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Venezuela’s oil output, already the lowest since 2009, is set to slide further this year as contractors scale back drilling after the cash-strapped country fell more than $1 billion behind in payments. The Latin American nation’s oil production, which generates 95% of export revenue, will decline by about 11% to 2.1 MMbpd by the end of the year, Barclays Plc estimates. Output is falling largely because oil-services companies aren’t being paid, according to the International Energy Agency.

Venezuela’s oil output decline accelerates as drillers go unpaid

The UK’s North Sea oil and gas industry, already reeling from low prices and high costs, now faces a worsening investment drought as the nation’s decision to quit the European Union looks set to trigger a second independence vote in Scotland. A poll on Scottish independence from the UK was defeated in 2014, but after voters there overwhelmingly backed the losing side in the referendum on EU membership a new vote is “very much on the table,” Scotland’s First Minister  Nicola Sturgeon said on June 26. This leaves the North Sea oil and gas industry, the bulk of which is in Scottish waters, potentially facing years of uncertainty and political paralysis.

North Sea faces worsening investment drought after Brexit

Total has signed an agreement with Qatar Petroleum, granting the Group a 30% interest in the concession covering offshore Al-Shaheen oil field for a period of 25 years beginning July 14, 2017. The Al-Shaheen field produces 300,000 bopd. The concession will be operated by a new operating company held 70% by Qatar Petroleum and 30% by Total.

Total obtains a 30% interest in Qatar's Al-Shaheen field

The U.S. has seen several weeks in which the levels of crude oil sitting in storage have declined, falling from 80-year record highs. Inventories have dropped more than 10 million barrels since May, offering clues that suggest that the oil market is moving closer to a supply/demand balance.... Although the EIA storage figures are closely watched by oil analysts, a lesser known but similar metric from Saudi Arabia also indicates an oil market continuing to adjust. According to data from the Joint Organisations Data Initiative, and reported on by Bloomberg, Saudi oil inventories have declined for six consecutive months, the longest period of contraction since data collection began 15 years ago. Saudi oil inventories have drawn down by 38.6 million barrels since October, taking storage down to 290.9 million barrels, a two-year low.

Saudi Arabia's oil reserves could be the answer to higher oil prices - Business Insider

One of the pillars of oil’s recovery from the lowest price in 12 years may be on the verge of crumbling. China is likely close to filling its strategic petroleum reserves after doubling purchases for it this year as prices plunged, JPMorgan Chase & Co. analysts including Ying Wang wrote in a June 29 research note. Stopping shipments for the reserve would wipe out about 15% of the country’s imports, according to the bank.

Oil bulls beware: China’s almost done amassing crude

Egypt may resume natural gas exports thanks to major discoveries off its shores, according to Snam SpA, Europe’s biggest gas infrastructure company. The findings are “very significant for North Africa” and especially Egypt, the most populous Arab nation, where demand for gas is rising for electricity generation, said Marco Alvera, the CEO of Milan-based Snam. Italian oil company Eni SpA called the super-giant Zohr field it discovered last year the largest in the Mediterranean. Eni and BP also made a “significant” find this year in the Nile Delta.

Egypt may return to gas exports after super-giant Zohr discovery

U.S. natural gas futures surged to the highest level in 10 months amid forecasts for sweltering heat and on speculation that a series of pipeline disruptions will curb supplies in the market. Most of the contiguous U.S. is in store for hotter-than-normal weather from July 8 through July 12, according to MDA Weather Services. The high in Chicago on July 11 may reach 95°F (35°C), 10 degrees higher than average, data from AccuWeather Inc. show.

U.S. gas surges to 10-month high on spreading heat, supply cuts

Abu Dhabi’s proposed merger of two of its largest sovereign investment funds would create a global energy business that produces more oil than OPEC member Libya and with bigger assets than ConocoPhillips.

