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- [00:00]
A
Foreign. You're listening to the Oil and Gas this Week podcast with Marc LaCour and Paige Wilson. This is the show for busy oil pros who quickly want to keep their finger on the pulse of the industry.
- [00:27]
B
You're listening to the Oil and Gas this Week podcast. This show for busy oil pros who want to quickly keep their finger on the pulse of the industry. Thanks for joining us for episode 398. And we're actually here in New Orleans, Louisiana. And here's Jenny Ginger. I'm sorry, Virginia.
- [00:43]
C
Ginger's perfect. First of all, thank you, Mark and Paige for being here with us today at the Pontchartrain Lighthouse, Shell's Hero program. Hero helping employees reach out is Shell's year round giving and volunteerism program that matches employee donations to qualified nonprofits. For today's Cook off, every dish you see here comes from Shell employee volunteers raising money for the charity of their choosing. Last year alone, the Hero program raised over $2.3 million for nonprofits across the greater New Orleans area. I also wanted to take a moment to thank all of our cooking teams for taking time out of their busy schedules and for all the charity partners for showing up here to raise money with heart and purpose. This event simply would not be possible without our Hero committee and our incredible volunteers who make this magic happen behind the scenes every single year. And of course, we also have to thank our leaders for their support year after year for not only the Cook off, but the virtual auction during Double Match Days and our Hero Golf tournament, which happens in November every year. I'd like to especially thank our EVP and country chair, Colette for her leadership and encouragement which truly fuels this program. Thank you all for being here at the Cook off and thank you all for the cooks, because at the end of the day, we can't have Cook off without cooks. Y' all are amazing. Thank you so much. Have a great day.
- [02:13]
B
Thank you so much, Ginger.
- [02:15]
A
Yeah, thanks, Ginger. Hey, Paige. Before we get into the rest of the show, we have a little announcement to make. Not officially, this is something that will have a bigger announcement later, but I want to give a big shout out to Navis. If you're not familiar with Navis, they build a better reality. Think digital twins. They're the new sponsor of Oil and Gas this week. So welcome to the family, Navis. Looking forward to working with you. Like I said, we have a bigger announcement of the new sponsorship later. The other thing I want to talk about is a mission page. Yeah, so we're at a mission here where Shell is making the local communities that they live and operate in better. It's the hero program. But there's another mission going on and is around educating our world's young people around the realities of energy with no politics or agenda. And this is done with a guy that I've known for a very long time who wrote a book his name. The book is Dexter's Adventures. Dexter's Adventures is a storytelling classroom discovery book made for our world's young people. So think elementary school.
- [03:15]
B
Oh, that's cool.
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A
For every dollar that is spent on the book, the dollar will be matched to help charitable organizations and scholarship program that strengthen communities and help expand opportunities for future generations around energy literacy. So if you're interested, please reach out to dexteradventures.com dexteradventures.com buy a book. Buy a dozen for your your kids classrooms. Buy buy buy 20 oggn is buying a bunch and donate them as well. This is a really critical mission once again to teach energy literacy in a way that's fun to our world's young people.
- [03:48]
B
Yeah, that's great stuff.
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A
And it looks like we got a review.
- [03:51]
B
Yeah. One from Brett Rogers with Purity Gas Inc. No questions, just wanted to leave a review, but can on Spotify, five stars. Mark, when you explain Group 3 based stock like you were describing soup ingredients, I knew this was my show. I was Purity gas on site. Nitrogen generation for oil and gas operations industry adjacent. Not a rough nag, but I've learned more about what our customers actually do here than anywhere else. You and Paige make a niche energy feel genuinely exciting. Get well soon and don't make us wait three weeks again. Hey, that was not our fault.
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A
Yeah, I'm still struggling. I reached out to Brett and we have a phone call scheduled. I want to learn more about what they're doing, but how cool is it they actually generate nitrogen gas on site instead of the risk of moving it around?
- [04:36]
B
Yeah, that's the safer way to do it.
- [04:39]
A
Yep. Speaking of risk, Paige, let's get into the news stories.
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B
Oh, my goodness. Well, it's been a hell of a week. Oil surge from 100 highlight inflation risk for global markets.
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A
Yeah, if you've been paying attention, you know, oil broke $100 a barrel just a couple of days ago.
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B
Seen that in a hot minute in a long time.
