Frontline Ltd. (NYSE:FRO) Q3 2023 Earnings Call Transcript

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It’s expected, and this is not my number, it’s what I’ve basically read in the press, is that, they might, short-term, be able to increase this to 300,000 barrels per day — or with 300,000 barrels per day, so they’re going to be in a 600,000 to 700,000 barrel per day kind of export capacity. Which portion of this is going to U.S., Europe or Asia, it’s very, very difficult case. They do still apparently owe China a couple billion dollars for that oil for loan kind of — or financing deals that were done some years back. When it comes to Guyana, Guyana is producing and exporting, because it’s a small nation, they don’t really consume anything, around 450,000 barrels per day. I think in the Venezuela-Guyana discussion, one could probably have some comfort in the fact that virtually all their oil production is owned by U.S. interests.

So, it’s probably likely to think that the U.S. will help Guyana in protecting their sovereignty over these areas. But it’s very early days to speculate on that. Operations are going as normal out of Guyana, as we speak. But, I think kind of — there is — the bright spot here is that we have — I think most analysts have been quite surprised by how resilient U.S. production has been this year and even going kind of above expectations, despite the lack of DUCs and the lack of CapEx and the lack of everything. And at the same time, we’ve seen that Latin America, there are more and more barrels being kind of squeezed out of the various basins there. So, we’re kind of mildly optimistic about that development going forward.

Greg Lewis: And then, as I think about the queue at the Panama Canal, I mean, clearly, that looks like it’s impacting the smaller segment of the product tanker markets just as we look at like, North American cargos heading down to Southwest South America. Has there been any knock-on effect on the LR2 market, just given that’s where your focus is? I’m trying to understand, these disruptions, and I guess containerships have priority over product tankers, which is keeping product tankers more — I was hearing that you might even see some MRs go through the Strait of Magellan. Is there any kind of knock-on effect that we’re seeing there that’s impacting the LR2 market?

Lars Barstad: I wouldn’t say it’s significant, to put it that way. And we haven’t really — it’s not that often, we’ve been exposed to the Panama Canal. We have on the other occasion ballasted through from the other end, but it’s not — yes, I would play down the impact at least on the larger clean vessels, because we haven’t really seen that tighten up the market very much, or increased ton miles to be quite honest.

Operator: Thank you. [Operator Instructions] There are no further questions at this time. And I would now like to hand the conference over to Lars Barstad for any speaking remarks.

Lars Barstad : Well, thank you all very much for listening in, and I wish you a pleasant day. And, hopefully, there is some, I’ve used the word fireworks, at least there’s some firecrackers left in this market, as we move into December here. Thank you.

Operator: That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.

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