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Iraq on Sunday invited foreign companies to bid for contracts to explore and develop natural gas reserves in 11 new blocks as the OPEC member seeks to produce much-needed natural gas for power stations and cut imports that weigh on the country’s budget.

Eight blocks are located in western Anbar province, one in the northern city of Mosul and two others are located along province borders, including one between Anbar region with Mosul and another with Iraq’s southern city of Naja, the oil ministry said in a statement on Sunday.

Iraq’s oil ministry has ended preparation to launch a sixth bidding round to auction off the gas blocks, the ministry said, without setting a date for the bidding process.

Iraq, OPEC’s second-largest producer after Saudi Arabia, flares much of its own gas, extracted alongside crude oil at its fields, because it lacks the facilities to process it into fuel and instead uses Iranian power imports to generate electricity.

Baghdad has been under pressure from the US to reduce its reliance on gas imports from Iran.

By ALARABIYA NEWS, June 22, 2023

Saudi Arabia has long had deep ties with the East and the West thanks to its strong position in the international energy arena. The Kingdom has been an oil and gas superpower for decades and is now focusing its attention on the development of its green energy capacity, to lead in the world of renewables.

But as it goes forward, it will have to decide on which international energy partners its wants to maintain and who it wants to compete with. China, a superpower in pretty much every energy source, is one such power. Over the last year, Saudi Arabia has been deepening its ties with the Asian giant, with greater collaboration suggesting a long-term energy partnership. 

China and Saudi Arabia have several long-standing ties, in energy and beyond. Until recently, when Russia overtook, Saudi Arabia was China’s top oil supplier. In 2022, it provided China with the equivalent to 1.75 million bpd of crude. And in December 2022, Saudi Arabia hosted the China-Arab summit, which was attended by Chinese President Xi Jinping.

The two leaders discussed trade ties and regional security, an ongoing discussion for the states. They decided to align policies across several areas, including security and oil, without interfering in one another’s internal affairs. Saudi Arabia and China stressed the “the importance of stability in the world oil markets,” highlighting that Saudi Arabia is a reliable exporter of oil to its Chinese partner. 

In March, the two powers announced they would be working together to construct a landmark $10-billion refinery in the north-eastern Liaoning province of China, with funding from Saudi’s state-owned Aramco. This brings together the largest energy consumer worldwide and one of its biggest exporters.

The development will consist of an integrated refinery and petrochemicals complex. Ashok Dutta, an oil industry executive based in Calgary, believes the move says “I’m committed to what you are doing, I will help you out and make this relationship more meaningful.” Aramco also acquired an expanded stake in a privately controlled Chinese petrochemical group for $3.6 billion. 

That same month, Saudi Arabia’s cabinet approved the decision to join the Shanghai Cooperation Organisation, a China-led political, security and trade alliance that includes member states such as Russia, India, Pakistan and four other central Asian nations. While it will not be considered a full member, the partial membership shows Saudi’s commitment to aligning its interests with China.

Earlier in the month, China helped secure a deal for long-time Middle Eastern rivals Saudi Arabia and Iran to resume diplomatic relations and reopen embassies in one another’s countries, demonstrating China’s involvement in the region. 

And this month, Saudi’s Energy Minister, Prince Abdulaziz bin Salman, said that the Kingdom wanted greater cooperation with China on trade and energy, rather than competition. Bin Salman stated during the 10th Arab-China Business Conference: “We came to recognize the reality of today that China is taking, had taken a lead, will continue to take that lead. We don’t have to compete with China, we have to collaborate with China.”

The energy minister highlighted the value in working in partnership with China, as the Asian giant has already strongly developed its renewable energy sector, getting the “right manufacturers”. Further, China’s oil demand continues to grow year on year, showing significant potential for Saudi’s crude export market as demand in other parts of the world begins to wane. 

However, bin Salman was quick to state that this partnership does not mean that Saudi Arabia will stop collaborating with other world powers, such as Europe, South Korea, Japan, the U.S., and Latin America. When asked whether the strengthening of ties with China would affect Saudi’s relationship with other countries the minister said: “We are Saudi Arabia, we don’t have to be engaged in what I call a zero-sum game. We believe that there are so many global opportunities.”

