Energy Tidbits April 21, 2019 - SAF Group...Trump joining Saudi Arabia, Russia, Egypt, etc in...

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Energy Tidbits

Dan Tsubouchi

Principal, Chief Market Strategist

[email protected]

Aaron Bunting

Principal, COO, CFO

[email protected]

Ryan Dunfield

Principal, CEO [email protected]

Alan Cooper

Vice President

[email protected]

Ryan Haughn

Principal, Energy

[email protected]

Trump Backs Haftar, Reduces Risk To Libya Supply Interruption

Post A Haftar Win

Welcome to new Energy Tidbits memo readers. We are continuing to add new readers to our Energy Tidbits

memo and energy blogs. The focus and concept for the memo was set in 1999 with input from PMs, who were

looking for research (both positive and negative items) that helped them shape their investment thesis to the energy

space, and not focusing on day to day trading. Our priority was and still is to not just report on events, but interpret

and point out implications therefrom. The best example is our review of investor days, conferences and earnings calls

focusing on sector developments that are relevant to the sector and not just a specific company results/guidance.

Our target is to write on 48 to 50 weekends per year and to send out by noon mountain time.

This week’s memo highlights:

1. Trump joining Saudi Arabia, Russia, Egypt, etc in supporting Haftar, we think this lessens the risk of an

interruption to Libya oil exports post a Haftar win. (Click Here)

2. Russia reaffirmed its support to Maduro a day after Bolton said US was meeting Russia on Venezuela. (Click

Here)

3. Big relief to Bakken and Cdn light differentials as Washington waters down impact of Bill 5579. (Click Here)

4. Liberals announced their new goal is to have a Trans Mountain expansion decision by June 18. (Click Here)

5. We had an early news cut off at Sun 530am mountain due to Sun morning travel.

6. Please follow us on Twitter at [LINK] for breaking news that ultimately ends up in the weekly Energy Tidbits

memo.

7. For new readers to our Energy Tidbits and our blogs, you will need to sign up at our blog sign up to receive future

Energy Tidbits memos. The sign up is available at [LINK].

Produced by: Dan Tsubouchi

April 21, 2019

https://twitter.com/Energy_Tidbits

http://www.safgroup.ca/research/trends-in-the-market/


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Energy Tidbits

Table of Contents Natural Gas – Natural gas injection of 92 bcf, storage now at a 57 bcf YoY deficit .................................................4

Figure 1: US Natural Gas Storage ....................................................................................................................4

Natural Gas – US Shale/tight plays estimated up 12.429 bcf/d YoY in May ............................................................4

Figure 2: EIA - Major Shale/Tight Play’s Natural Gas Production ....................................................................4

Natural Gas – Japan LNG imports for March down 8.1% YoY ................................................................................4

Figure 3: Japan Monthly LNG Imports (bcf/d) ..................................................................................................5

Figure 4: Japan’s Net Electricity Generation By Fuel (TWh), 2000-2017 ........................................................5

Natural Gas – South Korea LNG imports fall 35% YoY in March ............................................................................5

Figure 5: Seoul March Temperature Vs Average .............................................................................................6

Natural Gas – Nord Stream 2 doing all it can to minimize delays to yr end 2019 start ............................................6

Natural Gas – ARC says LNG Canada expected to buy 3rd party gas supply .........................................................7

Natural Gas – KMI sees need for more Permian gas egress to support oil growth .................................................8

Oil – US oil rigs down 8 to 825 oil rigs ......................................................................................................................8

Figure 6: Baker Hughes Weekly Rig Count – Total US Oil Rigs ......................................................................8

Oil – Total Cdn rigs were flat at 66 total rigs.............................................................................................................8

Figure 7: Baker Hughes Weekly Rig Count, Canadian Oil Rigs.......................................................................9

Oil – EIA says US oil production down 100,000 b/d to 12.1 mmb/d .........................................................................9

Figure 8: Weekly Oil Production .......................................................................................................................9

Figure 9: US Weekly Oil Production .............................................................................................................. 10

Figure 10: YoY Change in US Weekly Oil Production ................................................................................... 10

Oil – EIA revises Apr shale/tight oil production down 212,000 b/d MoM ............................................................... 10

Figure 11: Major Shale/Tight Plays Oil Production ........................................................................................ 10

Oil – DUCs flat in March, But Permian DUCs now >4,000, +1,046 YoY ............................................................... 11

Figure 12: EIA Estimated Drilled UnCompleted Wells .................................................................................. 11

Oil – Big relief to Bakken crude by rail, Wash Bill 5579 significantly watered down ............................................. 11

Figure 13: BNSF Rail Lines Map ................................................................................................................... 12

Figure 14: Bakken and Cdn Mixed Sweet Vs WTI ........................................................................................ 12

Oil – Michigan Gov seems to have reversed position on Enbridge Line 5 replacement ....................................... 13

Oil – Liberals expect to decide on Trans Mountain expansion by June 18 ........................................................... 13

Oil – Eagle Ford condensate still challenged to replace Iran condensate ............................................................ 14

Oil – Oil input into refineries down 22,000 b/d to 16.078 mmb/d........................................................................... 14


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Energy Tidbits

Figure 15: US Refinery Crude Oil Inputs (thousand b/d) ............................................................................... 15

Oil – Prepping for IMO 2020 pushing larger than expected Q2 turnarounds ........................................................ 15

Oil – US “NET” oil imports down 659,000 b/d to 3.591 mmb/d ............................................................................. 15

Figure 16: US Weekly Preliminary Oil Imports By Major Countries ...................................................................... 16

Oil – Exxon’s Guyana keeps moving to 1 mmb/d potential ................................................................................... 16

Oil – Pemex says Mexico oil production has turned the corner/stopped decline .................................................. 16

Figure 17: Pemex Apr Presentation – Oil Production Stabilizing In Q1 ........................................................ 17

Figure 18: US Imports Of Crude Oil From Canada, Mexico, And Venezuela ............................................... 17

Oil – Venezuela Central Bank cash burn only $1.3b YoY but gold burn is $0.45b/mth ........................................ 17

Figure 19: Venezuela Central Bank Reserves US$ billions .................................................................................. 18

Oil – Russia reaffirms support for Maduro ............................................................................................................. 18

Oil – Fighting escalated this weekend, LNA claims advancing in Tripoli .............................................................. 19

Oil – Could power outages be what causes first Libya oil/gas export interruptions? ............................................ 20

Oil – Trump support for Haftar should reduce risk of interruptions post a Haftar win ........................................... 20

Oil – Good news for Kuwait, it was only a “limited fire” at Kuwait’s Burgan oilfield ............................................... 20

Figure 20: OPEC Production As Per “Direct Communications” (thousand b/d) .................................................... 21

Oil – Saudi foils police station attack 250 km NW of Riyadh, not near oil and gas ............................................... 21

Figure 21: Saudi Arabia Major Oil and Gas Infrastructure .................................................................................... 22

Oil and Natural Gas – Hot summer sets up electricity risk this summer in Texas ................................................. 22

Figure 22: NOAA Apr 18 Updated July/Aug/Sept Temperature Forecast ............................................................. 23

Figure 23: ERCOT Forecast Electricity Margins ............................................................................................ 24

Technology – New Chinese undersea cables a security risk, but who owns sea rights? ..................................... 24

Figure 24: Submarine Cable systems in Asia-Pacific region ......................................................................... 25

Demographics – Tax rates, not just weather, drives population shift .................................................................... 25

Figure 25: State/Local Tax Level and Net Domestic Migration By State, 2018 ............................................ 26

Energy Tidbits – Now on Twitter ............................................................................................................................ 26

Energy Tidbits – Sign up on our email distribution for tidbits and blogs ................................................................ 26

LinkedIn – Look for quick energy items from me on LinkedIn ............................................................................... 26

Misc Facts and Figures.......................................................................................................................................... 26


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Energy Tidbits

Natural Gas – Natural gas injection of 92 bcf, storage now at a 57 bcf YoY deficit

This week, the EIA reported a 92 bcf injection vs expectations of a 89 bcf injection to bring storage to 1.247 tcf as of Apr 12, down 57 bcf YoY and down 414 bcf vs the 5-year average. This is a major narrowing of the YoY deficit from 183 bcf deficit last week, so no surprise HH gas prices are down to approx. $2.50. Strong YoY US natural gas production growth means storage should soon flip to a YoY surplus and keep HH gas prices weak thru the shoulder season. Below is the EIA’s storage table from its Weekly Natural Gas Storage Report. [LINK] Figure 1: US Natural Gas Storage

Source: EIA

Natural Gas – US Shale/tight plays estimated up 12.429 bcf/d YoY in May

On Monday, the EIA issued its Drilling Productivity Report Apr 2019, which is the EIA’s forecast for oil and natural gas production from the top shale/tight oil and gas basins for the current month (in this case Apr) and the next month (in this case May) and it continues to show huge growth in US natural gas production. (i) US shale/tight gas plays continue to show strong YoY growth, US shale/tight plays are estimated to be up 12.429 bcf/d YoY to reach 79.837 bcf/d in May from the major shale/tight basins. (ii) The new DPR estimates gas production from the major basins to increase 0.793 bcf/d from Mar to Apr to reach 78.930 bcf/d in Apr, and then another 0.907 bcf/d from Apr to May to reach 79.837 bcf/d in May. (iii) Similar to last month, the largest YoY increases came from the Appalachia which is +5.110 bcf/d YoY, and the associated natural gas from the Permian +3.081 bcf/d YoY. Below is our table showing the running EIA DPR data for the shale/tight gas plays. Our Supplemental Documents package includes the Drilling Productivity Report. Figure 2: EIA - Major Shale/Tight Play’s Natural Gas Production

