Author: Ricardo Perez

Trans Mountain expansion may not give long-term price relief to Canada’s booming oil output

Canadian oil producers expect the discount on their crude to shrink significantly when the Trans Mountain pipeline expansion (TMX) starts this year, but the relief may be short-lived as surging supply looks set to exceed the country’s pipeline capacity in just a few years.

TMX will ship an extra 590,000 barrels per day (bpd) of crude, trebling existing capacity to Canada’s Pacific Coast once the C$30.9 billion ($22.8 billion) expansion is finally complete. The Canadian government-owned project has hit technical issues on its final leg of construction, but is still targeting a second quarter in-service date.

For much of the last decade, oil companies in the world’s No. 4 producing country have been forced to sell their barrels at a deep discount to global prices due to lack of pipeline capacity to export crude.

Once TMX is operating, Canadian heavy crude differentials should narrow to around $10-$12 a barrel under U.S. benchmark crude from more than $19 a barrel currently, BMO analyst Ben Pham said in a note to clients last week.

He estimated the expansion would lift Canada’s total takeaway capacity to 5.2 million bpd, leaving 220,000 bpd of unused space on pipelines.

Still, oil sands production is rising so rapidly that some market players think Canada could again run out of pipeline space in less than two years, said RBN Energy analyst Martin King.

“Originally it was thought TMX would give us a four- or five-year window,” King said. “It now looks like that window of spare capacity might actually be a lot smaller.”

Canadian producers could add up to 500,000 bpd of supply this year and next year alone, Colin Gruending, executive vice president of liquids pipelines at midstream firm Enbridge Inc (ENB.TO), opens new tab, estimated on an earnings call this month.

The prospect for more bottlenecks would likely widen the discount again, and could deter companies from longer-term investments in growing Canada’s production.

For existing pipeline operators, the rising production and strong demand for capacity is good news. Enbridge said it may continue rationing space on its 3.1 million bpd Mainline pipeline system even once TMX starts operating, allaying concerns among some analysts the company could see a drop in volumes and revenues.

MORE OPTIONS

Most of the new capacity on TMX will be for heavy crude barrels, meaning light and synthetic crude oil is most likely to face rationing on the Mainline and any resulting price discounts, said RBN’s King.

The new capacity on TMX will give heavy crude producers a choice of sending barrels to the U.S. west coast and Asia, or to the U.S. Midwest and Gulf Coast on existing pipelines.

On a recent earnings call, Imperial Oil (IMO.TO), opens new tab CEO Brad Corson said having spare pipeline capacity would lift the value of heavy crude for the entire Canadian oil industry.

Imperial will continue to move most of its barrels to the Midwest and Gulf Coast, while keeping a look out for the highest-value markets, he added.

Ryan Bushell, president of Newhaven Asset Management, which holds shares in pipeline companies including Enbridge, said TMX would likely run at less than full capacity if strong pricing on the Gulf Coast, the world’s largest heavy crude refining centre, drew barrels onto pipelines heading south.

“It all depends on where the best pricing is, for the first time in a long time producers will have optionality,” Bushell said.

No matter how fast TMX fills up, it is likely to be Canada’s last major export pipeline ever built, due to regulatory hurdles, environmental opposition and uncertainty about future oil demand.

“The potential for brand new pipelines getting built is pretty close to zero,” RBN’s King said.

By Nia Williams / Reuters , February 21, 2024

Port of Rotterdam’s Throughput Drops Amidst Global Challenges

The Port of Rotterdam is feeling the impacts of global geopolitical and economic upheavals, posting a decline in total cargo throughput and recording a near-flat change in revenues last year. For Europe’s busiest port, Russia’s war in Ukraine and the resultant sanctions, changing energy needs dynamics in Europe, weakening economic growth and faltering global trade have conspired to create a slump in performance.

In 2023, Rotterdam recorded a 6.1 percent decline in total cargo throughput, moving 438.8 million tons compared to 467.4 million tons in 2022.

The fall was mainly seen in coal throughput, containers and other dry bulk. The port still had a “stable year financially” after revenue posted a marginal increase of 1.9 percent to $909 million.

For Rotterdam, the clouds of uncertainty that started gathering in 2022 continued last year. After demand for coal rose sharply in Europe due to concerns about energy security and large increases in gas prices in 2022, last year saw more stability and a transition to LNG.