Also at the event, Saudi Arabia signed a $5.6-billion deal with China’s electric vehicle maker Human Horizons to design and manufacture EVs. A total of $10 billion worth of agreements were signed in total during the Arab-China conference, across the technology, renewables, agriculture, real estate, minerals, supply chains, tourism, and healthcare industries.

This demonstrates a greater commitment to deepening ties with China, as the Kingdom expands its investments beyond oil and gas to renewables. This also aligns Saudi’s Vision 2030, with the aim for greater economic diversification and the establishment of a strong renewable energy sector, that will support the development of smart cities. 

Over several meetings during the last year, Saudi Arabia has made it abundantly clear that it intends to continue developing its relationship with China, particularly in energy and security. As the two powers look to become world leaders in renewable energy, while also continuing their commitment to fossil fuels in the mid-term, they will align policies to support their energy industries.

The Kingdom has suggested that this will not negatively affect its relations with other world powers, although some remain sceptical about this commitment. 

Oilprice.com by Felicity Bradstock, June 22, 2023

The 58 rating InvestorsObserver gives to Exxon Mobil Corp (XOM) stock puts it near the top of the Oil & Gas Integrated industry. In addition to scoring higher than 88 percent of stocks in the Oil & Gas Integrated industry, XOM’s 58 overall rating means the stock scores better than 58 percent of all stocks.

What do These Ratings Mean?

Analyzing stocks can be hard. There are tons of numbers and ratios, and it can be hard to remember what they all mean and what counts as “good” for a given value. InvestorsObserver ranks stocks on eight different metrics. We percentile rank most of our scores to make it easy for investors to understand. A score of 58 means the stock is more attractive than 58 percent of stocks.

These scores are not only easy to understand, but it is easy to compare stocks to each other. You can find the best stock in an industry, or look for the sector that has the highest average score. The overall score is a combination of technical and fundamental factors that serves as a good starting point when analyzing a stock. Traders and investors with different goals may have different goals and will want to consider other factors than just the headline number before making any investment decisions.

What’s Happening With Exxon Mobil Corp Stock Today?

Exxon Mobil Corp (XOM) stock is down -1.58% while the S&P 500 has gained 0.48% as of 2:14 PM on Monday, Jun 12. XOM has fallen -$1.70 from the previous closing price of $107.44 on volume of 7,532,421 shares. Over the past year the S&P 500 has gained 15.19% while XOM has gained 10.32%. XOM earned $14.78 a per share in the over the last 12 months, giving it a price-to-earnings ratio of 7.16.

By InvestorsObserver, June 22, 2023

U.S. Oil, a leader in retail, commercial, and wholesale fuel distribution; supply and trading; logistics; and terminal operations of refined products and renewable fuels, and U.S. Gain, a leader in the development and distribution of alternative fuels and environmental credits, today announced the formation of a combined company: U.S. Energy.

U.S. Energy is a vertically integrated energy solutions provider proficient in refined products, alternative fuels, and environmental credits. Its comprehensive portfolio of assets paired with risk management, financial services, and advisory insights offer customers realistic, executable strategies that satisfy both their economic and environmental goals.

U.S. Energy has offices in Wisconsin and Texas with an asset portfolio of more than 30 refined product terminals, 40 renewable natural gas development projects, 50 alternative fuel stations, and three forestry projects. As a key supplier to the transportation market, U.S. Energy offers diesel, gasoline, natural gas liquids, ethanol, biodiesel, renewable diesel, compressed natural gas, renewable natural gas, electric charging solutions, hydrogen, and a variety of carbon credits. Tenured in trading, logistics, storage, compliance, and marketing, U.S. Energy is uniquely positioned to serve its customers’ current and future energy needs.

As a privately held, family-owned business, U.S. Energy is a U.S. Venture company, committed to finding a better way to be the very best provider of transportation products, sustainability solutions, and insight driving the world forward.

