“Alles hat ein Ende, nur die Wurst hat zwei” - German Proverb (we’ll explain later)
GERMAN OIL.
It’s not well know that there’s Oil - onshore - in Germany.
It’s even lesser known that there’s a Royalty Trust comprised of Overrides on German Oil & Gas Fields (that’s not taxed by Germany OR the US), trading on the NYSE.
As alluring as double-tax-free publicly traded overrides may sound - it’s not worth your time.
[once upon a time, two of the editors of this newsletter went way down that rabbit hole]
HOWEVER - that was not our first look at Germany.
And German Oil is relevant today because Bloomberg is reporting that Exxon is about to start a sale process for its upstream assets in the UK + Germany.
The UK assets will sell fast.
The German ones won’t.
Germany produces ~50k bopd.
The largest field - Mittelplate - produces ~60% of that.
And onshore, next to Mittelplate is the Dieksand - probably the most surefire place to drill for conventional oil in the western world…
…but it won’t happen.
Greenpeace, long ago, won the battle for the German head-space.
So what’s next?
Wintershall - the other big player in Germany - has been making moves.
Exxon & Wintershall should just combine their German assets into a single legal vehicle & IPO it.
That’d easily be a >$1Bn listing…
And, if push-came-to-shove, it’d be easier to negotiate w/ the Bundestag as a local company -
KUWAIT.
Kuwait is planning to restart oil production in March at the Wafra field that it shares with Saudi Arabia in the “Neutral Zone”.
Back in December, Kuwait & Saudi settled a ~5x yr dispute over the Neutral Zone - which can produce >500k bopd.
All the while, both Kuwait & Saudi remain committed to their OPEC production quotas…
GAS.
We’ll leave it at this:
OTHER NEWS.
A banker in the Isabel dos Santos scandal dropped dead
There’s another concession bidding round in Iraq
The Haynes and Boone surveys were updated
Oh, almost forgot - that German proverb - it means:
“all things have an end - except for sausages, they have two”
Which sums up Exxon’s exit plans - they’re leaving, and sometimes the Germans make sausage, not sense -
That’s it for this week - the Superbowl can’t get here fast enough -