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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! A lot of updates on safety as workers are on strike in Argentina, while a big Nigerian refinery is finally open. But first let’s look into what’s happening in Ukraine, where a wind power plant is getting going in the midst of a war. 

Today’s top headlines:

• Chevron to buy PDC Energy in $7.6 billion deal
• Asia to drive oil demand growth in second half, says Vitol
• Italy’s Enel to invest more than $1 billion in Oklahoma solar factory

A logo of DTEK on a building of a business centre in Kiev before the war. REUTERS/Gleb Garanich

Ukraine’s biggest private energy company, DTEK, has completed the first stage of a planned 500-megawatt wind power plant, which is being put up during wartime, a risky undertaking, as Viktoria Lakezina reports here. 

Russia has been attacking Ukraine’s infrastructure relentlessly, occupying a major nuclear power plant, and destroying other facilities. So the wind plant, which now has a capacity of 114 MW, is something of an accomplishment. Maxim Timchenko, CEO of DTEK, told reporters at the Tyligul Wind Farm in southern Ukraine that they’re now prepping for the second phase of construction to become the largest wind farm in that country. 

“This project is very special because it was constructed mostly in times of war,” said Henrik Monefeldt, regional head at FairWind, a company involved in the installation. “It has been strenuous for the guys, it has been interrupted multiple times – air alarms and missiles flying by. But … they have been so proud working on this for the simple fact that we are helping to supply energy to Ukraine.” 

The IEA’s Fatih Birol does a lot of grimacing these days.

Late last year, the G7, European Union and Australia agreed on a $60-per-barrel price cap on Russian oil – and now they’re trying to further counter Moscow by cracking down on ways in which Russia has evaded the sanctions to some extent. But International Energy Agency (IEA) director doesn’t expect those moves to change the supply situation overall for crude and oil products, as Katya Golubkova and Sakura Murakami report here.  

Overall, Russia’s revenues have declined somewhat and the price of oil has also not skyrocketed following the sanctions, and indeed, oil has ebbed since nearly touching $140 last year in the wake of Russia’s invasion of Ukraine. Birol said this weekend in Japan that the new efforts, which lack specifics, also should not trigger a massive rally in crude.

“Any significant changes in the markets as always we will reflect in our analysis, in our reports, but for the time being I don’t see a reason to make a change in our analysis,” he said. 

That’s the brand-spanking new Dangote petroleum refinery in Ibeju-Lekki, Lagos, Nigeria. REUTERS/Temilade Adelaja

Nigeria’s long anticipated Dangote Petroleum Refinery will finally enter service on Monday, in what many hope will help the nation deal with persistent fuel shortages, but it still faces a lack of crude supply, as Macdonald Dzirutwe reports here.  

Nigeria is the biggest producer of oil in Africa but it is also a net importer of fuels because of lack of investment in its refining system. The new refinery is meant to process about 650,000 barrels of crude a day, which would make it one of the largest in the region and make Nigeria into a fuel exporter before long. At the same time, the country may have to now import more crude just to have enough feedstock to process into fuels.  

Well, a big black river, a man had found

So he put all his money in a hole in the ground

And sent a big steel arm driving down, down, down. 

Oil drillers are pulling back on activity due to the overall weakness in prices, as Scott DiSavino reports here. The overall U.S. oil and gas rig count fell to 720 in the most recent week, the lowest since May 2022. This week, the cuts were primarily oil rigs – dropping by 11, most since September of 2021. That followed a cut of 17 natural gas rigs the week prior, according to Baker Hughes, which publishes the weekly figures on rig operations.  

Overall oil rigs are at a low not seen since June 2022, with Texas rigs hitting its lowest since May of last year. Oil prices are down this year after rising 7% last year – but really, has been on a downward slope after peaking reasonably early on the back of the invasion of Ukraine, which panicked the markets about oil supply. Right now oil supply is expected to hit its highest on record out of U.S. shale basins, but the rig activity suggests drillers see fewer incentives to add more rigs. 

“Scott always thought he might die at that plant.  He had talked to his daughters about it and his family many times. And the reason he talked to them about it is because that plant is very dangerous.” 

Tony Buzbee, attorney for the family of Scott Higgins, who died while working at Marathon’s Galveston Bay refinery after a pump seal ruptured, igniting a fire that burned him to death. 

The biggest oil union in Argentina went on strike on Sunday, demanding better conditions after a series of accidents in the Vaca Muerta shale formation, the second-biggest unconventional gas reserve, as Reuters reports here. The union is the largest in the country, representing about 25,000 workers. The Vaca Muerta region produces about 47% of the country’s overall oil output and 40% of the natural gas, so the strike will likely slow production.  

The workers went on strike and then out to protest after the latest accident ended up with a worker amputating his arm. “Business owners contempt for people’s life and integrity is alarming,” reads a statement from the Private Oil and Gas Union. “The miserable indifference of those who have decision-making power costs or destroys the lives of workers and that is unacceptable.” 

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