- [04:58]
A
And then of course, it's dropped back down. Now, this has everything to do with what's going on with Iran, the US And Israel, especially around the Straits of Hormuz. If you listen to our previous episode, I explained how that's a physical constraint. And. And about 20% of the world's oil is moved through that area of the world. And the war that's going on right now, quite frankly, is not helping anything. Though the military conflict. Looks like Iran is running out of steam. We'll see if that's true or not. But the biggest thing is the fact that I heard Page are starting to lay mines in the strait.
- [05:29]
B
Oh yeah, no, I saw that on the news earlier.
- [05:31]
A
Which in our world is a. No, no, it's an escalation of desperation. And the problem with mines is they're indiscriminate. They don't just take out military ships. They'll take out anything and everything. And so the US has responded. Now, this is not in this news article, but I just happen to know this is going on. The U.S. has deployed a third aircraft carrier. This is USS George H.W. bush. That aircraft carrier should be arriving by the time you hear this. That means we have three aircraft carriers in and around that area of the Red Sea, I suspect because George R. Bush's flight.
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B
Did you say George R. Bush?
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A
I'm sorry, Bushes. In our history?
- [06:09]
B
No, you're thinking George R. Brown.
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A
George W. Bush, the aircraft carrier. Sorry, sailors, I know it's important to get the name of your ship right. The thing that's different about this aircraft carrier though, Paige is carrying a lot of conventional planes and munitions, which tells me that we have eliminated enough of the high technology warfare with Iran that we can start dropping conventional bombs and conventional planes. I'm not getting too deep into that. The fact that this third air aircraft carriers being deployed to me tells me the US Is going from a military point of view is going to open up the strait, which is something I predicted on the last show could be in the realm of possibilities where Iran refuses to give in to the world, uses this as a last resort and the US from a military point of view has to use force to open up the strait. And I think that's the whole reason that Georgia, I'm sorry, George W. Bush is headed that way for all of our armed forces. Y' all stay safe. Head on a swivel. And like I said, for all my devil dog brothers and sisters, bring it when the time is right. Next article.
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B
Okay, I'm so glad we started off with that one because the next one's a doozy as well. US gives Rosneft's German refinery network open ended sanctions exemption.
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A
Yeah, this is really interesting from a geopolitical point of view. So we talked. Shoot this is almost a year ago where Germany basically assumed some Russian refineries, the Rosnet refineries, and basically said we own them. Now. What's going on now is that the US has said that we're going to give these refineries that were once Russian, that are now German owned, open end sanctions, which means they can produce as much as they can to get on the market.
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B
There we go.
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A
Now, this tells me that our current administration is worried about things like fuel prices at the pump.
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B
Right.
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A
Cost of aviation fuel, diesel, all of the petrochemicals and out there. So the more that we can make it cheaper for refineries to operate around the world, or the more that we can increase refining output, the more we're going to mitigate that. And from a warfare point of view, I can see Iran understanding US culture and understanding that if things get too expensive here too quick, there's going to be a lot of negative pushback against this war. Not saying that's what's going on or not, but if that is what's going on, this is a smooth move by our current administration to give the world more refining capacity. We will keep an eye on this.
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B
All right. Well, we have.
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A
I mean, we don't have a choice.
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B
Yeah, there's. There's way too many things going on. All right. Hormuz crisis and shockwaves through global markets.
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A
Yeah. And we've all experienced this. You know, the newest things I'm experiencing, Paige, what's that? Is some of the gear that we order from Amazon to run OGGN has now been delayed. It went from days to months.
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B
I can see that.
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A
Because some of those products that we need that we're ordering from Amazon must travel through the Red Sea or the Strait itself. So with all the retaliation that's going on, and the other thing that's going on is a lot of Middle Eastern countries that would not be normally involved in this conflict are. And that's because Iran has targeted outside of the conflict between Israel and US, but has retaliated against other various countries in that region and they're retaliating and attacking both military and civilian targets. This drives fear and fear drives market volatility. Anytime somebody doesn't know how stable the futures could bring, the market swings back and forth. Now, Iran strikes have reached as far as Cyprus, which means now the EU is involved. I'm not going to get into all the politics that's going on there. However, some of the EU countries have allowed us to operate in their military bases. Some haven't. The ones that haven't be prepared for very serious and very swift sanctions from the US which seems to be our current method of operation. But global energy security and shipping routes under this type of pressure, especially around the Strait, the markets are going to continue to react. And you can see rising prices, you can see dropping prices. You can see inflation goes up. You're especially going to see energy prices climbing very quickly in Asia Pacific, then Europe. And it's already starting to happen here. What we're paying at the pump here in the south of the US has went up substantially.