U.S. Oil was most recently led by Eric Kessenich who joined the company in 2010 and was promoted to president in 2017. Kessenich was further promoted to chief operating officer of U.S. Venture in August 2022. As chief operating officer, Kessenich will oversee the operations of all U.S. Venture companies: including U.S. Energy, U.S. AutoForce, U.S. Lubricants, Breakthrough, and IGEN.

“This reunion is an important milestone for our company. While our roots remain in the refined products side of our business, we recognize the need to offer a more diverse range of solutions under one brand as our customers’ needs evolve—ultimately becoming an energy-agnostic solutions provider,” shared Eric Kessenich, chief operating officer at U.S. Venture. “With U.S. Oil’s tenure in refined products and U.S. Gain’s expertise in renewables, we knew we had an opportunity to service our customers with a more comprehensive offering and a streamlined experience.”

Mike Koel has been selected to lead U.S. Energy as its president. Koel has been with U.S. Venture for over 20 years—working within U.S. Oil as a trader, vice president of supply and trading, and vice president of business development. In May 2017, Koel was named president of U.S. Gain: a Sustainable Energy Solutions™ company he founded within U.S. Oil in 2011. In his new role as president of U.S. Energy, Koel will be responsible for the company’s growth and expansion into new markets and technologies.

“I’m honored to lead the U.S. Energy team in this next chapter as a company, and I’m excited to share we’ve already discovered synergies and opportunities to improve our customer experience,” said Mike Koel, president of U.S. Energy. “Our vertical integration throughout the energy supply chain enables access to an array of solutions at a competitive price. As an energy developer, distributor, and marketer, we can ensure our customers are aware of risks and opportunities within the industry and benefit from our development of new technologies that integrate with our service offerings.”

“The U.S. Oil brand dates back to our inception as a business. Formerly known as Schmidt Brothers Oil Company, my father and uncle founded this company in 1951 on our customer promise of finding a better way,” shared John Schmidt, president and chief executive officer at U.S. Venture. “As market needs have shifted, so have our solutions—giving way to new portfolio offerings and additional business units. The U.S. Energy brand continues that legacy: putting our customers first alongside their unique energy needs.”

Driven to be the very best and most trusted energy solutions provider dedicated to finding a better way toward a sustainable future, U.S. Energy has diversified throughout the energy supply chain to better serve its customers.

Gibson Energy said on Wednesday it will buy South Texas Gateway oil terminal from Buckeye Partners and its partners for $1.1 billion as the Canadian energy infrastructure firm looks to expand into U.S. crude oil export markets.

U.S. oil exports have boomed in recent years, touching a record of about 4.5 million barrels per day in March, on rising shale output, while Russia’s invasion of Ukraine boosted demand for U.S. oil.

South Texas Gateway, located in Ingleside, Texas, at the mouth of the Corpus Christi ship channel, is the second largest oil exports facility in the United States with total capacity of 8.6 million barrels across 20 tanks.

“As U.S. crude oil exports grow, driven by production growth from the low-cost, resource-rich Permian basin, Gibson anticipates the potential for future expansions at the terminal,” the Calgary, Alberta, company said in a statement.

Buckeye did not reply to a request for comment.

In March, the terminal exported a record 670,000 barrels per day, and year to date has handled 12% of U.S. crude exports, Gibson said.

The facility is 50% owned and operated by privately held Buckeye Partners. Phillips 66 (PSX.N) and Marathon Petroleum Corp (MPC.N) each have 25% stakes.

The company will finance the deal through a C$350 million ($262.72 million) equity offering and other debt offerings.

J.P. Morgan Securities Canada is acting as exclusive financial advisor to the deal, which is set to close in the third quarter of 2023. Latham and Watkins LLP and Bennett Jones were legal advisors on the transaction.

By Reuters, June 21, 2023

El Musel LNG terminal in Gijon has received administrative authorization for its start-up from the Spanish Ministry for the Ecological Transition and the Demographic Challenge.

According to the Spanish energy company Enagás, the technical conditions for the provision of LNG logistics services at the plant are established, and for its start-up, only the Commissioning Act is pending by the Industry and Energy Area of ​​the Government Delegation in the Principality of Asturias.

