Japan Leading an Unprecedented Oil and Gas Asset Buying Spree

fracking-well-drill

Guest essay by Eric Worrall

OilPrice.com reports that Private Equity firms and Japanese energy giants are ramping up to an unprecedented buying frenzy, snapping up shale assets in the USA and oil and gas assets worldwide.

Japan Is Aggressively Buying Up Oil And Gas Around The World

By Dave Forest – Nov 24, 2016, 2:51 PM CST

This coming year could be a surprisingly exciting time for oil and gas developers.

Yes, energy prices are depressed right now. But not everyone sees that as a negative. In fact, private equity funds are still raising record amounts of capital for energy investments — with managers and investors alike seeing the current downturn as a prime time to pick up good assets for cheap.

Most of that PE money is earmarked for U.S. shale. But this week’s announcements from Indonesia state oil firm Pertamina, and Japanese government arm Jogmec, show that the spending spree may now be extending to global oil and gas assets.

Pertamina had $700 million this year for acquisitions — and will likely have billions for the coming year. Jogmec is even more flush with cash — having arranged financial backing totaling $5.2 billion yearly for oil and gas M&A.

Read more: http://oilprice.com/Energy/Crude-Oil/Japan-Is-Aggressively-Buying-Up-Oil-And-Gas-Around-The-World.html

The oil giants are keeping their cards close to their chest, but OilPrice speculates that aside from obvious shale investments in the USA, the target of most of energy investments are new fields in Africa, Latin America and Southern Russia.

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88 thoughts on “Japan Leading an Unprecedented Oil and Gas Asset Buying Spree

      • The USA is already fully engaged in doing that to themselves. Don’t need the Japanese to help with that.

        G

      • Here in the US (as in many nations), we are being slowly subjected to artificially induced rate hikes (taxes, for now) designed to make the alternate “renewables” look relatively affordable. BHO said it himself that saving the planet involves “necessarily” higher energy costs.

      • Japan is just protecting their future in a dangerous world and we are the safest country in which to develop oil and gas resources. It is not going to hurt us, in fact it cements them as a strong ally as they rearm due to threats from China and North Korea.

    • Actually Doc, I believe this is “fallout” of the Japanese withdrawal from nuclear power sources. Expect the future to involve coal too, depending on the markets.

    • That’s the first thing that came to my mind. They’re catching on. Buy what you need, don’t take it by force.

  1. Great for HUMANITY! Cheap, abundant & reliable energy will lift BILLIONS of people out of poverty! This ought to drive the left over the edge. Only their ideas and actions work in the alternate universe that they live in.

  2. As if the green blob ever had that much support on a real, rather than a diplomatic basis. Despite the support by US and European “progressives”, most of the world does not share their obsessions or quasi-religion. I have not really heard anything about the new May administration in the UK as far as global warming, but not emphasizing the issue might be promising. Trump gave the New York Times the most waffles on the subject I have ever seen, so it is really unlikely he will follow a green blob policy.

    • The “blob” is sucking up mega-tax moneys to promote a losing grid powering technology and maintain the feed troughs of the fear-mongering bureaucrat-scientologists. The Donald knows how to identify and plug capital leaks.

    • Even Progressives, ironically, are fractured, as was revealed in the DNC emails, with the rational group supporting a basket of energy production technologies selected for fitness to purpose.

    • On the contrary, all of the world outside Trump’s America is serious about renewables and climate change.

      Finland and France announced an end date for coal power just in the last week… UK week before…

      India hit 10GW installed solar PV with an expectation of now installing that amount every year…

      A number of countries have set target dates for 100% renewable electricity since PAris.

      Really, you need to widen the news sources you look at.

      • Finland is building more nuclear power stations, France is a world leader in nuclear power. No need for them to use ineficcient renewables, then.

        Whatever they might say, UK will not be able to phase out coal without buliding lots of new nuclear power plants and expanding or upgrading existing ones. 100% renewables is pure, utter nonsense in any foreseeable future.

        For India, coal looks like a very good bet for rapidly increasing power production, though. All the shortcomings of coal power aside, it will be faster and simpler to install and India needs power quickly.

      • Griiff, if you really believe there is sincere support for the green mass movement outside the US or Europe, you are the one with a limited information bias. The Chinese and the Indians are doing what I termed “diplomatic” support, making polite but inconsequential gestures to humor the crazed CAGW advocates.

      • yeah? really?
        then consider how Sth Aus the “leader ” in renewables just did a deal to import even more vic COAL power
        and a NSW connector
        all of which is going to push everyones bills higher in all 3 staes
        but SA already high going to insanity charges due to the billions to run the new lines etc
        couple of new coal or gas plants would cost less than theyve paid already and ongoing ffs!