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B
Oh, yeah.
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A
And that a lot of that has to do with just market perception.
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C
Right.
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A
And the problem is there's nowhere to run. There's nowhere to add this 20% transportation capacity that's being constrained right now. So we will keep an eye on this as well.
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B
Pakistan, Afghanistan conflict halts critical Central Asian
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A
Trade Routes so Pakistan and the Taliban and Afghanistan has started a ground war. That part of the world, unfortunately, has seen conflict over and over and over and over again. I feel really bad for the, especially the Afghan people. Most of them are substance farmers. They barely can grow enough food to eat and feed their families. They're not involved in this politically or theologically. Either way, however, this open war between Pakistan and Afghanistan's Taliban leadership is just going to be a setback to the Asian global trade markets once again, which are suffering under this lack of energy, which pretty soon will also be suffering under things like the lack of grain, the lack of ammonia, other petrochemicals that are also transported through Strait of Hormuz. So there's been heavy casualties on both sides. Sides. And the reason this is important to the oil and gas industry is this is where a lot of rare earth minerals come from, which are in high demand and also under constraint right now. Paige, all the years that we've been doing this show, I cannot believe that the number one, number two, number three, number four, number five driver right now is wars. We've never had this happen before. I don't like it. I want to see it go away. At the same time, I want to make sure that we don't allow this sort of stuff to happen in the future. So if what's going on with Iran.
- [11:41]
B
Yeah, I think that's the whole reason for. For the entire conflict to begin with.
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A
Well, if we have to double down and suffer more expensive prices for a few months, I'm willing to do it. I'm tired of this sort of stuff affecting our industry. What's next?
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B
Analyst outlines two potential scenarios for Conflict, huh?
- [11:59]
A
This analyst that wrote this, this is out of Rigzone, this is Andreas Exart wrote this is probably already wishing they could retract this because things have changed so much since yesterday. But basically this analyst sees two scenarios. The first is a moderate and short lived escalation. This will affect crude prices and natural gas prices for a short period of time, probably for one quarter, maybe two and the prices will rise, will be roughly bearable $20 a barrel costs and we're seeing that right now. Now in the second scenario they see it as a severe longer lasting escalation in which case prices for crude natural gas have no upper limit. It depends on supply and demand. You know, if this goes on for a long time, it's no longer perception in the market that's affecting prices. It's truly physical supply and demand. Now you got to remember once again one in every five barrels are traded globally. Move their straits Hormuz and an extended stoppage would be a major supply shock. Probably like we have not seen since the Arab oil embargo in the 70s. So the other thing that's going on is because of the warfare and because of Israel especially attacking Iran's production and drilling facilities, their ability to produce oil has dropped dramatically, much less their ability to bring it to market which, which we're not allowing. So this is a mess. These two scenarios now have a third component with what's going on with Afghanistan and Pakistan. This is, this is a mess people. I know I say this but we will also have to keep an eye on this one as well.
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B
Well on a high note, Russian oil remains cheap.
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A
Well no, seriously, this is an interesting dynam. The Western world has placed a lot of sanctions on Russian oil to help force them to basically not be able to afford the war with Ukraine. Then we've had other countries that were buying Russian oil like crazy. India and China also be leveraged with trade agreements and embargoes to quit buying Russian oil. Well the one thing that none of us, including myself thought of that is something happened in the Straits of Hormuza, they're actually mining it and we're not going to be able to open up transportation again. Russian barrels don't need to cross the straits at all. Those Russian barrels can get to India and China through a bunch of different ways.
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B
Yeah.
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A
Now one of those ways is that dark fleet of mothballed supertankers which should not be moving crude oil around the world. It's dangerous to the environment, it's dangerous to people because these are not modern State of the art supertankers. These are supertankers that were destined for scrapyards that Russia bought and then put enough money to get them running so they can get around US sanctions. Russia would love to increase oil exports to India and China. In fact, Russia would love to increase all exports to anywhere that will buy it.
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B
Yeah.
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A
And so as from a US military point of view, what do you do if you remove the sanctions? You can allow this Russian oil on the market, which is a heavier crude that most of the world's refineries like, including ours. And Russia has tons of natural gas, including the ability to export some lng. If we remove the sanctions even temporarily, that'll put more barrels and more BTUs of natural gas on the market, which will keep prices low. But at the same time it's going to allow Russia to rebuild their savings account and continue the war with the Ukraine. I don't know where to call this. The people in the U.S. military and intelligence units have way more information than I do around this. Let's hope they make the right decision.