Abu Dhabi merger to create oil producer dwarfing OPEC's Libya

As LNG demand catches up - spurred by cheap prices, new consumers, floating regasification, the rise of gas in transportation, more electrification, and tighter emissions standards - the market will tighten by 2023, predicts consultancy Energy Aspects. That seems some way off, but as the near-term glut clears another 75m t/y of supply will be needed by 2025. To meet that need, the decisions to add capacity must be taken soon. So for all the sector's gloom now, producers must look ahead; using the pause to find more liquefaction efficiency (think modular construction, floating LNG, brownfield expansions) and marketing flexibility (think shorter contracts, less oil indexation, hubs, derivatives). Developers must put their faith in the cycle, remembering it will turn. They must keep building, preparing the market for consumers that may not even yet be born.

LNG: Gloomy now, brighter soon

China Gas Holdings Ltd. expects natural gas sales to grow 20% in the current fiscal year as lower prices and the country’s push to replace coal with cleaner fuels spur consumption. The fuel distributor, which runs most city gas projects in China, plans to sell 12 Bcm of natural gas in the year ending March, up from 10 Bcm in the previous period, executive Chairman Liu Minghui said in a briefing in Hong Kong Tuesday. Chinese authorities in November reduced prices for the fuel in an effort to encourage usage.

China gas targets 20% growth as lower prices boost demand

The market shook off a closely-followed industry report that showed a fourth weekly rise in the last five in the number of U.S. oil rigs operating. According to oil services firm Baker Hughes, producers added 11 oil rigs this week, the biggest increase since December, signalling a near-two year rout in drilling may have ended. [RIG/U] "Higher rigs indicate higher production, but we're still down by more than 300 rigs from a year ago, so no one's really too worried about it for now," said Phil Flynn, analyst at the Price Futures Group brokerage in Chicago.

Oil jumps on pre-holiday buying, Brent up 4 percent on week | Reuters

The number of earthquakes in Oklahoma has fallen 25% in 2016 compared with a year earlier, a decline attributed in part to actions by state regulators to police the oil and gas industry’s practice of pumping wastewater from its operations deep underground

Oklahoma Quakes Decline Amid Curbs on Energy Industry’s Disposal Wells - WSJ

Chevron Corp. may shortly give a green light to the most expensive oil project in the world this year as the industry digs out from the worst slump in a generation. The company said this week in a presentation on its website that the decision on expanding the Tengiz development in Kazakhstan will be made in mid-2016. Installing 4,500 camp beds for construction crews is done and port dredging 25% complete, it said. The project may cost as much as $40 billion and add crude supply equivalent to that of Libya. The investment was put on hold last year after cost estimates ballooned amid plunging oil prices.

Chevron deadline nears for $40-billion bet on next decade’s oil

Norway is facing the first oil worker strike since 2012 as government-mediated talks for platform workers approach a Friday midnight deadline. Should the talks fail, more than 700 workers will walk off the job, affecting fields run by Exxon Mobil Corp., Engie SA and Wintershall as well as drilling operations at Statoil ASA. About 6% of the oil and gas output in western Europe’s largest producer will be halted, according to the Norwegian Oil and Gas Association.

Norway oil worker talks hold 6% of production in the balance

Natural gas exports from the U.S. Gulf Coast will reach buyers in Asia and South America faster and at lower costs thanks to an expanded Panama Canal that could see 550 tankers a year by 2021. As of Sunday, the canal linking the Pacific and Atlantic oceans was open to the size of vessel typically used to carry liquefied natural gas after a $5.3 billion expansion. The shortcut will shrink travel times for ships carrying gas from U.S. shale fields and encourage utilities and traders who have reserved liquefaction capacity to actually use those plants.

Panama Canal to see 550 U.S. LNG tankers a year following expansion

BP, on behalf of the Tangguh Production Sharing Contract partners, announced that the final investment decision (FID) has been approved for the development of the Tangguh Expansion Project in the Papua Barat Province of Indonesia. The Tangguh Expansion Project will add a third LNG process train (Train 3) and 3.8 mtpa of production capacity to the existing facility, bringing total plant capacity to 11.4 mtpa. The project also includes two offshore platforms, 13 new production wells, an expanded LNG loading facility and supporting infrastructure.