      • UK Grid watch at 12:55 GMT: Wind 3.6%, estimated Solar 9.6%, Hydro 0.6%, Biomass 4.3% (burning protected forests, very green) leaving just 81.9% to be contributed by Reliables.

      • The UK and other government price comparisons are fraudulent. By all means allow, in any comparison of different generation systems’ unit power costs, for CO2 by including, say Stern’s, estimate of the present day cost per tonne of CO2 generated for remedying, rectifying in the future the consequence of supposed CO2 induced CAGW. Even with this cost saving applied to any benefits of renewables’ CO2 savings, renewables will always be more expensive!

        Why? Simply because we need to compare like for like power generation systems, i.e. the necessary base load systems with renewable base load systems. For example, the latter system including Wind Turbines must include not only the WT’s costs, but also the subsidies paid for WT’s to make them commercially viable, the cost of Gas Turbine Standby’s to accommodate no/low wind conditions, the subsidies paid to GT operators to so operate the GT’s grossly inefficiently and only with partial loading, and the cost of the extensive additional and enhanced Power Transmission System needed to connect the remote WT’s to areas of actual power demand. Costs of all these elements need to be total life cycle CAPEX/OPEX costs.

        Renewable Energy Suppliers and Governments continue to ignore, and even hide, these necessary additional works’ costs when using renewables which are not themselves base load systems and not located in areas of actual power demand. Effectively, we being asked to pay for massive, but unnecessary over-capacity of installed power generation and power transmission, as well as grossly inefficient inefficiently operated standby power generation systems. They also ignore the minimal CO2 savings such renewables as WT provide, bearing in mind that such a base load WT renewable system generates as much as 75% of its power from its Gas Turbine standby facilities which, in turn, generate their own CO2.

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  3. I am puzzled. I would guess that oil/gas prices will remain low for a long time. In that light, why would anyone rush to invest?

    • I hear you, but my guess is millions of dollars annual research budget buys you some information asymmetry.

      I once told the head gold trader of a merchant bank that my guess was gold would lurch upwards in 4 weeks to $1900. He laughed at me, but I was right – for all the wrong reasons. My crystal ball is pretty cloudy when it comes to predicting the future…

      • One of the wonderful things about free, market economies is that there are many crystal balls. When the single socialist crystal ball fails (as always), whole peoples suffer. Evidence CAGW and idiot UN and Western politics.

      • Reminds me of the time my forecast of a major winter storm coming off of Siberia into the Bering Sea was right on for the wrong reasons.

    • Security, and a great investment.
      Oil and gas prices have been held artificially low to reduce the income growth of Russia and other countries and the cost of consolidation less expensive. Oil and Gas prices will recover in value in the near term.The latest USA oil find is not they big – 3 years of supply.

      Syria is about the Arab countries wanting a gas pipeline across the country to supply Europe where Russia has a strong monopoly. The established regime in Syria said no, so the USA backed the so called anti govt forces and are trying to make that happen.

      It also forms part of the CO2 is bad program. The big game continues.

      • Those that thought that oil, coal and gas etc were dead ducks are naive. In the downturn of going green,they make some more bucks, and on the way up again even more bucks.

        Its called manipulative greed.

      • Oil prices were held artificially high, not low. Federal policy in the uUS denies access to, quite literally, trillions, with a “t”, barrels of oil. Much of it can be produced profitably at $60 or less.
        OPEC tried to limit production and managed, with the help of non-OPEC greenies, to keep the world’s supply down. If general world policies turn oil will stay below $75 for decades. Well, in constant dollars as we may get inflation.

      • Syria is about the Arab countries wanting a gas pipeline
        ===================
        A fact completely unreported in the US. Instead the citizens are fed a line of propaganda and ISIS is born.

      • Gas pipeline? Like any of the several hundred that already criss cross the region? Those sorts of “pipelines”?

      • In your excuse for a mind, the whole reason there is trouble in Syria is that the US wants a second pipeline so that Europe can have a more secure supply of oil?
        Are you always this paranoid?

      • Most importantly, we should be focused on expanding our production of cheap fossil fuel energy for the short term and at the same time, working very hard on developing and selling the public on our future energy needs with using safe and cheap / affordable and non subsidized new energy technology. The public needs to become informed of and understand that some of the newer forms nuclear energy is much safer, efficient and cheaper than previous designs and materials and other benefits, which the “greenies” try to keep the general public unaware of and continue to heap the monsters or Chernobyl and Fukushima upon. Burn fossils and burn the brains at the same time with new and better forms of energy. Not the Renewable BS of wind and solar that don’t pay off now or anytime soon… That anyone reasonable, knowledgeable person can see.

      • +1 Fossil fuels will not last forever….however long that may be. A real goal would be to exceed the energy density of fossil fuels and maintain or beat the portability and cost.

