Crude Summit: ConocoPhillips bullish on oil prices

Market: Crude oil
24/01/22

ConocoPhillips predicts the recent rally in oil prices to multi-year highs will persist and US oil production will eclipse its pre-pandemic record.

"I'm pretty bullish," Ryan Lance, chief executive of the leading US independent, said today at the Argus Americas Crude Summit in Houston, Texas. "We'll have some wind in our sails with these commodity prices."

ConocoPhillips became one of the top producers in the Permian basin with its $8.6bn acquisition of assets from Shell in December, which followed its $9.7bn takeover of Concho Resources in January 2021. Lance said that the US oil industry is ripe for further consolidation — given the large number of players — in order to bring down costs.

"That doesn't mean the small independents disappear," he added. "There's always going to be a business for those folks that are picking up assets from the large independent companies like mine or the integrated majors."

Further deals could be struck even with oil prices at elevated levels, the CEO said.

"Clearly, it's harder to transact at these kinds of prices, but you got to be patient, you got to be persistent," Lance said.

If oil prices remain at recent levels, that will represent a "tacit call" for US production to increase again.

US output is set to climb by around 800,000 b/d this year, led by private companies with even some modest growth likely by public independents. And over time, crude output will eclipse the peak set before the Covid-19 pandemic, although the rate of growth will be slower than in previous cycles, Lance said.

By Stephen Cunningham

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16/01/25

Mexico’s oil states led labor market losers in 2024

Mexico City, 16 January (Argus) — Mexico's oil and gas-dependent states led state job losses in 2024, driven by a sharp contraction in spending by state-owned Pemex and the completion of the Olmeca refinery, according to energy market sources and state data, even as two-thirds of the country's states posted job growth. Annually, the total employment in Mexico grew by 213,993 jobs in 2024, 67pc fewer than the 651,490 jobs added in 2023, according to the Mexican social security (IMSS) institute's tally of formal jobs, which have full benefits like better access to housing credits and public medical services. The deceleration in the number of jobs created last year adds to signals of a Mexican economy that was cooling as the year progressed, according to economists and energy market sources. "In 2024, the second lowest generation of jobs in the last 15 years was recorded, only after 2020, the year in which the Covid-19 pandemic hit," according to a report from Mexican think tank Mexico Como Vamos. Tabasco state, one of the most important for the energy sector in Mexico, led the reduction in employment among the 11 states that experienced job losses during 2024. Tabasco lost 28,675 jobs over the year, for a 12pc annual decline in employment in the state, according to IMSS data. Twenty-one states, including the capital, posted job growth. Campeche, the state with the second biggest annual percentage of job losses, and Tamaulipas, the other state with a high dependence on the oil sector, also reported significant declines in 2024, with annual formal job losses of 5,952 and 3,120, representing 4pc and 1pc decreases from a year earlier, respectively. These IMSS figures only account for formal jobs registered with the institute, which provide access to medical, pensions, and housing credits, and totaled 22.24mn as of December. The official statistics agency Inegi counts employment nationwide at 59.5mn as of the third quarter last year. Inegi's count of employment includes the informal sector, made up of jobs without social security and other benefits. Inegi's estimates put the informal labor sector at over 54pc of all jobs. According to IMSS, the country lost 405,259 jobs in December compared with November, the largest loss recorded for that month since 2000. Still, December is typically marked by heavy job losses because of seasonal adjustments. But last year the final month's tally was pulled even lower than normal by overall weak hiring over the year, Inegi said, even as total job growth was positive for the full year. While the labor situation in Mexico worsened in 2024 because of the weakening of the national economy, including a sharp depreciation of the peso to the dollar, the decline has hit the states most closely tied to the oil and gas sector and Pemex spending, said Carlos Ramirez, founder of consultancy Integralia. Tabasco hangover "Tabasco benefited greatly from the investment poured into Pemex by the administration of AMLO (former president Juan Manuel Lopez Obrador), Ramirez said. "This is going to change now with the (Claudia) Sheinbaum administration, and the state will suffer a hangover as the new government reduces its support for the oil and gas industry." Still, the national unemployment rate is low, at 2.6pc in November, according to Inegi. And the country added 361,000 jobs in the third quarter from a year earlier, according to Inegi's broader base of data. But the economy was slowing in the second half of 2024. Growth in gross domestic product slowed to an annual 1.6pc in the third quarter from 2.1pc in the second quarter, according to Inegi. Inegi's IGAE, an index that tracks the real economy, showed that the Mexican economy contracted 0.73pc in October, as economists lowered growth estimates for the Mexican economy for this year. Pemex chief executive Victor Rodriguez in early October implemented a 20pc cut to the company's upstream budget, aiming to save Ps26.78bn ($1.32bn). This decision, combined with delays in payments for contracts and a halt in new service agreements, severely impacted local companies in Tabasco and Campeche, according to oil services company association Amespac. Some companies announced layoffs as Pemex's financial constraints rippled through the supply chain. Part of Tabasco's workforce reduction could also be tied to the near-completion of the 340,000 b/d Olmeca refinery, said Jesus Carrillo, an analyst at think tank IMCO. While the major construction phases have concluded, the facility remains in a testing phase, contrary to Pemex's previous promises of full operations in 2024. Despite the recent downturn, heavy Pemex spending during the administration of former president Lopez Obrador made Tabasco the leading state in job creation between December 2018 and December 2024, Ramirez said. But with the refinery now completed and Pemex projecting further budget cuts for 2025, analysts expect labor market challenges in oil-reliant states to persist. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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BP to axe 4,700 staff, cutting 5pc of global workforce