Previously, in February, the plant received the approval of the singular economic regime for its logistic use by the National Commission for Markets and Competition (CNMC).

“The start-up of El Musel is a milestone for the start of commercial operations of the infrastructure, which is part of the Government’s More Energy Security Plan, and will make it possible to reinforce the security of energy supply in Europe,” Enagás said.

To note, on 6 June, Enagás began the binding phase of the capacity allocation process (Open Season) for logistics services at the El Musel, which is expected to end in July. The logistics services offered for this infrastructure are LNG unloading, storage and loading operations.

The Spanish major pointed out that the Gijón plant could contribute up to 8 bcm of LNG capacity per year to the security of the European energy supply and will allow the docking of ships of between 50,000 and 266,000 m3. The plant has two tanks with 150,000 m3 of LNG storage capacity, two tanker loading bays with a capacity to load a maximum of 9 GWh/d and a maximum emission capacity of 800,000 Nm 3/h.

On 28 February, Enagás and Spanish LNG terminal operator Reganosa signed an agreement by which Enagás acquired a network of 130 km of natural gas pipelines from Reganosa and in return, Reganosa purchased a 25% stake in the El Musel plant.

Enagás noted that the agreement reinforces both companies, allowing them to take advantage of their synergies and work together on new possibilities for collaboration to strengthen the security of supply and progress with the decarbonisation objectives of Spain and Europe.

To note, the start-up of El Musel is also a part of Enagás’ 2030 strategic plan.

By Offshore Energy, June 16, 2023

Port of Rotterdam has awarded a feasibility study contract to Proton Venture, an ammonia engineering company, for the scoping and conceptual design of an ammonia export terminal in Western Australia (WA).

Via this future ammonia hub to be located in Oakajee, the Dutch port aims to import 3 million tons of ammonia per year by 2030. As explained, the facility will employ proven technology in a new application for the transfer and loading of ammonia onto marine vessels.

Under the feasibility study contract, Proton Venture will demonstrate the technical and economical feasibility of an integrated port terminal facility for ammonia storage and loading.

As the main contractor, Proton Venture teamed up with Intecsea, a company designing the subsea pipelines, and Bluewater, a designer of the single point mooring (SPM), to employ storage tanks in combination with a unique SPM.

This innovative approach will accelerate the export of ammonia supporting Port of Rotterdam’s import targets, the company said.

In addition to ammonia export, the Netherlands and Australia have already established collaboration on renewable hydrogen.

Earlier this year, the Netherlands and Australia signed a memorandum of understanding (MoU) to support the development of a renewable hydrogen supply chain from Australia to Europe, including hydrogen trade policy, standards and certification schemes, port infrastructure and supply chain development, innovative hydrogen technologies, including shipping, equipment and services, and government policies about safety, social licence and regulations for hydrogen.

The MoU is said to have the potential to make Rotterdam an international hub for hydrogen imports, including for transport to other countries in Northwest Europe.

Shortly after signing this MoU, the two countries formed a tripartite partnership with Germany, aiming to develop a joint hydrogen hub in Western Australia, known as TrHyHub.

The objective of the project is to develop a new and modern port industrial complex for large-scale hydrogen production for both local use and export.

OFFSHORE ENERGY by Ajsa Habibic, June 16, 2023

Investment Thesis

Valero Energy (NYSE:VLO) has continued to demonstrate strength in its fundamentals as well as commitment to future growth through investment and diversification, however immediate wider restrictions and volatility serve only to dampen price action in the short term. We think VLO presents an immediate Hold opportunity until these uncertainties are navigated, at which point sustainably executed strategies will serve to give VLO the edge into the next uptrend.

Supply and Demand Imbalance

VLO is a refinery company based out of San Antonio whose core operations revolve around the manufacture, marketing, and distribution of petrochemical products, including ethanol and renewable diesel fuels. VLO has strategically grown its presence around the North American Gulf Coast, as well as select areas mid-continent.

The recent OPEC+ announcements involving the ceiling on oil production has persuaded analysts and the wider market that oil prices are set to rise as a result of a consistently strong and growing demand, pulling back refinery stocks due to fears of greater operating costs and weaker refinery margins. It can be said that this move by OPEC has provided an indicator of an immediate unsteady outlook for global oil.

