Good morning, here's what the Oilman has for you today:

• Billionaire of the Week: Leonid Mikhelson

• Drillers Find New Ways To Suck Oil Out of the Ground

• Upcoming Oil and Gas Events

• Tweet of the Day

Billionaire of the Week: Leonid Mikhelson

The art-loving gas billionaire

Leonid Mikhelson is a major shareholder and CEO of Russia’s largest private LNG company, Novatek.

Like many in the energy field, Mikhelson started from the bottom.

After earning a degree in engineering, the future billionaire began work in construction.

One of his first jobs was the construction of a major domestic gas pipeline.

Perhaps this project sealed his fate because, after years of working in construction, Mikhelson joined the board of then-small Novatek.

From pipelines to LNG

When Mokhelson became part of Novatek, the company wasn’t even into gas.

It was in construction.

However, under his leadership, Novatek expanded into natural resources and ultimately focused on gas.

Wholly owned by its shareholders, who do not include the Russian state, Novatek has become the largest LNG producer in Russia.

Its first LNG plant, Arctic LNG, has a capacity of 19.8 million tons per year.

Arctic LNG, under construction (and under sanctions) will have a similar capacity.

Despite sanctions, Novatek is now planning a third LNG plant—to have a capacity of more than 20 million tons per year.

Millions for art

Besides being a capable business leader, Mikhelson, whose net worth is $21.6 billion, is an avid art lover.

He has an extensive personal collection and an NGO set up specifically to support the arts.

The Novatek CEO even turned a former power plant just opposite the Kremlin into an art space housing his art foundation.

Here’s what he had to say about art in a Financial Times interview from 2013.

“It changes your attitude, the way you think …it gives you ideas.”

It seems these are quite profitable ideas.

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Drillers Find New Ways To Suck Oil Out of the Ground

Amid talk about peak oil demand, U.S. drillers are investing in new ways to extract oil.

These ways are costlier, in evidence that demand for oil is not exactly under threat.

The limits of efficiency gains

This year, U.S. oil production is set for another record.

That’s despite the hurdles that the Biden admin has thrown in the way of the industry.

It’s also despite pressure from investors to go green…

Which has been on the wane recently, to be fair.

And it’s also despite doomsday forecasts about peaking oil demand.

But there’s a problem: drillers have run out of some efficiency gains.

The speed of drilling, for instance, has plateaued.

Drilling even longer laterals has become tricky, too, because of servicing challenges.

So, drillers are looking elsewhere.

Like drilling more wells closer together.

The so-called cube development method is gaining popularity at the expense of the traditional best-bench method.

Peak oil demand, eh?

While there’s demand, there will be supply

The cube method is costlier.

It is also riskier because the wells are too close together, and you lose any additional productivity.

And yet, companies such as Exxon are betting on it in a bid to squeeze every last drop of oil from the shale patch.

Why?

Because there is demand for it.

It’s really amazingly simple.

Could this, and the record oil output be the reason why President Biden will miss COP28?

Who knows.

Upcoming Oil & Gas Events

• December 6: Petroleum Alliance Of Oklahoma Wildcatters Wednesday Luncheon, Oklahoma City, OK

• December 6: 15th Annual PAW Wildlife & Reclamation Conference, Casper, WY

• December 6: PIOGA Mix, Mingle & Jingle Holiday Party, Wexford, PA

• December 15: 23rd Annual KOGA Christmas Party, Bodley Bullock House, Lexington, KY

Around the Global Patch

🇸🇦 Anticipated Saudi oil price reduction for Asian markets.
🇰🇪 Kenya set to privatize oil and pipeline sectors.
🇬🇷 Greek gas expansion: quadrupling export capacity by 2025.

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