Source: EIA

Natural Gas – Japan LNG imports for March down 8.1% YoY

This week, Japan’s Ministry of Finance published its monthly import/export data [LINK]. Japan LNG imports for Mar were 11.30 bcf/d, which is down 8.1% YoY, and 10.4% MoM vs Feb. (i) The lower LNG imports are directly due to the warmer than normal temperatures this winter in Asia, weakening demand and led to surplus Asian LNG cargos being redirected to

2019

mmcf/d Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May May YoY

Anadarko 6,865 6,895 7,054 7,145 7,321 7,392 7,400 7,379 7,463 7,558 7,633 7,674 7,507 7,489 594

Appalachia (Marcellus/Utica)26,962 27,105 27,488 28,083 28,742 29,787 30,420 30,806 30,584 30,620 30,839 31,149 31,862 32,215 5,110

Bakken 2,279 2,356 2,336 2,435 2,481 2,561 2,607 2,565 2,705 2,773 2,786 2,801 2,716 2,730 374

Eagle Ford 6,330 6,403 6,436 6,504 6,585 6,647 6,689 6,728 6,770 6,816 6,867 6,907 6,853 6,883 480

Haynesville 8,388 8,781 8,849 8,975 9,194 9,592 9,464 9,844 9,852 10,006 10,165 10,341 10,522 10,754 1,973

Niobrara 4,814 4,832 4,673 4,787 5,001 5,092 5,109 5,204 5,245 5,287 5,344 5,406 5,580 5,649 817

Permian 10,656 11,036 11,269 11,608 11,958 12,164 12,438 12,743 13,137 13,399 13,629 13,859 13,890 14,117 3,081

Total 66,293 67,408 68,107 69,536 71,282 73,234 74,127 75,270 75,755 76,460 77,263 78,137 78,930 79,837 12,429

Japan LNG

imports down

8.1% YoY in Mar

YoY storage now

at 57 bcf YoY

deficit

US shale

estimated up

12.429 bcf/d in

May

http://ir.eia.gov/ngs/ngs.html

http://www.customs.go.jp/toukei/shinbun/trade-st_e/2019/2019034e.pdf


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Energy Tidbits

NW Europe. (ii) Japanese utilities also preferentially maximized coal where possible due to the higher LNG prices coming into the winter. Coal imports were flat YoY in March vs LNG down 8.1% YoY for Mar. (iii) Increasing nuclear power generation reduced LNG imports as nuclear reactors come back online following the 2011 Fukushima accident. In 2018, Japan restarted five nuclear reactors, and the EIA forecasts increasing nuclear power generation to displace up to 10% of Japanese LNG imports in 2019 [LINK]. Below is our table that tracks the monthly LNG import data, and the EIA’s graph on electricity generation by fuel type in Japan. The EIA data is slightly dated but shows the potential for nuclear power to displace some LNG import demand. Figure 3: Japan Monthly LNG Imports (bcf/d)

Source: EIA, SAF

Figure 4: Japan’s Net Electricity Generation By Fuel (TWh), 2000-2017

Source: EIA, SAF

Natural Gas – South Korea LNG imports fall 35% YoY in March

Similar to the widespread trend across Asia, South Korean LNG import demand has shown significant weakness this winter, and LNG imports were remarkably weak in March. LNG World News reported [LINK] South Korea LNG imports in Mar were down 35.3% YoY. Similar to China, Japan the decrease in YoY LNG import volumes is attributed to warmer than normal temperatures and high Asia inventory levels, as we have mentioned before with Asian buyers diverting LNG cargos to NW Europe. Another good data point from the South Korea customs data, was buyers in the country paid an average of $10.95 per mmbtu for LNG in Mar, this compares to North Asia spot LNG prices that fell as low as ~$4.50 per mmbtu in Mar. This serves a good reminder that spot trade in LNG only accounts for about 25% of the LNG market. Below is the Accuweather graph for Seoul, South Korea temperatures in March compared to the average, which shows the clearly warmer temperatures this year.

bcf/d 2014 2015 15/14 2016 16/15 2017 17/16 2018 18/17 2019 19/18

Jan 12.66 13.06 3.1% 11.22 -14.1% 12.85 14.6% 12.79 -0.5% 11.69 -8.7%

Feb 12.88 13.25 2.9% 12.30 -7.2% 13.35 8.5% 14.22 6.5% 12.60 -11.4%

Mar 12.46 12.60 1.2% 12.62 0.1% 12.61 -0.1% 12.28 -2.6% 11.30 -8.1%

Apr 11.54 10.56 -8.5% 10.21 -3.3% 10.52 3.0% 8.97 -14.7%

May 10.06 8.91 -11.4% 8.55 -4.0% 9.66 13.0% 9.92 2.7%

June 10.91 10.61 -2.8% 10.02 -5.6% 9.90 -1.2% 8.88 -10.3%

July 12.14 10.77 -11.3% 10.19 -5.4% 10.19 0.0% 10.55 3.6%

Aug 10.92 10.93 0.2% 11.96 9.4% 11.24 -6.0% 11.73 4.4%

Sept 11.64 11.06 -5.0% 10.67 -3.5% 9.31 -12.7% 10.04 7.8%

Oct 10.75 9.38 -12.8% 9.73 3.7% 9.50 -2.3% 10.12 6.5%

Nov 11.00 10.71 -2.7% 12.07 12.7% 10.26 -15.0% 10.15 -1.0%

Dec 12.79 12.51 -2.2% 11.69 -6.5% 12.31 5.4% 11.23 -8.8%

Fukushima Disaster

South Korea LNG

imports down 35%

YoY

https://www.eia.gov/todayinenergy/detail.php?id=38533

https://www.lngworldnews.com/south-koreas-march-lng-imports-plunge-35-pct/


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Energy Tidbits

Figure 5: Seoul March Temperature Vs Average

Source: Accuweather

Natural Gas – Nord Stream 2 doing all it can to minimize delays to yr end 2019 start

One of the two major global LNG and natural gas markets risk factors is Gazprom’s 5.3 bcf/d Nord Stream 2 export gas pipeline from Russia to Germany and then to other places in Europe. It was supposed to be in service by yr end 2019, but was thrown a roadblock by the Danish Energy Agency when it asked for another new alternative route even though it hadn’t yet ruled on the first two options. It looks like Nord Stream 2 is doing all it can to minimize any delays to its planned startup of yr end 2019. This week, Nord Stream 2 submitted its 3rd application for a route thru Danish waters. This 3rd application was because of the Danish Energy Request a few weeks ago asking for another route, despite not ruling yet on the original route and the alternative route. We hadn’t expected it to be too long for a 3rd application because of all the work done to date on the other nearby routes, but this seems pretty fast. The key question is when will Denmark issue a permit? There is no idea or timing commitment from the Danish Energy Agency on when they will rule. The DEA announced “The Danish Energy Agency will now process the application and initiate the environmental assessment process. This includes, among other things, a public consultation of the environmental impact report for the project with accompanying appendices. The public consultation is expected to be initiated shortly and will also include consultation with relevant countries in relation to any cross-border environmental impacts in accordance with the Espoo Convention. Subsequently, the Danish Energy Agency, in cooperation with the developer, shall address the received responses. The length of this part of the case processing will depend on the number, content and complexity of the consultation responses. This means that the Agency currently cannot say when a permit can be granted.” Nord Stream 2 release also announced that they already laid 1,000 km of the pipeline. They are clearly trying to get done all they can excerpt being held up by Denmark. We aren’t aware of any seasonal pipeline construction issues in Danish waters ie. like Keystone XL faces in some areas. But it seems hard to believe the yr end 2019 is going to be a full year delayed. We would think even if its 9 month or 1 year process for Denmark to give their permit, it shouldn’t be more than a few months thereafter to finish. Of course that assumes the DEA doesn’t ask for a 4th or 5th route, or the EU puts up a roadblock. Regardless, we think it will be a bit of a relief for the 5.3 bcf/d is a huge negative to LNG prices whenever it starts up. And any weakness in LNG prices does now push back onto Henry Hub prices. Our Supplemental Documents package includes the Nord Stream and DEA releases.

Gazprom’s two export pipelines will put big pressure on 2020/21 LNG prices We still don’t believe Gazprom’s two natural gas export pipelines (3.6 bcf/d Power of Siberia and 5.3 bcf/d Nord Stream 2) get enough market focus as we see these as

Nord Stream 2

trying to minimize

delays


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Energy Tidbits

game changers to LNG prices in 2020 and 2021. Its why we wrote our March 30 blog “LNG Price Pressures 2020/2021 With Gazprom Adding ~8.9 bcf/d Export Gas Pipeline Capacity Into Europe And China” [LINK]. Power of Siberia is on track to add 3.6 bcf/d into China on Dec 1/19. And Nord Stream 2 was originally on track to add 5.3 bcf/d into Germany by yr end 2019. Prior to the DEA forcing a delay in Nord Stream 2, LNG prices starting Jan 1/2020 were on track to be hammered with 8.9 bcf/d of gas pipeline gas hitting Europe and China. Now at least the impact of Nord Stream 2 will likely deferred until later 2020 and 2021 depending on when it goes in service. The issue is that the added volumes from the pipelines will be close to the growth in LNG demand. The recent Shell LNG Outlook 2019 estimated that global net LNG imports increased by 3.6 bcf/d in 2018. We believe that would have been higher other than high LNG prices saw some switching to coal in Asia and LNG import infrastructure is still being built out. The Nord Stream 2 delay may be a relief to 2020 LNG prices, but the addition of ~8.9 bcf/d natural gas into Europe and China will keep price pressures on spot LNG prices over the next couple years. Plus, this added pipeline connected gas will add to the base natural gas supply, including during shoulder seasons, which should add increased risk to seasonal price swings. There is much more in our March 30 blog. Our Supplemental Documents package includes our blog.