      • Furthermore, with investors believing that Trump and company will put fossil fuels back on top and with our new finds of massive oil and nat gas, etc. in parts of the U.S., the incentive for investment and research into new energy will not have the necessary backing and interest it should have. I am a big skeptic of CAGW, but also believe that fossils will come to an end and peter out someday and will continue, until then, to be the cause of geopolitical problems and such. There will be new finds and there will be places that run out of fossil fuel resources here and there in the world, but there will never be a good stability in our geopolitical relations. Like the Apollo program, a serious effort with a huge emphasis should be employed into new and safe, reliable, affordable, easily distributable forms of energy. And also to put forth, truthfully to the public, that they are safe. It seems that ‘now’ is a great time to do such a thing. Molten Salt or whatever, it needs to be done. Perhaps some of the “scientists” currently sucking at the teats of government climate change research (yuck) could be put to use in such an endeavor… Cleaving huge blocks of rock and hauling them up mountainsides in chain gangs or actually using any real education or brains they have in assisting such a project.
        My rant. But the solution is out there and when good heads are put together, much can be accomplished.

      • Brian H November 28, 2016 at 9:45 pm

        LPPFusion.com

        That’s interesting.

        In 2016 the company announced that it had achieved a fusion yield of .25 joules. link

        0.25 joule doesn’t sound like much. What am I missing?

    • Not if the shackles on global growth come off. The trillions of dollars sitting on the sidelines can make a difference.

    • “I am puzzled. I would guess that oil/gas prices will remain low for a long time. In that light, why would anyone rush to invest?”
      ———————–
      Buy low. Sell high.

    • Commie, Japan has very little in the way of natural resources. They are buying in now for their future at fairly low market prices, smart move. I would look at transportation stocks as well, they are low there too, so see them investing there. ( but hey, what do I know I don’t have any stocks but would if I could spare the $$)

    • They’re taking the long view, Bob.
      Oil and gas prices are depressed right now, but wait a couple of years. Think of it like buying a couple of houses when the property market is weak and sitting on them to sell or rent a few years later when the market is bouyant.
      There’s a lot of hot air about how the oil field is in crisis right now, as if it’s something new or somehow permanent, but as a mate of mine employed in the oil field services industry remarks; he’s a seasonal worker, like a fruit picker, the difference bing that his ‘seasons’ are about seven to ten years long.
      A quick look at inflation adjusted historical oil prices will demonstrate that the ‘normal’ oil price is about $30; right now it’s about $50 and staggering on up.
      Anyone with the spare coin to buy oil assets right now would be crazy not to.
      It’s not just Asian equity funds buying up oil assets, or feasting on the bones of bankrupt small operators, equity funds are buying up the supporting infrastructure and services (like supply boats and the like) all just waiting to cash in when the next boom comes along.
      Sea comes in, sea goes out…
      And you can bet there are equity fund vultures snapping up what ever coal assets are being flogged off by liquidators, because despite gloating from gang-green over coal’s economic performance the last few years, it’s no more a stranded asset than any other commodities that are priced low right now while the world’s economies are a bit crook.

  4. Somehow none of these people are giving credit to the new Paris/Marrakech energy economy that their governments pledged to sustainablize. Didn’t they get the memo? They’re only throwing good money after good! :-)

    • The UNFCCC and IPCC have actually, in a counterintuitive way, done us all a great service. In their attempt to deprive humanity of development to line with green cash the pockets of men like Musk, Soros, and Steyer, they have brought to sharp focus how much humanity owes its current levels of economic development to inexpensive fossil fuels.

      And the Earth’s biosphere benefits from the increased availability of carbon for photosynthesis.

      Win – Win.

    • Well, they are kind of an outlier against the general trend which is more renewable investment…

      Look at large European energy/power companies like RWE or EON (or Dong) – hiving off and selling off fossil fuel to concentrate on renewables.

      • how disingenuous of you grifff. You know that is because government policy makes it impossible to profit from energy technologies tat actually work.

        In the end like the Unions of yore, the greens will simply destroy the economies they influence

      • Griff

        November 29, 2016 at 12:55 am

        Well, they are kind of an outlier against the general trend which is more renewable investment…

        Look at large European energy/power companies like RWE or EON (or Dong) – hiving off and selling off fossil fuel to concentrate on renewables.

        Europe is selling off their reliables in favor of more renewables to say “Look how green we are”
        Then they are buying their energy shortfall from Chinese Coal Plants…Look how green (Hypocritical) they really are

  5. Shows us all how poorly the UN is really doing right now with their bogus CO2 scare. Hasn’t fooled every government.

    Even Obama never worried about AGW too much. Although he spent a lot of effort pinning down US oil production, apparently he financed, with US taxpayers cash, oil exploration etc in Brazil.
    http://www.forbes.com/sites/kenrapoza/2011/03/23/as-us-oil-rigs-leave-for-brazil-permits-and-prices-only-factor/#25cede83d727
    http://www.wsj.com/articles/SB10001424052970203863204574346610120524166

    This guy Dineesh D’Sousa analyses this strange action in his speech at 4.42 https://www.youtube.com/watch?v=LAjGxvCc3qE
    and at 46.00 at https://www.youtube.com/watch?v=A7R-xzs7F7Y

    This guy has a good many clues in my opinion.

