Bass Energy & Exploration is independently owned and operated by the Bass family.
Bass Energy & Exploration
7 NE 6th Street
Oklahoma City, OK 73104
Hungary, supported by Slovakia, is preparing to sue the European Union over its decision to phase out Russian oil and gas imports by 2027. Foreign Minister Péter Szijjártó argues the ban is a "Brussels diktat" that ignores the physical reality of Central Europe's landlocked energy infrastructure, which remains heavily dependent on Russian pipelines.
The EU agreement explicitly bans long-term contracts for Russian gas by the end of 2027. Commission President Ursula von der Leyen declared this the "dawn of a new era," aiming to permanently cut the revenue streams funding Moscow's war effort. This sets up a direct confrontation between Brussels' security goals and member state sovereignty.
A Delaware judge has approved the $5.9 billion sale of Citgo’s parent company to an affiliate of Elliott Investment Management. Venezuela’s government labeled the ruling "vulgar and barbaric dispossession," claiming they were excluded from the legal process and that the sale is a fraudulent act of economic warfare orchestrated by Washington.
The acquisition by Elliott Investment Management transfers control of the seventh-largest US refiner—with 829,000 barrels per day of capacity—from Venezuelan state hands to a private US hedge fund. The deal is designed to satisfy a fraction of the $20 billion in claims held by creditors, marking the potential end of Venezuela's ownership of its "crown jewel" foreign asset.
While the national US rig count dropped by 10 this week, Oklahoma showed remarkable stability, dropping only one rig to sit at 41. Notably, the Cana Woodford basin actually added a rig. This suggests that operators in the Mid-Continent are maintaining activity levels even as other regions pull back.
The industry tidbit notes that Russian gas now makes up roughly 12% of EU imports, down from 45% pre-war. This statistic underpins the EU's confidence in enacting a ban; however, it highlights the disproportionate burden on countries like Hungary and Slovakia that have not diversified as quickly as Western Europe.
Europe’s resolve to sever its remaining energy ties with Russia is confronting pushback from within. A new EU agreement to phase out Russian fossil fuel imports by 2027 has not only angered Moscow but also exposed fissures inside the bloc.
On December 3, 2025, EU officials proclaimed what European Commission President Ursula von der Leyen called “the dawn of a new era: the era of Europe’s full energy independence from Russia.” In a pre-dawn deal between EU governments and the European Parliament, the Union agreed to permanently halt Russian gas imports by late 2027, alongside phasing out remaining Russian oil supplies. Under the plan, LNG imports will end in 2026 and pipeline gas by September 2027, effectively terminating decades-long dependencies.
The strategic intent is explicit: drain the Kremlin’s war chest by cutting off energy revenues, while forcing a diversification to new suppliers. “By depleting Putin’s war chest, we stand in solidarity with Ukraine,” von der Leyen said, linking energy policy directly to the security landscape in Eastern Europe. The policy is legally binding and part of the EU’s broader RePowerEU strategy launched after Russia’s 2022 invasion of Ukraine.
Almost immediately, Hungary – joined by Slovakia – vowed to challenge the EU’s decision in court. Hungarian Foreign Minister Péter Szijjártó blasted the gas contract ban as a “Brussels order” that is impossible for Hungary to implement due to its energy geography. Approximately 85% dependent on Russian gas, Hungary lacks easy alternatives and sees the 2027 deadline as a reckless ultimatum. Szijjártó argues the measure was “disguised as a trade policy” to dodge the unanimity normally required for EU sanctions, calling it a violation of the EU’s founding treaties.
Slovakia’s leadership shares these concerns. Prime Minister Robert Fico indicated there are “sufficient legal grounds” to sue, noting that both Slovakia and Hungary remain highly reliant on Russian gas and oil and fear that pricier replacements will harm their economies. (Slovakia had only agreed to the phase-out after receiving vague guarantees of support that it now doubts will materialize.) With Hungary and Slovakia unable to veto this initiative – since it was passed by majority vote – they are taking the battle to the European Court of Justice, setting up an unprecedented intra-EU legal confrontation.
This clash lays bare the uneven progress in Europe’s energy diversification. Before the Ukraine war, roughly 45% of EU gas imports came from Russia. As of late 2025, that share has plunged to about 12% overall – a remarkable shift in just a few years. However, that statistic masks a key disparity: much of Western Europe replaced Russian supply with seaborne LNG from the U.S. and Qatar or pipeline gas from Norway, but Central Europe remains tethered to legacy Russian pipelines. Hungary, Slovakia, and others with no LNG terminals or spare interconnector capacity are still among the countries “receiving supplies” from Gazprom. For them, a 2027 cutoff without massive infrastructure investment could mean severe energy shortages or price spikes.
