Brilliant macro-to-micro analysis, Sandro — especially the way you connect declining onshore economics to offshore scarcity. One question I’d love to hear you explore further: what are the geopolitical and policy implications if offshore truly becomes the “old new king”?
Could deepwater fields shift global energy sovereignty — away from landlocked states and toward maritime powers? And how might this reshape OPEC influence, naval security, or even ESG-driven investment mandates over the next decade?
I think everyone’s attention is on the sea right now, because even the smallest spark of geopolitical tension in the Middle East could send oil prices soaring. The U.S. can’t release massive amounts of oil from its strategic reserves anymore like it did a few years ago to calm the market.
That’s why deepwater fields naturally strengthen maritime powers like the U.S., Brazil, and Norway control over the oceans is becoming just as important as control over land. It could reduce dependence on OPEC and the Middle East, and shift more influence toward countries with stable ocean access.
That said, macro is hard to predict — too many moving parts. There are plenty of tailwinds supporting offshore, but also headwinds like new taxes and regulations. That’s why I prefer to stay mostly focused on the micro side, on specific companies and their cash flows.
I think it will be announced by the end of the year.
There’s also a risk here — the price. You don’t want to overpay for an acquisition; in that case, it’s better to return all the free cash flow to shareholders through buybacks.
Brilliant macro-to-micro analysis, Sandro — especially the way you connect declining onshore economics to offshore scarcity. One question I’d love to hear you explore further: what are the geopolitical and policy implications if offshore truly becomes the “old new king”?
Could deepwater fields shift global energy sovereignty — away from landlocked states and toward maritime powers? And how might this reshape OPEC influence, naval security, or even ESG-driven investment mandates over the next decade?
Thanks for the great question.
I think everyone’s attention is on the sea right now, because even the smallest spark of geopolitical tension in the Middle East could send oil prices soaring. The U.S. can’t release massive amounts of oil from its strategic reserves anymore like it did a few years ago to calm the market.
That’s why deepwater fields naturally strengthen maritime powers like the U.S., Brazil, and Norway control over the oceans is becoming just as important as control over land. It could reduce dependence on OPEC and the Middle East, and shift more influence toward countries with stable ocean access.
That said, macro is hard to predict — too many moving parts. There are plenty of tailwinds supporting offshore, but also headwinds like new taxes and regulations. That’s why I prefer to stay mostly focused on the micro side, on specific companies and their cash flows.
shared!
👍
Well presented and interesting speculation. Thank you for writing this! Any idea when Valaris might announce such an acquisition?
I think it will be announced by the end of the year.
There’s also a risk here — the price. You don’t want to overpay for an acquisition; in that case, it’s better to return all the free cash flow to shareholders through buybacks.