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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The markets remain generally weak, with oil still in the mid-$70s range and natural gas in the $2.18 area in the United States, and producers are noticing, pulling back on their overall level of investment lately. Meantime, India is reconsidering how much diesel they use, while Warren Buffett speaks glowingly of Occidental Petroleum. 

Today’s top headlines:

• Sweden to cut biofuel additives in gasoline and diesel
• Equinor, partners to invest $9 bln in new gas field off Brazil
• Alberta wildfire shuts in at least 145,000 boepd of Canadian production

Filling a diesel container in Kolkata. Rupak De Chowdhuri/File Photo

An Indian oil ministry panel is suggesting the country should ban the use of diesel-powered four-wheeler vehicles by 2027 and push more gas and electric to try to cut pollution in the nation’s largest cities, Reuters reports. The country’s traffic is notorious, and many of India’s cars run on diesel – which accounts for about 40% of refined fuel consumption in one of the world’s biggest fuel consumers.  

Most of that diesel consumption comes from the transport sector, and the panel is recommending a switch to electric and gas-fueled vehicles in cities with more than a million people and polluted towns in order to cut emissions. “By 2030, no city buses should be added which are not electric…diesel buses for city transport should not be added from 2024 onwards,” the panel said in a report posted on the oil ministry’s website. 

India is one of the biggest emitters of greenhouse gases and ranks as second-worst worldwide in the Air Quality Life Index, which is run by the Energy Policy Institute at the University of Chicago; only Bangladesh ranks worse.  

Why is this man smiling? Well, he’s a 92-year-old billionaire who draws Coachella-type crowds to Omaha every year. Scott Morgan/File Photo

Just before the pandemic in 2019, Occidental Petroleum went all-in on a risky bet to buy Anadarko Petroleum in a deal that required CEO Vicki Hollub to reach an agreement for some financing with Berkshire Hathaway’s Warren Buffett. Since then, Berkshire has kept building a stake in Oxy, and now owns nearly a quarter of the company’s shares. But it isn’t going to buy the company, as Jonathan Stempel and Carolina Mandl report here.  

Buffett had in past decades steered clear of oil and gas investments but reversed that with his buy of Oxy shares, but he maintains that he prefers to have Hollub in charge of the independent share operator, which has a market value of $54 billion and has risen by more than 500% since the shares hit their nadir in March 2020 when the pandemic broke out.

Buffett could buy up to about 50% of the company – and owns a bunch of it through preferred shares used to finance the Anadarko buy. He’s also a big owner of Chevron shares, but much of his energy portfolio has been concentrated in utilities.   

This chart shows U.S. oil rig counts are falling in the last few months. (Refinitiv)

The price of oil has been under pressure in recent weeks, turning back OPEC+’s attempt to manage the market into higher prices, but the dip – based largely on recession fears and China’s slow rebound in activity – has taken its toll on drillers as well.  

In the United States, the Baker Hughes weekly rig count figures fell by seven last week, as Scott DiSavino reports. That’s for both oil and gas rigs, as natural gas has also been under pressure amid that commodity’s sharp falloff as well from last year’s surge. The total rig count still stands at 748, about 6% higher than a year ago, but with oil prices down 11% this year and natural gas off 52%, the incentive to boost activity just isn’t there right now. 

U.S. forecasts are for oil and gas output to decelerate in coming months due to the pullback in prices. Several companies have said they were going to curtail activity.  

That’s a motorcade transporting the International Atomic Energy Agency (IAEA) expert mission, escorted by the Russian military, to the Zaporizhzhia Nuclear Power Plant in March. REUTERS/Alexander Ermochenko/

Rafael Grossi, director general of the International Atomic Energy Agency (IAEA), warned over the weekend that the situation around the Russian-held Zaporizhzhia nuclear station in Ukraine is getting worse, becoming “potentially dangerous.” The people overseeing the plant, who were installed by Moscow after Russia’s invasion of Ukraine, recently started evacuating people from nearby areas.  

The plant has been in Russian hands for more than a year, having been seized not long after Russia invaded its neighbor. Now, shelling in the area is worsening, and so the Russians are evacuating residents – and there could be more as Ukraine prepares a ground offensive to try to reclaim land seized by the Russians. The plant is one of the largest nuclear facilities in the world and the biggest in Europe, but its status right now is not one of a power provider but a locus of a potential accident. 

“History has shown that these early statements are for the benefit of industry public relations and not public health.” 

Jennifer Hadayia, executive director of Air Alliance Houston, on Shell’s statements that there are no harmful risks to the community following a chemical plant fire in a Houston suburb that is still burning after three days. 

Australia is changing rules for taxes paid by the offshore LNG industry, boosting the taxes those companies have to pay, as John Mair reports here. The expected move would bring in about A$2.4 billion ($1.6 billion) over the next four fiscal years, Treasurer Jim Chalmers said. Shares of the companies reacted badly, trading lower in Monday trading after the rule was announced over the weekend.  

Australia is one of the world’s biggest LNG producers, generally vying for the top spot with Qatar and the U.S. Last month, Woodside Energy’s Meg O’Neill argued against the tax, saying it was going to undercut future revenue by choking off development. 

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