Coal throughput at the port fell by 20.3 percent to 23.1 million tons, mainly because of low demand for coal for power production. Decline in coal had the biggest impact on dry bulk throughput, which plunged by 11.8% to 70.6 million tons compared to 80 million tons in 2022.

Slowing economic growth in Europe also hit the segment, causing a striking decrease of 49.4 percent in other dry bulk.

In liquid bulk, overall throughput was 3.4 percent lower last year, down to 205.6 million tons compared to 212.7 million the previous year. Crude oil fell by 1.4 percent with the discontinuation of ship-to-ship transshipment.

On the flipside, increase in LNG imports as Europe moved to replace pipeline imports of Russian natural gas saw throughput increase by 3.7 percent to 11.9 million tons from 11.4 million tons the previous year. The port also saw more LNG bunkering activity.

Container throughput was noticeably down. Owing to lower consumption, lower production in Europe and the discontinuation of volumes to and from Russia due to sanctions, the number of TEU handled fell by seven percent to 13.4 million, down from 14.4 million the previous year. Roll-on/roll-off traffic fell by five percent, with the weak UK economy and lagging consumption being the main causes.

“2023 saw ongoing geopolitical unrest, low economic growth due to higher interest rates and faltering global trade, all of which had a logical effect on throughput in the port of Rotterdam,” said Boudewijn Siemons, Port of Rotterdam Authority CEO.

Despite facing a turbulent year, which the authority expects to continue this year in what is already shaping up as unpredictable, Rotterdam is advancing investments to transition the port to a sustainable facility. Last year the Port Authority invested a total of $319.5 million on key projects. Key investments are also lined up for implementation this year, some of which are critical in Rotterdam’s energy transition ambitions

BY THE MARITIME EXECUTIVE / February 21, 2024

Energy Traders Europe seeks clarity on storage levies

Energy Traders Europe has called on the European Commission and energy regulators’ association Acer to provide guidance on the legality of gas storage levies as soon as possible.

The association recently changed its name from European Federation of Energy Traders (Efet) to help people “immediately understand who we represent”, its chief executive, Mark Copley, told Argus. At a time when “energy is more political than ever”, it wants to be “more vocal in making the arguments that explain why trading helps customers across Europe”, Copley said.

The commission and Acer have been reticent to provide a full opinion on the gas storage levy imposed by Germany and the one planned by Italy, and while Copley “knows that both are taking this seriously and working on it, public statements would be welcome”, he said. The association’s members have been “providing them with their views and experiences”, but the “risk of contagion grows over time”. But the association remains “hopeful that German authorities recognise that this will ultimately impose additional costs on German consumers and can propose new tariffs without a legal challenge”, Copley said.

Storage levies “should not be charged on cross-border points at the expense of consumers in other member states”, as this “creates uncertainty, fragments markets, increases price spreads between countries and goes against the spirit of energy solidarity”, Copley said, echoing previous comments by the association. Attempts to recover the costs of strategic or national stocks should instead be carried out in a “non-discriminatory way via domestic network tariffs”. The size of the levies perhaps reflects the “unintended consequences of developing policies too quickly”, Copley said.

The potential imposition of a similar charge in Italy would “translate into an economic incentive to import gas from Russia” for countries in central and eastern Europe and would make storing gas in Ukraine more expensive, Copley said. If these levies are deemed legitimate, “many countries in central and southeastern Europe may end up facing additional pancaked costs of importing gas from western routes that cross more boundaries”, going “directly against Europe’s efforts to diversify supply”, he said.

Mandatory storage filling targets are another measure that should “certainly not exist in ‘normal’ situations, and there are respectable arguments that they should not exist at all”, he said. While the rush to ensure there was gas in storage is understandable from a political perspective, “too often transmission system operators were assigned very interventionist roles, channelled gas purchases into a narrow window that contributed to prices spiking and stopped traders doing what they’d normally do”. Gas was injected into storage “irrespective of what was happening” elsewhere in the market, he said. Some of the costs that are now having to be recovered through higher tariffs are “a result of badly designed storage policies”.

There has been a notable increase in new pipelines, interconnection capacity and LNG import capacity in central and eastern Europe over the past five years, but the “slowness of market reform in the region is preventing the use of that infrastructure efficiently”, Copley said. The priority should be improving access terms rather than building more pipelines, he said, noting that there is “already huge south-to-north capacity in the Trans-Balkan pipeline that could be better used”. There are “various worries” for association members, such as Turkey-Bulgaria capacity being tied up in the deal between state-owned incumbents Botas and Bulgartransgaz, and issues in Romania regarding centralised market obligations. These types of issues “chill the interest and usability of capacity”, he said.