    I agree with him that the election of Obama was a huge crock!

    Cheers

    Roger

    http://www.thedemiseofchristchurch.com

  6. A signal of tightening supply & demand.
    The energy industry is nothing if not cyclical.
    How high will this cycle go ? Time will tell.

  7. Without nuclear Japan would be energy starved and they realize wind and sun can’t provide their needs. All the Paris Climate Agreement signers did so because there is nothing but shame to keep them to their promises. They will all continue what they are doing with some obligatory renewables thrown in with over rated capacities to make an appearance they are complying and want to save the world. MSM continues to support the “every body is on board” meme. Meanwhile CO2 continues its’ linear rise and temperature doesn’t follow. How long can this scam last?

  8. Mo money, Mo money, Mo money. If you know how financial systems work you make money. If not,,,,,whose fault is that?

  9. Well, the clearing price after easy US shale hits 85% 36 month decline curves was about $110 Brent and $100 WTI. Give it 18 months to get back there. Best short I have seen in 15 years.

    • You must’ve slept through the sub-prime meltdown. Easy call after Bear-Sterns liquidation firesale. Systemic exposure of mortgage giants like Countrywide were easily seen. Only the more expert insiders though saw the risks to Lehman through CDOs backed by AIG insurance, and goldplated by the Moody’s et al.

  10. The next big advancement in humanity that will eliminate poverty, hunger, stop wars, save the environment, eliminate crime, racism, welfare, and put man on mars will be the development of a GMO food source that will free people from leftist thoughts.

  11. Not surprising, really. The islands of Japan are relatively small for the population, and natural resources are sparse. They are working in their self-interest by acquiring resources elsewhere for their future needs.

  12. The Japanese, like much of the Western developed nations depend on Crude oil that transits the Straits of Hormuz. The coming Iran-Saudi nuclear war will make that trade route extinct.

    The Japanese, after their killing of domestic nuclear power, are now dependent on fossil fuels more than ever. North America is a good hedge bet.

  13. I wonder if they foresee [or expect] the collapse of the acceptance of the CAGW hypothesis, or at least its over-estimate of the effect of C02 on future temps.

    • Weren’t the Japanese one of the firsts to pull out of the Climate Change deal game? Even before Paris? I seem to remember that being news back then, with all the usual dire predictions from the Faithful about how Japan would be ‘left behind’ in the great Sustainability Renewable Utopia.

  14. Remember how the Seychelles have claimed burning oil and gas is flooding their island nation. How they’ll disappear because of the burning of oil and gas? They even held an underwater cabinet meeting. If you look at the original article, who do see named as a partner of Jogmec in the search for oil and gas? The Seychelles government!

  15. Guess the luxury resort insurance barons in the Netherlands and The Seychelles government bureaucrats will queue up to receive the death benefits and payouts of the haphazard populace as they wither beneath the gentle waves of the passive Pacific. Töt Töt.

  16. Interesting. According to http://www.theaustralian.com.au/business/wall-street-journal/czech-firm-eph-buys-european-coal-power-plants/news-story/37607b0e90d42810f696b8ea738328db the Czechs are at it, too:
    “Since 2013, a little-known Czech company has purchased at least 10 coal- or lignite-fired power plants and related mines at fire-sale prices, in deals worth a total of more than $US7 billion ($9.4bn), according to data provider Dealogic. That gives it almost as much coal-derived electricity-generating capacity as Canada.”
    I wonder what is going on – perhaps they have some advanced knowledge…?

  17. Saudi Arabia continues to stupidly dump excess supply into the world’s oil market, which is keeping oil prices low and costing them $billions.

    The purpose of this insane plan is to hurt the US fracking industry, which they have temporarily done, but at a terrible cost.

    Saudi Arabia will eventually realize how stupid it is to waste so much money and will stop dumping excessive amounts of oil in the market.

    When this occurs, oil prices will rebound, however, because of all the new US supply coming online and ewlyndiscovered deposits, the rise in oil prices should be somewhat slow as they climb a wall of worry.

    • The Saudis also have the motive, Samurai, of injuring the Iranians. While low oil prices hurt the US oil industry, it injures the Iranian economy even more, and the Saudis are involved in a proxy war with Iran in Yemen. When someone had several posible motives for an action, it is damn near impossible to sort out why they are doing it.

  18. Who is going to move all this oil across the seas? Tankers. Check out the current low stock prices on those companies.

  19. I just locked in a propane price of just under $1.60/gal. for the next 12 months. Still can’t believe it.

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