Natural Gas – ARC says LNG Canada expected to buy 3rd party gas supply

On Tues, we tweeted [LINK] “Bloomberg: ARC says LNG Canada/Shell to buy 3rd party gas “looking at how much that costs & the risk of managing” the project. Ties to SAF Mar 17/19 Energy Tidbits, 3rd party gas up to ½ when contracted price is cheap enough vs marginal drill/tie-in cost.” Bloomberg reported on an interview with ARC CEO Stadnyk comments from an interview on the sidelines from CAPP conference in Toronto. Stadnyk says LNG Canada and Shell will be looking to buy gas supply from other natural gas suppliers who are not in LNG Canada. This is in line with our LNG Canada comments in the March 17, 2019 Energy Tidbits memo [LINK], wherein we said that we expected it will likely be 50% owned natural gas supply from LNG Canada partners and 50% buying natural gas from other natural gas producers such as ARC. We recognize Stadnyk’s comments were general on why, but we thought they were in line with our specific comments that LNG Canada/Shell would be opportunistic in buying 3rd party gas. Bloomberg says “They’re looking at how much that costs and the risk of managing all the different segments of the project,” Stadnyk said. “They’re just more open to communicating to companies about supply.” Here is what we wrote in the March 17, 2019 Energy Tidbits “There is no doubt that that the ideal situation for LNG Canada is no other competing large LNG projects potentially reducing their expected opportunity to contract other 3rd party gas at attractive prices, or drill as much as they want. Our expectation remains that, absent any other large LNG projects, LNG Canada group likely contracts 3rd party gas for up to half of the volumes during windows when the contracted gas price is cheap enough to compete against the marginal cost of drilling/tiein. It is to their benefit to be the sole controller of any sizeable LNG egress and the timing therein,. So we wonder if this public reminder of the phase 2 expansion is either a warning to other LNG projects considering FID or maybe even an invitation for others to contact them about seeing if they can be squeezed in to some lesser amount in phase 2”. Stadnyk also confirmed what we had heard – ARC was not in the group of Cdn producers working on their own LNG project. Bloomberg wrote “The opportunity to sell into the Shell project or other potential LNG facilities is part of the reason ARC hasn’t joined a group of 10 Canadian gas producers that have teamed up to help move another LNG facility closer to completion, Stadnyk said.” Our Supplemental Documents package includes the Bloomberg terminal ARC story.

ARC: LNG Canada

to buy 3rd party

gas supply

http://www.safgroup.ca/research/articles/lng-price-pressures-2020-2021-with-gazprom-adding-8-9-bcf-d-export-gas-pipeline-capacity-into-europe-and-china/

https://twitter.com/Energy_Tidbits/status/1118325018914635777

http://www.safgroup.ca/wp-content/uploads/2019/03/Energy-Tidbits-March-17-2019.pdf


8

Energy Tidbits

Natural Gas – KMI sees need for more Permian gas egress to support oil growth

There were a number of items to highlight from the Kinder Morgan Q1 call on Thurs. (i) Good reminder that Permian oil growth can be delayed/hampered if there isn’t egress for the associated natural gas from Permian oil wells. And Permian oil value is hurt unless there is Permian natural gas egress. KMI’s Q1 call focused on Permian natural gas egress to get to the Gulf Coast for feedstock to LNG exports. (ii) KMI’s two major Permian natural gas egress pipelines are on track: Gulf Coast Express – 2bcf/d gas pipeline, expected in service Oct 2019. Permian Highway – 2bcf/d gas pipeline, in service “a year after Gulf Coast Express” ie. In service date is around Oct 2020. (iii) Potential for a 3rd major Permian natural gas egress pipeline, in addition to Gulf Coast and Permian Highway. Permian gas egress was a central discussion point in the Q1 call, and note, more natural gas egress out of the Permian means higher oil and liquids production. Kinder even pointed to potentially building a third Permian natural gas pipeline (incremental to the two projects mentioned above). In the Q&A, mgmt. was asked about potential for KMI to build a 3rd Permian gas pipeline and said “Yes. And there are some discussions ongoing, there's nothing to announce. And, of course, it's not in the backlog, because we're not under contract or anything. But the demand to get out of the Permian continues to grow, and the desire to be able to unlock the value that's in oil and the NGLs, as well as the Natural Gas, continues to put pressure on the need for additional takeaway capacity. And so, short answer is yes. And if you look at the projections, they would show you that a GCX a year almost is what's required in order to – in order to satisfy the need for takeaway capacity and to unlock the value in the other commodities out of the Permian. I don't know that it's going to be anything like that pace or that it's going to be at that pace, but there's certainly interest already in pipe 3”. Our Supplemental Documents package include excerpts from the Kinder Morgan Q1 call transcript. There was no Q1 call slide deck..

Oil – US oil rigs down 8 to 825 oil rigs

Baker Hughes released its weekly rig data on Thurs this week, due to the Good Friday holiday. The headline was the big decrease in US oil rigs, which were down 8 to 825 oil rigs as of Apr 18. Decreases were in Others -5, Permian -1, Mississippian -1, and DJ-Niobrara -1. There were no increases for US oil rigs this week. US oil rig activity has been slowing in 2019, which is in line with recent comments from major service companies including Schlumberger and Halliburton indicating US E&P capex would be >10% lower in 2019 vs 2018. Below is our graph of the Baker Hughes weekly US oil rig data.

Figure 6: Baker Hughes Weekly Rig Count – Total US Oil Rigs

Source: Baker Hughes, SAF

Oil – Total Cdn rigs were flat at 66 total rigs

Baker Hughes reported Cdn rigs were unchanged at 66 total rigs as of Apr 18. Canadian drilling activity always reaches its low during spring breakup, we are likely at the bottom, or near the bottom level of spring drilling activity for 2019. Cdn oil rigs were up 1 to 19 oil rigs,

US oil rigs were

-8 this week

Total Cdn rigs

unchanged this

week

KMI sees need for

more Permian

natural gas egress


9

Energy Tidbits

which is down 19 YoY. Last year, Cdn oil rigs bottomed out at 32 oil rigs on May 11, whereas we are currently sitting at 19 active Cdn oil rigs in 2019. Cdn gas rigs were down 1 to 47 Cdn gas rigs, vs last spring’s bottom of 43 gas rigs on June 1. Below is our graph of the Baker Hughes weekly Cdn oil rig data.

Figure 7: Baker Hughes Weekly Rig Count, Canadian Oil Rigs

Source: Baker Hughes, SAF

Oil – EIA says US oil production down 100,000 b/d to 12.1 mmb/d

The EIA reported US oil production was down 100,000 b/d to 12.1 mmb/d for the Apr 12 week. Lower 48 was down 100,000 b/d to 11.6 mmb/d for the Apr 12 week. The new EIA Short Term Energy Outlook for Apr forecasted average Q2 US oil production at 12.36 mmb/d, 260,000 b/d higher than current production numbers and we should expect to see weekly oil production estimates increase as Permian to Gulf Coast egress is unlocked moving into Q3. Below we pasted an excerpt from the EIA weekly oil production data. [LINK]

Figure 8: Weekly Oil Production

Source: EIA

US production

of 12.1 mmb/d

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W


10

Energy Tidbits

Figure 9: US Weekly Oil Production

Source: EIA, SAF

Figure 10: YoY Change in US Weekly Oil Production

Source: EIA, SAF

Oil – EIA revises Apr shale/tight oil production down 212,000 b/d MoM

For the first time since Sept 2017, the EIA showed the first MoM decline in shale/tight oil production in the Apr Drilling Productivity Report. Last month the DPR forecast US shale/tight oil would increase from 8.507 mmb/d in March to 8.592 mmb/d in April. However, in the Apr DPR, the EIA lowered its April estimate to 8.380 mmb/d, a 212,000 b/d downward revision. This means that April is down 127,000 b/d from March of 8.507 mmb/d. This is the first MoM decline since Sept 2017 (down 28,000 b/d vs Aug 2017), and Dec 2016 (down 90,000 b/d vs Nov 2016). (ii) The new DPR estimates May to be 8.460 mmb/d, which is up 80,000 b/d from the downwardly revised April of 8.380 mmb/d, but still below March of 8.507 mmb/d. (iii) The May estimate of 8.460 mmb/d is +1.421 mm b/d YoY. (iv) The EIA also revised down its Permian April estimate from the original of 4.177 mmb/d to 4.094 mmb/d. (v) Note that the shale/tight oil production represents ~70% of total US oil production. Below is our table of running DPR estimates of shale/tight oil.