As a refinery company, the profitability of VLO rests principally on the spread between crude oil and that of its refined products; a variable dependent on supply and demand. On the demand side it seems clear that businesses are continuing to transition back to office-based working, and China’s production ramp up tells the same story. When factoring in supply cuts it seems to complete a clearer picture of the potential for oil prices rising back towards triple digits, a vision shared by Paul Sankey.

There is currently an aggressive bill to enforce maximum refining margins on refinery companies to control price gauging in the face of increased costs of living. Higher oil prices are typically pushed forwards, absorbed by the consumer, however, supply cuts and refinery margin limits as a result of political pressures may prevent this going forwards. Volatility in the price of oil poses a greater risk to VLO going forwards because of potentially damaged refinery margins.

Diligent Diversification

VLO has committed to continued Investment into the Permian basin, one of North Americas most prominent energy sources, via its McKee refinery in the Texas Panhandle. Development in such a strategic location serves to further grow its asset base and out-muscle other immediate competition.

VLO has recently sought US approval to import Venezuelan oil, demonstrating efforts to renew energy deals and diversify its import options. The configuration of VLO refineries render them an industry leader in the number of unrefined crude oils that can be processed, however they are capable of processing heavier and lower quality crude with particularly high efficiency. It seems obvious that Venezuelan imports would serve to raise margins and encourage sustainable profitability, but this is all easier said than done.

Venezuelan import requires approval from Biden Administration following sanctions in 2019, and the US may not want to be seen easing sanctions amidst rising tensions. Nevertheless, Chevron (NYSE:CVX) was recently granted approval to continue limited operations, which may provide some light at the end of the tunnel for VLO regarding this matter.

Further evidence of growth and diversification is demonstrated by the successful acquisition of a defense contract with the defense logistics agency for the development of aviation fuels, with a maximum value of $906 million.

As well as this, there is a continued commitment to innovative renewable fuel development through sustainable aviation fuel production, achieved by investment into the Diamond Green Diesel Port Arthur plant in Texas. This will be critical when considering the importance of long-term carbon reduction strategies.

Reinforced Strategic Edges

Earnings throughout 2022 were record breaking due to the strength of refinery volumes (Q4 2022 refineries were running at 97% capacity) and margins amidst wider chaos surrounding energy market. The free cashflow generated as a result of this has opened up a plethora of positive options for VLO, namely debt management, share buybacks and increased dividend pay-outs. An opportunity for management to focus on shareholders is of course good news for the bulls.

It was partly for these reasons that it was expected Q1 2023 earnings (reported on the 27th of April) would remain strong as a result of favorable demand economics, outweighing the impact of turnaround experiencing lower throughput. VLO certainly didn’t disappoint, with an earnings beat of over 14% and a revenue beat exceeding 6%. It was clear that the 97% refinery capacities witnessed last year were unsustainable, however Q1 2023 capacities of 93% continue to impress and may provide an early signal of further strength for the next quarter.

Despite this, positive price action has been reluctant, in our opinion this is likely as a result of wider macroeconomic fears and general caution surrounding supply-demand uncertainty. The price of VLO is down around 7% year to date and down 15% over the last 3 months alone.

Nevertheless, it seems clear that foundations are continuing to strengthen, with a declared quarterly dividend of $1.02 which went ex-dividend last week, representing a forward yield of 3.76%. VLO has demonstrated remarkable stability with its dividend as a result of growing margins leading to a manageable pay-out ratio of 11.5%. The reliability of dividends is a clear indicator of sustainable shareholder initiatives, investors looking for income opportunities would be likely be well served in the long term by VLO if seeking some comfort within energy diversification.

VLO currently boasts an industry ranking of 3rd out of 23 on the seeking alpha platform, with a Quant rating that was recently downgraded from Strong Buy to the current Buy consensus. As well as this, Bank of America have awarded VLO with a top sector rating, citing favorable leverage to refining environments. Investors will feel that VLO has largely felt underappreciated by the market, but this recognition may well represent the start of a new chapter for market growth.

