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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The oil market continues to swing to and fro, held back by concerns about demand built out of weakness in the Chinese economy, and as officials in Saudi Arabia and elsewhere keep trying to prop up the market through output cuts. The biggest stories today are out of the Middle East, however, where a lot of investment – and a bit of a dispute – are underway.  

Today’s top headlines:

• COLUMN: Europe’s surging solar sector set for cannibalization risk

• India’s green hydrogen push and challenges

• FOCUS: Fertilizer company OCI bets big on climate-friendly ammonia

Handshakes and smiles all around. That’s Patrick Pouyanne, Chairman and CEO of TotalEnergies, and Iraqi Deputy Prime Minister for Energy Affairs and Minister of Oil Hayan Abdul Ghani Al-Swad at a signing ceremony in Baghdad. REUTERS/Thaier Al-Sudani

In one of the largest energy development deals in some time, Iraq and France’s TotalEnergies inked a long-delayed $27 billion agreement to boost output in that country, along with efforts to boost the country’s renewable capacity, as Reuters reports here.  

The deal will give Total a 45% stake in the project, with QatarEnergy 25% and the country of Iraq another 30%, and is significant because Exxon Mobil, Shell and BP have all cut operations in Iraq in recent years. Iraq’s oil production has remained stagnant around 5 million barrels per day in recent years, putting it way behind the three largest worldwide oil producers – Saudi Arabia, the United States, and Russia, and more on a par with Canada.  

TotalEnergies Chairman and CEO Patrick Pouyanne said the project would break ground this summer and would see an investment of $10 billion over the next four years.   

It is not yet clear how much of an issue this dispute over gas rights will be. 

A bit of a back-and-forth has developed over who has the rights to a gas field in the Middle Eastern Gulf called the Durra field, with Kuwait Oil Minister Saad Al Barrak on Sunday saying that his country, along with Saudi Arabia, have “exclusive rights” over the field, as Reuters reports here.  

Iran, however, has said that it has a stake in the field and has called a Saudi-Kuwaiti agreement signed last year to develop it “illegal.” Saudi Arabia last week said that the kingdom and Kuwait own the field in what is known as the Gulf’s maritime “Divided Area.” “The other side has claims that are not based on a clear demarcation of the maritime borders,” said Al Barrak, referring to Iran.  

Iran, for its part, has said parts of the field are in areas where boundaries haven’t been defined. The field is expected to produce 1 billion standard cubic feet per day of gas and 84,000 barrels per day of condensates, per data from the Kuwait Petroleum Corporation. 

There are a lot of LNG projects in the works in North America.

There are a glut of projects on the way to export liquefied natural gas out of North America – but they need a lot of workers, and that’s going to be a challenge as Curtis Williams and Nia Williams report here. The projects are going to add about 86 million tonnes per annum of LNG, solidifying the U.S. as one of the largest exporters of the fuel.  

LNG availability has been somewhat stagnant in the last couple of years from North America with most new projects not slated to come online until next year, but the coming spate of projects will ramp up those exports. Some companies are even getting creative, with Cheniere Energy, the biggest U.S. LNG exporter, scheduling construction so it can move workers from one project to another. “We need to actively forecast and manage labor availability and supply chain like never before,” said Paul Marsden, head of Bechtel Corp’s Energy global business unit, which has built 30% of the world’s LNG plants in the last 20 years. 

People don’t think much about the emissions that come from the world’s armed forces, but militaries are responsible for more than 5% of emissions. These are U.S. Air Force F-35A aircraft. U.S. Air Force/R. Nial Bradshaw/Handout via REUTERS. 

Here’s a statistic few people probably know: militaries are among the world’s biggest fuel consumers, accounting for 5.5% of global greenhouse gas emissions, according to a 2022 estimate by international experts, as Sarah McFarlane and Valerie Volcovici report here. 

Some scientists and environmental groups are pushing the United Nations to force armies to disclose emissions and end a long-standing exemption that has kept some of their climate pollution off the books. That’s going to be a tough ask, as defense forces aren’t bound by such agreements – figuring such knowledge could undermine countries’ national security. However, there is more data coming out from various academics who think militaries in general should be saying more about their emissions. 

“The presence of economic slowdowns in China adds to the prevailing uncertainty in the oil market.” 

Mukesh Sahdev, head of downstream and oil trading at Rystad Energy, on crude prices. 

Australia, one of the world’s biggest exporters of natural gas, finalized a package of regulations on its domestic market on Monday, as Lewis Jackson reports here, as it tries to push wholesale prices down without hurting investment in a commodity that is important for the nation’s revenues.  

The code will include a cap on wholesale prices and give gas buyers more leverage in negotiations, but the rules also give domestic producers price cap exemptions, to allow more wiggle room and keep investment going. The rules put “government at the centre of the gas market” and make it responsible for any future shortfalls, the Australia Petroleum Production & Exploration Association (APPEA) said in a statement. 

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