“Greater stability and predictability in European energy policy” would also support European domestic gas production, and biomethane can play a role here too, he said. “But there is work to do to develop functioning biomethane markets, including the import of renewable gases from third countries”.

In the power market, Europe needs a “massive expansion” of most capacity types, including combined-cycle gas turbines with carbon capture. The key is to “make sure that the market design can reward the capabilities that a renewables-heavy system needs” — including the pricing of flexibility — hopefully helping to steer investment into the right assets”, he said. This includes a further merging of balancing markets and better functioning intra-day markets, he said. “The interaction with gas and hydrogen markets — and the price signals in all of those markets that will enable efficient decisions — will be a key part of addressing the challenges that will arise,” Copley concluded.

By Brendan A’Hearn / argusmedia , 02/15/24

Occidental Petroleum Eases Permian Basin Focus As Warren Buffett Buys More Shares

Warren Buffett-backed Occidental Petroleum (OXY) reported a stronger-than-expected fourth-quarter performance late Wednesday. Shares inched higher in premarket trade.

Occidental Petroleum saw fourth-quarter earnings fall 54% to 74 cents per share, slightly better than FactSet consensus of 71 cents. Revenue dipped 12.7% to $7.172 billion. Analysts had predicted sales totaling $6.95 billion, according to FactSet.

Occidental Petroleum stock shed 0.5% Wednesday, ahead of earnings. In Thursday’s premarket action, shares edged a fraction higher. OXY stock has slumped below its 200-day and 50-day moving averages to begin 2024, after climbing to nearly 67 in October 2023.

U.S. oil prices eased slightly to $76.50 per barrel, as markets weigh ongoing tension in the Middle East and concerns over China’s economy.

Occidental’s results come after energy giants Exxon Mobil (XOM) and Chevron (CVX) both closed the door on 2023 with mixed earnings and revenue reports. Meanwhile, for the 2024 year, both supermajors forecast nearly flat oil production compared to 2023 levels with focus on shareholder returns.

Chevron increased its quarterly dividend 8% to $1.63, from $1.51 after buying back 5% of it stock in 2023. Exxon Mobil and Chevron handed out a combined $58.7 billion to shareholders last year and expect to continue this focus in 2024. Warren Buffett has a nearly 5.9% stake in CVX.

Occidental Petroleum: Oil Supply
The top Permian Basin outfit produced 1.2 million barrels of oil equivalent per day in Q4, about 7,000 bpd higher than in Q4 2023 and just above company guidance.

The company targeted Capital expenditures of between $6.4 billion and $6.6 billion. That included a $320 cut to shale and exploration spending, as well as idling two Permian Basin drilling rigs, while increasing spending in the Gulf of Mexico. Analysts had targeted capex of $7 billion.

Last week, OXY Chief Executive Vicki Hollub warned there could be an oil supply shortage by 2025 as the world fails to replace crude reserves.

“We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” Hollub told CNBC at the Smead Investor Oasis Conference in Phoenix, on Feb. 5.

Occidental Petroleum produced 1.22 million barrels of oil equivalent per day in Q3, up 3% compared to last year and exceeding the midpoint of its guidance.

In November, OXY slightly raised its full-year production guidance. This came after the company forecast average full-year production of 1.210 million barrels of oil equivalent per day at the end of Q2.

In Q1, OXY predicted full-year production to average 1.195 million barrels of oil equivalent per day. Management previously expected 2023 production to average 1.18 million barrels of oil equivalent per day, keeping production mostly flat compared to the 1.16 million in 2022.

Warren Buffett Keeps Buying OXY
Warren Buffett’s Berkshire Hathaway (BRKB) reported late Wednesday it had increased its stake in Occidental by 8.74% during the fourth quarter, adding more than 19.5 million shares.

In early February, ahead of earnings, Warren Buffett had also loaded up on Occidental Petroleum stock. Buffett spent around $245.7 million on more than 4.3 million shares of OXY between Feb. 1 and Feb. 5, with a price range of 56.75 to 57.98, according to a regulatory filing last week.

In December, Warren Buffett also spent $588.7 million on more than 10 million shares of OXY stock, with a price range of 55.58 to a fraction more than 57, in the days following the energy company’s $12 billion acquisition of Permian Basin producer CrownRock.

