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RE: OPEC, for some quiet moments.. - admin - 03-23-2016

Canadian regulators extended by three months Petroliam Nasional Bhd.’s application to build a liquefied natural gas terminal on the nation’s Pacific coast so the Malaysian company can provide more information about the project’s environmental impacts. The Canadian Environmental Assessment Agency announced the extension Saturday in a filing after Pacific NorthWest LNG, as the project is known, detailed changes to its construction methods and schedule. Regulators need more information to review and analyze the project, the agency said.

Canadian Agency Extends Application for Petronas LNG Project - Bloomberg Business

Eni SpA on Friday announced plans for €13 billion ($14.71 billion) in cost cuts and asset sales, becoming the latest major energy company to further adjust its strategy to the oil price slump.

Eni Plans More Than $14 Billion in Cost Cuts, Asset Sales - WSJ

Venezuela's state-oil firm PDVSA has bought a 500,000-barrel cargo of U.S. crude from trading company PetroChina for delivery April 1-10 at its terminal in the Caribbean island of Curacao, traders told Reuters on Monday. The purchase is separate from a large tender launched by PDVSA to buy some 8 million barrels of U.S. and Nigerian crudes that was awarded last week to British firm BP and China Oil.

PDVSA to receive U.S. crude cargo from PetroChina: traders | Reuters

One of the biggest oilfields in China, Daqing, has slipped into a loss of around $700 million over the first two months of this year, according to the energy behemoth that operates the field. This level of loss is substantial even for a company as large as CNPC, and it’s a clear indicator that the world’s second-largest oil consumer has not been spared the fallout from the international price slump.

China’s Oil Majors See Production In Biggest Fields Shrink |

RE: OPEC, for some quiet moments.. - admin - 03-26-2016

Explorers once again idled drilling rigs in U.S. oil fields as crude inventories continue climbing, boosted by a surge in imports. Rigs targeting oil in the U.S. fell by 15 to 372, after one rig was added last week, Baker Hughes Inc. said on its website Thursday. More than 150 have been parked since the start of the year. Natural gas rigs gained 3 to 92, bringing the total down by 12 to 464.

U.S. drillers return to parking oil rigs as supplies build

In its 2016 energy outlook, the oil giant BP predicted that the US would be "energy self-sufficient" by 2021 and oil self-sufficient by 2030. Oil is used for products beyond just power, such as plastics, which is why oil independence would come shortly after energy independence. According to the report, much of this independence will be a function of a global shift, an adoption of more renewable energy, and the growing impact of shale drilling.

BP: US energy self-sufficient in 5 years - Business Insider

An oil shock may be lurking around the corner as the  price bust has hammered investment in future supply, according to the International Energy Agency. “Historic” investment cuts taking place now increase the possibility of oil-security surprises in the “not-too-distant” future, Neil Atkinson, head of the IEA’s Oil Industry and Markets Division, said in Singapore on Wednesday. About $300 billion is needed to sustain the current level of production, and nations including the U.S., Canada, Brazil, and Mexico are facing difficulty in keeping up investments, he said.

Oil security seen at risk by IEA on ‘historic’ spending cuts

A wave of projects approved at the start of the decade, when oil traded near $100/bbl, has bolstered output for many producers, keeping cash flowing even as prices plummeted. Now, that the production boon is fading. In 2016, for the first time in years, drillers will add less oil from new fields than they lose to natural decline in old ones. About 3 MMbopd will come from new projects this year, compared with 3.3 MMbopd lost from established fields, according to Oslo-based Rystad Energy AS. By 2017, the decline will outstrip new output by 1.2 MMbpd as investment cuts made during the oil rout start to take effect. That trend is expected to worsen.

