japanese buyers seeking long-term supply security.

The acquisition aligns with Mitsubishi’s Corporate Strategy 2027, which emphasizes value creation through integration across business segments. Under its “Create” growth pillar, the company is seeking to build end-to-end value chains that link upstream resources with downstream demand, including LNG, power generation, data centers, and industrial consumers.

For Japan, the move underscores continued reliance on overseas gas assets to underpin energy security, even as the country pursues decarbonization. For the U.S. gas market, it highlights the ongoing appeal of the Haynesville as global LNG demand continues to reshape domestic production and investment patterns.

By Charles Kennedy for Oilprice.com

 

Egypt Bets Big on Renewables as Foreign Investment Accelerates

By Felicity Bradstock - Jan 17, 2026

• Egypt has signed $1.8 billion in renewable energy agreements, including large-scale solar and battery storage projects with Scatec and manufacturing investments by Sungrow.
• 
  
• The government aims to raise renewables to 42 percent of electricity generation by 2030 while addressing gas shortages and energy security challenges.
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• Long-term PPAs, policy reform, and international investment will be critical to scaling solar, wind, and green hydrogen capacity across the country.
• 
  

Egypt expects to significantly expand its energy sector in the coming years, with recent oil discoveries in the Western Desert and big plans to develop its renewable energy capacity. Egypt started the year off by signing $1.8 billion worth of renewable energy agreements. The deals include contracts with Norwegian renewable energy developer Scatec and China’s Sungrow. This is part of the North African country’s aim to achieve a 42 percent contribution of renewable energy to electricity generation by the end of the decade.

The first project to be developed will be the Scatec solar energy plant, which will produce clean electricity, alongside the establishment of energy storage stations in Upper Egypt’s Minya Governorate, according to an Egyptian cabinet statement. The solar plant is expected to have a total capacity of 1.7 GW, with 4 GW-hours of battery storage.

In addition, the government has entered into a power purchase agreement (PPA) with Scatec, which will provide Egypt with 1.95 GW of clean power and 3.9 GW-hours of battery storage. “The agreements reflect growing demand for firm clean power and advanced storage solutions,” Scatec said in a statement.

Meanwhile, Sungrow plans to build a factory to manufacture energy storage batteries in the Suez Canal Economic Zone. It will provide some of these components to the Scatec solar energy plant, with the remainder will be made available for regional export and domestic demand growth. The project responds to the Egyptian government’s push to develop more local manufacturing to enhance supply chain security.

The new investment announcements follow a major bet on the renewable energy sector by the Egyptian government last year. The move was aimed at tackling the severe energy shortages Egypt has faced in recent years, particularly due to the country falling short on its natural gas production targets from its giant Zohr offshore gas field, which has had a knock-on effect on its economy. 

 

Last year, Egypt opened the door to foreign investment in green energy, announcing the aim of mobilising over $10 billion in private investment in the sector, including wind and solar power production. By the end of 2024, Egypt had attracted just $4 billion in investment. The government hoped to attract higher levels of funding by offering tax breaks, free land, cash rebates, and other incentives to investors, but experts suggested that improvements to national energy policies would also be key to attracting this investment.

 

By 2024, Egypt had a total installed capacity of renewable energy of almost 7.8 GW, including hydropower, as well as wind and solar energy. The country’s solar power capacity increased from 35 MW in 2012 to almost 2.6 GW in 2024. The New and Renewable Energy Authority estimated that Egypt’s total renewable installed capacity reached approximately 8.6 GW last year. 

 

While the new projects are promising, the government has said that greater international support will be required to reach its ambitious energy mix target by 2030. The government has encouraged investors to finance a range of clean energy projects, including green hydrogen, ammonia production, and renewable-powered heavy industry in the Suez Canal Economic Zone. However, investors have so far been deterred from developing new projects due to the lack of clarity on long-term power pricing. The PPA-based structure that the Egyptian government has agreed to on its Scatec deal, however, suggests that the country may now be prepared to support more favourable contracts for foreign developers to attract higher levels of investment.

