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oil and gas industry

Oil and Gas Industry – Elon Musk warns against vilifying the oil and gas industry

The world should stop vilifying the oil and gas industry, Elon Musk told Donald Trump in an interview on X, reiterating previous similar calls.

“My views on climate change and oil gas […] are pretty moderate,” Musk told Trump during the conversation.
“I don’t think we should vilify the oil and gas industry and the people that have worked very hard in those industries to provide the necessary energy to support the economy,” added the Tesla CEO billionaire, who has endorsed Trump for president.

Musk also said that realistically the world could transition to a sustainable economy in 50 to 100 years—a timeframe which Trump extended to “100 to 500 years” later on in the interview, without Musk correcting him.

Tesla’s boss and the face of the energy transition for many enthusiasts also said that regarding oil and gas “it’s not like the house is on fire immediately.”

Faster than Slower Oil and Gas Industry

“It’s probably better to move there faster than slower. But like without vilifying the oil and gas industry and without causing hardship in the short term,” Musk added.

That’s not the first time the billionaire has called on the public to stop “demonizing” fossil fuels. He did that at the end of last year when he told an Italian right-wing summit that it was time to be “pragmatic” and “sensible”, instead of demonizing oil and gas–at least in the medium term.

Donald Trump, for his part, has been a staunch supporter of the U.S. oil and gas industry and has claimed for years that the Biden Administration’s EV mandate will wreck good-paying American auto industry jobs.

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Source: Oil Price

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Mitigating legal risks

Mitigating legal risks in overriding royalty interest agreements

DISCLAIMER: We are not financial advisors. The content on this website related to mitigating legal risks is for educational purposes only. It merely cites our own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money; nor is there any guarantee that you won’t experience any loss when investing. Always remember to make smart decisions and do your own research!

Overriding royalty interest (ORRI) agreements are a staple in the oil and gas industry, providing a means for landowners or leaseholders to receive a percentage of the production revenue without bearing the cost of production. However, these agreements are fraught with potential legal risks that can jeopardize the financial stability of the involved parties. Mitigating these risks is essential to ensure the smooth execution of the agreements and to safeguard the interests of all stakeholders. This article explores the various legal risks associated with ORRI agreements and provides strategies to mitigate them effectively.

Understanding Overriding Royalty Interest Agreements

Overriding royalty interest agreements are contracts where the owner of the ORRI receives a fraction of the gross production revenue from the oil or gas produced from a lease, without having to contribute to the costs of production. Unlike working interest owners, who are responsible for the operational costs, ORRI owners benefit from the production revenue without bearing the associated financial burdens.

These agreements are typically carved out of the lessee’s working interest and can be transferred independently of the lease. While ORRIs provide a steady income stream, they also come with a unique set of legal challenges that need to be addressed to avoid disputes and financial losses.

Key Legal Risks in Overriding Royalty Interest Agreements

Ambiguities in Contract Terms

One of the most significant risks in ORRI agreements arises from ambiguities in contract terms. Vague or poorly defined terms can lead to misunderstandings and disputes between the parties. For instance, unclear definitions of what constitutes “production” or “gross revenue” can result in disagreements over the calculation of payments.

Regulatory Compliance

The oil and gas industry is heavily regulated, and ORRI agreements must comply with various federal, state, and local regulations. Non-compliance with these regulations can lead to penalties, fines, and even the invalidation of the agreement. It is crucial to stay abreast of the regulatory environment and ensure that all terms of the agreement adhere to the applicable laws.

Transferability Issues

While ORRIs can be transferred independently of the lease, the process of transfer can be fraught with legal challenges. Issues can arise if the transfer is not properly documented or if the new owner does not meet the regulatory requirements. Additionally, disputes can occur if the transfer impacts the interests of other stakeholders.

Production Shortfalls

ORRI owners rely on the continuous production of oil or gas to receive their royalty payments. Production shortfalls, whether due to operational issues, market conditions, or regulatory restrictions, can significantly impact the revenue stream. This risk is heightened by the fact that ORRI owners do not have control over the production operations.