BP approves expansion of Indonesia’s Tangguh LNG facility

The oil market surplus that vanished last quarter, helping prices post the best quarter in seven years, may return as early as this month as disrupted supply starts to pump again. Canadian output returning from outages caused by wildfires will be enough to put the market back into oversupply and oil may return to a trading range of $30 to $50, according to Morgan Stanley. Goldman Sachs Group Inc. said that a recovery in Nigerian production is a risk to its $50/bbl forecast for the second half of 2016. The bank said earlier that the market had switched to deficit in May.

Oil deficit dalliance seen ending as disrupted crude returns

A new independent estimate of world oil reserves has been released by Rystad Energy, showing that the U.S. now holds more recoverable oil reserves than both Saudi Arabia and Russia. For U.S., more than 50% of remaining oil reserves is unconventional shale oil. Texas alone holds more than 60 Bbbl of shale oil, according to this new data.

U.S. now holds more oil reserves than Saudi Arabia: Rystad

OPEC’s crude production increased in June as Nigeria raised output following repairs to some infrastructure that had been damaged by militant attacks. Nigeria pumped an average 1.53 MMbopd last month, a gain of 90,000 bopd from May, according to a Bloomberg survey. The West African country was able to repair some pipelines after agreeing a cease-fire with rebels in the Niger River Delta, Emmanuel Kachikwu, Nigeria’s state minister for petroleum resources, said on June 27. On Sunday however, the Niger Delta Avengers militant group claimed five more attacks on oil installations in the region.

OPEC crude production rises in June led by gains in Nigeria

Russian crude exports are on track to set a record this year, which is intensifying competition in Europe as Iran boosts shipments to the region.  Exports rose 4.9% to 5.55 MMbpd in the first half of the year from the same period in 2015. Russia’s output in June climbed 1.14% from a year earlier to 10.843 MMbpd, with increases every month since July 2014, according to data from the Energy Ministry.

Russian oil exports set for record as Europe competition grows

As oil prices began recovering from 13-year lows early this year, U.S. shale producers ramped up their hedges against another slump on a scale unseen for at least a year, a Reuters analysis of company disclosures shows. A review of disclosures by the largest 30 U.S. shale firms showed 17 of them increased their hedge books in the first quarter, the most at least since early 2015. Several, including EOG Resources Inc (EOG.N) and Devon Energy Corp (DVN.N), two of the biggest shale companies, secured significant protection of future earnings for the first time in at least six months.

U.S. shale firms' first-quarter hedging rush may squeeze margins, spur output | Reuters

India’s burgeoning demand for liquefied natural gas is dictating how many tankers make it to Europe, the world’s dumping ground for the fuel. LNG imports to India jumped 43% in May from a year earlier, a contrast to western Europe where shipments have stagnated over the past three months. The world’s second-most populous nation is expected to double its LNG intake over the next four years, according to energy consultants Wood Mackenzie Ltd.

India demand surge overtakes LNG otherwise meant for Europe

Liam Denning over at Bloomberg Gadfly put some numbers to the phenomenon, using data from Oslo-based Rystad Energy. The data is revealing, painting a portrait of an industry that has scaled down the size of new oil projects. Intriguingly, the focus on smaller oil fields began before the plunge in oil prices, although the price crash is accelerating that trend.

Big Oil Could Spark A Renaissance In U.S. Shale | OilPrice.com

OPEC is no longer functioning as a cohesive group. Is it time for OPEC to finally dissolve? The major oil-producing countries in the world heavily depend on the income from oil. A sharp drop in oil prices has rendered them vulnerable to terrorist attacks and political uprising. As members of the Organization of the Petroleum Exporting Countries (OPEC), these countries previously wielded power over oil prices and enjoyed the benefits of high oil prices.

Is It Time For OPEC To Dissolve? | OilPrice.com

A blistering start to summer is helping put U.S. natural gas futures on course for the biggest gain in eight years. Gas has surged 18% this year, rebounding from a 17-year low. Drillers, burned by earlier declines, are refilling storage at half last year’s pace as extreme heat boosts the use of air conditioners, increasing gas demand from power plants. By November, supplies will probably drop below the five-year average, the benchmark for normal levels, for the first time in 13 months, based on storage rates.