Figure 11: Major Shale/Tight Plays Oil Production

Source: EIA, SAF

2019

thousand b/d Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May May YoY

Anadarko 520 516 512 527 550 561 564 566 571 580 586 586 573 567 51

Appalachia 102 106 112 113 125 139 143 128 125 128 131 134 131 135 29

Bakken 1,232 1,254 1,242 1,285 1,311 1,374 1,407 1,392 1,417 1,414 1,349 1,441 1,374 1,385 131

Eagle Ford 1,266 1,275 1,330 1,308 1,334 1,380 1,383 1,393 1,402 1,413 1,425 1,434 1,422 1,429 154

Haynesville 42 42 41 41 41 43 42 42 43 43 43 43 44 44 2

Niobrara 596 592 569 581 635 656 669 687 694 702 716 732 742 764 172

Permian 3,256 3,254 3,371 3,416 3,542 3,645 3,795 3,919 3,974 3,960 4,007 4,137 4,094 4,136 882

Total 7,013 7,039 7,177 7,271 7,538 7,797 8,003 8,126 8,226 8,241 8,257 8,507 8,380 8,460 1,421

US shale oil down

212,000 b/d in Apr


11

Energy Tidbits

Oil – DUCs flat in March, But Permian DUCs now >4,000, +1,046 YoY

The EIA’s Drilling Productivity Report also includes the EIA’s estimate of Drilled UnCompleted wells at Mar 31. (i) The EIA estimates March DUCs were 8,500, which was basically flat to Feb at 8,504 DUCs. However, the 8,504 Feb DUCs were a result of a downward revision from the originally estimated 8,576 DUCs for Feb. (ii) Permian DUCs continue to be high at 4,021 DUC’s, which is up 1,046 DUCs YoY. This inventory can still provide an added boost to Permian oil and associated natural gas production once this DUC level gets worked down when the egress gets unlocked sometime in H2/19. Note also this will cause a big push on frack crews at that time. (iii) Appalachia DUCs are down 283 YoY and are now at 501 DUCs at March 31. Below is our running table of the EIA Drilling Productivity Report DUCs.

Figure 12: EIA Estimated Drilled UnCompleted Wells

Source: EIA

Oil – Big relief to Bakken crude by rail, Wash Bill 5579 significantly watered down

A major negative to Bakken crude by rail was removed with last Thurs night major changes made to Washington State Bill 5579. Bill 5579, as originally approved by the state senate in March, would have stopped all Bakken crude by rail thru Washington. The March version of the bill would prevent any crude with vapor pressure above 9 lb/sq inch from any rail, loading or storage facilities. This would mean that any Bakken (it has higher vapor pressure) couldn’t be moved by rail or, perhaps even more significantly, could not be held in any storage tanks in Washington. It received state house approval, but only after a major rewrite last Thurs night. The rewrite is a huge relief, it takes away the stopping of Bakken crude by rail thru Washington, or at least the 2018 level of Bakken crude by rail. The key major changes were: (i) 5579 now divides into existing facilities and new (post Jan 1) facilities. (ii) big change is that existing facilities can continue to import crude by rail below 9 lbs/sq inch at 2018 crude by rail volume levels. (ii) the bill is not changed for new post Jan 1, 2019 facilities, they cannot bring in any oil with vapor pressure above 9 lb/sq inch ie. any Bakken. (iii) big change and a critical point was removed from the original state senate approved bill. The Apr 12 bill does NOT include this clause “(2) A facility may not store crude oil produced from the Bakken region unless the oil has a vapor pressure of less than nine pounds per square inch.” Our Supplemental Documents package includes the combined senate approved 5579 plus the Apr 12 approved amendments. [LINK]

Means ~140,000 b/d of Bakken can still move by rail to west coast This is a huge relief, and not just for Bakken deliveries to Washington, but the major BNSF rail line for the Bakken has to go thru Washington to get to either Oregon or California. Last week’s (April 14, 2019) Energy Tidbits memo highlighted the North Dakota Pipeline Authority’s new monthly report [LINK], which includes its estimate that North Dakota crude by rail in Feb was approx. 227,000 b/d, which was down from approx. 252,000 b/d in Jan. The NDPA does not provide a breakdown by destination, but the EIA provides a breakdown of all crude by rail shipments by PADD. The EIA”s latest split [LINK] is for Jan and it was that PADD 2 Midwest (basically the Bakken) moved 139,000 b/d by rail to PADD 5 West Coast.

Drilled UnCompleted Wells , EIA Drilling Productivity Report Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Mar YoY

Anadarko 967 921 895 916 992 1,014 1,043 1,090 1,070 1,081 1,071 1,048 1,019 52

Appalachia (Marcellus/Utica784 771 753 759 718 687 642 607 556 529 521 509 501 -283

Bakken 719 749 750 756 755 778 817 775 742 730 722 722 710 -9

Eagle Ford 1,476 1,471 1,495 1,480 1,517 1,566 1,546 1,535 1,520 1,568 1,527 1,514 1,509 33

Haynesville 169 187 180 182 183 202 196 201 187 202 207 211 212 43

Niobrara 532 539 473 472 447 422 415 437 458 516 519 528 528 -4

Permian 2975 3103 3204 3,303 3,419 3,528 3,617 3,791 3,843 3,965 3,916 3,972 4,021 1,046

7,622 7,741 7,750 7,868 8,031 8,197 8,276 8,436 8,376 8,591 8,483 8,504 8,500 878

Bakken crude by

rail saved by

amended Bill

5579

Permian DUCs

are now 4,021

http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Amendments/House/5579-S.E%20AMH%20FITZ%20H2893.1.pdf

https://ndpipelines.files.wordpress.com/2019/04/ndpa-monthly-update-apr-12-2019.pdf

https://www.eia.gov/petroleum/transportation/


12

Energy Tidbits

Figure 13: BNSF Rail Lines Map

Source: BNSF

Also a huge relief to Cdn light oil diffs This significantly watered down Bill is a huge relief to Cdn oil diffs. Our Apr 4, 2019 blog “Risk To Cdn Light Oil Diffs If Washington State Govt Stops Bakken Crude By Rail In The State” to warn on the risk to Bakken and Cdn light oil diffs being hit if Washington state Substitute Senate Bill 5579 had been passed as proposed. It would have effectively stopped North Dakota Bakken crude by rail in the state of Washington and forced the Bakken to find new markets and it would have hit (widened) Bakken diffs to WTI. And this would have hit Cdn light oil diffs as it would have increased Bakken oil competing against Cdn light oil and not just in the US as Bakken crude comes north into Canada via rail and trucking. The hit to diffs problem would have been a bigger problem for Cdn light oil diffs. When Bakken diffs blow out, Cdn light oil diffs tend to blow out even more as seen in the below graph.

Figure 14: Bakken and Cdn Mixed Sweet Vs WTI

Source: Bloomberg, SAF Energy


13

Energy Tidbits

Oil – Michigan Gov seems to have reversed position on Enbridge Line 5 replacement

It looks like a positive this week to Enbridge’s Line 5 upgrade (tunnel) project in Michigan. On Wed, we tweeted [LINK] “Feels like Michigan Gov is setting stage for position change and a go ahead to Enbridge Line 5 upgrade. Her priority is no longer a no way to ENB tunnel, rather that its an option to replace existing pipeline at an earlier time & keep fuel access to U.P.” Anyone who follows politics knows that a politician will almost always try to set the stage for a position reversal. And that is what we feel Michigan Gov Whitmer is doing based on the Detroit News story. Its not just that she is reopening talks with Enbridge and that Line 5 tunnel is an option. You can see here set the stage in how she explains her priorities – get rid of the pipeline by a certain date and make get fuel to northern Michigan. Its now qualifying by a certain date and she also making sure she says her priority is to get fuel to people. This feels like a stage setting for a position change. Recall (see our March 28, 2019 Energy Tidbits) the Michigan Gov recently halted all state actions on the project. This week, the Detroit News [LINK] wrote “Michigan Gov. Gretchen Whitmer wants a faster plan to decommission Enbridge's Line 5 oil pipeline but is not ruling out the possibility of allowing the company to house a replacement in a tunnel deep beneath the Straits of Mackinac”, “The East Lansing Democrat has re-opened talks with Enbridge after using an executive order to halt state action on a tunnel plan backed by GOP former Gov. Rick Snyder and the Republican-led Legislature but deemed invalid by Attorney General Dana Nessel”, and “The governor said she is talking to stakeholders, including Enbridge, about next steps on Line 5. “My goal is to get the pipeline out of water, and to make sure Yoopers have access to affordable energy,” Whitmer said, referencing Upper Peninsula residents who rely on propane for home heating. “And one way or another those are those are the two things that I got to make sure we do.” Our Supplemental Documents package includes the Detroit News story.

Oil – Liberals expect to decide on Trans Mountain expansion by June 18

Natural Resource Minister Sohi said [LINK] they needed more time to “complete the Phase III consultations” with indigenous groups and therefore was extending the timetable for the Liberals to decide on the Trans Mountain expansion to June 18, 2019. No surprise, the Trans Mountain expansion and Energy East were both very topical on political news shows post the big majority UCP election win. The political show commentary was very interesting on Trans Mountain, we heard several Quebec media/political pundits say the same message – their Quebec Liberal sources were all expecting the Liberals to go ahead an approve Trans Mountain expansion and that shovels in the ground are likely to start up this summer. This was just defeated Premier Notley’s views. We are still surprised that this is the view with the upcoming Oct federal election as we have to believe Liberals shovels in the ground this summer will be a negative in the BC voting, and BC was what put the Liberals over the top for its majority. Our Supplemental Documents package includes the Liberal statement.

Remember this is a “goal” not a hard go or no go decision date We think that the Liberals must realize they need to make a decision on TMX if they really want to get going on TMX. We don’t know if the Liberals have been keeping certain construction services tied up while they wait to make a decision. But if they are doing so, it has to be costing them money. And if they haven’t tied up construction services, they run the risk of losing the construction services/labor to other projects. However, we don’t want to be the skeptic, but it is important to remember that June 18 is their “goal” and it isn’t being stated as a hard go or no go decision day. We have seen some early complaints from First Nations that the consultation process is inadequate. The CBC article “Trans Mountain consultation approach 'fatally flawed' even with extension, says First Nations leader” [LINK].

