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RE: OPEC, for some quiet moments.. - admin - 07-16-2015

A technological revolution spurred the U.S. oil boom that resulted in the greatest increase in domestic oil production in a century, and while that has stuttered in the face of a major oil price slump and an OPEC campaign to maintain a grip on market share, the American response could be another technological revolution that demonstrates that the first one was merely an impressive embryonic experiment. It’s not only about shale now—it’s about reviving mature oil fields through advancements in enhanced oil recovery, potentially opening up not only new shale fields, but older fields that have been forgotten.

OPEC, Get Ready For The Second U.S. Oil Boom | OilPrice.com

"People overly focus on supply and demand, and the truth is it's the global economy that drives the price of oil, and China is a proxy for the global economy," he told CNBC's "Squawk Box." According to Signal's analysis, demand from China has an almost 50 percent correlation to the price of oil.

Never mind Iran. Oil price is going nowhere Citi

Saudi Arabia has borrowed $4bn from local markets in the past year, selling its first bonds for eight years as part of efforts to sustain high levels of public spending as oil prices slump. Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said the government would use a combination of bonds and reserves to maintain spending and cover a deficit that would be larger than expected.

Saudi Arabia borrows $4B as oil price reality hits home

It's been about a year since oil prices started their historic drop, falling from above $100/bbl to a bottom of about $45 in March. After creeping back to around $60, prices are shaky again amid news of a nuclear deal with Iran and record Saudi production. And low oil prices are good for growth, right? Cheap oil means cheap gasoline, and the assumption throughout the oil price rout has been that for the U.S. economy, built on consumer spending, cheap gas is all good. In theory, yes. In practice, it's been tough to find the benefits in the economic data this year.

Cheap oil proves bad for the economy, so far




RE: OPEC, for some quiet moments.. - admin - 07-17-2015

The technique itself is nothing new. Oil crews across the world have been schooled on its simple principles for generations: Identify aging, low-output wells and hit them with a blast of sand and water to bolster the flow of crude. The idea originated somewhere in the plains of the American Midwest, back in the 1950s. But as today’s engineers start applying the procedure to the horizontal wells that went up during the fracing boom that swept across U.S. shale fields over the past decade, something more powerful, more financially rewarding is happening.

Refracing fever sweeps across shale industry after oil collapse

Cuadrilla Resources Ltd., the driller whose fracing ambitions have sparked protests, was refused permission to drill in northwest England in the latest blow to the UK’s nascent shale-gas industry. Lancashire Council voted on Monday to reject the company’s plans to drill at its Preston New Road site, according to the authority’s Twitter feed. Council officials had previously recommended drilling at the site be approved.

Cuadrilla drilling rejected in blow to UK fracing industry

The shale oil boom that turned the U.S. into the world’s largest fuel exporter and brought $3 gasoline back to America’s pumps is grinding to a halt. Crude output from the prolific tight-rock formations, such as North Dakota’s Bakken and Texas’s Eagle Ford shale will shrink 1.3% to 5.58 MMbpd this month, based on Energy Information Administration estimates. It’ll drop further in July to 5.49 MMbpd, the agency said Monday.

America’s shale oil boom grinding to halt as OPEC stands pat

Canada’s National Energy Board (NEB) has approved the application of Quicksilver Resources Canada for a 25-year natural gas export license with a maximum term quantity of 733 Bcm. The issuance of this license is subject to the approval of the Governor in Council. When evaluating natural gas and LNG export license applications, the NEB considers if the quantity of gas proposed to be exported is surplus to Canadian requirements, taking into account trends in the discovery of gas in Canada.

Canada’s NEB approves Quicksilver's LNG export license




RE: OPEC, for some quiet moments.. - admin - 07-18-2015

Importantly, however, the company signaled that it thinks some of the deep cutbacks seen in the oil industry over the last year may be coming to an end. And as the world's biggest oilfield services provider, Schlumberger is particularly attuned to changes in the industry.

