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Oil & Gas Stock Roundup: Eni's Discovery, Petrobras' FPSO Start-Up in Focus
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It was a week when oil prices moved up while natural gas futures registered a decrease.
On the news front, Italy-based energy major Eni (E - Free Report) made a natural gas discovery off Cyprus, while Brazil’s Petrobras (PBR - Free Report) started to churn out hydrocarbons from its P-71 FPSO in the Santos Basin pre-salt area. Developments associated with Imperial Oil (IMO - Free Report) , Chevron (CVX - Free Report) and Equinor (EQNR - Free Report) also made it to the headlines.
Overall, it was a mixed seven-day period for the sector. West Texas Intermediate (WTI) crude futures gained some 6.9% to close at $79.56 per barrel, but natural gas prices slumped more than 23% to end at $5.079 per million British thermal units (MMBtu). In particular, the oil market posted the largest one-week gain since October.
Coming back to the week ended Dec 23, the oil price action continued to be positive on China’s easing of Covid-Zero policies and demand concerns emanating from Moscow’s retaliatory crude export ban to countries that imposed price caps on its crude.
Meanwhile, natural gas finished deep down on forecasts of warmer weather.
Recap of the Week’s Most Important Stories
1. Rome-based energy biggie Eni made a significant natural gas discovery in the Zeus-1 well in Block 6 off Cyprus’ coast — the third consecutive find in the block, confirming the favorable outlook for the area and its development. Eni operates the block with a 50% interest.
The Zeus-1 well, located 162 kilometers offshore Cyprus, has been drilled and tested with the help of the Tungsten Explorer drillship. The test’s results are currently being incorporated to assess the discovered resources, which will drive additional studies for a fast-track development of Block 6.
Eni has been contributing to Cyprus’ growth since 2013 and runs five blocks within the facility. The company operates Blocks 2, 3, 6, 8 and 9 and has participating interests in Blocks 7 and 11. The success of the Zeus-1 well further enhanced the block’s potential after the Cronos-1 discovery in August. (Eni Makes Gas Discovery at Zeus-1 Well Offshore Cyprus)
2. Petrobras, the Brazilian state-owned oil major, recently announced that it commenced oil production from the P-71 FPSO installed in the Itapu field in the Santos Basin pre-salt area, roughly 200 km off the coast of Rio de Janeiro.
The P-71 FPSO, where output has started ahead of the anticipated date in 2023, can process up to 150,000 barrels of oil and 6 million m³ of gas per day. The P-71 measures 316 meters in length and can store 1.6 million barrels, and has the capacity to accommodate 166 people.
The P-71 will be positioned in a water depth of 2,010 meters and will be the only FPSO to produce in the Itapu field, fully operated by PBR. The company expects the unit to reach its maximum production capacity in 2023. (Petrobras Begins Production at Itapu Offshore Oil Field)
3. Imperial Oil recently provided an update on its corporate guidance outlook for 2023. The Zacks Rank #3 (Hold) Calgary-headquartered Canadian energy giant mentioned that its corporate strategy remains focused on maximizing the performance of existing assets and growth initiatives, prioritizing shareholder returns and delivering key sustainability initiatives.
IMO’s upstream output for 2023 is anticipated between 410,000 and 430,000 gross oil-equivalent barrels per day (bpd), reflecting the sale of the firm’s stake in XTO Energy Canada. The outlook is supported by planned strong operating performance in the company’s core oil sands assets and sustained production growth at Kearl.
Capital spending is predicted at C$1.7 billion for the next financial year. The amount includes the planned ramp-up for the Strathcona Renewable Diesel project, the application of solvent technologies at Cold Lake and ongoing investments in the in-pit tailing project at the Kearl oil sands facility. (Imperial Oil Issues 2023 Guidance, Plans C$1.7B Capex)
4 Chevron announced that it led a $318-million fundraising round for Canada-based carbon capture tech firm, Svante, being the lead investor in the latter’s series E round. Svante, which develops filters to capture industrial carbon emissions for storage or reuse, will use the funds to accelerate the manufacturing of its carbon capture technology.
The investment by the U.S. oil major will also support Svante’s filter-manufacturing unit in Vancouver, which is expected to produce enough filter modules to capture millions of tons of carbon dioxide per year across hundreds of large-scale carbon capture and storage facilities.