Liberals goal to

decide on TMX

by June 18

Positive Michigan

Gov comments

on Line 5

replacement


https://www.detroitnews.com/story/news/local/michigan/2019/04/17/whitmer-talks-enbridge-revised-line-5-tunnel-option/3486545002/

https://www.canada.ca/en/natural-resources-canada/news/2019/04/statement-by-the-honourable-amarjeet-sohi-updating-the-governments-plan-for-a-decision-on-the-trans-mountain-expansion-project.html

https://www.cbc.ca/news/indigenous/trans-mountain-consultation-extension-judy-wilson-1.5103341


14

Energy Tidbits

CBC writes “Extending the timeline doesn't address all these issues and approach to consultation," said Wilson. Among her criticisms is that Canada is in a "clear conflict-of-interest" when it comes to fulfilling its obligations to Indigenous groups, especially since it purchased the project from Kinder Morgan. "As pipeline owners, they have a constant bias now because they're looking at the interest of the pipeline as a national interest versus their Crown role for consultation to our Indigenous Peoples," said Wilson in an interview Thursday.” We can’t help but wonder what happens if there are increasing complaints from First Nations that the consultation process has been inadequate? Will the courts care? Will the Liberals extend the period? The Liberal release said “To meet this obligation, to respond to what we have heard from Indigenous groups, and with advice from Federal Representative Justice Iacobucci, the Governor in Council (GiC) has extended the timeline so that a decision on TMX can be made by June 18, 2019. Our goal is to make a decision at the end of this period. This provides the time required to respond to what Indigenous groups are telling us and to conclude the Phase III Crown consultations before the GiC decision.” Our Supplemental Documents includes the CBC story.

Oil – Eagle Ford condensate still challenged to replace Iran condensate

There was a good food for thought Bloomberg terminal story this week “U.S. Eagle Ford Oil Isn’t Replacing Iran Condensate for Now: FGE”. (i) It ties to the latest South Korea Eagle Ford story (see our Apr 7, 2019 Energy Tidbits [LINK]) that South Korea was testing Eagle Ford 48 if it can replace Iran condensate. The biggest challenge is Eagle Ford is very different quality. Platts said recently [LINK] “Some market sources in Asia, however, have noted that the uncertainty around the API of the crude would mean that it is unlikely suitable for condensate splitters, which typically process condensates with an API of over 55. “The API gap is wide, and I don’t think it can be directly replaceable for condensates,” said another trader. Iran’s South Pars condensate, a favorite of many Northeast Asian condensate splitters, has an API of 61.6, while Australia’s North West Shelf condensate, Asia’s most liquid condensate grade, has an API of 63. However, the US and Australia are producing slightly “heavier condensates” that could possibly substitute for Iranian barrels. Asian buyers have been familiarizing themselves with this “heavier” condensate and some companies have cited plant modifications to run heavier feedstocks coming out of the US and Australia” (ii) The first question that comes up is what does this do for the sanctions? We think this fits the narrative we have that Trump can’t reduce waivers in particular for condensate if no replacement for Iran condensate. (iii) But its also raises questions as to what happens if they end up blending in the 60 with the lower API. This story is interesting as it says they are having problems segregating the Eagle Ford API 60, which likely adds to quality concerns. We don’t know the relative volumes, but we assume the 60 has to be a low percentage otherwise they might be able to segregate. But if they are effectively just blending in the 60 with the lower API, does that blended lighter API help/hurt the refinery demand? What does it do to pricing for the Eagle Ford? Does it add more blended light oil and impact Permian light oil diffs? Is it more able to blend with heavy crude? Or is it just a small volume percentage so no impact? (iv) The good thing is that Eagle Ford is at the Gulf Coast so not sent by rail. (v) Recall the first issue on South Korea refineries rejecting Eagle Ford wasn’t API, but quality due to contamination (see our March 31, 2019 Energy Tidbits [LINK]). Our Supplemental Documents package includes the Bloomberg terminal story and the Platts story.

Oil – Oil input into refineries down 22,000 b/d to 16.078 mmb/d

Crude oil input to refineries were down 22,000 b/d to 16.078 mmb/d for the Apr 12 week. This compares to last week, when crude oil inputs were up 251,000 b/d, and two weeks ago

Eagle Ford

condensate

challenged to

replace Iran

Oil input into

refineries down

22,000 b/d

http://www.safgroup.ca/wp-content/uploads/2019/04/Energy-Tidbits-April-7-2019.pdf

https://blogs.platts.com/2019/04/09/us-crude-grade-alternative-iranian/

http://www.safgroup.ca/wp-content/uploads/2019/04/Energy-Tidbits-March-31-2019.pdf


15

Energy Tidbits

when crude inputs were up 18,000 b/d. Refinery utilization was up 0.2% this week to 87.7%. We are in the normal seasonal period when refinery utilization and crude oil inputs to refineries increase to the normal peak each year in Q3. And that will be the case in 2019. However, as has been signaled, we are expecting a higher than normal turnaround season in Q2 and Q3 as refineries prepare for IMO 2020. This means US refinery demand for crude oil will continue to be below last year’s levels for the next 2 to 3 months. Below is our graph of the EIA weekly crude oil input to refineries.

Figure 15: US Refinery Crude Oil Inputs (thousand b/d)

Source: EIA, SAF

Oil – Prepping for IMO 2020 pushing larger than expected Q2 turnarounds

The best indicator of the larger than normal refinery turnarounds in Q2 for IMO 2020 comes from the weekly refinery crude oil input data (see above) in the form of less crude oil demand. This trend of larger than normal refinery turnarounds was also highlighted Reuters in its story “U.S. refiners planning major plant overhauls in second quarter” [LINK] and “refiners are planning more upgrades than usual in the first half of 2019 to avoid fall and winter shutdowns as they prepare to meet coming low-sulfur standards.” We don’t highlight individual refinery turnarounds in our Energy Tidbits memos, rather we will note if there is an event other than a turnaround ie. a fire or explosion. Bloomberg terminal provides excellent data on refinery outages including their running table that lists every refinery that is out of service for turnaround or other reason. But the Reuters article lists a few examples to make its point ie. Valero’s turnaround of its Memphis 65,000 bpd gasoline producing fluidic catalytic cracking unit for a 60-day overhaul the last week of April, BP shutting one of two small CDUs at its 413,500 bpd Whiting, Indiana, refinery on Monday for 30 days of work, continued turnaround of Shell’s 112,000 bpd gasoline-producing residual catalytic cracking unit at Royal Dutch Shell Plc’s 218,200 bpd Norco, Louisiana, refinery. That unit is expected to restart in the first full week of May.

Oil – US “NET” oil imports down 659,000 b/d to 3.591 mmb/d

US “NET” oil imports were down big, with a 659,000 b/d decrease for the Apr 12 week, dropping net imports to 3.591 mmb/d, from 4.250 mmb/d for the Apr 5 week. Oil imports were down 607,000 b/d to 5.992 mmb/d for the Apr 12 week, compared to 6.599 mmb/d for the Apr 5 week. Exports were up 52,000 b/d to 2.401 for the Apr 12 week, compared to 2.349 mmb/d for the Apr 5 week. Some items to note on the oil import by country data. (i) Canada and Saudi Arabia were fairly unchanged. Canada was down 28,000 b/d to 3.396 mmb/d, and Saudi Arabia was down 61,000 b/d to 423,000 b/d for the Apr 12 week. (ii) Venezuela was down 68,000 b/d to 71,000 b/d, which is likely due to carry over from the Chevron Pascagoula refinery importing Venezuelan crude earlier this month. (iii) Mexico was

IMO 2020 leading

to more Q2

turnarounds

https://www.reuters.com/article/us-usa-refinery-overhauls/u-s-refiners-planning-major-plant-overhauls-in-second-quarter-idUSKCN1RV0NV


16

Energy Tidbits

down 231,000 b/d to 706,000 b/d for the Apr 12 week. This was expected, as Mexico exports were up big last week, and Mexico numbers seem to follow a weekly pattern of up big one week, and down big the next. Below is our table of the US oil imports by major country. Figure 16: US Weekly Preliminary Oil Imports By Major Countries

Source: EIA, SAF

Oil – Exxon’s Guyana keeps moving to 1 mmb/d potential

ExxonMobil’s offshore Guyana oil exploration continues to look better and better. In Exxon’s March investor day conference [LINK], the company estimated Guyana reserves at ~5.5 billion boe and forecast production of 750,000 b/d by 2025. Note, these estimates were modestly increased from 2018-2019, as Exxon made 5 new discoveries in 2018, and 2 more in 2019 prior to March. This week, Exxon announced its 13th offshore Guyana oil discovery, adding incremental reserves to the existing 5.5 billion boe [LINK]. The discovery was at Yellowtail-1 well, the fifth discovery in the Turbot area, which ExxonMobil expects to become a major development hub. As we have seen in other Guyana exploration announcements, Exxon has not yet made any increases to its reserves or production estimates for Guyana ie. no change yet to its 2025 production guidance of 750,000 boe, but given the very early stage of Guyana as an oil basin, we won’t be surprised to see Guyana being twice as big as Exxon’s current estimate. Exxon also recapped its existing development plan “Startup of the Liza Phase 1 development is on track to begin by the first quarter of 2020 and will produce up to 120,000 barrels of oil per day utilizing the Liza Destiny FPSO, which is expected to arrive in country in the third quarter. Liza Phase 2 is expected to startup by mid-2022. A final investment decision is expected soon subject to government and regulatory approvals. Upon approval, the project plans to use the Liza Unity FPSO to produce up to 220,000 barrels per day. Sanctioning of a third development, Payara, is also expected in 2019, with startup projected for 2023”. Our Supplemental Documents package includes the Exxon announcement.