Schlumberger Q2 earnings - Business Insider

It may be difficult to look beyond the current pricing environment for oil, but the depletion of low-cost reserves and the increasing inability to find major new discoveries ensures a future of expensive oil. While analyzing the short-term trajectory of oil prices is certainly important, it obscures the fact that over the long-term, oil exploration companies may struggle to bring new sources of supply online. Ed Crooks over at the FT persuasively summarizes the predicament. Crooks says that 2014 is shaping up to be the worst year in the last six decades in terms of new oil discoveries (based on preliminary data).

Why Oil Prices Must Go Up | RealClearEnergy

Royal Dutch Shell expects oil prices to recover gradually over the next five years, with progress slowed by persistent global oversupply and receding Chinese demand growth. The Anglo-Dutch energy giant is betting on crude rising to $90 a barrel by 2020, a key assumption in its move to buy rival BG Group for $70 billion to help transform it into a leading player in the costly deepwater oil production and liquefied natural gas (LNG) markets.

Shell expects oil price recovery to take several years - Yahoo Finance

The size of BHP Billiton Ltd.’s $2.8-billion writedown for its U.S. shale assets took some banks by surprise: at least two thought it was too small. After the latest charge, Melbourne, Australia-based BHP values its U.S. onshore business at $24 billion. That’s more than 40% higher than what analysts at JPMorgan Chase & Co. think it is worth and over twice Citigroup Inc.’s estimate. The producer said its U.S. onshore assets would generate positive cash flow in the year to June 2016 with oil at $60/bbl, above current prices.

BHP shale writedown has some banks asking: Where’s the rest?




RE: OPEC, for some quiet moments.. - admin - 07-19-2015

Canada needs to connect to global liquid natural gas (LNG) markets to avoid a decade of decline in natural gas production, the Canadian Association of Petroleum Producers (CAPP) said Wednesday in its 2015 natural gas forecast and LNG report. “Accessing the global LNG market can strengthen the long-term viability of Canada’s natural gas industry and backstop the significant economic benefits it creates for Canadians,” said CAPP President and CEO Tim McMillan.

Global LNG market vital to grow Canada’s natural gas production

Russian major oil and gas companies are uniquely positioned to take advantage of the current macro-economic environment and favorable fundamentals, and to withstand any prolonged period of oil price weakness, according to the latest analysis from Wood Mackenzie.

Russian majors well positioned for prolonged downturn, Wood Mac says

International oil companies will rush back to Iran after the removal of sanctions, helping the OPEC member double production by the end of the decade, according to former Eni SpA CEO Paolo Scaroni. The country can restore production to 1970s levels of 6 MMbpd by 2020 as its “plentiful” and inexpensive reserves draw in foreign oil explorers despite the risk of sanctions being restored, Scaroni said. The flood of Iranian oil into a global market that’s already oversupplied will keep crude prices low for the rest of the decade, he said.

Oil ‘El Dorado’ Iran can double output by 2020, former Eni CEO says

Going by a recent report from Fitch, Iran has close to 34 trillion cubic meters of natural gas reserves, which is around 18 percent of the total global natural gas reserves. This means that Iran definitely has the potential to become a major player in the natural gas market once the sanctions are lifted. It is interesting to note that, in spite of the western sanctions, Iran’s natural gas production grew in 2014 as another phase of its largest natural gas field, the South Pars, came online. Although Iran has one of the highest global natural gas reserves, it contributes merely 1 percent to the total global natural gas trade with almost 90 percent of its natural gas exports going to Turkey, while the remainder goes to Armenia and Azerbaijan. Iran is at a strategic location where it can benefit from the growing natural gas demand from Asian countries like India, China and Pakistan. It is therefore planning a number of gas pipelines once the sanctions are lifted.

