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Pemex Seeks to Keep 83% of Proven, Probable Reserves

Mexico’s state oil monopoly Petróleos Mexicanos, or Pemex, is aiming to keep more than four-fifths of the country’s proven and probable oil and gas reserves for its own exploitation as the government prepares to open the state-run sector to private and foreign investment for the first time in 75 years. The energy overhaul passed last year by Congress amended the constitution to allow foreign and private companies to explore for and produce oil and gas under profit-sharing and even production-sharing agreements. It marks the first opening of the state-run industry since the 1938 oil expropriation. The changes, however, give Pemex the first choice of projects that it wishes to be assigned directly under a so-called "Round Zero." The Energy Ministry said Monday that it has until Sept. 17 to decide which of the requested projects will be assigned directly to Pemex, taking into account the state company’s technical […]

Posted On : Published By : Tom Whipple
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Venezuela Takes Steps to Ease Curbs on Currency

Seeking to confront the deep economic problems that have helped fuel weeks of protests here, Venezuela ’s socialist-inspired government took a step on Monday toward easing strict currency controls and opened what it says will be a free market for the sale of dollars to Venezuelans. The new exchange rate mechanism is intended to reduce the black market price of dollars, which had soared in recent months. Yet the impact of the measure, which is similar to a system that was shut down in 2010, depends on how much money the government allows to change hands in the new market and how freely it allows the market to operate. Alejandro Grisanti, an economist for Barclays, said the change “makes the exchange rate system more flexible,” adding, “And in that sense it’s very positive for Venezuela.” The new system will operate in tandem with a base exchange […]

Posted On : Published By : Tom Whipple
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Weatherford Says Cutting Back Venezuela Operations

Oilfield services provider Weatherford International Ltd said on Monday it was reducing operations in Venezuela and expects its Russian business to grow this year. The Swiss-headquartered company, which competes with Schlumberger and Halliburton, said the "serious liquidity situation in Venezuela" is causing it to pare back services it provides inside the OPEC country, Chief Executive Bernard Duroc-Danner said at the Howard Weil conference in New Orleans on Monday. Weatherford provides drilling and exploration services to Venezuela’s national oil company Petroleos de Venezuela SA , but Venezuela’s currency devaluation and economic instability have prompted payment delays, according to Weatherford’s annual filing with the U.S. Security and Exchange Commission. In Russia, Weatherford expects a "very constructive year," Duroc-Danner told the conference. He did not mention the ongoing tension between Russia and Ukraine over Crimea and how it could affect his business. Last year, revenue in […]

Posted On : Published By : Tom Whipple
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Energy Needs Put Japan in Difficult Position Over Ukraine

Japan’s increasing reliance on Russian energy has put Tokyo in a difficult position in the dispute over Ukraine and Crimea, with the latest developments gaining close scrutiny from an energy industry that has been disrupted by sanctions on its suppliers in the past. “Japan’s crude imports from Russia have risen sharply in recent years,” noted Petroleum Association of Japan Chairman Yasushi Kimura at his monthly news conference Monday. “While there hasn’t been any impact so far, we’ve been watching developments carefully,” said Mr. Kimura, who is also chairman of JX Holdings Inc., the country’s biggest oil refiner by capacity. Japan imports about 250,000 barrels a day, or 7% of its crude supply, from Russia. Industry minister Toshimitsu Motegi has noted that Russia is a major energy supplier for Japan and has also said he has been watching developments carefully. Russian President Vladimir Putin formally annexed Crimea on Friday. In […]

Posted On : Published By : Tom Whipple
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Why peak oil signals the world's end, or at least the one we know

While global financial markets are still levitating somewhere between the stratosphere and the Kingdom of Asgard, by 60°24′31″ North and 172°43′12″ West, in the middle of nowhere, an isolated island of 137.857 sq-mi holds the key of three major economic developments and risks: November 2013, Lawrence Summers raised the question whether the “secular stagnation” and the impossibility for the US and other major economies to grow without the help of recurring bubbles was not doomed to become the “new normal”. March 2014, the Conference Board released a study (figure 1) showing the falling trend in global total factor productivity, i.e. in the share of output not explained by the “accumulation of factors” (more on this economic jargon below). March 2014 again, the NASA published a research paper answering to “widespread concerns that current trends in resource-used are unsustainable, but possibilities of overshoot/collapse remain controversial”. This study tells us that, […]

