What to Watch

Aramco Scales Back IPO Plan, Eyes Saudi-Only Listing

 Saudi Arabia is scaling back its ambitions for a public offering for  oil giant Aramco, moving ahead with a listing next year solely on the Saudi stock exchange, write the Wall Street Journal’s Summer Said and Maureen Farrell.

Saudi officials said that an international IPO for Aramco has become much more complicated than they initially believed.

Oil prices, around $65 a barrel, have shored up the kingdom’s budget and bought them more time to determine whether an international offering remains a good idea.

A listing on the Tadawul, as the Saudi bourse is called, gives the government a chance to follow through on Prince Mohammed’s promise to publicly list the company without the litigation and disclosure risks that are likely to crop up on larger exchanges such as New York, London or Hong Kong.

Meanwhile, turmoil in the Middle East supported oil prices  on Tuesday.

Brent crude, the global benchmark, was up nearly 1% at $66.69 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up by 1% at $62.75 a barrel.

Crude prices have been supported by rising political tensions between Saudi Arabia and Iran—two key members of the Organization of the Petroleum Exporting Countries—and fresh signals the Trump administration could pull out of an international agreement to curb Iran’s nuclear program, re-impose economic sanctions and hurt Tehran’s oil exports.

Energy News

Embattled Chinese Oil Giant Halts Plans for European Expansion

Troubled Shanghai-based oil company CEFC China Energy Co. is pulling out of plans  to expand in Central Europe, following a statement from the Czech government that the company’s chairman has been sidelined amid an investigation in China. CEFC said it will no longer pursue a $987 million deal to lift its stake to 50% in a Czech-Slovak holding company called J&T Finance Group SE.

Public Offerings and Deal Round Up

Varo Energy BV, a Netherlands-based integrated fuel-supply company, said Monday that it plans to float on the Euronext Amsterdam stock exchange in a listing that could value the Carlyle Group LP-backed firm at $2.5 billion.

Meanwhile, Bloom Energy Corp., a maker of large power generators, has jump-started its idled plan to take the fuel-cell company public, after crucial tax credits were restored. The company successfully lobbied the U.S. to reinstate a federal subsidy for alternative energy systems and can now sell its products for about 40% more per unit than it could last year.

Lastly, Venado Oil & Gas LLC and investment firm KKR & Co. have acquired Cabot Oil & Gas Corp.’s Eagle Ford assets for $765 million, reports Aisha Al-Muslim for Dow Jones Newswires.

“Saudi Arabia is enjoying the best of both worlds as it is cashing [in on] higher prices thanks to the cuts of other nations and at the same time increasing its overall oil exports.”

– Olivier Jakob, managing director of Petromatrix

SandRidge Energy Rejects Midstates Petroleum’s Bid, but Hires Advisers to Review Alternatives

SandRidge Energy Inc., an early player in the American shale boom, has rejected Midstates Petroleum Co.’s unsolicited offer for a stock  merger but it has hired advisers and said it is open to other options.

WSJ Energy In-Depth

New Zealand May Stop Awarding New Oil, Gas Exploration Permits

 New Zealand’s center-left government is considering a halt to new oil and gas exploration, with Prime Minister Jacinda Ardern backing alternative industries with less environmental impact, writes the WSJ’s Rob Taylor.

As her Labor-led coalition  considers the issue of granting petroleum companies new rights to search for crude oil and natural gas in New Zealand waters, Ms. Ardern said an option was to put up nothing for tender.

“This is all about what we do in the future,” she said Tuesday. “In considering block offers, you are considering the future of oil and gas exploration in New Zealand. What we are actively considering is the thing that decides whether or not we continue to drill for oil and gas.”

New Zealand’s oil and gas sector contributes over NZ$2.5 billion to the economy, according to the country’s petroleum industry.

Big Number

518,000

Warming temperatures in Arctic Alaska have hurt oil production  as the machinery used in extracting crude in frigid weather has underperformed, Reuters reports. Oil production in the North Slope has averaged about 518,000 barrels per day this year, down from about 533,000 barrels per day forecasted last fall.

FutureCurve

Today: The American Petroleum Institute releases its weekly forecasts on U.S. petroleum inventories for the week prior.

April 18–19: IQPC hosts the Oil & Fuel Theft Summit in Geneva. Speakers include Mahmoud Al-Bayati, the director general for counter-terrorism for Iraq, William J. Waggoner, the Chief Executive Officer for the Mexico Petroleum Company and Daniel Gianfalla, a member of the national maritime security advisory committee at the U.S. Department of Homeland Security.