Through the latter half of 2022 Buffett loaded up on OXY, with the billionaire investor targeting shares in the $57-$61.50 price range. Warren Buffett’s Berkshire substantially increased its stake in the international oil play over the past year, putting OXY among Buffett’s top holdings.

MarketSmith charts show OXY stock finding price support around the 55-57 range, dating back to June 2022.

Buffett Bets On Big Oil
As of February, Berkshire Hathaway held a 28.3% stake in Houston-based Occidental Petroleum, according to FactSet. In August 2022, the Federal Energy Regulatory Commission granted Berkshire Hathaway approval to purchase up to 50% of available OXY stock.

However, Warren Buffett told shareholders in early 2023 he has no intention of taking over the company. Ahead of Occidental Petroleum Q3 earnings in early November, between Oct. 23-Oct. 25, Berkshire added 3.92 million OXY shares. Buffett made those OXY buys at a share price between 62.68-63.04, according to regulatory filings.

Occidental stock has an 18 Composite Rating out of 99. The Warren Buffett stock also has a 26 Relative Strength Rating and a nine EPS Rating.

By Investors / KIT NORTON , 02/15/2024.

Shell expects 50% rise in global LNG demand by 2040

Global demand for liquefied natural gas (LNG) is estimated to rise by more than 50% by 2040, as China and countries in South and Southeast Asia use LNG to support their economic growth, Shell said on Wednesday.

The market remains “structurally tight”, with prices and price volatility remaining above historic averages, constraining growth, the world’s largest LNG trader said in its 2024 annual LNG market outlook.

Demand for natural gas has peaked in some regions, including Europe, Japan and Australia in the 2010s, but continues to rise globally, and is expected to reach around 625-685 million metric tons per year in 2040, Shell said. That is slightly lower than Shell’s 2023 estimates of a global demand increase to 700 million tons by 2040.

“While things are relatively balanced and seemed relatively comfortable today, the market is still quite fragile,” Steve Hill, executive vice president for Shell Energy, told analysts on a call following the outlook report.

“We have a structurally tight market that’s been balanced by near-term market weakness for where we see fragility and volatility continuing,” Hill said.

CHINA DOMINANCE

Shell said that global demand for LNG is estimated to rise by more than 50% by 2040, as China and countries in South and Southeast Asia use LNG to support their economic growth.

China, which in 2023 overtook Japan as the world’s top LNG importer, is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas, the report said.

“China is the market that we are most bullish about this decade. And one of the reasons for that is the massive amount of new gas infrastructure that is coming on stream at the moment,” Hill told analysts.

China’s 2024 LNG imports are expected to rebound to nearly 80 million tons, from about 70 million tons in 2023, according to ICIS and Rystad forecasts, surpassing 2021’s record 78.79 million tons.

From 2030 to 2040, declining domestic gas production in parts of South Asia and Southeast Asia could drive a surge in demand for LNG as these economies need fuel for gas-fired power plants or industry.

Shell’s report predicted a balance between rising demand and new supply for those regions, but said significant investments would be needed in gas import infrastructure.

“In the medium term, latent demand for LNG – especially in Asia – is set to consume new supply that is expected to come on to the market in the second half of the 2020s,” the report said.

As supplies were ample last year as the world market started to recover from the major disruption linked to the onset of the Ukraine war in 2022, prices have eased.

Asian spot prices averaged around $18 per million British thermal units (mmBtu) in 2023, easing from an all-time high of $70/mmBtu in 2022.

Prices fell further this year and remain below $10/mmBtu, encouraging buyers from China to Bangladesh to lock in new term supplies from Qatar and the United States.

Hill said that long-term LNG contracts which Europe has signed so far will not fill a demand-supply gap for the rest of this decade, adding that there was a structural shortage of 50 million to 70 million metric tons a year for the rest of the decade or more that Europe needs to secure.

In the U.S. market, he said that an extended ban on new LNG export projects would have “quite an impact” on the fast-growing global market.

The ban “is probably okay if it lasts a year or so, but if it was a long-term ban, then it would have quite an impact on the market,” Hill told analysts.

By Reuters / Marwa Rashad, Emily Chow and Ron Bousso , February 14, 2024

BP readies green diesel refinery for take off as $10 billion sustainable aviation market looms

Plans by one of the world’s biggest oil and gas businesses to build a new biodiesel refinery in Kwinana have been lodged for development approval.