In essence, Brussels’ one-size-fits-all mandate is running up against a physical reality – you cannot instantly reroute the energy flows of landlocked nations. This reality check raises the stakes of the coming legal battle: it’s not just a political squabble, but a question of keeping the heat on and the lights running in parts of Europe. The outcome will either cement a new EU-wide stance on energy security or force a rethinking of how to accommodate member states still leaning on legacy suppliers.
Across the Atlantic, a courtroom in Delaware has effectively redrawn ownership of a strategic chunk of the Western hemisphere’s refining capacity. The fate of Citgo Petroleum – a U.S.-based refiner long controlled by Venezuela’s PDVSA – has become a high-profile example of legal mechanisms being used to achieve geopolitical ends.
In late November, U.S. Judge Leonard Stark authorized the sale of Citgo’s parent company (PDV Holding) after an auction designed to satisfy creditors of Venezuela. The winning bid, $5.9 billion from Amber Energy (an affiliate of Elliott Investment Management), was approved despite objections from Caracas. Citgo operates three large refineries in Louisiana, Illinois, and Texas, and had been valued at up to $13–18 billion in court proceedings. It faces more than $20 billion in claims from companies owed money after Venezuela’s past nationalizations and debt defaults.
The sale process, ongoing since 2019, has been slowed by sanctions and legal maneuvers. Even with the judge’s greenlight, the transaction isn’t final – it still requires approval from the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and is under appeal by Venezuela’s representatives. Barring a last-minute reprieve, however, control of Citgo will pass out of Venezuelan hands. Notably, Elliott’s Amber Energy has indicated it intends to keep Citgo intact, retaining its refineries, pipelines, and retail network rather than breaking up the company. That network constitutes about 829,000 barrels per day of refining capacity, making Citgo the 7th-largest refiner in the U.S..
Venezuela’s government has reacted with outrage, framing the Citgo sale as a blatant example of U.S. economic warfare. Vice President Delcy Rodríguez denounced the court’s decision as a “fraudulent process” and a “vulgar and barbaric dispossession” of an asset that “belongs to the Venezuelan people.” Caracas points out that it was barred from defending its stake in Citgo – because Washington does not recognize Nicolás Maduro’s administration as Venezuela’s legitimate government, neither PDVSA nor Venezuelan officials were allowed to participate in the U.S. legal proceedings.
Rodríguez stated that Venezuela “does not and will not recognize the sale of Citgo,” signaling that the Maduro government will refuse to accept the loss of its U.S. refining subsidiary. In retaliation, the pro-Maduro National Assembly in Caracas moved to strip citizenship from opposition figures who it blames for facilitating what it calls the “theft” of Citgo. These moves are largely symbolic – Venezuela has little power to influence U.S. court decisions – but they underscore the political magnitude of losing Citgo, often dubbed the “crown jewel” of Venezuela’s overseas assets.
The Citgo saga represents more than just a debt collection effort; it marks the end of an era where oil nations pursued vertical integration into the U.S. downstream market. For decades, Venezuela leveraged Citgo to secure outlets for its heavy crude and wield political influence (e.g. offering discounted heating oil to U.S. communities). That chapter is now closing. A major state-owned oil company’s asset is being transferred to private investors through a court-supervised process, sending a strong message about the long arm of U.S. law over foreign sovereign property.
From a strategic standpoint, the implications are twofold. First, investors in sovereign bonds and expropriation claims see that persistence can pay off – even politically sensitive assets can be seized and sold to satisfy debts. Second, governments hostile to the U.S. (and their creditors) are learning that geopolitical tussles are increasingly playing out via legal and financial channels. The Citgo case may become a template for future showdowns, where courts and creditors, rather than armies, are the ones forcing outcomes in great power disputes.
Zooming into the domestic oil and gas sector, U.S. drilling activity reveals a nuanced picture. Broadly, 2025 has seen a pullback in drilling due to softer prices and investor pressure for capital discipline. Yet at a granular level, some regions (notably Oklahoma) are holding steady or even boosting activity, defying the national trend.
According to Baker Hughes data, the total U.S. rig count fell by 10 rigs to 544 in the week leading up to Thanksgiving 2025 – the lowest level since 2021. This drop was driven entirely by oil drilling cuts (12 oil rigs were idled, while 3 gas rigs were added), reflecting cautious sentiment among shale operators as oil prices have cooled. Major oil-producing regions like the Permian Basin have seen notable declines (the Permian lost 3 rigs that week, down to ~251 rigs), and the Eagle Ford in South Texas shed 2 rigs (down to 39). In Texas overall, the count fell to its lowest in over four years.
Oklahoma, however, stands out for its resilience. The state counted 41 active rigs, only one fewer than the previous week. In fact, one of Oklahoma’s primary shale targets – the Cana Woodford – added a rig, bringing its tally up to 17 active rigs. This gain helped offset declines elsewhere, such as the Granite Wash play in western Oklahoma (which dropped by 2 rigs to a total of 12). Other Oklahoma plays (Arkoma Woodford, Ardmore Woodford, etc.) held steady, highlighting a generally flat activity level in the state despite the national downturn.