Drillers can't replace lost output as $100 oil inheritance spent

RE: OPEC, for some quiet moments.. - admin - 03-28-2016

Israel’s High Court struck down the government’s controversial proposal to regulate the natural gas industry, in a dramatic ruling that blocked plans to develop the country’s largest field and conclude export deals. In a summary of its decision, the court said it objected to the so-called stability clause that would have prevented major regulatory changes for 10 years, inserted to encourage investment. It gave the government a year to revise its plan.

Israel's High Court strikes down government natural gas plan

Explorers once again idled drilling rigs in U.S. oil fields as crude inventories continue climbing, boosted by a surge in imports. Rigs targeting oil in the U.S. fell by 15 to 372, after one rig was added last week, Baker Hughes Inc. said on its website Thursday. More than 150 have been parked since the start of the year. Natural gas rigs gained 3 to 92, bringing the total down by 12 to 464.

U.S. drillers return to parking oil rigs as supplies build

Exxon Mobil Corp. is in advanced talks to acquire a stake in a giant Mozambique natural gas development project from Italy’s Eni SpA, a sign that major oil companies are again hunting for deals after energy prices crashed in 2014.

Exxon Mobil in Talks to Buy Stake in Big Mozambique Gas Project From Eni SpA - WSJ

This counterintuitive move highlights a paradox driving the Russian oil industry — thanks to the weakness of the rouble and the nature of the country’s tax system, energy companies are coping with the collapse in crude prices better than their peers almost anywhere in the world. Russia, the world’s third-largest oil producer, lifted output to a post-Soviet record of 10.91m barrels a day in January, partly due to a 12 per cent increase in drilling last year. But that may not be enough. With the enormous west Siberian fields developed in Soviet times in decline, Russia needs to invest ever more just to keep oil production steady.

Amid the oil price crash, Rosneft is running to stand still -

RE: OPEC, for some quiet moments.. - admin - 03-31-2016

Total's supercomputer, Pangea, recently boosted its computing power from 2.3 to 6.7 petaflops, the equivalent of more than 80,000 laptops combined. Its storage capacity has also been increased, to 26 petabytes—the equivalent of 6 million DVDs. With this upgrade, Pangea is the industry’s top computer and among the top 10 most powerful computers, public or private, worldwide in the TOP500 ranking.

Total's supercomputer now the industry’s most powerful

Iran will attend talks with fellow OPEC members and Russia in Qatar next month without joining their proposal to freeze crude oil production, according to a person familiar with the nation’s policy. Oil Minister Bijan Namdar Zanganeh will attend the discussions in Doha on April 17, said the person, who asked not to be identified as the talks are private. Iran will maintain its policy of regaining market share lost during years of sanctions so won’t accept limits on its output, the person said. Most OPEC members, including Saudi Arabia, have said they will go to the meeting.

Iran said to attend Doha talks without joining oil freeze

Pierre Andurand, a hedge fund manager who predicted the oil collapse, said crude is starting a “multi-year bull run” because low prices have curbed supply. Crude futures, currently trading near $40/bbl, will rebound to $60 to $70 this year and $80 in 2017, the chief investment officer of London-based hedge fund Andurand Capital Management LLP said in a newsletter to investors. A spokesman for the money manager declined to comment.

Oil trader who predicted slump sees bull run starting

ABB has won a five-year contract to deliver equipment and services for Shell’s Prelude FLNG, the world’s first floating liquefied natural gas (FLNG) facility, the largest floating facility ever built. The order includes the delivery of motors, generators, variable speed drives and low-voltage switchgear and guarantees service and lifecycle management of the electrical equipment, as well as service and support for motors from third-party vendors.

ABB to provide equipment and services for world's largest FLNG facility

RE: OPEC, for some quiet moments.. - admin - 04-01-2016

But Credit Suisse Group AG Global Energy Economist Jan Stuart concludes that oil demand "growth appears to be re-accelerating" in 2016, with the recent bout of softness attributable to a warm winter, subdued activity in resource-extracting industries, and persistent weakness in select sputtering emerging markets like Russia and Brazil. "Oil demand growth is alive and well," he writes in a recent note. "We think that with hindsight this winter will look like a dip in an otherwise still unfolding fairly strong growth trend that is partly fueled by the ongoing economic recovery of in North America and Europe and longer standing trends across key emerging market economies."