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B
All right, next up, Vintage secures extension of loan for Australian gas projects.
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A
When I saw Vintage, I thought of the, the CE private networking group that's prevalent. I go, I didn't realize they got oil and gas. What I didn't know is that Vintage is a basically a natural gas company and they're working with the Australian government because they basically got a loan and this loan is going to give them about US$7 million, about 10 million Australian dollars to increase natural gas production in the Cooper Basins. The natural gas is needed, the market is there for it. And then quite frankly with what's going on in the world, the world could buy this natural gas.
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B
Yeah.
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A
So this new agreement is with the South Australian government. This is going to allow them unlock more gas from the Odin and the Vela fields. All these fields are already producing right now and so I mean we're looking at a major increase in production. Unfortunately, it's going to be about three years before this gas hits the market, which hopefully by then we don't have these conflicts anymore. But good job by Vintage and secureness load to be able to increase your natural gas production for the, for your people in Australia.
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B
I think my nose is starting to clear up. I can smell some of this food, I'm telling you. Finally.
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A
I know we always say we're hungry. We were recording this. That's just Amy are both from South Louisiana and when you're around a cook off sponsored by Shell in New Orleans and the cooking teams have cast iron pots. And I'm actually amazed nobody has open fire going on. Right. But these guys are cooking a fish. Koobie on. If you don't know what that is, Google it. These guys, like, they're cooking a jambalaya maybe. It's hard to tell from here. Tasso pasta. Oh, wow. But Paige, look at the pots.
- [17:03]
B
I know.
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A
The pots are like our history.
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B
Yeah.
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A
So anyway, audience, I know you can't smell it at one point we'll figure out Smell of Vision for the podcast.
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B
Yeah, I don't think so.
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A
Where are we? I've lost track of the news we're on.
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B
Ecuador reaches deal with Canadian Providence to advance Bay du Nord.
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A
Yeah, I think this is cool. So basically, Newfoundland had to have some reserves that are actually very robust. They've been proven. The problem is they had some environmentalists not want anybody to tap into those reserves. Ecuador said, hey, we got this. Hold my beer. And they came in and not only did they get the environmentalists to agree to let them actually start to operate, they worked us in a deal with the Canadian province so that everybody benefits from it. This is how things should be done. When you have pushback, instead of trying to fight it, why don't you stop for a second? If you're a major operator, educate the people that are pushing back. Now, we all know that a portion of them just don't like our industry. There's nothing you can do change that. But most of the people that are involved in those groups, groups are local community citizens and they're just worried. So if you educate them and then in this case, give them a discount on the natural gas that's going to be produced, all of a sudden they see this as a benefit. And so Ecuador signed a preliminary deal toward this, this project. Now remember, this is gonna be an fpso, which is cool. That's floating production, storage and offloading, which means basically a big ship is going to handle all the stuff that was normally done on land. And with this type of agreement, the local Canadian government has secured a path forward that's going to allow them to deliver long term value, increase employment for their local citizens, and then provide energy for the people that live in that part of the world, I think this is a win. Win all around. Great job, Equinor.
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B
Well, we can't have an episode of Oil and Gas this week without mentioning our favorite state of California.
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A
Hey, Callie.
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B
Bureau of Ocean Energy Management eyes California Offshore Drilling.
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A
Yeah, so what's going on is BOEM is announced intent to actually propose oil and gas lease sales in northern Central and Southern California on the outer shelf. If you, if you go through this article, you'll see where there's been a lot of work done by our federal government and with different groups in the state to get this thing set up with a lot of approvals that was needed. When this turns into a lease sale, it'll be scheduled for 2027 for next year, and it'll be the 11th National Outer Continental Shelf program for California lease sales. Now, let's talk about the reality of situation. I don't know a single operator that's going to bid on these leases to drill offshore because of the geopolitical reason operating in California. In California, you're wondering why your fuel prices at the pump are hitting $8 a gallon.
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B
You know who just recently left?
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A
We were Yamaha. Just. That's right.
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B
Yeah.
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A
I mean, you're moving out of the state, you have unemployment on the rise, and all this has to do with your political decisions like this. I love your state. I think it's one of the most beautiful places in the world. Not just in the U.S. but guys, California, you all got to do something about this. So fingers crossed. When these lease sales go out, there's actually some bidders out there. I don't think there'll be a single one. Yeah, we'll see.
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B
Yeah, we'll see. But anyway, Spencer Pratt for mayor of la, that's my, my endorsement. All right, last one. Shell foundation, raising incomes while lowering emissions.
