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RE: OPEC, for some quiet moments.. - admin - 11-12-2016

Energy Transfer Partners LP said Thursday that its Dakota Access crude pipeline, plagued by protests for months, is still set to be in service by spring. Donald Trump’s election, meanwhile, means business is “only going to get better,” the company’s leader said.

Energy Transfer on Trump: ‘It’s Only Going to Get Better’ - Bloomberg

An oilfield services company that laid off almost two-thirds of its workers over the past two years is now warning it can't find enough new staff to take full advantage of a recent increase in activity. Calgary-based Essential Energy Services (TSX:ESN) says it cut more than 400 workers in 2015 and almost 250 in the first three months of this year, dropping its staff count from almost 1,000 to a low point of 343 last March.

From bust to boom: oilfield firm can't get enough staff to cover rising activity | The Chronicle Herald

The Organization of the Petroleum Exporting Countries pumped more crude oil last month even as the group geared up to complete a plan to cut output at its meeting at the end of this month in an effort to stabilize oil prices. OPEC’s crude oil output increased by 240,000 barrels a day in October to 33.64 million barrels a day, the group said in its monthly oil market report Friday

OPEC’s Oil Production Cut in Doubt as Output Flows - WSJ

US independent oil producers have taken advantage of the recent bump in crude prices to lock in future revenues, building up derivatives positions for 2017. In third-quarter earnings reports over the past three weeks, several US exploration and production companies said they had hedged significantly more of their expected oil sales for the coming year than they had done at the equivalent point of 2015 in preparation for this year.

Independent US oil producers increase hedges for 2017

High Oil Prices are on their way.... - Kaliboo - 11-14-2016

Admin, thanks for forwarding these articles, especially the one above.

This is one of the first signs of what I predicted about 2 years ago that will drive us beyond $100 oil.  There is an abundance of oil and gas that can be discovered, developed and brought on production in the world.  The technology improvements have made it easier to outpace demand.  The two critical variables that will control prices going forward (short of wars and depressions/recessions) are investment levels and availability of trained, experienced people.  This article is one of the firsts I've seen that specifically speaks to the last point.  It's happened before.  Bidding wars start for companies to hire people with super attractive pay/benefit offers and "golden handcuffs" to keep the key employees they have.  This shortage of people will drive futures and eventually spot prices sharply upward as this new fear sets in.  When I hired into industry in 1979, I recall such a time.  Engineers and geologists received 3 across the board pay raises in one year just to keep up wiht the market rate.  But still turnover was high.  Today in the meantime rigs and equipment has been scrapped and existing equipment is 2 years older.  Experienced staff are 2 years closer to retiring or have.  The longer low prices persist, the more severe the price recovery and the longer high prices will last.

My original prediction in ~Feb 2015 was $100 oil within 2 years (i.e., by Feb 2017).  I think that is still possible but not likely.  I underestimated the ability of companies with a strong US onshore asset base to adapt and survive, but also didn't see the Iranian deal coming.  We now have the Trump factor to add in, whatever that will be.

Another article you posted a while back commented on the world oil replacement ratio being closer to 50% rather than the needed 100+% to replace consumption and accomodate growth.  This confirms very high prices are being fully baked into the cake.  It will take years to catch up as demand passes a shrinking supply.

I suspect the "fear wave" of an oil shortage will precede the reality by many months.

Three technology breakthroughs, however, could doom the industry: (1) solar technology step energy efficiency improvement, (2) battery technology breakthrough yielding step increase in energy density, (3) mass adoption of self driving cars.  Collectively, acting together these could do to oil and gas, what gas has done to coal.  Any two of these might do the job as well.   IMHO.

RE: OPEC, for some quiet moments.. - admin - 11-14-2016

My pleasure Kaliboo.