Oil – Pemex says Mexico oil production has turned the corner/stopped decline

This week, Pemex posted its April investor presentation [LINK] and said production levels began to stabilize in Q1, following two weather related shut downs in Jan. Based on actuals for Jan/Feb, and forecast for Mar, average Q1 production should be 1.677 mmb/d. This means Pemex must be anticipating solid oil production growth thru the remainder of 2019 as Pemex forecasts Mexico oil production to average 1.773 mmb/d in 2019, or +96,000 b/d from Q1 levels. Below is a slide from the Pemex presentation, and a graph of US oil imports from Canada, Mexico, and Venezuela.

Feb 8/19 Feb 15/19 Feb 22/19 Mar 1/19 Mar 8/19 Mar 15/19 Mar 22/19 Mar 29/19 Apr 5/19 Apr 12/19 WoW

Canada 3,190 3,288 3,047 3,553 3,389 3,518 3,447 3,212 3,424 3396 -28

Saudi Arabia 415 594 346 697 947 407 490 764 484 423 -61

Venezuela 117 558 208 83 112 0 0 0 139 71 -68

Mexico 529 911 460 915 615 712 463 574 937 706 -231

Colombia 124 388 349 292 326 421 479 451 389 248 -141

Iraq 406 845 310 217 234 405 381 128 156 5 -151

Ecuador 119 99 100 327 116 197 96 105 184 49 -135

Nigeria 0 0 29 0 29 136 138 277 0 93 93

Kuwait 0 138 176 111 47 69 288 124 43 43 0

Angola 0 0 0 0 0 0 0 0 0 0 0

Top 10 4,900 6,821 5,025 6,195 5,815 5,865 5,782 5,635 5,756 5,034 -722

Others 1,310 701 892 806 931 1,067 758 1,128 843 958 115

Total US 6,210 7,522 5,917 7,001 6,746 6,932 6,540 6,763 6,599 5,992 -607

Mexico oil

production has

stopped

declining

Another Exxon

offshore Guyana

oil discovery

https://corporate.exxonmobil.com/-/media/global/files/investor-relations/analyst-meetings/2019-exxonmobil-investor-day.pdf

https://corporate.exxonmobil.com/news/newsroom/news-releases/2019/0418_exxonmobil-announces-13th-discovery-offshore-guyana

http://www.pemex.com/en/investors/investor-tools/Presentaciones%20Archivos/Investor%20Presentation%20April%202019.pdf


17

Energy Tidbits

Figure 17: Pemex Apr Presentation – Oil Production Stabilizing In Q1

Source: Pemex

Canada has been the big winner in Mexico/Venezuela oil declines Mexico’s oil production is down ~600,000 b/d in the last four years. Canada has been the big winner in the decline in Venezuela and Mexico oil production and exports to the US. Venezuela oil production is still going lower, but Pemex is saying Mexico oil production looks to have turned the corner and is no longer in decline. Below is a chart we created from the EIA oil import data from Canada, Mexico and Venezuela.

Figure 18: US Imports Of Crude Oil From Canada, Mexico, And Venezuela

Source: EIA

Oil – Venezuela Central Bank cash burn only $1.3b YoY but gold burn is $0.45b/mth

No question Maduro has surprised by his ability to retain control (albeit with Russia’s key support), but what hasn’t surprised is that he is running out of money/gold/cash flow. Last week’s (April 14, 2019) Energy Tidbits memo noted Venezuela’s dwindling gold reserves and how, at 2019 burn rate of ~$0.45b/mth, its >$4b gold reserves will be gone by year end 2019. It’s a good thing, Maduro has gold as it has helped to minimize his cash burn rate. On Tues, we tweeted [LINK] “Bloomberg terminal “Venezuela’s international reserves fell to $8.59b on Apr 12, according to data supplied by the central bank”, vs $9.92 Apr 30/18. Not too bad a cash burn, but gold burn is ~$0.45b/mth in 2019 and >$4b gold reserves should be gone by yr end!”. On Mon, Bloomberg terminal reported on Venezuela Central Bank dwindling cash

0

500

1,000

1,500

2,000

2012 2013 2014 2015 2016 2017 2018 2019

Th

ius

an

d b

/d

Venezuela Mexico Canada

Venezuela

reserves only

down $1.3b YoY



18

Energy Tidbits

reserves. It was a two sentence report “Venezuela Central Bank Reserves Drop $404 Million on April 12. Venezuela’s international reserves fell to $8.59 billion on April 12, according to data supplied by the central bank.” However, the story included a link to Bloomberg’s monthly data, which shows that a year ago its international reserves were $9.92b, so only a YoY burn of $1.33b. The cash burn rate was only minimized because Maduro is burning thru his gold reserves at a faster rate. Maduro took over on Apr 19, 2013, and Venezuela’s international reserves were $27.59b on March 31/13. That means he has burnt thru $19b in 6 years, or $3.2b/yr or $0.26b/mth. Below is the graph we created of the Bloomberg data. Figure 19: Venezuela Central Bank Reserves US$ billions

Source: Bloomberg

Oil – Russia reaffirms support for Maduro

On Thurs, we tweeted [LINK] “Russia not abandoning Maduro yet. Deputy FM Ryabkov “Venezuela and Cuba are our allies and strategic partners in the region. We will do everything we can to let them feel our support”, has no immediate plans to meet US Special Envoy for Venezuela Abrams.” Maduro’s ability to hang on to power has been directly due to Russia stepping up in its support to Maduro and in standing up against the US in Venezuela. This week, Russia was very specific that it is continuing to stand with Maduro and did so the day after Bolton indicated the US was meeting with Russia to get them out of Venezuela. It was a direct rebuke to any hint that Russia may be walking away from Maduro. (i) Bloomberg interviewed White House National Security Advisor John Bolton this week and reported [LINK] that the US is attempting to persuade Russia to drop its support for Maduro. The Bloomberg article said “Bolton said that National Security Council staff are in Moscow this week discussing Russia’s involvement in Venezuela. Trump wants better relations with Russian President Vladimir Putin’s government, Bolton said, “and we’ve said very clearly that the possibility of adventurism in Venezuela is not going to help in that regard.” Russia and China “are hedging their bets in Venezuela,” Bolton said. “I think it’s an indication that they see their debts and investments in jeopardy if they back Maduro unequivocally.” In response, Russian Deputy Foreign Minister Sergey Ryabkov shot down any interpretation from Bolton’s comments that Russia is on side to get rid of Maduro. In an interview the next day with Sputnik News [LINK] Ryabkov said "We are concerned over the continuing actions by the United States toward the countries of the Latin American region. We see the sanctions as absolutely unlawful and illegitimate… We will oppose them. Venezuela and Cuba are our allies and strategic partners in the region. We will do everything we can to let them feel our support”. Russia’s ties with Maduro are likely very complex, but Its no surprise that Russia views the US sanctions as “absolutely unlawful and illegitimate”, partly due to Venezuela’s debt outstanding with Russia. Our Supplemental Documents package includes the Bloomberg and Sputnik stories.

Feb 1/19 Feb 8/19 Feb 15/19 Feb 22/19 Mar 1/19 Mar 8/19 Mar 15/19 Mar 22/19 Mar 29/19 Apr 5/19 WoW

Canada 3,701 3,190 3,288 3,047 3,553 3,389 3,518 3,447 3,212 3,424 212

Saudi Arabia 610 415 594 346 697 947 407 490 764 484 -280

Venezuela 345 117 558 208 83 112 0 0 0 139 139

Mexico 497 529 911 460 915 615 712 463 574 937 363

Colombia 268 124 388 349 292 326 421 479 451 389 -62

Iraq 343 406 845 310 217 234 405 381 128 156 28

Ecuador 341 119 99 100 327 116 197 96 105 184 79

Nigeria 87 0 0 29 0 29 136 138 277 0 -277

Kuwait 0 0 138 176 111 47 69 288 124 43 -81

Angola 0 0 0 0 0 0 0 0 0 0 0

Top 10 6,192 4,900 6,821 5,025 6,195 5,815 5,865 5,782 5,635 5,756 121

Others 954 1,310 701 892 806 931 1,067 758 1,128 843 -285

Total US 7,146 6,210 7,522 5,917 7,001 6,746 6,932 6,540 6,763 6,599 -164

Russia

continues to

back Maduro


https://www.bloomberg.com/news/articles/2019-04-17/bolton-says-u-s-seeks-to-persuade-russia-to-drop-maduro-support

https://sputniknews.com/latam/201904181074246651-us-sanctions-venezuela-cuba/


19

Energy Tidbits

US will need Russia et al debt restructuring support

Our concern for Guaido executing his plan after a regime change is that he needs the US, Russia and others support in a debt restructuring plan. If he doesn’t have a debt restructuring plan, he will be stuck at the gate and unable to execute any plan. And that for any US led debt restructuring plan to work, it will need Russia, China and others onside. Our Feb 15, 2019 blog “Part 2 – Guaido’s Game Changer For A Return To Growth, PDVSA Doesn’t Have To Be >50% In Any Joint Ventures” highlighted that Trump has been thinking about debt restructuring support. Its why Russia’s apparent shooting down any thoughts of abandoning Maduro, if true, make it seem like Maduro will be hanging in for a little while longer.

Are there any secret US/Russia discussions going on to end the stalemate?

Notwithstanding the apparent rebuke by Russia of Bolton’s comments and the Trump track record of publicly indicating their intentions, we have to at least wonder if there are some secret US/Russia discussions on how to end the impasse. Both parties have to realize that there is a bit of stalemate and if the stalemate continues, it only makes Venezuela worse off and more difficult to recover. And if there aren’t any secret discussions, is just because the US and Russia have different priorities? The US would like to have a stable Venezuela, a return to cheaper heavy oil feedstock for Gulf Coast refineries and a foreign policy accomplishment for Trump going into 2020. For the Russians, is their priority keeping Maduro in power, retaining their priority with Maduro and milking what little cash flow is available first to them? This week, Reuters [LINK] and others picked up the Interfax report citing Russia Finance Minister Siluanov that Venezuela made its latest debt interest payment (believed to be $100 million) on time.

