Welcome to Grid Brief! Here’s what we’re looking at today: Carlos Slim bought stake in a Mexican oil project, Indonesia considers curbing LNG exports, Texas’s grid troubles spur a battery storage rush, and more.

Carlos Slim Buys Stake In Mexican Oil Project

Mexican billionaire Carlos Slim’s Grupo Carso has acquired a minority stake in Talos Energy’s Zama oil field project.

“Grupo Carso is purchasing a 49.9% minority stake in the local unit of Houston-based Talos Energy Inc. for $125 million,” reports Bloomberg. “The deal gives Carso a 17.4% stake in Zama, with the price implying a minimum valuation of about $250 million for the oil field stake. Talos will retain control of the local unit through a 50.1% stake. The transaction is pending approval from the local regulator.”

“We celebrate yesterday’s announcement, also because it’s a Mexican company that’s going to be part of the partnership,” Mexican President Andrés Manuel López Obrado said last week. “Grupo Carso’s participation is important because they own oil rigs, so it’s not going to take long. This is good news.”

Some of AMLO’s critics, who see him as an anti-corporate leftist, might be surprised to see AMLO praise Slim’s acquisition. But a closer look at context offers clarity.

“It should be noted that effectively all of PEMEX's competitors within Mexico's domestic market are of foreign origin. AMLO is frequently and not always incorrectly described as an anti-business statist, but the president is above all a nationalist and does not view all business equally,” Juan David Rojas, an intelligence fellow at Florida International University’s Jack D. Gordon Institute for Public Policy, told Grid Brief via email. “AMLO has previously referred to Carlos Slim as a source of ‘Mexican pride’ and the country's most ‘austere and institutional businessman.’ Consequently, Grupo Carso's acquisition of Talos' Mexican operations was celebrated by Lopez Obrador and is entirely consistent with the administration's goal of reestablishing Mexican control over the oil sector.”

AMLO said that he anticipates Zama will produce 150,000 to 180,000 barrels a day by 2029 after beginning operations in 2025.

Indonesia Considers LNG Export Limits

Indonesia will consider curbing their liquified natural gas exports to better serve national consumption; an extension of the policies it has placed on palm oil and coal.

“Indonesia was the world’s sixth-largest LNG exporter last year, according to ship-tracking data,” reports Bloomberg. “The country has been moving to prioritize gas volumes for its domestic market to help feed economic growth and after supply chain snarls combined with a post-pandemic industrial rebound last year to trigger a global squeeze on fuel supplies.”

About 10 million tons/year of LNG contracts are expected to expire through the end of the decade—that’s nearly half of Indonesia’s export capacity.

“We believe that this policy will have a positive impact in meeting domestic energy needs, encouraging domestic industry growth, and maintaining existing export commitments,” Jodi Mahardi, Indonesia’s deputy coordinating minister for maritime sovereignty and energy, said.

The Indonesian President Joko Widodo is also contemplating curbing electricity exports to Singapore.

Share Grid Brief

We rely on word of mouth to grow. If you're enjoying this, don't forget to forward Grid Brief to your friends and ask them to subscribe!

The Lone Star State’s Battery Rush

BlackRock, Korea's SK, Switzerland's UBS and a slew of other companies are chomping at the bit to develop more battery storage in Texas. The Texas power market’s volatility and fragility have created a welcoming atmosphere for battery storage developers.

“Power prices in Texas can swing from highs of about $90 per megawatt hour (MWh) on a normal summer day to nearly $3,000 per MWh when demand surges on a day with less wind power,” reports Reuters. “That volatility, a product of demand and higher reliance on intermittent wind and solar energy, has fueled a rush to install battery plants that store electricity when it is cheap and abundant and sell when supplies tighten and prices soar.”

Battery projects coming online are currently seeing double digit returns, sometimes as high as 20%.

In 2022, Texas accounted for about a third of new US grid-scale battery storage, just behind California which has mandated energy storage development for ten years.

Chris McKissack, CEO of storage developer GlidePath, told Reuters that batteries should remain a good bet for a long time.

"If no new generation is built and all you've got is old generation and load growth, you've got even more volatility," McKissack said. High volatility means more batteries.

Many expect batteries to smooth out the market, but storage isn’t generation; coordination issues between supply, demand, profitability, and topographical grid placement will determine the battery fleet’s actual impact. It’s an experiment liable to produce surprising results.

Conversation Starters

• Rosneft profits: 📈. “First-quarter net profit of Russia's largest oil producer Rosneft rose by 45.5% from the previous three months to 323 billion roubles ($4 billion) on the back of rising output, the company said on Wednesday, exceeding expectations,” reports Reuters. “Rosneft, headed by Igor Sechin, a long-standing ally of President Vladimir Putin, has shown resilience in the face of Western sanctions by redirecting its oil flows from Europe to Asia amid a wider political fallout. The company's shares rose in morning trade by about 1.4%, outperforming Moscow's stock market.”

• A tough summer waits for Queensland’s grid. “Wholesale power prices are expected to rise because of a delay in bringing two central Queensland coal-fired generators back online,” reports ABC Australia. “A fire at Callide Power Station, near Biloela, in May 2021 triggered one of the state's worst power outages in decades. The two units were expected to progressively come back online from September. But the owner, CS Energy, on Tuesday said this timeline has been set back. One of the units, C3, is now predicted to be back at half its capacity from January next year. C4 is expected to return from May next year.”

• The world’s first battery powered tanker may become operational this decade. “Japanese battery startup PowerX Inc. revealed a 140-meter-long electric propulsion vessel capable of transporting stored electricity across oceans,” reports Oilprice.com. “The ‘battery tanker’ will be equipped with 96 containerized marine batteries that can haul renewable energy worldwide, connecting grids, islands, and offshore wind farms. The completion of the vessel is slated for 2025, with sea trials in 2026. “

Crom’s Blessing

Interested in sponsoring Grid Brief?

Email [email protected] for our media kit to learn more about sponsorship opportunities.