Last week, I wrote that OPEC needs friends and a miracle to re-balance the oil market. Could President Trump be that unwitting buddy, providing the miracle by tearing up the nuclear agreement with Iran and removing almost a million barrels a day of supply at a stroke?Trump's number one priority is to dismantle the "disastrous" deal -- although his to-do list might have changed since saying that back in March. As luck would have it, that daily million barrels is about the same size as the cut OPEC needs to make, as I calculated last week. Can he do it? Yes, despite assertions to the contrary from Iran's President Rouhani and a slew of analysts. Here's how:The Joint Comprehensive Plan of Action, as the deal is snappily titled, wasn't ratified by Congress, but brought into force by President Obama via executive order. Trump could rescind that. The fall-out would be messy, but it could be done (in theory).There's another way too, enshrined within the agreement itself.

Donald Trump Could Be OPEC's New Best Friend - Bloomberg Gadfly

Iran boosted oil output at three western fields faster than it expected as rival OPEC producer Saudi Arabia called for a collective output cut later this month to help rebalance the market. Output at the fields west of the Karoun River, near Iran’s border with Iraq, rose to about 250,000 bpd from 65,000 bpd in 2013, the Oil Ministry’s news service Shana reported Sunday, citing President Hassan Rouhani at a ceremony to formally open the project'>project. Iran had expected to reach that output target by the end of the year, Mohsen Ghamsari, director for international affairs at the National Iranian Oil Co., said in September.

Iran pumps more oil as Saudi’s call for OPEC output cuts

Oil companies booked tankers to store as many as 9 MMbbl of crude in northwest Europe amid signs that space in on-land depots is filling up, a ship-operator said. The glut could get bigger still, given the region is scheduled to load the most cargoes in 4 1/2 years next month.

Oil tankers used to store millions of barrels as land sites fill

Just one day after the IEA warned the world could drown in oil if production does not fall beneath demand sometime soon, OPEC released a new market whammy, offering up the cartel’s production figures, which largely jive with figures reported by the IEA yesterday: OPEC has increased its oil production.

OPEC’s Bearish Report Provides Little Hope For Oil Markets |

RE: OPEC, for some quiet moments.. - admin - 11-15-2016

OPEC members need to stop bickering over output curbs or risk the group becoming irrelevant to global oil markets, according to an analyst who predicted the biggest price crash in a generation. It’s in the interest of all producers to reach a deal that’s aimed at stabilizing prices, which are 61% lower than their 2014-highs, said Gary Ross, executive chairman at PIRA Energy Group, which is now a part of S&P Global Platts. A failure to implement an agreement could drag down crude to as low as $35/bbl, while success at the group’s meeting later this month may push oil to $60, almost 35% higher than current levels, he said.

Analyst who foresaw oil crash sees OPEC uniting in self-interest

Now that the dust has settled after Donald Trump’s unexpected, earth-shattering win on Nov. 8 and 9 in the U.S. presidential election, we’re beginning to see more clearly the shape that his administration’s oil and gas policy may take. Soon to be gone are the anti-industry stands and actions of Barack Obama, which the defeated Democratic nominee, Hillary Clinton, had clung to during the campaign. This has been a collection of policies that includes aggressive global warming regulations, support of the Paris climate agreement, opposition to offshore and Arctic drilling, opposition to fracing, precluding the building of the Keystone XL pipeline, rapid phase-out of fossil fuels in favor of much-more-expensive renewables, and a host of other industry-stifling proposals.

A Trump presidency will be good for U.S. upstream activity

Output from Ugandan crude deposits being developed by companies including Tullow Oil and Total is unlikely to be exported as soon as the nation expects because of the scale of the infrastructure projects required to transport the fuel out of the country. The government of Uganda, where oil was discovered in 2006, has said it expects to begin shipping crude within five years. To do that, it must overcome challenges facing other countries in the region like Mozambique and Tanzania, where a lack of finance and technical capacity to build multiple, capital-intensive infrastructure projects is delaying the start of natural-gas production.