What The Iran Deal Could Mean For Natural Gas Markets | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 07-20-2015

Drillers sidelined rigs in U.S. oil fields for the first time in three weeks, resuming the steepest and most protracted decline in drilling on record. Rigs targeting oil in the U.S. decreased by 7 to 638, Baker Hughes Inc. said on its website Friday. They rose by five last week. Natural gas rigs rose by 1 to 218 and miscellaneous rigs were unchanged at 1, bringing the total down by 6 to 857.

Oil drilling retreat resumes in U.S. after two-week reprieve

Schlumberger’s second-quarter earnings fell 30% year-on-year as the downturn in the market continues to take its toll. The company reported a second-quarter profit of $1.12 billion, or 88 cents a share, down from $1.6 billion, or $1.21 a share, during the like period last year.

Schlumberger profit falls 30% on oil price slump

Eight months into OPEC’s plan to hit rival oil producers, the casualties are mounting. Surprisingly, the most resilient may be the one that triggered the fight: the U.S. Projections for combined daily output from Brazil, Canada, Russia, Mexico and Colombia by the end of the decade were cut by 2.8 MMbbl since oil slumped last year, data from the countries and the International Energy Agency show. In contrast, the U.S. Energy Department increased its estimate for crude output in 2020 by more than a million barrels.

U.S. oil rolls with OPEC’s blows as Brazil and Canada take hits

Despite the shale slowdown in the United States and disappointing results across Europe, largely caused by the recent dramatic decline in international oil prices, Argentina’s small but burgeoning shale industry still shows great potential. A unique convergence of geological, political and economic factors has placed the country on the cusp of impressive growth, although certain challenges remain.

Can This Next Shale Hotspot Live Up To The Hype? | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 07-21-2015

The oil guru who predicted last year’s rout said $100/bbl crude is likely to return within five years as faltering supply fails to meet demand. Gary Ross, the founder of consultants PIRA Energy Group, said oil markets aren’t nearly as oversupplied as many believe and spare capacity is tight since Saudi Arabia is pumping all the crude it can without new drilling.

Oil guru who called 2014 slump sees return to $100 crude by 2020

The U.S. Department of Energy (DOE) has granted Bear Head LNG Corporation and Bear Head LNG (USA), LLC authorization to export up to 440 Bcf per year of U.S. natural gas to Canada, and up to eight million tonnes per annum (mtpa) of LNG from Canada to free trade agreement (FTA) countries.

Bear Head LNG receives DOE approval for exports to FTA countries

Those countries lag far behind the United States in production, however. Though China, the world’s largest annual emitter of carbon dioxide, has nearly as much technically recoverable shale gas as the U.S. according to recent EIA estimates, challenging geology has been a major obstacle, and the country has had to scale back its near-term goals dramatically (see “China’s Shale Gas Bust&rdquoWink.

Countries Outside North America Struggle to Tap Huge Shale Gas Resources | MIT Technology Review

Ghawar is the world’s oil spigot. It’s the biggest conventional field in the world’s biggest-producing country, Saudi Arabia. Statistics about Ghawar—a narrow, deep deposit in porous limestone—are a state secret. The best guess, according to Rasoul Sorkhabi, a geology professor at the University of Utah, is that the field accounts for about 60 percent of Saudi oil.

Fuel Feud Pits Saudis’ Secretive Ghawar Against Sprawling Bakken - Bloomberg Business