The Energy and Environmental Economist Azza Ghanem said that “Egypt has successfully integrated more than 2,000 MW of wind power and over 2,500 MW of solar power into the national grid—a significant shift compared to the situation a decade ago.” Ghanem added, “Renewable energy has contributed to reducing reliance on fossil fuels and lowering emissions, thereby supporting Egypt’s climate goals.” Ghanem highlighted the importance of public-private partnerships and long-term PPAs in driving investment in the sector.

In addition to developing its solar and wind energy capacity, last year, the Egyptian government announced it was creating investment incentive packages aimed at increasing the country’s green hydrogen production, with the aim of contributing 8 percent of the global share of green hydrogen, or 10 million tonnes a year. Egypt’s strategic position, linking Africa to Europe and the Middle East, as well as its abundant sunlight, makes it well-suited for green hydrogen production and export. The Suez Canal is, therefore, expected to play a major role in the global clean energy supply chain.

The existing green ammonia production at Misr Fertilisers Production Company complex in Damietta, in cooperation with Norway’s Scatec and Yara International, aims to use 480 MW of solar and wind energy to produce 150,000 tonnes a year of green ammonia, starting in 2027. 

Egypt has significant green energy potential, and the government has begun to introduce new policies aimed at rapid sectoral expansion. However, to achieve its renewable energy production aims by the end of the decade, it must attract higher levels of international investment across a range of clean energies.

By Felicity Bradstock for Oilprice.com

New Discoveries Fuel Egypt's Push for Energy Independence

By Charles Kennedy - Jan 16, 2026

Companies operating in Egypt continue to make oil and gas discoveries and drill new wells at the start of the year, further boosting hydrocarbon production as the North African country looks to reduce import dependence. 

Several companies have drilled successful wells in the Western Desert, Eastern Desert, and the Nile Delta, Egypt’s Ministry of Petroleum and Mineral Resources said on Friday.  

The new wells are expected to add around 47 million cubic feet of natural gas and about 4,300 barrels per day (bpd) of crude oil and condensates to Egypt’s daily hydrocarbon production.

Khalda Petroleum Company, a joint venture between Egyptian General Petroleum Corporation (EGPC) and Apache Corporation, has made three new oil and gas discoveries. In addition, Desouq Petroleum Company, in partnership with Harbour Energy, successfully drilled the appraisal well Ez-2 in the Desouq development area in the Nile Delta. 

State-owned Egyptian General Petroleum Company also brought new wells into production in both the Western and Eastern deserts, raising Egypt’s daily output by around 8 million cubic feet of gas and more than 1,250 bpd of oil and condensates.

Earlier this week, Egypt announced discoveries at four exploration wells in the Western Desert. The four exploration wells are expected to have a combined daily production capacity of nearly 4,500 barrels of crude oil and 2.6 million cubic feet of natural gas. 

At the end of last year, Egypt said it plans to drill 480 new exploratory oil wells over the next five years, in an ambitious $5.7 billion wager that the country can claw its way back from years of production decline.  

A total of 101 wells are slated for drilling in 2026, spread across Egypt’s main producing regions. 

After four years of declines, Egypt’s oil and gas production started to rise in September, providing much-needed relief to the import bill of the North African country.    

By Charles Kennedy for Oilprice.com

Germany Relaunches Major EV Subsidy Program With Billions in Funding

By Tsvetana Paraskova - Jan 16, 2026

Two years after abruptly ending the EV subsidies due to budget constraints, Germany is returning the incentives for buying electric vehicles with federal funds of $3.5 billion (3 billion euros) by 2029.  

With the return of the incentives, Germany plans to prop up its ailing automotive sector, which has suffered a lot in recent years from surging costs, supply chain issues, and Chinese competition in EV sales. 

The end of the previous EV subsidy scheme in Germany at the end of 2023 under the previous government resulted in a plunge in German EV sales the following year. 

Now the government of Chancellor Friedrich Merz has approved a new scheme in effect from January 1, 2026. 

Under the new scheme, the German government will pay an EV buyer between $1,740 (1,500 euros) and $7,000 (6,000 euros), depending on the model of the vehicle and the household’s earnings and size, Germany’s Environment Minister Carsten Schneider told the Bild newspaper on Friday. 