BP wants to revive the site of its old oil refinery with new green energy projects, including a potentially $1 billion plant to make green diesel and sustainable aviation fuel from vegetable oils, animal fats and other waste products. That could be followed by a hydrogen facility next door.

H2Kwinana, a green hydrogen project, is part of BP’s plans to transition its former oil refinery site in Kwinana into an energy hub. The project proposes the production of green hydrogen, sustainable aviation fuel (SAF), Hydrotreated Vegetable Oil (HVO), and integration of planned biorefinery and green hydrogen production facilities with BP’s operating import terminal and optimization of the existing site assets.

According to BP, H2Kwinana has secured government support and is now advancing to front-end engineering and design (FEED).

“We aim to install 100 MW of electrolyzer capacity fuelled by reclaimed water renewable energy. The green hydrogen produced could then be used to decarbonize the bio-refinery we’re planning and other industrial facilities in the area,” the company stated.

In April 2022, the Commonwealth Government granted funding of up to $70 million for the H2Kwinana green hydrogen project, and in 2023, BP began leveraging its site infrastructure and repurposing some redundant processing units to advance the biorefinery project.

BP also completed a concept development phase study into its energy hub H2Kwinana and identified two potential base case scenarios, with the hub producing either 44 tonnes per day of green hydrogen or 143 tonnes per day. The potential growth target of 429 tonnes per day was selected as the third and final case.

Following the study, engineering and technology company Technip Energies was awarded a contract for a hydrogen production unit at BP’s Kwinana biorefinery.

The contract covers the engineering, procurement and fabrication (EPF) of a modularized hydrogen production unit with a capacity of 33,000 normal m3/hour, using Technip Energies’ SMR proprietary technology.

The unit will be capable of producing hydrogen from either natural gas or biogas produced by the Kwinana biorefinery.

By Acapmag / Sourced Externally, February 14, 2024

As gas prices rise, oil refinery issues impact what drivers pay at pump

“We’ve gone from $2.63 late last week back up to $3.03 a gallon. So, it’s a huge jump,” Head of Petroleum Analysis for Gas Buddy Patrick De Haan said about the average price of gas in Milwaukee.

He tells CBS 58 the change is due to a power outage closing an Indiana oil refinery earlier this month, coupled with increased oil prices.

“So, we’ve just had several weeks of news that has been pushing the wholesale price of gasoline up,” he explained.

But he said the worst is yet to come.

“We’re also coming into a time of year where we usually start to see gas prices going up. Usually, after Valentine’s Day is over, we get the seasonality that really comes into play,” De Haan said.

With warmer weather inching closer, De Haan said once the refinery – which produces 10 million gallons of gasoline a day – reopens, drivers might see prices go down, but not for long.

“Demand starts to go up as motorists start to get out more and more. We [will] already start the transition to cleaner, more expensive summer gasoline in the next couple of weeks, plus other refineries will be doing maintenance before the summer driving season, and it’s just a matter of time before we see some of these $3 gas prices disappear,” he said.

If you want to save at the pump, you are encouraged to keep up with your car maintenance, plan your routes, and enroll in fuel rewards programs.

 By cbs58/ Stephanie Rodriguez , February 12, 2024

Introducing First-Ever Mobile Coating Robots to the U.S. Oil & Gas Industry

A leader in surface preparation solutions, is thrilled to announce its exclusive USA distribution partnership with Dutch innovator Qlayers™. This partnership marks the introduction of the first-ever mobile coating robots, specifically designed for remote field projects in the oil & gas industry.

The 10Q robots, developed by Qlayers, are a pioneering solution in industrial coating, offering unparalleled efficiency and safety benefits. Before their U.S. introduction, these robots had already garnered significant international interest for their superiority over traditional hand-coating methods. Key advantages include:

Unmatched Efficiency: Capable of applying multiple protective coating layers much faster than human teams, the 10Q robots dramatically accelerate project timelines.

Enhanced Safety: These robots significantly mitigate fall risks by reducing human working hours at heights by up to 85%.

Optimal Paint Usage: The robots’ automated coating method drastically reduces overspray resulting in up to 50% paint savings.

Precision Application: Ensuring consistent coating thickness, robots excel in delivering precise feathering between rows.

Eco-Friendly Technology: The patented spray shielding system significantly reduces the release of Volatile Organic Compounds (VOCs) and microplastics into the greater environment.

