Summary of Key Points from Citi Research Call Industry Overview - The report focuses on the **Global Energy** sector, particularly the **upstream investment** outlook for 2026, indicating an improving appetite for investment despite lingering crude price risks [4][5]. Global Upstream Spending Outlook - **Total Global Upstream Spending** is projected as follows (in billion USD): - 2025E: 247 - 2026E: 242 - 2027E: 247 - Notable changes: 2026 is expected to see a **2% decrease** compared to 2025, but a **2% increase** in 2027 compared to 2026 [5]. Regional Insights - **China**: Expected spending remains stable at **57 billion** for both 2026 and 2025, with a **3% increase** in 2027. - **Latin America**: Anticipated growth of **5%** from 2025 to 2026, reaching **28 billion**. - **Middle East/North Africa**: Slight decrease of **1%** in 2026, maintaining **84 billion**. - **Asia (Other) & Australia**: A significant drop of **27%** in 2026, down to **11 billion**. - **International Oil Companies (IOCs)**: Expected to decrease spending by **2%** in 2026, maintaining **61 billion** [5]. U.S. Market Insights - The U.S. shale oil volumes are highly dependent on oil prices, with limited swing potential of a few hundred thousand barrels per day [14]. - The Delaware basin has seen a sharp drop in productivity, while other major basins show mixed results [14]. Brazil's Oil Production - Brazil's oil production is expected to increase due to a pipeline of new Floating Production Storage and Offloading (FPSO) units, with Petrobras accounting for approximately **64%** of Brazil's total oil and gas production [15][21]. - Underinvestment in exploration is eroding reserve replacement, despite ongoing production growth [22]. Middle East and North Africa (MENA) Capital Expenditure - MENA capital expenditure is set to peak next year, with Saudi Arabia leading in capital expenditure, particularly in the Jafurah shale project [25]. - The UAE is increasing its midstream and LNG investments, while Qatar continues steady expansion [25]. LNG Market Dynamics - The U.S. is expected to add **50%** of new global LNG capacity, potentially absorbing most of the oversupply impact by 2030 [30]. - An estimated **6 billion cubic feet per day (bcfd)** of global oversupply is anticipated by 2030, with the U.S. absorbing a significant share [31]. - LNG supply is expected to exceed **35 bcfd** of capacity by 2030, but pricing may suffer as a result [32]. Refining Capacity and Valuations - Global refining capacity is set to rise, particularly in Asia, India, and the Middle East, while closures are expected in Europe and the U.S. [51]. - Current valuations in the refining sector are around historical averages, with FY26 estimates projected to be **70% higher** year-over-year [53]. Renewable Energy Insights - Proposed changes to renewable fuel volume obligations by the EPA could lead to higher Renewable Identification Number (RIN) pricing, with a significant increase in biomass-based diesel requirements [59]. Conclusion - The report indicates a cautious optimism in the energy sector, with investment opportunities in upstream oil and gas, particularly in regions like Brazil and the Middle East, while also highlighting potential risks associated with pricing and oversupply in the LNG market [4][5][25][31].

CNOOC (China National Offshore Company) has been the standout in output growth, expanding production from 690,000 b/d in 2020 to about 900,000 b/d in 2025, supported by 650,000 km 2 of offshore acreage across the Bohai Gulf and South China Sea. Although historically an offshore-focused producer, CNOOC has moved to broaden its onshore presence as new plays emerge and the company positions itself against resource concentration risk. Meanwhile, another Chinese oil and gas state-owned major Sinopec (with 600,00 ...

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中国石油大庆油田12月5日发布消息，经过5年集中勘探开发，大庆古龙页岩油年产量已突破百万吨，实 现页岩油规模化效益开采。 ...

