Saudi Arabia is sniffing around the Marcellus Shale. Bloomberg reports that super secret talks are happening between Saudi Aramco (largest oil company in the world, owned by the Saudi government) and Equinor, which until recently was called Statoil. Equinor is majority-owned by the government of Norway. The Saudis are considering “buying a stake” in or possibly a joint venture with Equinor. It seems Norway is hesitant to hop into bed with the Saudis. We don’t blame them.
We know we’re in the minority and a bit naive (some might call us jingoistic) at times, but we don’t like foreign ownership of critical American assets. We understand, ours is not a practical outlook in today’s globalist world. After all, plenty of American assets are now owned by foreign countries. Example: the Chrysler Building in Manhattan is owned by Abu Dhabi. Money is money, whether it comes from here at home or from a foreign country, right?
Still, we have not forgotten the fact that Osama bin Laden and most of the 9/11 terrorists were Saudis. The Saudis are not our “friends”–although we understand the U.S. government must maintain cordial diplomatic relations with the Saudi government.
Lately the Saudis have been on a mission to corner the world market for natural gas the way they did with oil, recognizing that natgas is “what’s next” after oil. That mission has brought them to our doorstep. We guess we’ll just have to learn to deal with it.
Saudi Aramco is weighing a potential investment in Norwegian oil company Equinor ASA’s U.S. shale operations in what could be the energy giant’s first ever overseas venture for gas exploration, according to people familiar with the matter.
The state-run company, known officially as Saudi Arabian Oil Co., is considering investing in Equinor’s Marcellus shale operations through a joint venture or by buying a stake, the people said, asking not to be identified because the talks are private. Aramco may also invest with other oil companies to gain access to U.S. shale gas, the people said.
No final decisions have been made and the deliberations between Aramco and Equinor are at an early stage, they said. Representatives for Aramco and Equinor declined to comment.
Aramco is expanding its search for gas to help reduce the nation’s reliance on sales of crude. Saudi Arabia also wants to use gas as fuel in the kingdom’s power stations and for the production of petrochemicals, a high-priority industry for the government in its strategy to diversify the economy. The country is looking for natural gas supplies in the U.S., Russia’s Arctic and Australia both to supply global markets and meet demand at home, Saudi Energy Minister Khalid Al-Falih said this year.
A partnership with Aramco will give the Norwegian company more firepower to expand in the U.S., the people said. Equinor has been chasing deals for natural gas-rich acreage to add to its large position in the Appalachian region, Al Cook, the company’s head of strategy, said in an interview in March. The oil firm is also considering selling all or some of its operations in the Eagle Ford shale in the U.S., people familiar with the matter in March.
Still, Equinor, which is 67 percent owned by the Norwegian government, would have to overcome political unease with the kingdom’s human rights record. In November, the country said it would halt any new export licenses for sales of defense material to Saudi Arabia after already banning exports of arms and ammunition.
Aramco plans to double its total gas production to 23 billion cubic feet daily in the coming decade, Chief Executive Officer Amin Nasser has said. The company’s trading unit sold its first liquefied natural gas cargo last month in the latest example of Aramco’s effort to expand outside its historical business of pumping and selling crude.*
Although our Marcellus & Utica Shale Almanac 2018 is getting a bit dated, it still has some great information, highly useful. The Almanac shows that Statoil’s Marcellus/Utica assets are located in Monroe County in Ohio, and in Harrison, Tyler and Wetzel counties in West Virginia.
*Bloomberg (May 7, 2019) – Saudi Aramco Is Said to Consider Shale Investment With Equinor
A little music to lighten your Wednesday:
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