16/01/25

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16/01/25

BP to axe 4,700 staff, cutting 5pc of global workforce

London, 16 January (Argus) — BP confirmed today that its current cost-cutting programmes are expected to lead to a headcount reduction of around 4,700 roles at the company itself — about 5pc of its global workforce — along with a reduction of some 3,000 contractor roles. The job cuts were outlined in an internal email to employees from chief executive Murray Auchincloss in which he explained that since June last year BP has stopped or paused 30 projects as part of a multi-year plan "to simplify and focus" the company. It is also taking other measures, such as increased digitalisation, to drive efficiency into its organisation, he said. The email detailed the number of staff positions that would be affected and noted that 2,600 of the 3,000 contractors who are leaving BP had already done so. BP launched a cash cost reduction programme last spring aimed at shaving at least $2bn off the company's yearly outgoings by the end of 2026. Around a quater of those cost savings are set to be implemented this year. BP's overall employee numbers have grown to around 90,000, with headcount rising significantly over the past couple of years through acquisitions, including its purchase of service station network TravelCenters of America which brought 20,000 employees with it. The company issued a trading update on 14 January that flagged it would report a weaker fourth quarter when it releases its financial results on 11 February. BP is also scheduled to hold a strategy day in London on 26 February. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump energy nominee vows to expand US LNG