Oil – Fighting escalated this weekend, LNA claims advancing in Tripoli

We had an early cut off of Sun 5:30am mountain. The general commentary for this week and in particular this morning was that fighting escalated around Tripoli, LNA claims this morning that it is advancing in Tripoli, it could have been worse if Haftar went more after the city centre, and Libya tried to fight back outside of Tripoli. (i) First reports that we have seen of LNA claiming advancing in Tripoli. Sun morning report by Asharq Al-Awsat [LINK] that LNA (Haftar forces) were advancing “LNA announced it had gained control over “several new sites” inside the capital, and the military information center said in a statement posted on its Facebook page that the forces are advancing, while GNA militias are retreating, indicating that military reinforcements are arriving to various military brigades and army battalions at the earliest.” The qualifier is that this based on the LNA Facebook claims and that Asharq Al-Awsat is a Saudi owned news. However, it is the first claims of LNG advancing. (ii) Multiple reports this morning and last night that Sat was likely the heaviest day so far for fighting and air strikes. (iii) Haftar rocket attacks only hit the Tripoli city centre one day. The Wed reports pointed to a significant Haftar escalation with rocket attacks in the city centre, but, so far, it has only been one day. Bloomberg terminal reported “At least seven powerful explosions rocked the city centre”, and “It is the first time that the centre of Tripoli has been hit in the clashes which tend to calm down during night time.” (iv) Thurs reports like Russia’s Sputnik news [LINK] that Libya striking back at Haftar outside of Tripoli, east of the Sharara oil field. It was in the vicinity of the city of Sabha, which looks like ~200 km from Sharara oil field. But the point here is that there looks like Libya trying to not just resist in Tripoli but hit at Haftar forces elsewhere. We do not know if this caused Haftar to shift any forces out of Tripoli.

LNA claims

advancing in

Tripoli

https://www.reuters.com/article/venezuela-russia-debt/russia-says-venezuela-paid-debt-interest-on-time-ifax-idUSR4N21Z027

https://aawsat.com/english/home/article/1688746/libya-army-intensifies-strikes-tripoli-gna-prepares-decisiveness

https://sputniknews.com/middleeast/201904181074249514-attack-libya-haftar/


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Energy Tidbits

Oil – Could power outages be what causes first Libya oil/gas export interruptions?

One of the must watch, but under the radar Libya events this week were the warnings that Libya’s power grid on the western coast were at risk. On Tues, we tweeted [LINK] “W/o electricity, Libya oil/gas exports hit any day now. Libya Observer: electric co chair warns “western region might plunge into total darkness if any of the electrical circuits were damaged, saying that there are already 16 power lines out of service”. The escalated fighting is the big factor, but there is a real risk that power outages cause the first interruptions in oil and natural gas exports. Power outages are happening now with fighting. As we have just seen in Venezuela, when power goes out, it affects the entire oil and natural gas supply chain from production in the field, to field production/processing plants, to pump/compressor stations for the pipelines, to the export terminals. Power is needed. Libya Observer reported [LINK] “Chairman of the General Electricity Company of Libya (GECOL), Abdul Majid Hamza, warned that the western region might plunge into total darkness if any of the electrical circuits were damaged, saying that there are already 16 power lines out of service, due to the armed clashes in the outskirts of the capital. Hamza explained in a press conference that several areas south of Tripoli are now in total blackout and that the company's technicians were unable to restore the electricity service due to the continued clashes”.

Oil – Trump support for Haftar should reduce risk of interruptions post a Haftar win

On Fri morning, we posted a two part tweet on the big breaking Libya news that Trump has joined the Saudi Arabia, Russia, Egypt, UAE, etc. in supporting Haftar. This was a bit of a surprise given the well reported Pompeo prior statement “We have made clear that we oppose the military offensive by Khalifa Haftar's forces and urge the immediate halt to these military operations against the Libyan capital". It not so much that Trump has switched gears on one of his cabinet ministers, rather the fact that he is now clearly supporting Haftar is a significant event to Libya and to oil markets. It will certainly embolden Haftar to keep going in his fight to take over Tripoli and we have to believe it deflates Libya to see the US go with Haftar. But more than that, it changes the dynamics on what happens with a Haftar win and we believe it reduces the risk of oil export interruptions post a Haftar win. It has to eliminate the risk of UN sanctions with US and Russia able to veto any UN action. Haftar controls all Libya oil production fields and we believe the international community will now be more likely to recognize any Haftar led Libya National Oil Corporation, which means that he will the have the access to the oil cash flow. On Fri, we tweeted (i) [LINK] “Libya news. Trump joins KSA, UAE and Russia on Haftar’s side. Reuters [LINK]: Trump recognized Haftars’ “significant role in fighting terrorism and securing Libya’s oil resources”, “discussed a shared vision for Libya’s transition to a stable, democratic political system” …” and (ii) [LINK] “… Reduces risk premium to an interruption in Libya exports and oil risk premium. Post a Haftar win, UN sanctions unlikely with US/Russia able to veto. Haftar controls oil fields, should now get int. recognition of a Haftar controlled Libya NOC ie. Haftar gets oil cash flow.” Our Supplemental Documents package includes the Reuters story.

Oil – Good news for Kuwait, it was only a “limited fire” at Kuwait’s Burgan oilfield

It was interesting this week to see KUNA (the official news agency for Kuwait) report two separate “limited fires”. The first “limited fire” was Thurs at Kuwait’s super giant greater Burgan oil field and the second was Sat at the 460,000 b’/d Mina al-Ahmadi refinery. (i) We had an early cutoff for news (Sun 5:30am mountain) due to Sunday travel, but have seen zero updates or stories on the “limited fire” at the Burgan oil field. We hadn’t planned to tweet or include the item on the “limited fire” at Kuwait’s Burgan oilfield in today’s memo until we saw subsequent Kuwait oil price increase that day. We recognize that Kuwait Petroleum changes its prices regularly, but it caught our attention as they increased its price by 99 cents

“Limited fire” at

Kuwait Burgan oil

field

Trump supports

Haftar

Potential power

outages in Libya


https://www.libyaobserver.ly/inbrief/gecol-warns-western-region-will-plunge-darkness-if-hostilities-continue


https://www.reuters.com/article/us-libya-security-trump/white-house-says-trump-spoke-to-libyan-commander-haftar-on-monday-idUSKCN1RV0WW



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Energy Tidbits

in the hours following the limited fire contrary to flat to slightly down Brent prices in this short period. As a result, we thought it was at least making sure we put a watch on it to see if there is any impact on Burgan. On Thurs, we had a two part tweet [LINK] “Kuwait new agency (KUNA) reported (2:24am local 04/18) “KOC teams extinguish limited fire in pump at Burgan oilfield”, “nobody was harmed by the fire”. No inference of any real impact on Kuwait oil production. Greater Burgan was ~1.6 mmb/d in 2017/18 … “ and [LINK] “… Coincidence or bullish oil data point?” Kuwait raised its oil price 99 cents (11:07am local 04/18), a period when Brent was basically flat. Kuwait’s reported Apr oil volumes (been flat in 2019) in OPEC MOMR (May 14) will show if any fire impact.” KUNA is the official Kuwait news agency and the official messaging of a “limited fire” did not infer there would be any real impact on Kuwait oil production. Kuwait changes its prices regularly, so there is a good chance this price increase is coincidental, but if not, then it is a bullish sign for oil prices. At a minimum, it means that we need to watch this Burgan fire to see what impact it is having on Kuwait oil production. Unfortunately, we won’t get any real data support, one way or another, to see if the Burgan “limited fire” had any significant impact on Kuwait oil production probably until the OPEC MOMR (release Tues May 14), which includes Kuwait’s April oil production as per “Direct Communications” ie. Kuwait’s numbers. Kuwait oil production as been basically flat in 2019 to date. (ii) On Sat, KUNA reported [LINK] said it extinguished a “limited” fire in an oil processing unit of the Al-Ahmadi Port Refinery and that production at the refinery was unaffected. Our Supplemental Documents package includes the KUNA stories on the limited fires at Burgan and the refinery and then the Kuwait oil price increase. Figure 20: OPEC Production As Per “Direct Communications” (thousand b/d)

Source: OPEC

Oil – Saudi foils police station attack 250 km NW of Riyadh, not near oil and gas

We try to follow any news on any terrorist, fires or other events in Saudi Arabia that could cause any impact on oil and gas infrastructure. We couldn’t miss this morning’s Al Arabiya (Saudi news) headline “Saudi Arabia foils terrorist attack north of Riyadh” [LINK], but the story didn’t seem to portray a particularly critical event. Rather, they wrote “Saudi Arabia on Sunday foiled an attempted terrorist attack north of the capital Riyadh. Al Arabiya sources say the Saudi authorities have foiled an attempted terrorist attack on the General Directorate of Investigation’s Center in al-Zulfi suburb around 250 km north of Riyadh. Initial reports of the terrorist attack indicate the killing of four assailants. The attackers of al-Zulfi center carried machine guns, bombs and Molotov cocktails.” We always check non Saudi news for any contrary reporting, but this is a relatively breaking news item so the only reports are

Saudi “foils

terrorist attack

north of Riyadh”



https://www.kuna.net.kw/ArticleDetails.aspx?id=2789422&Language=en

https://english.alarabiya.net/en/News/gulf/2019/04/21/Saudi-Arabia-foils-terrorist-attack-north-of-Riyadh.html


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Energy Tidbits

based on the original Al Arabiya story but did add color such as this was a police station. The most important item for oil and gas markets is that this is reportedly 250 km NW of Riyadh and therefore isn’t close to any oil and gas infrastructure so should have no impact on oil prices. Figure 21: Saudi Arabia Major Oil and Gas Infrastructure

Source: Geopolitical Futures

Oil and Natural Gas – Hot summer sets up electricity risk this summer in Texas

Last week’s (Apr 17, 2019) Energy Tidbits memo noted the Bloomberg terminal story “Electricity in America’s Oil Patch Just Soared Above $3,000” and how that reminded us of our fears from our Feb 17, 2019 Energy Tidbits memo for Texas electricity problems this summer are probably going to come true. No question it was hot in early April in Texas, but its still three months to the normal periods of consistent daily heat in July/Aug. Hence our fears that it won’t just be higher electricity costs this summer, but there is the risk of interruptions and delays in connecting to the grid. And unfortunately for Texas electricity users like the oil and gas sector (production, pipelines, plants and terminals), NOAA issued its monthly seasonal forecast [LINK] on Thurs and it calls for above normal temperatures in Texas this summer. The biggest risk area for potential electricity shortages is the Permian, but all areas will see higher electricity costs.