Complementing BlastOne’s revolutionary tank solutions, including the VertiDrive™ abrasive blasting robots for surface preparation, the 10Q robots represent a significant leap in industrial coating efficiency and safety. “We are excited about our partnership with Qlayers,” said Matthew Rowland, CEO of BlastOne. “The 10Q robots are not just innovative; they’re transformative for large tank coating projects in the U.S.”

Qlayers, based in the Netherlands, specializes in advanced robotic solutions for coating large-scale industrial assets, including storage tanks, wind turbines, and ships. The 10Q robot stands as the industry’s leading automated coating solution tailored to maximize cost-efficiency and safety for both storage tank owners and coating contractors.

Josefien Groot, Co-founder and CEO of Qlayers, expressed her enthusiasm during the grand opening of BlastOne’s Houston office, where the partnership agreement was officially signed. “This partnership signifies a crucial step in our mission to revolutionize the industry. We’re confident that BlastOne’s expertise will be instrumental in the widespread adoption of this technology.”

The revolutionary 10Q robots are now available for purchase or rental throughout the U.S. exclusively through BlastOne. With locations from Washington state to New Jersey, and from California to Florida, BlastOne’s geographic network was designed to serve industrial corrosion control companies across the nation.

By: BlastOne International, February 12, 2024

Diamondback, Endeavor Energy in talks to create $50 billion company, sources say

U.S. shale oil rivals Diamondback Energy (FANG.O), opens new tab and Endeavor Energy Resources are close to finalizing a roughly $25 billion cash-and-stock deal that would create an oil and gas company valued at more than $50 billion, sources said on Sunday.

Diamondback could announce a transaction as soon as Monday that would give its shareholders more than half of the combined companies, the people said, which would become the largest, pure-play oil producer in the Permian shale field.

Reuters in December reported that Endeavor Energy Partners was exploring a sale that could value the largest privately held oil and gas producer in the Permian basin at between $25 billion and $30 billion.

Endeavor and Diamondback did not immediately respond to a request for comment.

The combined company would be the third-largest oil and gas producer in the Permian, the top U.S. oilfield that straddles West Texas and New Mexico. Its oil and gas volumes would be behind Exxon Mobil  and Chevron, which have announced recent deals

PRESSURE TO COMBINE

“This is a layup in terms of the acreage overlap and fit,” said Dan Pickering, chief investment officer of Pickering Energy Partners. The combined company would replace Pioneer Natural Resources, which is being acquired by Exxon, as the top solely Permian producer, he said.

Permian producers are consolidating in a race to lock in future drilling inventory and output from the top U.S. oilfield. The deal is likely to put additional pressure on the remaining firms to combine for greater efficiencies and scale, analysts said.

But future deals are unlikely to match the sheer size of Permian shale deals in recent months, said Andrew Dittmar, a senior vice president at data analytics firm Enverus. He ruled out any competing bids for Endeavor.

Diamondback’s use of cash and stock will allow Endeavor founder Autry Stephens and family to retain a major role in the largest oil company in Midland, Texas, where both companies are based, said Dittmar.

“Their (drilling) inventory is extremely high quality that will make the combined companies a very attractive investment on Wall Street. I imagine it will be well received by the market on Monday,” he said.

Diamondback fended off competition from other parties including ConocoPhillips (COP.N), opens new tab, the Wall Street Journal earlier reported.

The sale would come almost 45 years after Texas oilman Stephens started the company that would become Endeavor.

Endeavor’s operations span 350,000 acres (1,416 square kilometers) in the Midland portion of the Permian Basin.

Stephens, a former appraisals engineer who became more known through his appearances on the TV documentary series Black Gold, grew Endeavor by acquiring the unloved acreage of his competitors and managing to extract oil and gas profitably.

To lower his production costs, Stephens created and used his own fracking, construction, trucking and other services companies.

Reporting by Utkarsh Shetti in Bengaluru; additional reporting by Gary McWilliams in Houston; Editing by Josie Kao, Mark Porter and Diane Craft.

By Reuters / Anirban Sen, February 11, 2024

Dow announces completion of inaugural green bond offering

The Dow Chemical Company (“TDCC”), a wholly owned subsidiary of Dow (NYSE: DOW), announced today the closing of its green bond offering of $600 million aggregate principal amount of 5.150% notes due 2034 and $650 million aggregate principal amount of 5.600% notes due 2054.