Posted On : Published By : ASPO-USA
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Why peak oil signals the world’s end, or at least the one we know

While global financial markets are still levitating somewhere between the stratosphere and the Kingdom of Asgard, by 60°24′31″ North and 172°43′12″ West, in the middle of nowhere, an isolated island of 137.857 sq-mi holds the key of three major economic developments and risks: November 2013, Lawrence Summers raised the question whether the “secular stagnation” and the impossibility for the US and other major economies to grow without the help of recurring bubbles was not doomed to become the “new normal”. March 2014, the Conference Board released a study (figure 1) showing the falling trend in global total factor productivity, i.e. in the share of output not explained by the “accumulation of factors” (more on this economic jargon below). March 2014 again, the NASA published a research paper answering to “widespread concerns that current trends in resource-used are unsustainable, but possibilities of overshoot/collapse remain controversial”. This study tells us that, […]

Posted On : Published By : ASPO-USA
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Marathon pins growth strategy to U.S. shale

Marathon Oil Corp. will look to North American shale as a foundation for its 2014 growth agenda, Chief Executive Officer Lee Tillman said Monday. Tillman said at an investment conference in New Orleans his company plans to deploy more than two dozen rigs in the Eagle Ford shale play in Texas, the Bakken reserve area in North Dakota and the Woodford shale area in Oklahoma. "We continue to have high confidence in our ability to deliver on our North America long-term production growth targets," he said in a statement . Last month, Tillman highlighted his company’s production from U.S. shale. Combined, the three reserve areas gave up 144,000 barrels of oil per day on average during the fourth quarter. In December, Marathon said it would invest more than 60 percent of its $5.9 billion in capital expenses next year on developing the Eagle Ford, Bakken […]

Posted On : Published By : Tom Whipple
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Booming U.S. NGL Exports Idled With Houston Channel Shut

The closing of the Houston Ship Channel is idling ships that carried a record amount of U.S. natural gas liquids exports last year, raising questions about the need for geographic diversity in the burgeoning market. Most U.S. capacity to export NGLs is on the channel, said Peter Fasullo, a principal at Houston-based energy consultant EnVantage Inc. The U.S. averaged 475,000 barrels a day of exports in 2013, up from 164,000 in 2010, according to Energy Information Administration data. Two companies, Enterprise Products Partners LP (EPD) and , have channel operations that combine to represent 380,000 barrels a day of export capacity, Fasullo said. “That’s all going to go offline,” Fasullo said. “Ships can’t get into the terminals to get loaded, and those that are loaded can’t get out.” There is no estimate on when the 52-mile (83-kilometer) channel will reopen, U.S. Coast Guard Captain Brian Penoyer said yesterday at […]

Posted On : Published By : Tom Whipple
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Oil Spill Closes Houston Ship Channel Indefinitely

HOUSTON—A key waterway linking refineries and petrochemical plants with the Gulf of Mexico remained closed indefinitely to ship traffic, two days after a collision triggered an oil spill in Texas’ Galveston Bay. More than a hundred ships were waiting Monday to enter the Houston Ship Channel, a 52-mile waterway that connects the Port of Houston with the open ocean, according to the U.S. Coast Guard. That was up from about 60 ships waiting for access a day earlier, authorities said. Initial hope that limited traffic would be permitted late Monday was dashed when cleanup crews skimming oil from the water’s surface reported recoverable amounts of fuel stuck in the jetties, said Patrick Seeba, program manager with the Houston Ship Channel Security District. The continuing effort to contain the spill, estimated at 4,000 barrels of fuel oil, threatened to further jam ship traffic for days. The situation, if prolonged, could […]

Posted On : Published By : Tom Whipple