Risk for Texas

electricity

problems

https://www.cpc.ncep.noaa.gov/products/predictions/long_range/seasonal.php?lead=3


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Energy Tidbits

Figure 22: NOAA Apr 18 Updated July/Aug/Sept Temperature Forecast

Source: NOAA

Tight Texas electricity could impact oil growth timing Our Feb 17, 2019 Energy Tidbits memo had a lengthy item warning on the risk that a tight Texas electricity margin could impact oil growth timing. We noted how ERCOT (the Electric Reliability Council of Texas) had forecast a 22% electricity margin [LINK] going for the winter 2018)/19 yet there were local shortages. And then we highlighted ERCOT is forecasting a way lesser reserve margin this summer – in fact much lower than normal and definitely less than ideal [LINK]. As opposed to this winter with a ~22% margin, ERCOT sees the summer as <10% margin. ERCOT said “Electric Reliability Council of Texas (ERCOT) today released its December Capacity, Demand and Reserves (CDR) Report, which includes planning reserve margins for the next five years. The planning reserve margin for summer 2019 is forecasted to be 8.1% based on resource updates provided to ERCOT from generation developers. This is 2.9% lower than what was initially reported in the May CDR. The report shows reserves are expected to increase to 10.7% in 2020 and 12.2% in 2021. "ERCOT’s ability to meet Texans’ growing power needs through the record-setting summer of 2018 was supported by the actions taken by power suppliers and consumers, and the policymakers who are committed to the success of the ERCOT market," said ERCOT CEO Bill Magness. "We anticipate the same type of focus on system performance as we head into another year with tight reserves." The anticipated decrease in power reserves for summer 2019 is primarily driven by a higher summer peak load forecast and delays and cancellations of planned generation projects”. And “Significant oil and gas development in far West Texas continues to drive increasing electricity demand in Texas. The annual growth rate in peak demand in West Texas is forecasted to be around 8 percent through 2023, whereas ERCOT’s annual system-wide load growth rate is 2 percent during the same time. The peak load forecast for summer 2019 is expected to be 74,853 MW, which is 651 MW higher than what was reported in the May CDR. ERCOT’s current system-wide peak demand record is 73,473 MW, set on July 19, 2018 between 4 and 5 p.m.”. Below is the ERCOT summer 2019 power outlook.

http://www.ercot.com/news/releases/show/165772

http://www.ercot.com/news/releases/show/168033


24

Energy Tidbits

Figure 23: ERCOT Forecast Electricity Margins

Source: ERCOT

Technology – New Chinese undersea cables a security risk, but who owns sea rights?

We continue to believe the China’s island building in the South China Sea and subsequent territorial claims will only increase in global prominence especially as the world realizes the impact is in a wide range of issues. Its not just disrupting global shipping including oil and LNG tankers. Last week’s (April 14, 2019) Energy Tidbits memo wondered if the biggest problem for other countries with China’s territorial claims in the South China Sea isn’t oil and gas rights, or sea lane control, or air traffic control, but control of sea floor that include all the major underwater communication cables. This week, Bloomberg [LINK] “China's next naval target is the internet's underwater cables” highlighted a different aspect of the underwater communication cables. Bloomberg noted Huawei’s repair work and buildout of more undersea submarine cables. The risk here is regarding potential “back doors” in the China cable infrastructure, opening up the potential for China or Huawei to manipulate data passing through the undersea cables. Although security is a big risk, we were a little surprised that the Bloomberg story only focused only on the security angle and did not mention the idea of China’s territorial claims having an impact, which questions who owns the sea rights. Our South China Sea coverage has noted how China’s territory claims could impact transit of oil, natural gas, LNG or any shipped goods, oil and gas or other minerals in these lands, and potential impact on air travel over the claimed territorial lands. But if China is successful in its territorial claims, even before the security risks, there will be the question of ownership of the rights of ways for major intercontinental underwater communication cables. Below is the map included in last week’s Energy Tidbits memo. Our Supplemental Documents package includes the Bloomberg story.

China to build

more undersea

cables

https://www.japantimes.co.jp/opinion/2019/04/16/commentary/world-commentary/chinas-next-naval-target-internets-underwater-cables/#.XLlk7uhKiUl


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Energy Tidbits

Figure 24: Submarine Cable systems in Asia-Pacific region

Source: IAdvantage

Demographics – Tax rates, not just weather, drives population shift

US Census Bureau published its new population estimates, along with areas that saw the highest numeric population growth over the past year, and over the 2010-2018 period [LINK]. States that saw the largest numeric growth from 2010-2018 (also true for 2017-2018) included Texas, Arizona, Nevada, Florida, Washington, and California. When the original Silent Generation move south happened post WWII, it was mostly driven by the people moving from the north to the south attracted by weather and a better climate for retirement. There is no question that good weather continues to be attractive, but it is also clear that tax differences are having an impact. It is no surprise that the above-mentioned states showed strong population growth, as Florida, Nevada, Texas, and Washington all have no state income tax and Arizona’s state income tax is small at 1.41%. Although migration within the US is likely attributable to a multitude of factors, we have to believe taxation differences play an increasing role in deciding where to live. Below, we pasted a graph from the CATO Institute [LINK] and their study on interstate migration, and the correlation between taxation and migration.

Tax differences

also driving

population shift

https://www.census.gov/newsroom/press-releases/2019/estimates-county-metro.html

https://www.cato.org/blog/new-census-data-show-migration-low-tax-states


26

Energy Tidbits

Figure 25: State/Local Tax Level and Net Domestic Migration By State, 2018

Source: CATO Institute

Energy Tidbits – Now on Twitter

As you have probably noticed in today’s memo, we are tweeting now for breaking news or early views on energy items, most of which are followed up in detail in the Energy Tidbits memo or in separate blogs. We have now been tweeting for a few weeks, our Twitter handle is @Energy_Tidbits and can be followed at [LINK]. We wanted to use Energy Tidbits in our name since I have been writing Energy Tidbits memos for over 19 consecutive years. Please take a look thru our tweets and you can see we aren’t just retweeting others tweets. Rather we are trying to use Twitter for early views on energy items. Our Supplemental Documents package includes our tweets this week.

Energy Tidbits – Sign up on our email distribution for tidbits and blogs

Please note that we have set up our Energy Tidbits memo on our Stream Asset Financial website alongside our blogs. The distribution for the Energy Tidbits memo will be via the same notification system used for our blogs. To ensure you receive Energy Tidbits memos, please go to our blog sign up. We will be using the blog notification list for Energy Tidbits. The blog sign up is available at [LINK].

LinkedIn – Look for quick energy items from me on LinkedIn

I can also be reached on Linkedin and plan to use it as another forum to pass on energy items in addition to our weekly Energy Tidbits memo and our blogs that are posted on the SAF Energy website [LINK].

Misc Facts and Figures.

During our weekly review of items for Energy Tidbits, we come across a number of miscellaneous facts and figures that are more general in nature

Burger King’s Impossible Whopper, the latest plant based protein product

We, like many others, may have had a bit of a April Fool’s Day hesitation when Burger King announced they were going to sell their plant based Impossible Whopper in St. Louis. But it isn’t a surprise and it seems like every week, there is another new plant based burger. Hearing the Burger King announcement, we

Look for energy

items on LinkedIn

Sign up to receive

future Energy

Tidbits memos

Energy Tidbits now

on Twitter

https://twitter.com/Energy_Tidbits

http://www.safgroup.ca/research/trends-in-the-market/

http://www.streamasset.ca/


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Energy Tidbits

couldn’t help but fondly remember Dave Thomas (found of Wendy’s) and the good old days mid 80’s fight for consumers burger choice and wonder if Dave is thinking, maybe Wendy’s should roll out his famous 1984 commercials “Where’s the beef?” This was Wendy’s way of trying to distinguish competitors increasing use of soy and less beef. And this also led to the distinction between hamburgers and burgers and that distinction is why these plant based items can be called a burger. Merriam-Webster defines burger as “a sandwich similar to a hamburger” vs a hamburger as “1a : ground beef b : a patty of ground beef 2 : a sandwich consisting of a patty of hamburger in a split typically round bun”.

Energy Tidbits April 21, 2019 - SAF Group...Trump joining Saudi Arabia, Russia, Egypt, etc in...

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