Record heat wiping out U.S. gas glut fuels best rally since ’08

Exxon Mobil Corp. and Qatar Petroleum have teamed up to look at energy assets in Mozambique, home to some of the biggest natural gas discoveries in a generation, according to four people with knowledge of their plans. The companies are considering buying stakes in gas fields owned by Anadarko Petroleum Corp. and Eni SpA, the people said, asking not to be identified because the matter is confidential. They have a strong relationship and often discuss potential investments, though no final agreement has been reached, the people said.

Exxon said to join forces with Qatar for Mozambique gas assets

Oil swung between gains and losses after falling to a one-week low as investors fled to haven assets on concern the UK’s vote to leave the European Union (EU) will hinder global growth. Futures dropped as much as 1.5% in New York before inching higher. Gold surged to a two-year high while yields on German and Japanese government bonds slipped to record lows after Bank of England chief Mark Carney said risks from Britain’s decision have started to crystallize. The market shrugged of the risk of oil-industry strikes in Norway and Nigeria. Government data Thursday will show U.S. crude supplies declined last week, according to a Bloomberg survey.

Oil swings between gains, losses as traders weigh Brexit effect

The cost to drill wells at Argentina’s Vaca Muerta, site of the world’s second-biggest shale reserves, has dropped 20% this year, putting Chevron Corp. and its partners closer to meeting spending goals. Drilling costs at Loma Campana field in Vaca Muerta have declined to $11.2 million per well from $14 million in the last three months of 2015, Ali Moshiri, president for Latin America and Africa, said in an interview with Bloomberg News in Buenos Aires on Thursday. That’s putting the joint venture with YPF SA closer to its goal of drilling wells at less than $10 million, he said.

Chevron Vaca Muerta costs drop 20% nearing goals, Moshiri says

It’s time for oil investors to start taking electric cars seriously. In the next two years, Tesla and Chevy plan to start selling electric cars with a range of more than 200 miles priced in the $30,000 range. Ford is investing billions, Volkswagen is investing billions, and Nissan and BMW are investing billions. Nearly every major carmaker—as well as Apple and Google—is working on the next generation of plug-in cars. This is a problem for oil markets. OPEC still contends that electric vehicles will make up just 1 percent of global car sales in 2040. Exxon's forecast is similarly dismissive.

Another Oil Crash Is Coming, and There May Be No Recovery - Bloomberg Business

Private equity (PE) firms are readying to deploy capital into the global oil and gas sector with 25% planning acquisitions before the end of the year and 43% by the first half of 2017, according an EY global survey of 100 PE firms active in the sector. With $971.4 billion of PE dry powder from June 2016 still to be deployed, EY's survey, Capitalizing on opportunities: Private equity investment in oil and gas, reveals that PE firms are now preparing to increase investment into the sector.

Private equity set to unleash trillion dollar warchest, EY survey finds

Oil markets will remain stable this year even as Iran plans to keep boosting crude exports to regain the market share it lost due to sanctions, according to a senior official at state-run National Iranian Oil Co. Iran exports about 2 MMbbl of its daily output of 3.8 million, said Mohsen Ghamsari, NIOC’s director of international affairs. The country has regained about 80% of the market share it held before the U.S. and European Union tightened sanctions on its oil industry in 2012, he said. Sanctions were eased in January, and Iran plans to double crude exports.

Oil price seen stable even as Iran plans to boost crude exports

Oil dropped to a two-month low after U.S. producers deployed the most rigs since April, signaling that output losses that trimmed a global glut may slow. Futures fell as much as 1.9% in New York to the lowest level since May 11. Rigs targeting oil in the U.S. rose by 10 to 351 last week, the highest since April 15, Baker Hughes Inc. said on its website. Money managers cut net long wagers on West Texas Intermediate to the lowest since March in the week ended July 5, Commodity Futures Trading Commission data show.

Oil falls to two-month low as U.S. drillers boost operations

About two-thirds of U.S. natural gas production and about half of U.S. oil production currently comes from hydraulically fractured wells. Fracking is an essential process in the U.S. oil and gas extraction process that has enabled the country to become self-sufficient in its hydrocarbon needs. The fracking industry is currently at a critical moment, facing reduced spending and increased environmental regulations. However, this is exactly the point where things get better. It’s this pressure that will bring fracking into the next decade, better, safer and stronger. It’s not the end of fracking, it’s simply the new beginning.