Tullow, Total Uganda oil exports may delay on infrastructure

The United States imported over 670,000 bpd of crude and fuels from Mexico in August, according to the EIA. Another 773,000 bpd came from Venezuela. Together, the two countries ranked third in the U.S. oil and products import mix, after Canada and Saudi Arabia.

Wall Or No Wall: Trump Needs The Mexican Oil Industry |

RE: OPEC, for some quiet moments.. - admin - 11-16-2016

Hedge fund manager Pierre Andurand says OPEC is still likely to agree on an output freeze this month and prompt a sharp rally in oil prices, despite disputes among its members. The years-long supply glut that hammered oil prices is gone with no sign that production will grow next year, Andurand said in a note to investors obtained by Bloomberg News. The founder Andurand Capital Management, which oversees $1.4 billion in its main strategy, put the chance of an agreement by the Organization of Petroleum Exporting Countries at 70%.

Crude seen reaching up to $70 by year-end 2017

In a troubled oil world, the Permian basin is the gift that keeps on giving. One portion, known as the Wolfcamp formation, was found to hold 20 Bbbl of oil trapped in four layers of shale beneath the desert in West Texas, the U.S. Geological Survey said in a report on Tuesday. That’s almost three times larger than North Dakota’s Bakken play and the single largest U.S. unconventional crude accumulation ever assessed. At current prices, that oil is worth almost $900 billion.

Permian oil riches rise as U.S. sees reserves worth $900 billion

Global oil demand won’t stop growing before 2040 despite pledges made at the Paris climate change summit last year to cap greenhouse-gas emissions, the head of the International Energy Agency said. IEA Executive Director Fatih Birol’s comments have added to a debate over when oil consumption—which has steadily grown for decades—will begin a sustained decline, a change known as peak demand. Royal Dutch Shell PLC’s RDS.B, +2.15% RDSB, -0.34%  Chief Financial Officer Simon Henry caused a stir earlier this month when he said the company believes demand for oil could stop growing within the next two decades and as soon as five years.

IEA says oil demand won’t peak until 2040 - MarketWatch

A new report from the World Energy Council predicts that global demand for crude oil could hit a peak in 2030 at 103 million barrels per day. The scenario would require rapid and substantial advancements in electric vehicles, efficiency, renewable energy, and digital technologies – developments that are no longer difficult to imagine. Additionally, the report envisions a scenario in which global primary energy demand – which includes energy demand for everything including transportation and electricity – could also peak before 2030.

Oil’s Biggest Threat: Demand To Peak Within 15 Years |

RE: OPEC, for some quiet moments.. - admin - 11-17-2016

Iraq’s oil minister will bypass energy talks this week in Qatar, where rival producer Saudi Arabia plans to hold talks with Russia on possible collective action to limit production. His Iranian counterpart is also said to be giving the meeting a miss. Iraq and Iran both want exemptions from any OPEC cuts in output, putting pressure on Saudi Arabia, the producer group’s biggest member, to bear the brunt of a possible reduction. The Organization of Petroleum Exporting Countries has yet to find a way to finalize a preliminary deal it reached in September to curtail supply, ending a two-year policy of pumping without limits.

Iran, Iraq oil ministers said to bypass energy talks with Saudis

The U.S. is set to export a record number of cargoes of shale gas this month. Nine liquefied natural gas tankers have departed or are scheduled to leave Cheniere Energy Inc.’s Sabine Pass terminal in November, the most since exports began in February, according to ship-tracking data compiled by Bloomberg and Genscape Inc. That may increase as more declare their destinations.

U.S. to send a record volume of shale gas overseas

Working natural gas in storage reached a record high of 4,017 Bcf as of Nov. 4, according to EIA’s latest Weekly Natural Gas Storage Report. Inventories have been relatively high throughout the year, surpassing previous five-year highs in 48 of the past 52 weeks. Declining natural gas production and strong demand from the power sector were offset by a warmer-than-usual winter, which left natural gas inventories in April (the beginning of the 2016 injection season) above the previous five-year maximum.