15/01/25

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15/01/25

Trump energy nominee vows to expand US LNG

Washington, 15 January (Argus) — President-elect Donald Trump's nominee to lead the US Department of Energy (DOE), oil executive Chris Wright, said today he supports expanded LNG production and an "evolution" in energy systems to address climate change. Wright, the chief executive of oil services company Liberty Energy, told lawmakers he would focus on trying to "unleash American energy at home and abroad" and to restore "energy dominance" if confirmed to the position.Wright also said that DOE should support innovation and technology, and revisit federal policies that make it "too easy to stop projects" and very hard to begin them. "Previous administrations have viewed energy as a liability instead of the immense national asset that it is," Wright said at a confirmation hearing with the Senate Energy and Natural Resources Committee. "To compete globally, we must expand energy production, including commercial nuclear and liquified natural gas, and cut the cost of energy for Americans." Trump, after being sworn in on 20 January, is expected to quickly order DOE to lift a pause on licensing of new LNG export facilities that President Joe Biden imposed nearly a year ago. DOE is also responsible for managing the US Strategic Petroleum Reserve, which currently holds 394mn bl of crude, and oversees a vast portfolio of loans and grants for clean energy projects, including an $8bn program intended to support the development of new hubs for clean hydrogen. Wright did not offer in-depth comments on the timeline for issuing licenses to proposed LNG export terminals, which Trump has pledged to approve on his "very first day back." But Wright committed he would consider how licensing more LNG export capacity could affect US natural gas prices, which could increase by 31pc by 2050 if LNG exports are "unconstrained", a study from President Joe Biden's administration found . Democratic lawmakers at the hearing raised concerns about Wright's past comments that downplayed the risks of climate change. US senator Alex Padilla (D-California), whose state is dealing with tens of billions of dollars in damage from ongoing wildfires, cited a LinkedIn post in 2023 in which Wright said alarm about wildfires raging in Canada at the time were simply "hype to justify impoverishment from bad government policies." Wright, who wrote in a separate LinkedIn post that there is no "climate crisis" , said he stood by his 2023 comments on the wildfires. Wright said climate change is a "real and global phenomenon", and that DOE has a role to play by supporting progress in technologies such as nuclear, solar, geothermal and battery storage. "It is a real issue," Write said. "It's a challenging issue, and the solution to climate change is to evolve our energy system." Wright is widely expected to win confirmation in the Senate, where Republicans will have a 53-47 majority once Ohio governor Mike DeWine (R) fills the seat recently vacated by US vice president-elect JD Vance. Trump has said Wright will also serve on his newly created Council of National Energy, which will oversee policies across the federal government related to energy. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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IEA nudges global refinery runs forecast higher

15/01/25

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15/01/25

IEA nudges global refinery runs forecast higher

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Tariff war is a lose-lose proposition: Canada

15/01/25

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15/01/25

Tariff war is a lose-lose proposition: Canada

Calgary, 15 January (Argus) — Any retaliation by Canada to tariffs imposed by the US would be designed to apply political pressure, the country's energy minister said today in Washington, DC, but a potential tariff war between the two countries is a lose-lose proposition. "We are not interested in something that escalates," Canada's minister of energy and natural resources Jonathan Wilkinson said in a panel discussion at the Woodrow Wilson Center. But until tariffs are imposed, Canada does not know how it will need to respond. Canada will likely focus on goods that are "important to American producers," but also those for which Canada has an alternative. "The point in the response is to apply political pressure," said Wilkinson, who advocated for stronger trade ties between the two countries byway of energy and critical minerals. US president-elect Donald Trump plans to impose a 25pc tariff on all imports from both Canada and Mexico when he takes office on 20 January. So far he has not signaled any plans to exempt any goods, including oil and gas. Alberta's premier Danielle Smith and now Wilkinson are promoting the flow of more crude to ensure North America's energy security. "We can enhance the flow of Canadian crude oil from Alberta," said Wilkinson by boosting capacity on pipelines like Enbridge's 3.1mn b/d Mainline crude export system. "The US cannot be energy dominant without Canadian energy." The incoming administration would be open to such pipeline expansions, said Heather Reams, president of Washington-based non-profit Citizens for Responsible Energy Solutions. "It's something that the Trump administration and Republican members in Congress would be interested in revisiting to ensure that there is a steady flow of the energy that's needed to fuel our mutual economies," Reams said on the panel. Enbridge's Mainline moves Canadian crude from Alberta to the US Midcontinent, where Wilkinson expects consumers will be faced with higher gasoline prices — adding as much as 75¢/USG at the pump — should tariffs be imposed. Americans could also see higher food prices if tariffs are put on potash, a fertilizer mined in Saskatchewan and used by US farmers, she said. Development of critical minerals like germanium, gallium and others should be pursued further to minimize the US' exposure and dependence on China, according to Wilkinson, echoing comments made by Ontario premier Doug Ford on 13 January in his own appeal to enhancing trade ties with the US. "We cannot be in a position where China can simply manipulate the market," said Wilkinson, citing that country's dumping of nickel. "We should form a true energy and minerals alliance." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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