CVX, in 2021, launched Chevron New Energies to accelerate lower-carbon business opportunities in carbon capture, utilization, and storage, hydrogen, renewable fuels and products, offsets and emerging technologies. Moreover, the energy giant intends to invest $10 billion in lower carbon projects through 2028, emphasizing that it remains committed to collaborating in new ways to quicken progress. (Chevron Leads $318M Raise for Svante's Series E Round)
5 Equinor and partners announced plans to invest NOK 13.2 billion to upgrade the Hammerfest liquefied natural gas (“LNG”) facility at Melkoya. The Stavanger, Norway-headquartered integrated major submitted a plan for development and operation to the Norwegian Minister of Petroleum and Energy to secure the future of the Hammerfest LNG.
The project involved gas onshore compression and electrification, and will secure the future of Hammerfest LNG. Onshore gas compression will provide enough flow from the reservoir to extend plateau production and maintain high gas exports from the facility beyond 2030.
Beside this, Equinor will replace the facility’s gas turbine generators with an onshore power connection. This will cut carbon dioxide emissions by 850,000 tons per year, which is equivalent to 2% of Norway’s annual emissions. Notably, the project is a major contributor to the energy transition. (Equinor to Invest NOK 13.2B to Upgrade Hammerfest LNG)
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
With oil rising significantly for the week, stocks were up too. The Energy Select Sector SPDR — a popular way to track energy companies — rose 4.3% last week. Over the past six months, the sector tracker has increased 19.4%.
What’s Next in the Energy World?
Following last week’s improving fortunes for oil and gas, market participants will closely track the regular releases to look for further guidance on the direction of the commodities. In this context, the U.S. government’s statistics on oil and natural gas — one of the few solid indicators that come out regularly — will be on energy traders' radar.
Data on rig count from the oilfield service firm Baker Hughes, which is a pointer to the trends in U.S. crude/natural gas production, is closely followed too. News related to the EU price cap on Russian oil exports and the potential demand boost from the easing of coronavirus lockdowns in China will be the other factors that will dictate the near-term price movement of the commodities.
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Oil & Gas Stock Roundup: Eni's Discovery, Petrobras' FPSO Start-Up in Focus
It was a week when oil prices moved up while natural gas futures registered a decrease.
On the news front, Italy-based energy major Eni (E - Free Report) made a natural gas discovery off Cyprus, while Brazil’s Petrobras (PBR - Free Report) started to churn out hydrocarbons from its P-71 FPSO in the Santos Basin pre-salt area. Developments associated with Imperial Oil (IMO - Free Report) , Chevron (CVX - Free Report) and Equinor (EQNR - Free Report) also made it to the headlines.
Overall, it was a mixed seven-day period for the sector. West Texas Intermediate (WTI) crude futures gained some 6.9% to close at $79.56 per barrel, but natural gas prices slumped more than 23% to end at $5.079 per million British thermal units (MMBtu). In particular, the oil market posted the largest one-week gain since October.
Coming back to the week ended Dec 23, the oil price action continued to be positive on China’s easing of Covid-Zero policies and demand concerns emanating from Moscow’s retaliatory crude export ban to countries that imposed price caps on its crude.
Meanwhile, natural gas finished deep down on forecasts of warmer weather.
Recap of the Week’s Most Important Stories
1. Rome-based energy biggie Eni made a significant natural gas discovery in the Zeus-1 well in Block 6 off Cyprus’ coast — the third consecutive find in the block, confirming the favorable outlook for the area and its development. Eni operates the block with a 50% interest.
The Zeus-1 well, located 162 kilometers offshore Cyprus, has been drilled and tested with the help of the Tungsten Explorer drillship. The test’s results are currently being incorporated to assess the discovered resources, which will drive additional studies for a fast-track development of Block 6.
Eni has been contributing to Cyprus’ growth since 2013 and runs five blocks within the facility. The company operates Blocks 2, 3, 6, 8 and 9 and has participating interests in Blocks 7 and 11. The success of the Zeus-1 well further enhanced the block’s potential after the Cronos-1 discovery in August. (Eni Makes Gas Discovery at Zeus-1 Well Offshore Cyprus)
2. Petrobras, the Brazilian state-owned oil major, recently announced that it commenced oil production from the P-71 FPSO installed in the Itapu field in the Santos Basin pre-salt area, roughly 200 km off the coast of Rio de Janeiro.