Bankruptcy of the Lessee

The financial stability of the lessee is a critical factor in the viability of ORRI agreements. If the lessee goes bankrupt, the ORRI owner may face significant financial losses. Bankruptcy proceedings can be complex, and the ORRI owner may have to navigate a labyrinth of legal hurdles to protect their interests.

Environmental Liabilities

The oil and gas industry is inherently associated with environmental risks. ORRI agreements can be impacted by environmental liabilities arising from spills, contamination, or other incidents. Even though ORRI owners are not involved in the operational aspects, they can still be dragged into legal battles if the lessee faces environmental litigation.

Strategies for Mitigating Legal Risks in ORRI Agreements

Drafting Clear and Comprehensive Contracts

The foundation of a robust ORRI agreement lies in clear and comprehensive contract drafting. Every term and condition should be meticulously defined to avoid ambiguities. Key aspects such as the calculation of royalty payments, the definition of gross revenue, and the process for dispute resolution should be explicitly stated. Seeking legal counsel during the drafting phase can help ensure that the contract is watertight and compliant with all relevant regulations.

Regular Review and Compliance Checks

Given the dynamic regulatory environment of the oil and gas industry, it is essential to conduct regular reviews and compliance checks of ORRI agreements. This includes staying updated with changes in federal, state, and local laws and ensuring that the agreement is amended as necessary to remain compliant. Regular audits can help identify and rectify potential compliance issues before they escalate into legal disputes.

Proper Documentation of Transfers

To mitigate the risks associated with the transferability of ORRIs, it is crucial to maintain thorough and accurate documentation. The transfer process should be clearly outlined in the agreement, and all parties involved should adhere to it. Ensuring that the new owner meets all regulatory requirements is also essential. Legal assistance can be invaluable in navigating the complexities of ORRI transfers and ensuring that they are legally sound.

Diversifying Revenue Streams

To mitigate the risk of production shortfalls, ORRI owners can consider diversifying their revenue streams. This can include investing in multiple leases or exploring other investment opportunities within the oil and gas industry. Diversification can provide a buffer against the financial impact of production disruptions and help maintain a steady income stream.

Conducting Financial Due Diligence

Before entering into an ORRI agreement, it is essential to conduct thorough financial due diligence on the lessee. This includes evaluating their financial stability, creditworthiness, and operational capabilities. Understanding the lessee’s financial health can help assess the risk of bankruptcy and make informed decisions. Additionally, including provisions in the agreement that address bankruptcy scenarios can provide a layer of protection for the ORRI owner.

Including Environmental Protection Clauses

To address environmental liabilities, ORRI agreements should include specific clauses that outline the responsibilities and liabilities of the lessee in the event of environmental incidents. These clauses should detail the lessee’s obligation to comply with environmental regulations and mitigate any damages. While ORRI owners are generally not liable for operational incidents, having clear environmental protection clauses can help shield them from potential litigation.

Case Studies of Legal Disputes in ORRI Agreements

Dispute over Ambiguous Contract Terms

In one notable case, a dispute arose over the interpretation of the term “production” in an ORRI agreement. The lessee argued that production referred only to the oil and gas sold, while the ORRI owner contended that it included all oil and gas extracted. The court ruled in favor of the ORRI owner, highlighting the importance of clear and unambiguous contract terms. This case underscores the need for precise language in ORRI agreements to prevent similar disputes.

Regulatory Compliance Failure

Another case involved an ORRI agreement that failed to comply with updated state regulations. The state imposed penalties on the lessee, who then sought to pass on the financial burden to the ORRI owner. The ORRI owner successfully argued that the lessee was responsible for regulatory compliance. This case illustrates the critical importance of regular compliance checks and updates to ORRI agreements to align with changing regulations.

Transfer Dispute

In a transfer dispute, the original ORRI owner sold their interest to a new party without properly documenting the transfer. The new owner faced challenges in receiving their royalty payments due to the lack of clear documentation. The dispute was resolved in court, but it highlighted the complexities involved in the transfer of ORRIs and the need for meticulous documentation.

Bankruptcy of the Lessee

A significant case involved the bankruptcy of a lessee, which left the ORRI owner struggling to secure their royalty payments. The ORRI owner had to navigate the bankruptcy proceedings to protect their interests, which proved to be a lengthy and costly process. This case emphasizes the importance of conducting financial due diligence on the lessee and including protective provisions in the ORRI agreement.