The total funds of $3.5 billion would be sufficient for Germany to subsidize the sales of about 800,000 electric vehicles over the next three to four years, the minister added. 

Regarding concerns about Chinese competition, Schneider told Bild that in 2025 about 80% of the new registered electric vehicles and plug-in hybrids in Germany were made in Europe. 

At the end of last year, Germany was the leader of the EU member states pushing for the European Union to soften its de facto ban on new gasoline and diesel passenger cars from 2035. The lobbying from Germany and Italy, and the auto industry, resulted in the European Commission proposing the easing of the de facto ban on new sales of combustion-engine cars from 2035. 

The new regulations will allow for plug-in hybrids (PHEV), range extenders, mild hybrids, and internal combustion engine vehicles to still play a role beyond 2035, in addition to full EVs and hydrogen vehicles. 

By Tsvetana Paraskova for Oilprice.com

END OF FRACKQUAKES

Low Oil Prices Force Billionaire Harold Hamm to Halt Bakken Drilling

By Michael Kern - Jan 16, 2026

If anyone is still wondering whether the Trump Administration’s goal of $50 per barrel oil price would hurt American drillers, the answer came this week from oil tycoon and wildcatter Harold Hamm, who is ceasing drilling operations in North Dakota for the first time in decades.

“This will be the first time in over 30 years that Harold Hamm has not had an operation with drilling rigs in North Dakota,” Hamm, who founded Continental Resources, told Bloomberg in a telephone interview published on Friday. 

“There’s no need to drill it when margins are basically gone,” the billionaire oil magnate and Trump donor said. 

Hamm first proved in the Bakken shale play in North Dakota that hydraulic fracturing could help unlock huge oil resources in horizontal drilling. The rest is history. 

The U.S. shale industry has survived two market crashes in the past decade, returning stronger each time and helping U.S. crude oil production hit a record of over 13 million barrels per day. 

But the breakevens in the shale plays are close to $60 per barrel WTI price. In recent months, the U.S. benchmark price has rarely topped $60 a barrel for a sustained period.  

In the Bakken, the breakeven for drilling a well is now on average at least $58 per barrel, up by 4% from a year ago, as costs have increased, a BloombergNEF report has found.   

President Donald Trump’s major campaign pledge of cheap oil at about $50 per barrel would reduce drilling activity in all the major basins, including the most resilient play, the Permian, analysts say. 

Hamm told Bloomberg that “A lot of people are assessing their activity in all the basins.” 

Lower 48 oil production will stall in 2026 for the first time since the pandemic, Wood Mackenzie said last month in its preview of what to expect in the U.S. onshore basins. 

In the December Dallas Energy Survey, which encompasses mostly the Permian, one executive at an exploration and production company said that “Decreasing oil prices are making many of our firm’s wells noneconomic.” 

By Michael Kern for Oilprice.com 

China Halts Electricity Imports from Russia Due to Price Dispute

By Charles Kennedy - Jan 16, 2026

Russia is in negotiations with Beijing to potentially resume power supply to China, the Russian Energy Ministry told Reuters on Friday, after a Russian media report said that China halted electricity imports from Russia due to high prices. 

On Friday, Russian business daily Kommersant reported that China on January 1 stopped buying any electricity from Russia. 

The Chinese refusal to buy Russian electricity was the result of high Russian export prices, which in 2026 topped the domestic power prices in China for the first time, Kommersant reported, citing sources familiar with the matter. 

Russia’s electricity exports to China are unlikely to resume in 2026, as the higher Russian export price than Chinese domestic power prices since January 1 makes purchases uneconomical for Beijing, according to Kommersant’s sources. 

The electricity supply contract between Russia and China is valid until 2037. 

The Russian Energy Ministry could resume exports if China requests so, Kommersant noted. 

“Russia could resume electricity exports to China if it receives a corresponding request from Beijing and if mutually ?beneficial cooperation terms are reached,” the ministry told Reuters, commenting on the price dispute. 

Russia’s priority is to meet growing electricity demand in Russia’s Far East regions. Yet, Russia could resume supply to China if the parties reach a deal on pricing, the ministry added. 