Core Insights - Argentina's natural gas production in September 2025 decreased significantly, with a total of 4.9 billion cubic feet produced, marking a 6% decline from the previous month and a 12% drop year-on-year, primarily due to a sharp decline in shale gas production [1] - Despite the drop in natural gas output, Argentina's unconventional oil production reached a record high, driven by the Vaca Muerta shale formation, which is crucial for the country's economic recovery [5][14] Natural Gas Production - September 2025 natural gas production was 4.9 billion cubic feet, down 6% month-on-month and 12% year-on-year [1] - Shale gas production specifically fell to 3.1 billion cubic feet per day, a 7.5% decrease from August and a 15.6% decline compared to September 2024 [1][6] Oil Production Overview - Argentina's average daily crude oil production for September 2025 was 833,874 barrels, a 2% increase from August and a 14% increase year-on-year, setting a new record [4] - Total crude oil output for September 2025 was 25 million barrels, slightly down by 1% from the previous month [4] Unconventional Oil Production - Unconventional oil output surged by 30% year-on-year to an average of 550,881 barrels per day, accounting for 66% of total petroleum production [3] - The Vaca Muerta shale is identified as a key driver for rising oil and gas production, with significant untapped potential [5][7] Economic Impact - The increase in oil production is expected to enhance hydrocarbon exports, improve the balance of trade, and boost fiscal income for the Argentine government [2] - Foreign energy investment in Argentina is on the rise, supported by recent economic reforms aimed at reducing barriers to investment [14] Vaca Muerta Shale Potential - The Vaca Muerta formation is estimated to contain 16 billion barrels of recoverable shale oil and 308 trillion cubic feet of recoverable natural gas, making it one of the largest shale plays globally [7] - The formation's characteristics are comparable to or superior to U.S. shale plays, with a low breakeven price of $36 to $45 per barrel, making it profitable even in a low-price environment [10][11] Environmental Considerations - The crude oil from Vaca Muerta has a lower carbon footprint, producing 15.8 kilograms of CO2 per barrel, significantly less than the global average [13] - The light and sweet nature of the crude oil enhances its attractiveness for refining into low-emission fuels [12]

Group 1: Historical Context and Oil Market Dynamics - The global oil industry was historically dominated by a small group of Western firms known as the 'Seven Sisters' until the 1973 oil embargo, which marked a significant shift in the balance of power between oil-producing and consuming nations [1] - The 1973 oil crisis saw oil prices surge from approximately US$3 per barrel to nearly US$11 per barrel, contributing to a global economic slowdown, particularly in Western countries [1] - The U.S. has historically employed a 'divide and rule' strategy in the Middle East to manage the power of oil-producing nations, which culminated in the 2014-2016 Oil Price War with OPEC [3] Group 2: U.S. Shale Revolution and Global Energy Dynamics - The U.S. shale oil and gas sectors transformed the country from a major importer to a leading exporter, reversing the energy power dynamics established post-1973 [2] - Middle Eastern countries, particularly Saudi Arabia and the UAE, are now seeking U.S. expertise to develop their own shale resources, with significant investments in projects like Saudi Arabia's Jafurah shale gas development [4][5] - Saudi Arabia aims to increase its gas output by 80% by 2030, with the Jafurah Gas Plant expected to reach a sustainable production rate of 2.0 billion standard cubic feet per day by 2030 [4] Group 3: UAE's Shale Gas Development - The UAE is focusing on developing its shale gas reserves to meet local energy demands and future export needs, collaborating with U.S. firms like EOG Resources [5][6] - The Ruwais Diyab Unconventional Gas Concession aims to produce 1 billion standard cubic feet per day before 2030, significantly enhancing ADNOC's production capabilities [6] Group 4: Global LNG Market and Future Demand - The importance of LNG in global energy markets has surged, especially following the geopolitical tensions stemming from Russia's invasion of Ukraine, which has led to increased demand for alternative gas supplies [7] - Forecasts indicate that data center-related demand could contribute an additional 150-200 billion cubic meters of gas annually by 2040, representing a 3.6-4.9% increase in global gas demand [7]