What explains Oklahoma’s steadiness while rigs elsewhere are being laid down? Industry observers cite localized economic advantages and operator strategies. Some Mid-Continent producers have lower break-even costs, mineral lease obligations, or hedges in place that keep drilling viable. Additionally, natural gas prospects in Oklahoma’s basins might be improving with rising gas prices, justifying continued drilling even as oil-directed activity slows. The divergence suggests that U.S. shale is not a monolith; each basin responds to its own mix of geology, prices, and corporate priorities.
The fact that the Cana Woodford (an Oklahoma SCOOP/STACK area) is still attracting rigs is particularly telling. It reinforces the idea that even during a broader retrenchment, companies will “keep drilling through the downturn” if they see a competitive edge or future payoff. The Mid-Continent’s stable rig count could imply confidence that these wells will be profitable once commodity conditions improve, or that operators are positioning for an eventual rebound by securing acreage and retaining crews now.
For policymakers and local economies, Oklahoma’s experience offers a counterpoint to gloomier national trends. Steady drilling means jobs and revenue in those regions persist. However, it also serves as a reminder of cyclicality – just as activity can diverge regionally on the way down, it can just as quickly surge back when market signals turn. Those focused on energy security would note that maintaining a baseline level of domestic drilling capability, even in a downturn, can pay dividends in flexibility when geopolitics or economics constrain imports.
The disparate stories of Hungary’s EU challenge, Venezuela’s Citgo loss, and Oklahoma’s drilling resilience all illustrate a common theme: the concept of energy security is being redefined in real time. No longer purely about supply and demand, it now encompasses legal sovereignty, geopolitical loyalty, and the hard truths of infrastructure. Policymakers must perform a high-wire balancing act.
In 2025, courtrooms and regulatory bodies have become key battlegrounds for energy outcomes. The EU’s effort to legislatively dictate energy sourcing has turned into a legal fight with its own member states, essentially pitting collective security goals against national legal rights. Meanwhile, the U.S. legal system is executing what foreign adversaries see as economic warfare – using creditor rights and sanctions to pry away strategic assets. This trend toward “lawfare” means that energy strategy now demands as much attention to courts, treaties, and sanctions regimes as to pipelines and wells. Energy companies and investors are increasingly lawyering up, knowing that contracts and court orders can reshape markets overnight (as seen with Citgo).
For all the high-level policy pronouncements, the physical infrastructure of energy remains a stubborn gatekeeper. European officials can declare a Russian gas ban, but without pipelines to new suppliers or LNG terminals in landlocked states, those declarations meet natural limits. Hungary’s insistence that Brussels account for “physical impossibility” is a call for pragmatism: energy transitions and sanctions alike must reckon with the on-the-ground infrastructure gap. Similarly, Venezuela’s loss of Citgo underscores how owning strategic infrastructure (or losing it) has long-term impacts on national energy security. Nations that lack infrastructure flexibility – whether it’s a small country reliant on a single pipeline or a petrostate lacking domestic refining – find their policy options constrained. Thus, any durable balance between security and pressure requires investing in infrastructure diversity: alternate import routes, storage, refining capacity, and so on.
As we conclude this Q4 2025 outlook, one thing is clear: we are in the age of sovereign litigation and fragmented security. Energy security for a country is no longer just about having friendly suppliers or ample reserves; it’s about navigating a thicket of legal and geopolitical challenges. Policymakers will need to balance the immediate demands of national welfare (keeping energy affordable and available) against the long-term imperative of standing up to aggression and instability (whether that means sanctioning a belligerent or enforcing debt contracts). There is no one-size-fits-all answer. Western Europe may be willing to pay more for gas as the price of undermining Putin’s war financing, whereas Central Europe views that price as potentially too high to bear domestically. The United States may celebrate a win against Maduro in court, but it also sets a precedent that could spook other nations’ investments.
For energy investors and industry stakeholders, the advice is to stay nimble and informed. Geopolitical flashpoints can and will spill over into boardrooms and bankruptcy auctions. The value of assets can hinge on diplomatic recognition (ask Venezuela) or regulatory classifications (ask Hungary). In this environment, due diligence means assessing political risk and legal frameworks as much as geology and engineering.
Energy security requires fortifying the legal rights that underpin markets, hardening and diversifying physical supply lines, and prudently managing geopolitical alliances. Striking this balance is no easy task – but it is the key to ensuring that, whether in a crisis or a transition, the lights stay on and economies keep running. The coming year will test policymakers on this balance, and those decisions will reverberate across global energy markets for years to come.
Bass Energy & Exploration is independently owned and operated by the Bass family.
Bass Energy & Exploration
7 NE 6th Street
Oklahoma City, OK 73104