The death of oil demand has been greatly exaggerated: Credit Suisse

Today, I'm going to try and tackle the reasoning for my wild predictions of oil reaching triple digits by the end of 2017. While I am nearly alone in these forecasts, they are not just pulled out of space, but with deep regard for the fundamental supply/demand picture that everyone mostly agrees upon, combined with what I think is a deeper insight into the likely trajectory of oil company leverage, financing and the role of financial oil derivatives.

The Case for $120 Oil in 2018 - TheStreet

Liquefied Natural Gas Limited’s wholly owned subsidiary, Bear Head LNG Corporation, Inc. has reached an agreement to purchase additional land from Nova Scotia Business Inc. (NSBI) to support expansion of its proposed LNG facility on the Strait of Canso in Richmond County, Nova Scotia.

Bear Head LNG buys additional land as it expands proposed facility

BP and China National Petroleum Corporation (CNPC) today signed a production sharing contract (PSC) for shale gas exploration, development and production in the Neijiang-Dazu block in the Sichuan basin, China. Witnessed by BP Group Chief Executive Bob Dudley and CNPC Chairman Wang Yilin, the contract is BP’s first shale gas PSC in China and covers an area of approximately 1,500 km2. CNPC will be operator for this project.

BP and CNPC sign BP's first shale gas production sharing contract in China

RE: OPEC, for some quiet moments.. - admin - 04-03-2016

Oil began its calamitous slide in mid-2014, and there’s been a lot of speculation since then about when—and how quickly—it will recover. By analyzing past oil cycles and their drivers, we can understand what the signs of a sustainable rally might be.

These 3 things mark a turning point in crude oil - Business Insider

With U.S. oil prices now trading below $40 a barrel, the corporate casualties are already mounting. More than 50 North American oil and gas producers have entered bankruptcy since early 2015, according to a Reuters review of regulatory filings and other data. While those firms account for only about 1 percent of U.S. output, based on the analysis, that count is expected to rise. Consultant Deloitte says a third of shale producers face bankruptcy risks this year.

RPT-As US shale drillers suffer, even the bankrupt keep pumping oil | Reuters

Saudi Arabia is getting ready for the twilight of the oil age by creating the world’s largest sovereign wealth fund for the kingdom’s most prized assets. Over a five-hour conversation, Deputy Crown Prince Mohammed bin Salman laid out his vision for the Public Investment Fund, which will eventually control more than $2 trillion and help wean the kingdom off oil. As part of that strategy, the prince said Saudi will sell shares in Aramco’s parent company and transform the oil giant into an industrial conglomerate. The initial public offering could happen as soon as next year, with the country currently planning to sell less than 5 percent.

Saudi Arabia Plans $2 Trillion Megafund for Post-Oil Era: Deputy Crown Prince - Bloomberg

OPEC expects oil prices to rebound to a “moderate” level even if Iran doesn’t join other producers in an agreement to freeze production. About 15 or 16 nations will attend the freeze discussions in Doha, Qatar, on April 17, Abdalla El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said at a press conference in Vienna on Monday. While all members of the group have been invited, not all will attend and he didn’t know whether Iran will join in.

OPEC sees moderate oil bounce even if Iran won't join freeze

RE: OPEC, for some quiet moments.. - admin - 04-05-2016

Saudi Arabia will only freeze its oil output if Iran and other major producers do so, the kingdom’s deputy crown prince said, challenging the country’s main regional rival to take an active role in stabilizing the over-supplied global crude market.