Environmental Liability Dispute

In an environmental liability dispute, an ORRI owner was dragged into litigation following an oil spill caused by the lessee. The lessee argued that the ORRI owner should share the liability, but the court ruled in favor of the ORRI owner, stating that they were not involved in the operational aspects. This case highlights the importance of including environmental protection clauses in ORRI agreements to safeguard against such liabilities.

Best Practices for Drafting ORRI Agreements

Engage Legal Experts

Given the complexities and legal nuances of ORRI agreements, engaging legal experts with experience in the oil and gas industry is crucial. Legal professionals can provide valuable insights and ensure that the agreement is comprehensive, clear, and compliant with all relevant regulations.

Define Key Terms Clearly to Mitigating Legal Risks

To avoid disputes arising from ambiguous terms, it is essential to define key terms clearly in the agreement. This includes the definition of production, gross revenue, and any other critical terms that could impact the calculation of royalty payments. Clear definitions can prevent misunderstandings and provide a solid foundation for the agreement.

Include Detailed Compliance Clauses

Including detailed compliance clauses in the ORRI agreement can help mitigate regulatory risks. These clauses should outline the lessee’s responsibilities for adhering to federal, state, and local regulations and the consequences of non-compliance. Regular compliance reviews and updates should also be mandated in the agreement.

Address Transferability

To address the legal challenges associated with the transferability of ORRIs, the agreement should include specific provisions for the transfer process. This includes the documentation, the responsibilities of the parties, and any regulatory requirements. Properly documented transfers can prevent disputes and ensure a smooth transition of ownership.

Diversify Risk

Diversifying risk is a critical strategy for mitigating the financial impact of production shortfalls. ORRI owners should consider investing in multiple leases or other revenue-generating opportunities within the oil and gas industry. Diversification can provide a buffer against production disruptions and help maintain a steady income stream.

Include Bankruptcy Provisions

Given the financial risks associated with the lessee’s bankruptcy, including specific provisions in the ORRI agreement to address bankruptcy scenarios is essential. These provisions should outline the steps in the event of bankruptcy and the rights of the ORRI owner to protect their interests. Conducting thorough financial due diligence on the lessee can also help assess the risk of bankruptcy and make informed decisions.

Incorporate Environmental Protection Clauses While Mitigating Legal Risks

To safeguard against environmental liabilities, the ORRI agreement should include environmental protection clauses that outline the lessee’s responsibilities and liabilities in the event of environmental incidents. These clauses should detail the lessee’s obligation to comply with environmental regulations and mitigate any damages. Clear environmental protection clauses can help shield ORRI owners from potential litigation

Mitigating legal risks in overriding royalty interest agreements is essential for ensuring the financial stability. It brings success to the involved parties. By drafting clear and comprehensive contracts, conducting regular compliance checks, properly documenting transfers, diversifying revenue streams, conducting financial due diligence, and including protective clauses, ORRI owners can effectively mitigate the various legal risks associated with these agreements. Engaging legal experts with experience in the oil and gas industry can provide valuable insights and ensure that the agreements are robust and legally sound. By adopting these best practices, ORRI owners can safeguard their interests and navigate the complexities of the oil and gas industry with confidence.

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Quantum Capital to acquire Caerus Oil and Gas in $1.8bn deal

Quantum Capital to acquire Caerus Oil and Gas in $1.8bn deal

US-based private equity firm Quantum Capital Group has recently finalized an acquisition deal. It is with Caerus Oil and Gas, a prominent energy company. They are operating in the Rocky Mountain region. The agreement, valued at $1.8 billion, marks a significant move in the energy sector. It underscores Quantum Capital’s strategic expansion plans. According to reports from Bloomberg, sources have confirmed the successful acquisition. It involves Quantum Capital purchasing Caerus from its existing investors. Moreover, it includes Oaktree Capital Management, Anschutz Investment Company, and Old Ironsides Energy.