EIA: Amount of natural gas in storage reaches new record

OPEC’s Libya plans to almost double crude production next year even as the producer group tries to implement a deal to trim production and ease a global supply glut. The country with Africa’s largest crude reserves currently produces 600,000 bpd, state-run National Oil Corp. Chairman Mustafa Sanalla said in a statement posted on the company’s website. It’s seeking to boost output to 900,000 bopd by the end of 2016 and about 1.1 MMbopd next year, he said.

Libya to nearly double oil output as OPEC’s task gets harder

RE: OPEC, for some quiet moments.. - admin - 11-18-2016

Shale drillers in the U.S. are about to tighten their grip on the global natural gas market. TransCanada Corp.’s decision this week to shelve plans for lower tolls on its gas pipeline to eastern Canada means less supply will head there from the country’s western reservoirs. That opens the door for U.S. explorers like Antero Resources Corp. and Rice Energy Inc. to edge out Canadian competitors and ship more gas north of the border.

U.S. shale drillers poised to take hold of global gas market

Petroliam Nasional Bhd. will be ready to decide whether to proceed with a proposed $27-billion liquefied natural gas plant on Canada’s Pacific Coast by April, according to Rich Coleman, British Columbia’s minister of natural gas development. The state-owned Malaysian energy company, which won conditional Canadian government approval in September after more than three years of regulatory review, is in the process of reassessing the project’s costs, including those of steel, pipes and other inputs, he said.

Canada sees Petronas’ $27-billion LNG decision by April

Crude oil traded near $46/bbl as Saudi Arabia, due to meet with Russia and some OPEC nations in Doha, said it’s optimistic that producers will reach an agreement to stabilize world markets.

Oil steadies as Saudi Arabia says it’s optimistic on production deal

Santos has signed an agreement to acquire a 20% stake in Petroleum Prospecting License (PPL) 402 in Papua New Guinea. The interest will be acquired from both Oil Search and Exxon Mobil. PPL 402 lies about 40 km northwest of the Hides gas field and production facilities, and within the highly prospective thrust and fold belt trend. The license covers an area of 510 km2.

Santos acquires stake in Papua New Guinea exploration license

RE: OPEC, for some quiet moments.. - admin - 11-19-2016

Iraq would have to compensate international oil companies for limits placed on their production, according to industry sources and documents seen by Reuters, further reducing the prospect it will join any OPEC deal to curb the group's output. The compensation - stipulated in contracts - would compound the financial hit of losing much-needed revenue from crude sales, if the cash-strapped country were to yield to OPEC entreaties to curtail national production.

Iraq's oil contracts make joining OPEC output cut more painful | Reuters

After discovering oil off the shores of Guyana, Exxon Mobil (XOM) appears to have hit it big. However, as the integrated oil major works to further develop the Liza discovery, it is also in the midst of significant financial negotiations with foreign governments. Analysts at Credit Suisse recently highlighted the discussions between Exxon Mobil and the Chadian government as well as the Nigerian National Petroleum (NNPC), which could both affect the company's balance sheet in the coming years.

ExxonMobil's Liza Field Offshore Guyana Proved Biggest Discovery of 2015 - TheStreet

Nigeria has reached a deal to pay $5.1 billion in unpaid bills to oil majors including Royal Dutch Shell and Exxon Mobil , the minister of state for oil said on Thursday. The Nigerian National Petroleum Corporation (NNPC), the OPEC member's state oil firm, has amassed a total of $6.8 billion in unpaid bills up to December 2015, so-called cash calls, that it was obliged to pay under joint ventures with Western oil firms, with which it explores for and produces oil.