Saudi Arabia will only freeze oil production if Iran joins plan

Oil hit its lowest level in nearly a month last week, but one of Wall Street's top commodities analysts says a recovery is on the way in 2016. On CNBC's "Futures Now", global head of commodities strategy at RBC Capital Markets Helima Croft predicted that oil will rebound following a scheduled meeting between OPEC and non-OPEC members on April 17th in the Qatari capital. "We spent an entire year with [Saudi Arabia and Russia] saying everything was fine," explained Croft. "Their decision to come out and even mention a freeze was a catalyst for the rally" that recently pulled crude to within view of $40, Croft said. "As we look towards the April 17 meeting, I don't think Saudi Arabia would even show up in Doha if there wasn't going to be an agreement."

Oil could soon see $50 – here’s why: RBC analyst

BP is seeking to hit it big in China’s shale gas fields where competitors including Royal Dutch Shell have struck out. The London-based explorer on Thursday signed its first shale-gas production deal in China, joining the nation’s biggest oil company, China National Petroleum Corp., to target the same areas that rival ConocoPhillips has walked away from. Shell separately on Friday said it’s giving up on its shale acreage in China, where challenging drilling conditions stymied the exploitation of what’s estimated to be the world’s largest reserves.

BP taking a bet on China's shale gas while Shell backs out

Gail India Ltd. bought the second shipment of liquefied natural gas from Cheniere Energy Inc.’s Sabine Pass plant in Louisiana in a deal that makes it the first Asian importer of U.S. shale gas. The nation’s biggest supplier will receive the cargo, bought on spot basis, at the Dabhol import terminal on the country’s west coast by mid-April, Vandana Chanana, a company spokeswoman, said Friday by e-mail. Faith Parker, a spokeswoman at Cheniere in Houston, didn’t immediately respond to a voice mail left outside office hours and an email sent Friday morning.

India is first Asian importer of U.S. shale gas

RE: OPEC, for some quiet moments.. - admin - 04-06-2016

The Organization of Petroleum Exporting Countries and other major oil producing countries can reach an agreement for a production freeze, even if Iran doesn’t join the action meant to help shore up prices, according to Kuwait’s OPEC governor.

Producers can reach oil output freeze without Iran, Kuwait says

Al-Naimi is probably right. Left alone, the market will balance demand and supply; that is what markets do. And if OPEC and Russia manage some kind of actual production freeze, that will happen faster. One way or another, though, the factors that have been sending oil prices down for the past two years are changing. Drawing on the work of my McKinsey colleagues, here are two possible scenarios:

Black swans and barrels: Thinking about oil | Scott Nyquist | LinkedIn

Including the first train from Gorgon, Australia's LNG export capacity currently stands at 6.2 Bcf/d. If the additional LNG capacity currently under development is fully operational as planned by 2019, the country's LNG export capacity would likely increase to the largest in the world, at 11.5 Bcf/d, equivalent of one-third of global LNG trade in 2014.... Gorgon LNG is the first of the four new projects off the northern coast of Western Australia to be partially commissioned. Three other projects in the northwest—Prelude, Wheatstone and Ichthys—are still under construction. These three projects have a combined capacity of 2.8 Bcf/d and are expected to come online in 2016-18. Most new Australian liquefaction capacity is contracted on a long-term basis to countries in the Asia Pacific region. Among destinations for Australian LNG, Japan accounts for the largest share of contracted liquefaction output, with contracts for 79% of output from the existing liquefaction projects (in operation prior to 2014) and 35% from the new projects. China is the second-largest destination, with 15% of contracted LNG from the existing liquefaction projects and 23% from the new projects. However, almost half of LNG contracted to China (about 1 Bcf/d) has flexibility in destination clauses. This flexibility allows buyers to take these volumes to countries other than China. In contrast, only 7% of LNG contracted to Japan (about 0.4 Bcf/d) is flexible and can be shipped to other countries. Almost 2 Bcf/d of the new Australian liquefaction capacity will be marketed on a spot basis.