The transaction has garnered attention in the industry, and representatives from Quantum Capital and Caerus have refrained from offering official comments on the matter. The news has sparked curiosity and speculation among industry experts and stakeholders. This is as the acquisition signals a potential shift in ownership dynamics within the energy market. Despite requests for clarification, parties involved in the deal, including Oaktree Capital Management, Anschutz Investment Company, and Old Ironsides Energy, have chosen to remain tight-lipped, leaving room for anticipation and analysis within the investment community.

Caerus currently operates more than 7,400 wells across the Piceance Basin in Colorado and Uinta Basin in Utah.

The company also has related infrastructure including more than 3,862km of gas and water pipelines, as well as numerous water treatment and storage facilities.

“Quantum Capital to acquire Caerus Oil and Gas in $1.8bn deal ” was originally created and published by Offshore Technology, a GlobalData owned brand.

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Source: yahoo!finance

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Discover how environmental regulations impact oil and gas royalties & explore strategies to navigate challenges in our comprehensive guide.

Effects of environmental regulations on oil and gas royalties

DISCLAIMER: We are not financial advisors. The content on this website related to the effects of environmental regulations is for educational purposes only. We merely cite our own personal opinions. To make the best financial decision that suits your own needs, you must conduct your own research. You must seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk. There is no guarantee that you will be successful in making, saving, or investing money. Nor is there any guarantee that you won’t experience any loss when investing. Always remember to make smart decisions and do your own research!

Environmental regulations play a crucial role in shaping the landscape of the oil and gas industry. It is influencing everything from exploration and production activities to royalty payments.  Governments around the world implement stricter environmental standards. This is to address climate change and protect natural resources, oil and gas companies face increasing scrutiny and compliance requirements. In this comprehensive article, we explore the effects of environmental regulations on oil and gas royalties. We will examine how regulatory frameworks impact industry operations, financial performance, and stakeholder relationships.

Understanding Environmental Regulations in the Oil and Gas Industry

Environmental regulations governing the oil and gas sector encompass a wide range of issues, including air quality, water management, waste disposal, and greenhouse gas emissions. These regulations are implemented at the local, national, and international levels by government agencies such as the Environmental Protection Agency (EPA) in the United States and the European Union’s Directorate-General for Environment. Key environmental regulations affecting the oil and gas industry include:

  • Clean Air Act (CAA): The CAA regulates air emissions from oil and gas operations, including criteria pollutants such as nitrogen oxides (NOx), sulfur dioxide (SO2), volatile organic compounds (VOCs), and hazardous air pollutants (HAPs). Compliance with CAA requirements may involve installing emissions control equipment, implementing leak detection and repair programs, and obtaining permits for air emissions.
  • Clean Water Act (CWA): The CWA regulates discharges of pollutants into surface waters, including produced water, drilling muds, and other wastewater generated during oil and gas operations. Companies must obtain permits under the National Pollutant Discharge Elimination System (NPDES) to discharge wastewater into water bodies and implement best management practices to prevent water pollution.
  • Resource Conservation and Recovery Act (RCRA): The RCRA governs the management and disposal of hazardous waste generated by oil and gas activities, including drilling fluids, hydraulic fracturing fluids, and contaminated soils. Compliance with RCRA requirements involves proper handling, treatment, storage, and disposal of hazardous waste to minimize environmental risks and protect human health.
  • Endangered Species Act (ESA): The ESA protects endangered and threatened species and their habitats from activities that may harm or jeopardize their survival. Oil and gas companies must conduct endangered species assessments and obtain permits from regulatory agencies to operate in areas inhabited by protected species, such as migratory birds, marine mammals, and endangered plants.

Impact of Environmental Regulations on Oil and Gas Royalties

Environmental regulations have far-reaching implications for oil and gas royalties, affecting royalty calculations, production costs, and overall profitability. The following are some key effects of environmental regulations on oil and gas royalties:

Compliance Costs

Meeting environmental compliance requirements incurs significant costs for oil and gas companies. It includes investments in pollution control technologies, environmental monitoring programs, and regulatory compliance personnel. These additional expenses reduce companies’ net revenue from oil and gas production. It is impacting the amount of royalties paid to mineral rights owners and government entities.