RE: OPEC, for some quiet moments.. - admin - 07-22-2015

Halcon Resources Corp. almost ran into trouble with its banks in June 2013. And again in March 2014. And in February 2015. Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon’s banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing. That kind of patience may be coming to an end... Banks are already preparing for the next reevaluation of oil and gas credit lines, reviews which typically take place twice a year in April and October. The loans are based on the value of drillers’ producing reserves, which has shrunk as oil prices fell. Many companies are also losing protection as hedges that locked in prices as high as $90 a barrel begin to expire.
 Wall Street Lenders Growing Impatient With U.S. Shale Revolution - Yahoo Finance
An all-star panel of upstream-related speakers managed to agree on Monday morning, that the Iranian deal with the U.S. and other Western countries may pose an oversupply problem for oil markets in the long term, and it will create problems in the very short term, as well. Speaking at the opening plenary session of the Unconventional Resources Technology Conference (URTeC) in San Antonio, Adam Sieminski, administrator of the U.S. Energy Information Administration (EIA), noted that Iran has been storing oil in very large crude carriers (VLCCs) along its coastline, just waiting for a nuclear deal to be signed that would lift sanctions and allow it to throw that oil onto the market.

URTeC '15: Speakers assess global market in wake of Iranian deal

Iran will emphasize regaining oil sales it lost due to sanctions over helping to prop up prices once curbs that choked off the nation’s crude exports are lifted. The Persian Gulf producer plans to restore output to the level it achieved before the economic curbs crippled production and exports, Oil Minister Bijan Namdar Zanganeh said Monday in Tehran. Iran wants to pump almost 4 MMbopd within seven months once sanctions are removed and 4.7 MMbopd as soon as possible after that, he said.

Iran seeks to regain market share regardless of oil price

Energy producers are abandoning the search for oil and natural gas close to shore in the U.S. Gulf of Mexico as drilling budgets shrink and exploration migrates to land-based shale fields. The number of permits for new wells in seas less than 500 ft (152 m) deep plunged 74% to nine during the first six months of this year from a year earlier, according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE).

Oil explorers retreat from shallow U.S. Gulf in shift to shale




RE: OPEC, for some quiet moments.. - admin - 07-23-2015

IHS expects continued oil sands production growth through 2020, albeit lower than what would be expected had prices remained higher, according to a new production forecast by the Englewood, Colorado-based organization. Oil sands production is forecast to grow by 800,000 bpd by 2020, a level that will keep Canada among the largest sources of growth in global oil supply throughout that period. Canada will remain the third largest source of supply growth in the world, a position it has held since 2005.

Oil sands production growth to continue despite oil price slump, IHS says

ConocoPhillips ended talks with PetroChina Co. on a shale gas development in the country after a two-year study. “The right commercial decision was to halt further discussions on this block,” ConocoPhillips’s China unit said in an emailed response to questions Wednesday. The company said it made the decision last year. While China has sought to replicate the U.S. shale boom, the nation last year cut its 2020 shale gas production target to about a third of its original estimate amid difficult geology, lack of infrastructure and limited exploration rights. The nation holds the world’s largest shale gas reserves.

ConocoPhillips halts Sichuan shale gas talks with PetroChina

Keppel Shipyard Limited, a wholly owned subsidiary of Keppel Offshore & Marine, has signed a contract worth approximately $684 million with Golar Gandria N.V., a subsidiary of Golar LNG Limited, to perform the conversion of a Moss-type LNG carrier, the Gandria, into a Golar floating liquefaction (GoFLNG) facility. The contract will become effective upon the parties fulfilling certain conditions precedent by Sept. 21, 2015.

Keppel bags third floating liquefaction facility conversion worth $684 million

The U.S. Strategic Petroleum Reserve (SPR), once seen as a cornerstone of America’s energy security, is losing its shine in Washington. The SPR was established in the aftermath of the 1973-1974 oil embargo, which led to high gasoline prices, fuel rationing, price controls, and long lines at gas stations. The U.S. government decided to stockpile oil in salt caverns in Texas and Louisiana, fuel that could be used in the event of a supply outage. Today, the SPR holds 695 million barrels of oil. In the decades since, oil from the SPR has only been released a handful of times – including the Persian Gulf War in 1990-1991, Hurricane Katrina in 2005, and during the Arab Spring in 2011.