The P-71 FPSO, where output has started ahead of the anticipated date in 2023, can process up to 150,000 barrels of oil and 6 million m³ of gas per day. The P-71 measures 316 meters in length and can store 1.6 million barrels, and has the capacity to accommodate 166 people.
The P-71 will be positioned in a water depth of 2,010 meters and will be the only FPSO to produce in the Itapu field, fully operated by PBR. The company expects the unit to reach its maximum production capacity in 2023. (Petrobras Begins Production at Itapu Offshore Oil Field)
3. Imperial Oil recently provided an update on its corporate guidance outlook for 2023. The Zacks Rank #3 (Hold) Calgary-headquartered Canadian energy giant mentioned that its corporate strategy remains focused on maximizing the performance of existing assets and growth initiatives, prioritizing shareholder returns and delivering key sustainability initiatives.
You can see the complete list of today’s Zacks #1 Rank stocks here.
IMO’s upstream output for 2023 is anticipated between 410,000 and 430,000 gross oil-equivalent barrels per day (bpd), reflecting the sale of the firm’s stake in XTO Energy Canada. The outlook is supported by planned strong operating performance in the company’s core oil sands assets and sustained production growth at Kearl.
Capital spending is predicted at C$1.7 billion for the next financial year. The amount includes the planned ramp-up for the Strathcona Renewable Diesel project, the application of solvent technologies at Cold Lake and ongoing investments in the in-pit tailing project at the Kearl oil sands facility. (Imperial Oil Issues 2023 Guidance, Plans C$1.7B Capex)
4 Chevron announced that it led a $318-million fundraising round for Canada-based carbon capture tech firm, Svante, being the lead investor in the latter’s series E round. Svante, which develops filters to capture industrial carbon emissions for storage or reuse, will use the funds to accelerate the manufacturing of its carbon capture technology.
The investment by the U.S. oil major will also support Svante’s filter-manufacturing unit in Vancouver, which is expected to produce enough filter modules to capture millions of tons of carbon dioxide per year across hundreds of large-scale carbon capture and storage facilities.
CVX, in 2021, launched Chevron New Energies to accelerate lower-carbon business opportunities in carbon capture, utilization, and storage, hydrogen, renewable fuels and products, offsets and emerging technologies. Moreover, the energy giant intends to invest $10 billion in lower carbon projects through 2028, emphasizing that it remains committed to collaborating in new ways to quicken progress. (Chevron Leads $318M Raise for Svante's Series E Round)
5 Equinor and partners announced plans to invest NOK 13.2 billion to upgrade the Hammerfest liquefied natural gas (“LNG”) facility at Melkoya. The Stavanger, Norway-headquartered integrated major submitted a plan for development and operation to the Norwegian Minister of Petroleum and Energy to secure the future of the Hammerfest LNG.
The project involved gas onshore compression and electrification, and will secure the future of Hammerfest LNG. Onshore gas compression will provide enough flow from the reservoir to extend plateau production and maintain high gas exports from the facility beyond 2030.
Beside this, Equinor will replace the facility’s gas turbine generators with an onshore power connection. This will cut carbon dioxide emissions by 850,000 tons per year, which is equivalent to 2% of Norway’s annual emissions. Notably, the project is a major contributor to the energy transition. (Equinor to Invest NOK 13.2B to Upgrade Hammerfest LNG)
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
Company Last Week Last 6 Months
XOM +3.8% +23.8%
CVX +5.1% +21.7%
COP +6.6% +28.5%
OXY +2.3% +9.2%
SLB +7.3% +49.1%
RIG +9.1% +28.3%
VLO +4.2% +12.6%
MPC +4.9% +32.8%
With oil rising significantly for the week, stocks were up too. The Energy Select Sector SPDR — a popular way to track energy companies — rose 4.3% last week. Over the past six months, the sector tracker has increased 19.4%.
What’s Next in the Energy World?
Following last week’s improving fortunes for oil and gas, market participants will closely track the regular releases to look for further guidance on the direction of the commodities. In this context, the U.S. government’s statistics on oil and natural gas — one of the few solid indicators that come out regularly — will be on energy traders' radar.
Data on rig count from the oilfield service firm Baker Hughes, which is a pointer to the trends in U.S. crude/natural gas production, is closely followed too. News related to the EU price cap on Russian oil exports and the potential demand boost from the easing of coronavirus lockdowns in China will be the other factors that will dictate the near-term price movement of the commodities.