Production Constraints

Environmental regulations may impose restrictions on oil and gas production activities. It includes emission limits, water quality standards, and habitat conservation measures. Compliance with these regulations can limit the scope and intensity of exploration and production operations. It leads to reduced output and lower royalty payments to mineral rights owners.

Permitting Delays

Obtaining permits for oil and gas activities under environmental regulations? It often involves a lengthy and complex regulatory review process, including environmental impact assessments, public hearings, and stakeholder consultations. Permitting delays can prolong the timeline for bringing oil and gas projects online. It will result ot delaying royalty payments to mineral rights owners and impacting project economics.

Legal and Regulatory Risks

Non-compliance with environmental regulations can expose oil and gas companies to legal liabilities. Moreover enforcement actions and regulatory penalties, including fines, injunctions, and permit revocations. Legal disputes and regulatory sanctions can disrupt production operations. It can also increase operating costs and erode profitability. It is affecting royalty payments to mineral rights owners and investors.

Reputational Impact

Environmental violations and controversies in the oil and gas industry can damage companies’ reputations erode public trust. It attracts negative media attention. Stakeholder perception of companies’ environmental performance can influence investment decisions. Moreover impacting shareholder value, and social license to operate, ultimately affecting royalty payments and corporate profitability.

Strategies for Managing Environmental Risks and Maximizing Royalties

Oil and gas companies can adopt various strategies to navigate the effects of environmental regulations on royalties and mitigate associated risks:

Environmental Compliance Planning

Developing comprehensive environmental compliance strategies and management plans can help companies proactively identify, assess, and mitigate environmental risks associated with oil and gas operations. Implementing robust environmental management systems, conducting regular audits, and investing in employee training and awareness programs can ensure compliance with regulatory requirements and minimize potential liabilities.

Technology Adoption

Embracing innovative technologies and best practices for environmental stewardship can enhance companies’ operational efficiency, reduce environmental impacts, and optimize production processes. Investing in advanced pollution control equipment, wastewater treatment technologies, and methane emission reduction measures can help companies meet regulatory standards while maximizing resource recovery and minimizing environmental footprint.

Stakeholder Engagement

Engaging with local communities, indigenous groups, environmental organizations, and regulatory agencies is essential for building constructive relationships, fostering transparency, and addressing stakeholder concerns. Collaborating with stakeholders throughout the project lifecycle, from planning and permitting to operation and closure, can help companies navigate regulatory challenges, secure social license to operate, and sustainably manage oil and gas royalties.

Risk Management and Insurance

Implementing comprehensive risk management strategies and obtaining appropriate insurance coverage? Well it can protect oil and gas companies against potential environmental liabilities, legal disputes, and financial losses. Purchasing environmental liability insurance, pollution legal liability insurance, and regulatory compliance insurance can provide financial protection. It can also give peace of mind for companies facing regulatory uncertainties and compliance risks.

Investment Diversification

Diversifying investment portfolios and revenue streams beyond traditional oil and gas assets? It can help companies mitigate the financial impacts of environmental regulations on royalties. Exploring opportunities in renewable energy, carbon capture and storage, and sustainable development projects can provide alternative sources. It focuses on revenue and reduce dependence on fossil fuel extraction. It will also contribute to environmental sustainability and social responsibility.

Environmental regulations have profound effects on oil and gas royalties, influencing production costs, compliance obligations, and stakeholder relationships. By understanding the impact of environmental regulations on royalty payments and adopting proactive strategies for managing environmental risks, oil and gas companies can navigate regulatory challenges, enhance operational resilience, and maximize returns for mineral rights owners, investors, and communities. With a holistic approach to environmental stewardship, regulatory compliance, and stakeholder engagement, oil and gas companies can sustainably manage royalties and contribute to the long-term viability and resilience of the industry amid evolving environmental pressures and regulatory expectations.

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American oil and gas companies have cut back on methane emissions even as production reached record heights, a new analysis shows.

US oil and gas industry is emitting less carbon than it used to

The US oil and gas industry continues to extract record amounts of fossil fuels, despite climate activists’ calls to ​“keep it in the ground.” But while oil and gas extraction has increased in recent years, the carbon emissions from that industrial activity have actually fallen, a new analysis has found.