Sales Revenues and Profitability - The energy market faced challenges in Q3 2025, with sales revenue declining to EUR 282.7 million, a 27% decrease year-on-year. EBITDA fell to EUR 27.9 million (-31% year-on-year), and the reported net loss for the quarter was EUR 66.0 million [1][2] - Adjusted EBITDA, excluding temporary fair-value changes, was EUR 32.5 million, down 25% year-on-year. The adjusted net loss was EUR 61.4 million, which included impairments of EUR 39 million for shale oil production assets [1][2] Market Conditions - Lower profitability was attributed to declining electricity prices in the Baltics and reduced shale-oil sales volumes due to maintenance shutdowns. However, the distribution segment showed strong performance [2] - The CFO highlighted significant developments in the Baltic energy sector, including desynchronization from the Russian grid, which enhances energy independence and creates opportunities for Eesti Energia [3] Strategic Developments - The company plans to focus on completing ongoing developments and improving efficiency throughout 2025, with structural changes set to take effect in 2026, introducing three business lines: Distribution, Electricity, and Industry [4] - The strategic direction aims to establish a balanced portfolio of renewable generation, dispatchable power, and flexibility services to ensure reliable service and long-term value creation [5] Renewable Generation and Electricity Sales - Sales revenue from renewable generation and electricity sales decreased to EUR 152.6 million, a 31% decline year-on-year, primarily due to lower market prices despite stable sales volumes [5] - Renewable electricity output increased by 5% to 369 GWh, driven by new wind farms, while retail electricity sales volumes decreased by 6% [6] Non-Renewable Electricity Production - Revenue from non-renewable electricity production dropped by 60% year-on-year to EUR 15.4 million, with production from oil-shale-based units down 83% due to maintenance and low market prices [7] - The segment EBITDA was EUR -6.6 million, marking a decline compared to the previous year [8] Distribution Segment - Distribution service revenue increased by 12% year-on-year to EUR 73.1 million, supported by a 4% increase in sales volume [11] - Distribution EBITDA improved significantly to EUR 27.4 million (+55% year-on-year), driven by higher margins and increased sales volume [11] Shale Oil Segment - The shale-oil segment experienced a 69% decrease in sales revenue to EUR 11.6 million, with sales volume down 60% to 37 thousand tonnes [12] - Segment EBITDA was EUR -6.2 million, reflecting lower margins and significantly reduced sales volumes [13] Other Products and Services - Revenue from other products and services increased by 11% year-on-year to EUR 30.0 million, driven by growth in flexibility and frequency-reserve services [14] - EBITDA for this segment rose to EUR 4.3 million, with notable increases in flexibility services [15] Investments - The Group's investments in Q3 2025 totaled EUR 104.4 million, a 37% decrease year-on-year, as large renewable projects near completion [16] - Distribution-network investments reached EUR 40.7 million, supporting upgrades and reliability improvements [17] Financing and Liquidity - The Group's borrowings at the end of Q3 2025 amounted to EUR 1.637 billion, with a strong liquidity buffer of EUR 644 million [18] - Key financing developments included the acquisition of the remaining 2.8% stake in Enefit Green, leading to its delisting [19] Future Outlook - The Group is preparing for a transformation starting in 2026, which will enhance profitability and competitiveness through a simplified structure [22] - Strategic changes are expected to drive earnings growth and strengthen cash flows while supporting the transition to a carbon-neutral energy system [23]