The Fracking Evolution: Better, Safer, Stronger | OilPrice.com

The new OPEC Monthly Oil Market Report is out with crude only production numbers for June 2016. OPEC added Gabon to its member countries this month. But I do not have historical production numbers for Gabon so this report does not include Gabon. (Click to enlarge) OPEC crude only production reached 32,643,000 barrels per day, (not including Gabon). This was an increase of just over a quarter of million barrels per day. See exact data below.

OPEC Production Reaches New All-Time High | OilPrice.com

On the surface, the recovery of the global oil market is firmly in place, signaling an end to two years of oversupply and collapsing prices. However, one key indicator is warning of turbulence ahead. Crude’s rally stalled near $50/bbl in the past month and the one-year price contango—where near-term deliveries are cheaper than those a year ahead—has almost doubled. That’s a signal that demand from refiners could be weakening. When the same thing happened last summer, a fragile oil rebound gave way to a renewed rout.

Return of oil contango shows price recovery to be bumpy ride

Oil traders don’t know who to follow these days. Weekly inventory reports that help set prices for crude futures come primarily from two sources: The industry-funded American Petroleum Institute and the U.S. government’s Energy Information Administration. In six of the past 10 weeks, however, the data reported by the two groups has differed by at least 2 MMbbl, with the gap for the week ended May 6 at 6.9 MMbbl. That week, the API showed a stockpile gain while the EIA saw a decline, one of eight weeks this year with diametrically opposed results. It’s a divergence that’s sending mixed signals to a market eager to determine when supply and demand will once again steady oil prices. The frequency of the gap "creates uncertainty in a market that already has enough uncertainty,"

Data gap whipsaws oil prices on differing views of stockpiles

Most of the oil projects planned over the next decade are economically viable with prices below $60 a barrel as explorers succeed in squeezing costs, consultant Wood Mackenzie Ltd. said. Oil explorers will be able to add 9 million barrels a day to global supply by 2025 with Brent crude under $60, mostly from U.S. shale, the Edinburgh-based company said in a study Wednesday. That’s about 70 percent of new projects under consideration, an increase from 50 percent a year ago. Still, the remaining 4 million barrels a day of production needed to meet demand by the middle of the decade may require prices as high as $85 a barrel, it said.

Most Global Oil Projects Seen Working Below $60 on Cost Cuts - Bloomberg

Oil fell after the biggest gain in three months as U.S. industry data showed the nation’s crude stockpiles increased, adding to concerns about oversupply. Futures lost as much as 1.6% in New York. Inventories rose 2.2 MMbbl last week, the American Petroleum Institute was said to report. Middle East production has climbed to a record while U.S. output slumps, a sign that OPEC’s strategy of defending market share is succeeding, the International Energy Agency said in its monthly oil market report.

Oil retreats after industry data show U.S. stockpiles expanding

The collapse in oil prices in 2014 left many planned oil investments with high costs and not commercially viable. Two years on, and the industry has started to adapt to lower oil prices, cutting costs, and getting more projects over the economic threshold. Future commercial supplies are now increasing again. Wood Mackenzie's recent analysis of the global oil market shows 70% of new drilling in U.S. tight oil plays and pre Final Investment Decision (FID) conventional oil projects are commercial under $60/bbl Brent. This is an increase from 50% a year ago. These projects are crucial to offset global demand growth and declines from existing production.

U.S. tight oil is biggest winner of cost cutting, Wood Mac says

Exxon Mobil Corp. made an indicative takeover proposal for InterOil Corp. that topped a competing $2.2-billion bid for the owner of trillions of cubic feet of natural gas discoveries in Papua New Guinea, a person with knowledge of the matter said. Exxon is still conducting due diligence and hasn’t yet submitted a formal offer, the person said, asking not to be identified as the information is private. There’s no certainty that any definitive bid from Exxon would be deemed superior to the existing buyout agreement with Oil Search Ltd., according to the person.

InterOil said to get Exxon buyout offer topping Oil Search