Even as fossil gas production rose by 40 percent from 2015 to 2022, methane emissions from gas extraction fell by 37 percent, according to a study of Environmental Protection Agency data published today by climate nonprofits Ceres and the Clean Air Task Force. That finding suggests that when energy companies want to, they can effectively reduce emissions of methane, a potent greenhouse gas with 82 times the global warming potential of carbon dioxide over 20 years, and 30 times the warming potential over 100 years. Overall greenhouse gas emissions, which count the industry’s considerable carbon dioxide releases, also fell, but by a more modest 14 percent.

There’s a clear playbook for tackling the planet-warming emissions that result from combusting fossil fuels in power plants or vehicles. But the extraction of those fuels happens farther from public view, and adds up to a major source of industrial emissions. Indeed, oil and gas extraction and refining emitted more greenhouse gases into the atmosphere than any other industrial subsector last year, the Rhodium Group reports. And while power and transportation emissions are falling, heavy industry is on track to become the largest emitting sector within the next decade.

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Source: Canary Media

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Like every industry now, the oil and gas sector is trying to figure out how to adopt and deploy artificial intelligence.

How will AI be applied to oil and gas? One company has some answers

So How will AI be applied to oil and gas? The oil and gas sector is trying to figure out how to adopt and deploy artificial intelligence. They see the enormous profit potential in fit-for-purpose AI tools to help optimize processes. It will also control costs on a granular level that just a few years ago would have been unimaginable.

Few companies so far have in-house expertise in this arena. So for now they will rely on third party contractors. As I sought to learn more about the subject, I recently interviewed Jimmy Fortuna. He us the chief product officer at Enverus. He is also one of the oil industry’s biggest providers of SAAS-based data analytics and consulting.

Enverus recently introduced an AI tool it calls Instant Analyst. It is product that works in conjunction with generative AI technologies from Amazon Web Services (AWS). It enables Enverus to analyze vast data streams to enable real-time decision-making.

“When a user asks the Enverus Instant Analyst an open-ended question, the AI-powered system searches exclusively through Enverus’ vast repository of proprietary research and analytics,” Fortuna says. “This curated content, housed within the Enverus Intelligence Vault, includes tens of thousands of documents containing valuable insights and data points specific to the energy industry. By using solely Enverus proprietary content, the Instant Analyst ensures that the answers it provides are highly relevant, accurate, and easily verifiable.”

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Source: Forbes

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As a group, the oil and gas industry’s free cash flow-to-capital expenditures ratio rose to 1 last year from 0.4 in 2020, and it’s forecast to approach 1.4 by 2030.

Gas & Oil companies are swimming in so much cash that they’re cutting back on borrowing at a faster pace

Demand for Loans

Last year, the demand for loans from Gas & Oil companies or fossil-fuel companies fell 6% year-on-year and that followed a decline of 1% in 2022.

From a climate perspective, this may sound like good news because the drop in bank lending to oil, gas and coal companies should mean less investment and less production over time.

The reality, however, is that oil and gas companies don’t need a lot of loans because they’re generating so much money these days from their underlying businesses, said Andrew John Stevenson, senior analyst at Bloomberg Intelligence. And that trend is likely to continue through the end of the decade, he said.

Its Fair Share of Ups and Downs

The oil and gas industry has seen its fair share of ups and downs in recent years, marked by cycles of booms and busts. However, the current landscape seems to be favoring a more prosperous outlook, with companies reporting healthy balance sheets and increased cash flow.

This financial stability can largely be attributed to the upward trend in oil prices, which have been driven by a combination of factors such as strong global demand and coordinated production cuts by OPEC and its allies under the OPEC+ agreement.

A Much-Needed Boost

The resurgence in oil prices has provided a much-needed boost to companies within the industry, enabling them to capitalize on the improved market conditions. With a steady stream of revenue coming in, many firms are now in a stronger position to invest in exploration, production, and technological advancements.