Australia's Gorgon, one of the world's largest LNG terminals, ships first cargo - Today in Energy - U.S. Energy Information Administration (EIA)

Moody's oil and gas Liquidity Stress Index (LSI) hit a record high of 31.6% in March, up from 27.2% in February. The overall LSI rose to 10.3% from 9%.The LSI measures the percentage of issuers with Moody's lowest liquidity rating of SGL-4."The composite LSI’s rise is echoing the climb following the last major turn in the credit cycle that started in mid-2007 and ultimately led to an LSI peak of 20.8% in March 2009," says Moody's John Puchalla, and though this spike is mostly about energy, liquidity cracks are beginning to show outside of that sector.

Moody's: Liquidity stress in energy hits record - iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA:HYG) | Seeking Alpha

RE: OPEC, for some quiet moments.. - admin - 04-07-2016

Estimated natural gas well completions decreased 70% in the first quarter of 2016 compared to year-ago levels, according to API's 2016 Quarterly Well Completion Report, First Quarter.

API: Oil and natural gas exploratory drilling down in first quarter

The reason that U.S. oil production has not fallen more is remarkable efficiency gains. Occidental Petroleum described a series of measures they have taken that have reduced the time it takes to complete a well by up to 50%, which could enable it to drill the same number of wells each month using half the number of rigs. Other innovations are allowing much more oil to be produced from each completed well. Decker, Flaaen, and Tito (2016) note that the average new well in the Bakken produced 200 barrels/day in 2007. Last year the number was 400 b/d. However, it remains true as ever that production from an average new well will have fallen off by half within a year of operation.

Productivity gains in U.S. shale oil | Econbrowser

The table below reports operating income for five of the most important companies in the shale oil boom, which between them produced almost a million barrels a day in 2014. Between them they lost $32 billion in 2015, a year when the average price of WTI was $49/barrel. So far in 2016 we’ve averaged $33/barrel. Despite ongoing productivity gains and cost savings, a significant fraction of current world oil production cannot be sustained at current prices.

Productivity gains in U.S. shale oil | Econbrowser

Oil climbed after U.S. crude inventories unexpectedly dropped from the highest level in more than eight decades. Futures rose the most in three weeks in New York. Crude supplies fell 4.94 MMbbl last week, Energy Information Administration data show. A 2.85 MMbbl gain was projected in a Bloomberg survey of analysts. Refineries processed the most crude in three months as output and imports slipped. Diesel led gains after the report showed stockpiles of distillate fuel, which includes diesel and heating oil, tumbled on the East Coast.

Oil surges as crude supply unexpectedly drops from 86-year high

RE: OPEC, for some quiet moments.. - admin - 04-10-2016

Mexico’s proven oil and gas reserves fell sharply last year as oil prices dropped and discoveries were modest.

Mexico’s Proven Hydrocarbon Reserves Fell 21% in 2015 - WSJ

Oil at $35/bbl is neither too high nor too low but just right to make shares of U.S. explorers worth buying, according to Goldman Sachs Group Inc. While prices of crude at that level are above cash costs of production, they will deter a rebound in shale output from occurring too early, the bank’s New York-based analysts including Brian Singer said in a report dated April 6. Oil at $30 to $35/bbl should keep the behavior of U.S. companies unchanged and help lift West Texas Intermediate to $55 to $60/bbl in 2017, according to Goldman.

Goldman says $35 oil is Goldilocks ideal for U.S. explorers

Natural gas prices should double over the next year. Over-supply plus a warm 2015-2016 winter have resulted in low gas prices. That is about to change because supply is decreasing

Why Natural Gas Prices Could Double From Here | Zero Hedge

Norway will allow increased production from its biggest natural gas field as Europe’s second-largest supplier of the fuel prepares for increased competition with Russia and the U.S. The production permit for Troll was increased 10% for the gas year starting Oct. 1, according to field operator Statoil ASA. Norway last year installed two new compressors at the North Sea field, ending technical issues that previously limited capacity and helping supply record volumes to Europe.

Norway to boost gas output as Russia, U.S. LNG supply increases