Strategic balance sheet diversification through added exposure to alternatives such as natural gas also demonstrates a commitment to sustainable growth, which is necessary to maintain the edge once the economic slowdown comes to a halt.

This provides a logical view into why Seeking Alpha’s current growth factor grade of a B may seem reliable when exploring further growth potential, this is to say that it seems likely growth will only strengthen from this point onwards.

Long-Term Technical Uncertainty

VLO recently broke beneath the 200-Day EMA which is relatively significant when considering the price of VLO has been more or less consistently above this long-term indicator for almost 2 years. This demonstrates that recent weakness runs deeper than a light sell-off and provides a strong argument that rushing in to buy shares just because they appear cheap could be a mistake without considering the full picture.

The integrity of a medium term buy case for VLO may rest on its’s ability to demonstrate a confident recovery towards this key indicator within the coming weeks, which it has achieved in past periods with little resistance.

The potential for a sharpish return to levels above the 200-Day EMA may also be supported by the recent MACD cross, which has historically provided a decent indication of future price strength as seen in December of last year.

Conclusion

In conclusion, recent OPEC activity has thrown a degree of uncertainty into energy markets which presents possible immediate supply volatility and a moderate threat to refinery margins as a result of unstable operating expenses.

Despite this volatility, VLO continues to diversify its refinery environments, revenue streams and balance sheet exposure; demonstrating a fundamentally strong and strategically sound foundation which could serve as an excellent edge once the economic slowdown cools off.

Superb refinery operating capacities, which have continued into 2023, have served to pull in record cashflows which enable an experienced management team to consider approaches to address additional shareholder benefits. When combined with a stable and growing dividend pay-out, VLO becomes an attractive option for those seeking income investing strategies during this wild energy market.

We are optimistic about the long term of VLO, however investors will be keen to see strength in the coming weeks for a possible return towards the 200-Day EMA to confirm a level of resistance against any potential severe downtrend.

This, when combined with ever present risks such as consumer behavioral changes, resource volatility and forced production cuts mean that we would like to see VLO weather the immediate storm before returning to a confident Buy rating, although investors willing to navigate these risks will likely find joy on the other side in a great refinery company.

By SeekingAlpha, June 16, 2023

Hedge funds have long been a favored investment vehicle for high net worth individuals and institutions looking to diversify or enhance their portfolio returns, providing sophisticated investment strategies unavailable to the average investor. One such hedge fund, HRT Financial LP, has recently purchased 119,459 shares of Ultrapar Participações S.A. (NYSE:UGP) during the fourth quarter, valued at approximately $289,000 according to its most recent Form 13F filing with the Securities and Exchange Commission.

Ultrapar Participações S.A., an oil and gas company with a market capitalization of $4.03 billion, operates through several segments including fuel distribution, LPG distribution, chemicals, storage terminals, and drugstores. Shares in the firm opened at $3.62 on Wednesday – a healthy boost from its 52-week low of $2.13 – with a fifty-day moving average of $3.11 and a two-hundred-day moving average of $2.72.

The company’s financial standing is sound, evidenced by its debt-to-equity ratio of 0.92 and quick ratio of 1.41 as well as its tripling of net profit in Q3 2020 compared to the same quarter in the previous year. Moreover, analysts expect continued growth for Ultrapar Participações S.A.: the company boasts a price-to-earnings ratio (P/E) of 12.91 and a PEG ratio of 0.61 indicating that it is undervalued in relation to expected earnings growth.

Investors interested in exploring what other hedge funds are holding UGP can use HoldingsChannel.com to get the latest 13F filings and insider trades for Ultrapar Participações S.A.

In conclusion, HRT Financial LP’s purchase gives further credence to Ultrapar Participações S.A.’s success story despite economic headwinds wrought by COVID-19. With its sound financial standing and strategic positioning as a diversified oil and gas company, Ultrapar Participações S.A. remains an intriguing investment opportunity for discerning investors seeking exposure to the sector.

BestStocks by Yasmim Mendonça, June 16, 2023