Strategic Petroleum Reserve No Longer Key Part Of U.S. National Security | OilPrice.com




RE: OPEC, for some quiet moments.. - admin - 07-24-2015

Imagine parking your $300 million boat for months out in the open sea, with well-paid mechanics hovering around it and the engine running. The Gulf of Mexico and the Caribbean Sea have become a garage for deepwater drillships—at a cost of about $70,000 a day each. It’s either that or send your precious rig to a scrapyard.

Oil rigs left idling turn Caribbean into expensive parking lot

A report by Sberbank warned that Gazprom’s revenues are likely to drop by almost a third to $106bn this year from $146bn in 2014, seriously eroding Russia’s economic base. Gazprom alone generates a tenth of Russian GDP and a fifth of all budget revenues.

Oil and gas crunch pushes Russia closer to fiscal crisis - Telegraph

In a recent note to clients, J. P. Morgan's Sergey V. Arinin estimated just how much the Kingdom's November decision may have cost them and OPEC overall: "Our simple calculation shows that the strategy to increase production cost Saudi Arabia about $90 billion/year and probably close to $200 billion/year for OPEC as a whole," he writes. "We believe that Saudi Arabia may hav accommodated another 1 mbpd of shale oil supply without much sacrifice in 2015 (and possibly the same in 2016)."

How much OPEC's decision to go after market share cost them - Business Insider

Martijn Rats and Haythem Rashed, in a report to investors yesterday. That confidence was based on four premises, they said, and only three have proven true.

Oil Warning: Crash May Be Much Worse Than You Think - Yahoo Finance




RE: OPEC, for some quiet moments.. - admin - 07-27-2015

The signing of a contract with China for the supply of gas through the 'Altai' pipeline (or 'the Power of Siberia - 2'Wink has been delayed indefinitely, two federal officials told 'the Vedomosti'. The growth of the Chinese economy is slowing down, China is revising its energy needs, they explain. The growth in demand for gas in China is slowing, and due to the fall in oil prices, LNG, for example from Australia, is becoming more accessible for China, the analyst of 'Sberbank CIB' Valeriy Nesterov informs. According to BP, in 2012-2013 gas consumption in China has grew by 12-13%, while in 2014 the increase was 8.5% and reached 185.5 billion cubic meters. In H1 2015 the growth was only 2%, Nesterov states, in this situation 'Gazprom' will not be able to get a high price for the 'Altai' gas.

OilVoice | Russia: The conclusion of the second gas contract with China is postponed

It looks to me as though we are heading into a deflationary depression, because prices of commodities are falling below the cost of extraction. We need rapidly rising wages and debt if commodity prices are to rise back to 2011 levels or higher. This isn't happening. Instead, Janet Yellen is talking about raising interest rates later this year, and we are seeing commodity prices fall further and further. Let me explain some pieces of what is happening.

OilVoice | Nine Reasons Why Low Oil Prices May 'Morph' Into Something Much Worse - Page 1

The plunge in oil prices last year led many to say that a decline in U.S. oil production wouldn't be far behind. This was because almost all the growth in U.S. production in recent years had come from high-cost tight oil deposits which could not be profitable at these new lower oil prices. These wells were also known to have production declines that averaged 40 percent per year. Overall U.S. production, however, confounded the conventional logic and continued to rise--until early June when it stalled and then dropped slightly. Anyone who understood that U.S. drillers in shale plays had large inventories of drilled, but not yet completed wells, knew that production would probably rise for some time into 2015--even as the number of rigs operating plummeted.

This Is Why A Serious Decline In U.S Shale Plays Is Not Far Away | OilPrice.com

I'm going to run through a few seemingly unrelated facts here fairly quickly, but the message is: the North American energy market is so opaque right now-because fundamentals are changing so fast-that my #1 2015 credo-SMALL POSITIONS-still holds true. And be prepared to change your mind in a hurry. This is the chart that is giving oil investors around the globe-but especially in North America-complete fits:

OilVoice | I've Never Seen A Market Like This