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A
And it's just a coincidence that we're at the Shell here at Cook Off. And I'm also going to talk about. Shell is doing something really good.
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B
Yeah.
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A
So Shell foundation supports a lot of local communities around the world. And what they're trying to do is two things. In these local communities, they're trying to raise incomes while cutting emissions. And when I say local communities, I'm talking about stuff like small shareholder farmers, people who drive for things like Uber, except it's in other parts of the world. Uber doesn't exist. Micro entrepreneurs where the simple one thousand dollar donation, you can actually stand up their business. And that's what Shell foundation is doing. They're working with three groups of people and they're trying to take these groups of people which make up most of the world, let's be honest here. And they're trying to help bring their income up to a standard where they can actually do more things like education, birth control, transportation. And so I love that they're doing this. And so, you know, Big shout out, Shell. Shell Foundation. You know, I can't think of a more noble cause. And the fact that you're doing this in local communities around the world, and not just the local communities that you operate in, but local communities all over the world. This is how you make the world a better place. And I love that you're doing things like this. So, you know, once again, huge thank you, Shell, for making this world a better place. We love this. And I think pretty soon we're getting ready to love some food.
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B
Yeah. Yeah. I think we got 20 minutes left.
- [21:41]
A
For 20 minutes left. Just enough time for me to say, hey, we're trying to grow our YouTube channel. So go to. Go to YouTube, search for Ogg in comment on any video. We don't care which one. We don't care what the comment is. We'd like it to be nice, but we don't care. Take a screenshot of that comment on our YouTube channel and send it to marketing ggn.com that's marketing.com and we will send you an official Oggn heart hat. By what you mean sticker. And we'll also send you a temporary tattoo. And that temporary tattoo is a key to actually score an OGGN shirt. Speaking of score stuff, sign up for our two newsletters. We have our monthly oil gas events newsletter, the links in the show, notes for that, and then our weekly update, which is funky fun. Speaking of food, there's recipes in there from the oil field, a bunch of cool stuff, by the way, for the companies that have been reaching out to me wanting to sponsor newsletters. They've been sponsored for all of 2026. So sorry you have to wait to 2027. Weekly Rig Count page. Where are we?
- [22:37]
B
Oh, it's good stuff. We're up 1 in the United States at 551, down 9 in Canada at 205 for obvious reasons. Up 33 internationally at 1112.
- [22:49]
A
That's all the drillers vacating the Middle east finding someplace else to stack their rig at a lower day rate.
- [22:55]
B
Exactly.
- [22:56]
A
That's off those men and women that are that sort of stuff. LinkedIn company page. Just join it people, if you have. If you listen to this podcast or any one of our 29 other I
- [23:04]
B
don't know anymore oil and gas podcast.
- [23:06]
A
And you know what?
- [23:07]
B
I just work here.
- [23:08]
A
We did something that, that I, I said we would never do, but it's already paying off in droves. We launched our first podcast that's outside of oil and gas. It's the mining and mineral show. We launched it last week in Toronto, Canada at padac, which is the largest mining conference in the world. If you're in the mining space, go give it a listen. It's really, really good.
- [23:26]
B
I hear Toronto is lovely this time of year.
- [23:29]
A
It was 7 degrees Fahrenheit. I'm not sure lovely is. That's why I did not go for 7 degrees Fahrenheit. But yeah. So want to find out about our 30 other oil and gas podcasts or now our mining podcast or anything else we're doing in the future? Just go to LinkedIn, sign up for our company page. You'll be notified for anybody else. Remember, we're the number one oil and gas merch store in the world. If you want myself or any of my experts to come speak at your event, let me know. I'll come share the details first. Friday Q and A is right around the corner. Submit a question. If we read your question on the air, you will get a big shout out.
- [23:59]
B
We might even have a special episode of that coming up soon.
- [24:01]
A
We might have a really special episode of that coming up soon. Ready to close this thing down?
- [24:05]
B
Yep.
- [24:06]
A
Do it. Oh, that's me. Never mind.
- [24:07]
B
That's you. Remember folks, what show are you on, buddy?
- [24:11]
A
I'm thinking of the next one. Remember folks, do great work, pay it forward and we will see you next time. Thanks for listening to oggn, the world's largest and most listened to podcast network for the oil and energy. If you like this show, leave us a review and then go to oggn.com to learn about all our other shows. And don't forget to sign up for our weekly newsletter. This show has been a production of the Oil and Gas Global Network.