The notes represent the Company’s inaugural green financing instrument, in alignment with Dow’s Green Finance Framework (“Framework”) published on our website on January 25, 2024. The Framework was established to support the execution of Dow’s sustainability strategy and achieve its targets focused on climate protection and a circular economy. Dow intends to allocate proceeds from this offering toward projects that meet eligibility criteria contained within the Framework, including expenditures and investments related to our Fort Saskatchewan, Alberta Path2Zero project. Additional details on eligibility criteria and use of proceeds are available in the Framework.

“This green bond offering marks a foundational opportunity for investors to participate in Dow’s strategy to decarbonize and drive circularity while growing earnings over the cycle,” said Jeff Tate, Dow’s chief financial officer. “We expect the proceeds of this instrument to primarily support our project to build the world’s first net-zero Scope 1 and 2 emissions ethylene and derivates complex in Alberta, which achieved the critical milestone of final investment decision from our Board in November 2023.”

In 2020, Dow announced its intention to be carbon neutral for Scopes 1+2+3 plus product benefits by 2050. The commitment included a mid-term target to reduce by 2030 the Company’s Scope 1 and 2 net annual carbon emissions[1] by 5 million metric tons versus its 2020 baseline. Achieving this 2030 target represents a total 30% emissions reduction versus Dow’s 2005 level.

Additionally in 2022, Dow announced its Transform the Waste strategy – which will enable the development of circular ecosystems by transforming plastic waste and alternative feedstock to commercialize 3 million metric tons per year of circular and renewable solutions by 2030.

 Carbon emissions refers to GHG emissions in carbon dioxide equivalent (CO2e).

Cautionary Statement about Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “opportunity,” “outlook,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “will be,” “will continue,” “will likely result,” “would” and similar expressions, and variations or negatives of these words or phrases.

Forward-looking statements are based on current assumptions and expectations of future events that are subject to risks, uncertainties and other factors that are beyond Dow’s control, which may cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements and speak only as of the date the statements were made. These factors include, but are not limited to: sales of Dow’s products; Dow’s expenses, future revenues and profitability; any global and regional economic impacts of a pandemic or other public health-related risks and events on Dow’s business; any sanctions, export restrictions, supply chain disruptions or increased economic uncertainty related to the ongoing conflicts between Russia and Ukraine and in the Middle East; capital requirements and need for and availability of financing; unexpected barriers in the development of technology, including with respect to Dow’s contemplated capital and operating projects; Dow’s ability to realize its commitment to carbon neutrality on the contemplated timeframe, including the completion and success of its integrated ethylene cracker and derivatives facility in Alberta, Canada; size of the markets for Dow’s products and services and ability to compete in such markets; failure to develop and market new products and optimally manage product life cycles; the rate and degree of market acceptance of Dow’s products; significant litigation and environmental matters and related contingencies and unexpected expenses; the success of competing technologies that are or may become available; the ability to protect Dow’s intellectual property in the United States and abroad; developments related to contemplated restructuring activities and proposed divestitures or acquisitions such as workforce reduction, manufacturing facility and/or asset closure and related exit and disposal activities, and the benefits and costs associated with each of the foregoing; fluctuations in energy and raw material prices; management of process safety and product stewardship; changes in relationships with Dow’s significant customers and suppliers; changes in public sentiment and political leadership; increased concerns about plastics in the environment and lack of a circular economy for plastics at scale; changes in consumer preferences and demand; changes in laws and regulations, political conditions or industry development; global economic and capital markets conditions, such as inflation, market uncertainty, interest and currency exchange rates, and equity and commodity prices; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, including the ongoing conflicts between Russia and Ukraine and in the Middle East; weather events and natural disasters; disruptions in Dow’s information technology networks and systems, including the impact of cyberattacks; and risks related to Dow’s separation from DowDuPont Inc. such as Dow’s obligation to indemnify DuPont de Nemours, Inc. and/or Corteva, Inc. for certain liabilities.

Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. A detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company’s subsequent Quarterly Reports on Form 10-Q. These are not the only risks and uncertainties that Dow faces. There may be other risks and uncertainties that Dow is unable to identify at this time or that Dow does not currently expect to have a material impact on its business. If any of those risks or uncertainties develops into an actual event, it could have a material adverse effect on Dow’s business. Dow Inc. and The Dow Chemical Company (“TDCC”) assume no obligation to update or revise publicly any forward-looking statements whether because of new information, future events, or otherwise, except as required by securities and other applicable laws.

By corporate.dow/ The Dow Chemical Company, February 9, 2024