Neither side, however, seeks to terminate the contract, said InterRAO, the Russian supplier exporting electricity to China.  

“At present, the parties are actively exploring opportunities for electricity trade,” InterRAO said. 

China and Russia, close as they are, have had several energy squabbles over prices that China deems unfavorable. 

One of the most prominent examples is the planned Power of Siberia 2 huge gas pipeline from Russia to China via Mongolia. A final agreement on the Power of Siberia 2 has been elusive due to some sticking points, including the price at which Russia’s Gazprom will deliver the gas. 

By Charles Kennedy for Oilprice.com

 

The Hidden Energy Costs of Artificial Intelligence

By Haley Zaremba - Jan 16, 2026

• AI’s energy use is rising rapidly, but poor transparency and fast-changing technology make accurate projections nearly impossible.
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• Governments and companies are preparing for worst-case scenarios by accelerating energy development, sometimes at the expense of climate goals.
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• The real environmental impact of AI is driven by large-scale industrial deployment, not individual user behavior or isolated queries.
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Projections for the AI sector’s energy needs in the coming years are massive in scale. The International Energy Agency expects AI’s energy demand to double between now and 2030, presenting a serious challenge for energy security in many nations and regions where large data center developments are planned. 

But planning ahead for data center development and their associated energy needs is an almost impossible task. The real and future energy use of artificial intelligence is incredibly hard to pin down due to the rapid growth and advancement of the technology, as well as the lack of disclosure requirements imposed on AI firms. Accurate projections for the future are therefore all but impossible, since we don’t even know how much energy AI is using in the present moment. But we do know that it’s a whole lot.

The result of all this uncertainty is an enormous amount of hand-wringing on the part of end-users and rapid - panicked, even - investment in new and expanded energy production capacity on the part of the private and public sectors alike. “The energy resources required to power this artificial-intelligence revolution are staggering, and the world’s biggest tech companies have made it a top priority to harness ever more of that energy, aiming to reshape our energy grids in the process,” stated the MIT Technology Review in a May 2025 report. 

World leaders are left with little option but to prepare for the most intensive scenarios. Already, countries around the world are fast-tracking new energy development, often at the risk of climate goals. “From the deserts of the United Arab Emirates to the outskirts of Ireland’s capital, the energy demands of AI applications and training running through these centres are driving the surge of investment into fossil fuels,” Financial Times reported in August.

Better and more responsible policy around AI and its supporting industries will necessarily depend on better and more available data about AI’s energy use – but major questions remain unanswered about how much will that use fluctuate as levels of both integration and efficiency increase, and how much does the way that users interact with these platforms influence the energy footprint of large language models.

The subject of how much energy an individual AI query uses is currently a subject of much debate. There is even a question as to whether our politeness with large language models – using extra computing power to say please and thank you to models like ChatGPT – is directly driving up energy usage and costing companies like OpenAI millions. No matter how many times ChatGPT receives the input “thank you” it has to run a fresh “inference”, performing “a full computational pass through the model.” All those individual computations add up, and add up in a big way.

Of course, the concern over a few extra polite words is extremely small potatoes compared to the myriad other, more demanding ways that AI is being used. Nevertheless, a recent op-ed for The Conversation argues that the “persistence of the idea” that all those drops in the ocean add up to an important impact “suggests that many people already sense AI is not as immaterial as it appears.” The article goes on to state that “that instinct is worth taking seriously.”

On the other hand, this mentality is also diverting attention from the real problem of AI’s environmental impact. Individual queries and user-end activity is virtually negligible compared to what’s happening on the producer end of the equation. The spread of AI is not user-driven. Rather, it’s industry-driven, and being indiscriminately integrated across virtually every economic sector there is at a rapid pace, and with serious energy consequences. 

“AI’s integration into almost everything from customer service calls to algorithmic “bosses” to warfare is fueling enormous demand,” the Washington Post reported last August. “Despite dramatic efficiency improvements, pouring those gains back into bigger, hungrier models powered by fossil fuels will create the energy monster we imagine.”