This influx of capital not only benefits the companies themselves but also has a ripple effect on the broader economy, as it creates jobs, drives innovation, and contributes to overall economic growth. As the industry continues to navigate through this period of relative stability, it will be interesting to see how companies leverage their newfound financial strength to drive long-term growth and sustainability.

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Source: FORTUNE

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Smaller regional U.S. banks have boosted significantly their lending to oil and gas firms over the past two years.

Small banks significantly boost loans to oil and gas firms

While major European banks are competing to announce new policies limiting funding to oil and gas projects, smaller regional U.S. banks have boosted significantly their lending to oil and gas firms over the past two years.

Regional banks BOK Financial, Citizens Financial, Truist Securities, Fifth Third Securities, and US Bancorp have seen their combined loans to the fossil fuel industry jump by over 70% on an average annualized basis since the beginning of 2022, compared to the previous six years, according to data compiled by Bloomberg.

These five banks are now among the world’s top 35 banks in terms of the number of deals they have signed with the fossil fuel industry, Bloomberg’s data showed.

Total global financing for fossil fuels since the Paris Agreement has been led by the biggest U.S. banks, with JP Morgan Chase, Citi, Wells Fargo, and Bank of America placing #1 through #4, respectively, with billions of U.S. dollars of financing for oil and gas between 2016 and 2022, according to research by environmental campaigners.

Regional U.S. banks are also seeing a growing pool of customers in the fossil fuel industry. This comes as European banks are re-evaluating their funding for oil and gas, and energy-rich U.S. states are leading an anti-ESG drive to blacklist major financial corporations and asset managers, which they believe are discriminating against the oil and gas industry.

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Source: Oil Price

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Energy shares jumped 124% so far since Biden took over at the Oval Office vs. a 65% decline for the comparable period under Trump.

Against all odds American oil soars under Biden

After a sharp decline in the final quarter of 2023, U.S. gasoline, American oil soars prices are surging again in a pivotal election year, offering Republicans a fresh chance to pin the blame on President Biden’s green agenda much to the chagrin of the White House. According to Bloomberg, citing new data from AAA Automobile Club, U.S. gas prices are now on course to hit the dreaded $4-a-gallon mark in the coming months, thanks to rising crude prices amid tightening supplies.

But here’s the kicker: under most key metrics, the U.S. oil and gas industry has flourished under the Biden administration despite its push towards a carbon-free future, proving that not even Washington has sufficient power to single-handedly sway large, globally interconnected markets like oil and gas. GOP White House hopefuls were quick to lambast Biden and his energy policies in the post-Covid oil price rally that hit its zenith shortly after Russia invaded Ukraine.

Yet, Big Oil investors were hardly complaining. According to data compiled by Reuters, profits of the top five publicly traded oil companies, namely Exxon Mobil Corp, Chevron Corp, BP Inc, Shell Plc and TotalEnergies SE rocketed to $410 billion during the first three years of the Biden administration, a 100% increase compared to the corresponding period of Donald Trump’s presidency.

Not surprisingly, oil and gas investors have been handsomely rewarded under the Biden administration, with energy shares jumping 124% so far since Biden took over at the Oval Office vs.-65% decline for the comparable period under Trump.

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Source: Oil Price

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US Oil Rig Count Rises: The oil rig count was 510 in the week ended Mar 15, increasing from the week-ago figure of 504.

Permian oil rig count increases in 3 of prior 5 weeks

In its weekly release, Baker Hughes Company BKR stated that the U.S. Permian oil rig count was higher than the prior week’s figure. The rotary rig count, issued by BKR, is usually bring out in major newspapers and trade publications.

Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry. The number of active rigs and its comparison with the week-ago figure indicates the demand trajectory for the company’s oilfield services from exploration and production companies.

Rig Count Data in Detail

Total U.S. Rig Count Rises: The number of rigs engaged in the exploration and production of oil and natural gas in the United States was 629 in the week ended Mar 15. The figure is higher than theweek-ago count of 622. Although the figure increased in three of the prior five weeks, there has been a slowdown in drilling activities. Many analysts believe that shale producers are getting more efficient, requiring fewer rigs, while some doubt whether certain producers have enough prospective land to drill. The current national rig count is, however, lower than the year-ago level of 754.

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Source: yahoo!finance

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