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

• Oilfield Service Firms Sound Alarm on Demand

• Europe’s Big Oil Locks Horns with Venture Global over LNG Cargos

• Upcoming Oil and Gas Events

• Tweet of the Day

Oilfield Service Firms Sound Alarm on Demand

Oilfield service providers are bracing up for a weak quarter.

Demand for their services seems to weaken as the year draws closer.

The reason: E&Ps have drained their full-year budgets.

A sign of things to come?

For the pessimist, this could be a sign of things to come.

After a record year, this year has seen the E&P industry book much smaller profits.

And with all that cash returning to shareholders, there’s no wallet that can stay full.

Also, there’s the new default setting of the industry, which is a caution in spending decisions.

It’s the new normal and should, at some point, stop being a cause for concern.

It’s tough, but oilfield service providers are tough, too.

It may be time to adjust to the new normal.

Besides, this might not be a sign of things to come.

It could be business as usual

It might be the usual lower-demand stage of the industry cycle.

Lower oil prices, higher production costs, lower spending plans…

Until the next stage of the cycle when demand prompts more spending and the rest of it.

Sure, there’s the added pressure of ESG and all the forecasts about peak oil demand.

But in the end, it’s the real world that decides, not forecasters.

The slowdown could be part of business as usual in the oil patch.

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Europe’s Big Oil Locks Horns with Venture Global over LNG Cargos

Five European energy majors are after Venture Global, claiming it did not deliver contracted LNG cargos.

They even reached out to Brussels and Washington for help.

Depending on how it ends, the story could jeopardize U.S. LNG.

Who’s lying?

Okay, here’s the story.

The five LNG buyers, including BP and Shell, claim Venture Global has not been sending them cargos agreed under long-term contracts.

Venture Global says its Calcasieu Pass LNG plant is under force majeure because of faulty equipment…

However, according to a recent Reuters report citing Venture Global, Calcasieu Pass was working at capacity.

The Europeans accuse Venture Global of selling “their” cargo on the spot market that fetches higher prices.

The U.S. firm has, in turn, accused the Europeans of reselling LNG outside Europe to make fatter profits.

No wonder the matter has reached the arbitrage court and now the respective governments of the two parties.

It might even be worth a movie adaptation with that level of drama.

The bigger potential problem

It’s up to the courts to decide who’s lying and who’s telling the truth.

The very emergence of this dispute is a bad sign.

As Shell commented in a letter to the EU and U.S. governments, this sort of thing could undermine investor confidence in U.S. LNG.

Sadly, this is true, regardless of how the whole affair ends.

The mere suggestion of contract violation could push investors in future capacity away.

They’re a sensitive crowd.

Upcoming Oil & Gas Events

• November 14: LOGA State of the Industry Series, Petroleum Club of Shreveport, Shreveport, LA

• November 15-16: Petroleum Alliance of Oklahoma Fall Conference and Auction, Oklahoma City, OK

• November 16: 29th Annual Executive Oil Conference and Exhibition, Midland Country Horseshoe Arena, Midland, TX

• November 28: TIPRO/IPAA Leaders in Industry Luncheon, Petroleum Club of Houston, Houston, TX

• November 28-29: UTA Oil and Gas Conference, Hilton Americas, Houston, TX

Around the Global Patch

🇮🇳 ONGC launches $5B deepwater oil project.
🇦🇿 Azerbaijan navigates Israel-Turkey diplomatic rift.
🇳🇴 Norwegian operator anticipates riches in 2023 wells.

Tweet of the Day

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