By Haley Zaremba for Oilprice.com

JP Morgan Boss Sounds Alarm on AI Bubble and Sticky Inflation Threat

By City A.M - Jan 16, 2026

• Jamie Dimon, CEO of JP Morgan, issued a stern warning to global markets, cautioning against underestimating geopolitical risks, sticky inflation, and the threat of an AI bubble.
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• The bank announced its fourth-quarter 2025 earnings, which included a hefty increase in loan loss provisions to $4.7 billion, taking a seven per cent chunk out of the firm's profit.
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• JP Morgan announced a £10 billion investment in the UK, including a new Canary Wharf headquarters, following Chancellor Rachel Reeves' attempts to foster closer ties with global financiers.
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The boss of JP Morgan, Jamie Dimon, has warned global markets not to underestimate current risks, as the US banking giant hiked its provisions for bad loans.

The world’s most influential banker said that whilst the US economy had remained “resilient” and consumer and business trends were “generally healthy,” ongoing risks persisted.

“Markets seem to under-appreciate the potential hazards – including from complex geopolitical conditions, the risk of sticky inflation and elevated asset prices,” Dimon said.

Dimon also weighed in on growing agitation surrounding the independence of the Federal Reserve after Trump’s latest attack on chair Jerome Powell.

“Anything that chips away” at the central bank’s independence “is not a good idea,” he said on Tuesday, adding “everyone we ‍know believes in Fed independence”.

The banking titan’s warning to markets come after he sounded the alarm on an AI bubble telling the BBC he was “far more worried than others.”

“Most people involved won’t do well. Some of the money being invested will probably be lost,” he said.

Fears of an AI bubble have sent jitters across the UK following pledges of capital injections from US giants into the UK economy.

Microsoft earmarked £22bn to build the country’s largest supercomputer and AI infrastructure. Meanwhile, chipmakers Nvidia and OpenAI laid out plans to create the largest AI computing facility in Europe.

Still, markets have continued to notch record highs despite ongoing concerns. The FTSE 100 smashed the 10,000 milestone in its first trading session of the year, whilst S&P and Dow Jones wrapped up last week’s with new highs after rallies in chipmakers.

The banking chief has also issued warnings around the rise of private credit, following the collapse of car parts maker First Brands and subprime auto lenders Primalend and Tricolour.

Dimon cautioned more “cockroaches” were likely to emerge in a credit downturn, telling an analyst call that some banks’ underwriting of loans to private credit “won’t be as good as you think”.

Dimon hikes provisions for sour loans

The renewed concerns came as JP Morgan released its fourth-quarter earnings update for 2025, where the bank notched $46.8bn (£35bn) in managed revenue.

The bank officially announced it will become the new issuer of the Apple Card, a move expected to bring over $20bn in card balances to the Chase platform.

But JP Morgan continued the trend of bulking up its financial cushion amid broader economic nerves, with loan loss provisions rising to $4.7bn in the final quarter from $2.6bn the year prior and $3.4bn in the third quarter.

The hefty increase took a chunk out of the firm’s bottom line, with profit falling to $13bn, a seven per cent drop compared to the prior-year quarter.

Chris Beauchamp, chief market analyst at IG, said: “This is another great set of numbers from JPMorgan, notable for strong client inflows and payments revenues… investors worried about overstretched equities can at least ease back on concerns about earnings.”

This week Dimon is expected to introduce Chancellor Rachel Reeves as they jointly host an event at next week’s World Economic Forum, according to Sky News.

The roundtable gathering in Davos, Switzerland, will be attended by bosses of the world’s biggest multinational firms and comes as Reeves attempts to curry favour with global financiers in her bid to make Britain an investment destination.

Reeves has maintained a close relationship with the American banking boss as part of her attempts to drive economic growth across the UK.

Following the Autumn Budget – where banks were able to skirt a highly-anticipated tax raid – JP Morgan announced a whopping £10bn investment into the UK with a new Canary Wharf office.

The project is expected to create an additional 7,800 jobs across construction and other local industries. Once finished, it will house up to 12,000 and serve as the bank’s main headquarters in the UK, and it will be the bank’s biggest presence across Europe, the Middle East and Africa.

JP Morgan contributes nearly £7.5bn to the local economy and supports 38,000 jobs.

By City AM