Tuesday, April 10, 2018

The Market, Energy, And Political Page, Part 4, T+41 -- April 10, 2018

Mood. Wow, I'm in a great mood. I can't wait to see the next presidential approval poll. The ACLU is hypocritically quiet over yesterday's events. For archival purposes: the FBI, using the SDPD fig leaf, raided the offices and the home of Trump's long-time personal lawyer. Any thinking person who carries a copy of the US Constitution in her pocket needs to be duly alarmed. And this, by the way, is why some folks are very concerned about the First and Second amendments now that the Fourth Amendment has been rescinded (?) by the Deep State.

I Won't Back Down, Tom Petty

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New NYSE Ticker Symbol

GE's new ticker symbol: FF -- for flip-flopping. Ever since Jack "the great one" Welch departed, GE has been struggling to figure out what business it was in. Elizabeth Warren's attack on big banks drove GE out of the financial sector; global warming group think pushed/pulled GE into renewable energy; and, now with crude oil surging, FF appears to be getting back into energy.

First, a re-thinking of selling BHGE. Then, the biggest flip-flop: re-thinking about selling its brand-new Burlington Northern railroad diesel locomotive manufacturing plant in Ft Worth (previously posted). Now, today, this from Morningstar:
The Ugandan government has signed an investment agreement with a consortium led by U.S.-based General Electric Co. (GE), clearing the way for the long delayed construction for the east African nation's [$4-billion] maiden oil refinery, officials said Tuesday. 
The 60,000 barrels-a-day plant will be built along Uganda's western border with Congo, where France's oil giant Total SA and China's CNOOC Ltd.  are currently developing oil fields estimated to contain 6.5 billion barrels of oil.
The deal, signed between government and the consortium known as the Albertine Graben Refinery Consortium clears way for the development, design and financing of the plant, which is expected to come on stream by 2020.
The development caps more than a year-long selection process which is critical for the commercialization of Uganda's vast oil fields
Landlocked Uganda has already agreed terms with Tanzania over the construction of an 800-mile oil-export pipeline to the port of Tanga. Oil production could peak at as much as 230,000 barrels-a-day of crude by 2023.
Let's do the data points:
  • peak oil? what peak oil?
  • Uganda
  • vast oil fields
  • $4 billion refinery
  • consortium led by FF
  • FF will partner with France and China
  • on stream by 2020
  • more headaches for Saudi Arabia
  • wouldn't solar energy make more sense in Uganda now that Tesla's world dominance in EVs means the end of the Fossil Fuel age
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Validation

Way too expensive: some time ago I blogged that Exxon Mobil over-paid to get into the Permian. If I find the post, I will link it. But, yes, I was very, very clear on that: Exxon Mobil over-paid to get into the Permian. Exxon paid about $24,000/acre to get into the unproved, undeveloped west side of the Permian. Now we have validation. From Reuters (so you know it has to be true):
Exxon Mobil Corp is in talks with Qatar over a possible deal that could see the country investing in the company's U.S. shale gas resources, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
The deal could take the shape of a joint venture in which Qatar, through state-owned Qatar Petroleum, could partner or invest in future wells with Exxon's XTO Energy subsidiary.
The newspaper said no deal had been finalized yet and talks could collapse. The newspaper did not say how much Qatar was planning to invest in XTO Energy.
If the deal takes shape as described, it would be the first time a Middle Eastern country invested significantly in a U.S. shale-related project.
Cattle Cow, Eddy Arnold and LeAnn Rimes

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