Nigeria reaches a deal to pay $5.1 billion in unpaid bills to oil majors: minister | Reuters

Baker Hughes reported an astonishing 20-rig gain this week to the number of active oil and gas rigs in the United States for its November 18th reporting period, bringing the total number of active oil and gas rigs in the US to 588—169 fewer than this same time last year. The breakdown for this week’s monumental increase is 19 oil rigs and 1 gas rig. This week marks the largest increase in oil rigs in the US since July 2015, and in the last three weeks alone, 30 new oil rigs have been made active. The number of oil rigs now stands at 471.

Oil Slides As U.S. Rig Count Surges Most In 16 Months |

RE: OPEC, for some quiet moments.. - admin - 11-21-2016

Growing confidence that crude prices will rise in coming months is sustaining the expansion of oil drilling in the shale patch. Rigs targeting crude rose 19 to 471 this week, the biggest increase in the last 16 months, according to Baker Hughes  data reported Friday. Shale drillers have now added 155 rigs since an expansion started at the end of May. Natural gas rigs rose by 1 to 116, bringing the total for oil and gas up by 20 to 588.

Drillers add most rigs in 16 months amid market optimism

OPEC said it made progress toward a deal to cut production by more than 1 MMbpd after another round of oil talks with Russia, but left crucial details including the role of Iraq and Iran to be resolved later this month.

OPEC-Russia oil talks leave key details unresolved

API released a new report by Catalyst Environmental Solutions showing that the Environmental Protection Agency’s (EPA) finding of no widespread effects to drinking water quality is supported by state and federal regulatory reviews, and dozens of recent peer-reviewed case studies. “This report shows that EPA’s conclusion has scientific backing and reflects the effectiveness of existing industry practices and state regulations,” said API Director of Upstream and Industry Operations Erik Milito. “The EPA’s study on hydraulic fracturing and groundwater protection will be viewed globally and must reflect existing scientific evidence. As the study is finalized and prepared for release by the end of the year, it is critical for any review to focus on the facts and available science.”

Scientific evidence in EPA study confirms safety of hydraulic fracturing process

Petronas’ first floating liquefied natural gas (FLNG) facility, PFLNG SATU, achieved the first gas milestone from Kanowit gas field, offshore Sarawak, on Nov. 14. Petronas’ Acting V.P. LNG Assets, Development & Production Adnan Zainal Abidin said the first gas milestone signified the commencement of commissioning and startup for the FLNG facility that will soon progress towards commercial operations and first cargo.

Petronas achieves first gas from inaugural FLNG facility

RE: OPEC, for some quiet moments.. - admin - 11-22-2016

Goldman Sachs Group raised its oil-price forecast for early next year, saying it is “tactically bullish” on the likelihood that OPEC will be able to reach a deal to curb output to steady global markets. The investment bank said it expects oil prices in New York to rise to an average $55/bbl during the first half of 2017—from $45 and $50 previously—on the assumption that OPEC will agree to cut output to 33 MMbpd and that Russia will freeze production.

Goldman says OPEC deal probable, raises WTI price forecast

The future for conventional oil projects is far from over despite the recent slump in large finds and an industrywide shift to developing tight oil, delegates at an upstream event in London heard last week. While fewer conventional exploration wells are being drilled as a result of the upstream spending collapse in the wake of the oil price slump, many in the industry have prematurely concluded that sources of conventional oil are running out, according to the head of exploration research at Wood Mackenzie Andrew Latham.

Feature: Producers urged to ignore conventional oil, gas at their peril - Oil | Platts News Article & Story

The companies that own the rights to Israel’s largest natural gas pool are close to securing the $4-billion financing needed to develop the field, according to the CEO of one of the partners. "The Leviathan financing agreements are in the final stages of negotiations," Delek Drilling LP CEO Yossi Abu said in a Tel Aviv conference on Monday, referring to the Israeli gas reservoir.

Israel gas partners close to $4-billion financing for Leviathan

Russian President Vladimir Putin said he sees no obstacles to an OPEC agreement this month after oil exporters made major progress in overcoming differences as he reaffirmed Russia is willing to freeze crude output at current levels.

Putin optimistic about OPEC deal, Russia ready to freeze production