A Real Pain in the Neck... for OPEC
“If somebody built it, somebody can un-build it” - Nick [The Score]
Three weeks ago, production started up again
Two weeks ago, Libya hit 250K bbl / day
Last week, 300K bbl / day were flowing
By the end of next week, that number will double - to 600K.
Libya - the African nation with the continent’s largest reserves - is finally returning oil production to the market…
… at a time when the market doesn’t need it.
In September, OPEC+ announced strong compliance with their production cut program (which Libya is exempt from).
The same groups meet on Thursday & Monday, for another review.
At some point - under the current macro circumstances - we won’t be surprised if an OPEC+ meeting ends in disarray (like in March):
There’s going to be politicians who have to answer to unreasonable constituents… constituents who will ask (disingenuously) why they aren’t producing more oil; &
The longer Covid curtails demand, the more likely it is that a politician gives in to such demands, breaking the cartel’s curtailment discipline
BP feels compelled to tell the world what cards it’s holding.
And that’s a surefire way to lose a game of poker.
On one hand, BP says:
So, it should come as no surprise that - at the same time that BP makes a first production announcement on a large project (Oman's Ghazeer gas field) - sources say BP is in talks to sell down its stake in… *Ghazeer*.
A&D is - in part - a poker game.
And you can’t win at poker by telling the table your hand -
We thought it was generous.
That kind of contrast is an indication that it’s objective -
The Bank of England tipped its hand
Kelcy Warren stepped down (remains Chairman)
Aussie Shale - an exploration well hits in the NT
We’re not normally Cowboys fans, but we’re definitely rooting for Dak - catch y’all next week -