Production Highlights - Total production reached 127 Mboe/d, a 74% year-over-year increase and a 7% quarter-over-quarter increase[12] - Oil production specifically hit 110 Mbbl/d, showing a 73% year-over-year increase and a 7% quarter-over-quarter increase[12] - Strong productivity from new well tie-ins boosted Q3 2025 production growth by 7% quarter-over-quarter[14] Financial Performance - Revenues increased to $706 million, a 53% year-over-year increase and a 16% quarter-over-quarter increase[13] - Adjusted EBITDA reached $472 million, a 52% year-over-year increase and a 17% quarter-over-quarter increase[12] - Net income was $319 million, while adjusted net income was $155 million[12] - Earnings per share (EPS) was $30, while adjusted EPS was $15[12] Costs and Pricing - Lifting cost decreased to $44 per barrel of oil equivalent (boe), a 6% year-over-year decrease and a 5% quarter-over-quarter decrease[12] - Average realized oil price was $646 per barrel[20] Cash Flow and Leverage - Pro forma net leverage ratio was 15x Adjusted EBITDA[12] - Operating activities cash flow reflects income tax payments of $179 million, partially offset by a decrease in working capital of $43 million[31]

Core Insights - Argentina's federal government has focused on the Vaca Muerta shale formation for over a decade, which has become a key driver for the country's hydrocarbon production [1] - The nationalization of YPF in 2011 was a pivotal moment that allowed the company to lead the development of Vaca Muerta, despite initial backlash from financial markets [1] Production Growth - Shale oil and gas production in Argentina has reached record highs, with August 2025 data showing crude oil production at 816,144 barrels per day, 65% of which was shale oil [2] - Natural gas production for the same month was 5.5 billion cubic feet, with 67% attributed to shale gas [2] - Year-over-year, oil output increased by nearly 15%, while natural gas production saw a modest 3% rise [2] Shale Oil and Gas Performance - Shale oil production surged by 30% year-over-year to 530,057 barrels per day, marking a new record and comprising 65% of all crude oil lifted in Argentina [3] - Shale gas production, however, declined by 1.6% month-over-month to 3.7 billion cubic feet per day, although it was still 3% higher year-over-year [3] Comparison with U.S. Shale Plays - Vaca Muerta's characteristics are more similar to the Permian Basin than the Eagle Ford Shale, with well productivity believed to surpass that of major U.S. shale plays [4] - A typical well in Vaca Muerta yields around 30 barrels per foot drilled, which is double the production of the Permian and other U.S. shales [4] - The average breakeven price in Vaca Muerta is estimated at $36 per barrel, comparable to U.S. shale basins despite higher drilling costs [4]

Core Insights - Chevron Corporation aims to increase its oil output in Argentina's Vaca Muerta shale formation to 30,000 barrels per day (bpd) by the end of 2025, reflecting confidence in this significant energy resource [1][2] Company Expansion - Chevron has been investing in Vaca Muerta for years, currently producing approximately 25,000 bpd and planning to ramp up to 30,000 bpd by year-end 2025 [2] - The company’s Argentina country manager highlights the growth potential of Vaca Muerta, emphasizing its strong unconventional resource base and the ability to scale quickly under favorable conditions [2][8] Industry Impacts - Vaca Muerta is recognized as the world's second-largest shale gas reserve and fourth-largest for shale oil, playing a crucial role in Argentina's energy strategy to reduce reliance on imports amid an economic crisis [3][4] - Increased production from Vaca Muerta is expected to enhance Argentina's energy independence and economic prospects, with analysts estimating crude production could reach 1 million bpd by 2030 [4] Market Pressures - Despite its potential, Vaca Muerta faces challenges from global oil market pressures, including lower oil prices and reduced spending, which have led to a slowdown in drilling activities [5] - Other companies, such as TotalEnergies and GeoPark, have scaled back their involvement in the region, indicating a cautious approach to investment in Vaca Muerta [6][7] Regulatory Environment - Chevron emphasizes the need for a stable investment climate in Argentina, calling for competitive costs and predictable regulatory frameworks to support its expansion plans [8][9] - The company’s executives stress that uncertainties in capital movement and government policy could hinder the formation's potential [9] Future Outlook - Chevron's plans for increased output come amid mixed signals for shale development globally, but Vaca Muerta continues to show momentum with ongoing investments [10] - The anticipated Vaca Muerta South pipeline, expected to be operational by 2027, will further support production and export capabilities [10][11]