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Mexico’s energy reform seeks to reverse decline in oil production

In late 2013, Mexico’s congress approved historic legislation that altered the 1938 ban on private sector participation in the Mexican energy sector. These reforms, that end the 75-year monopoly of Petroleos Mexicanos (Pemex) and allow for greater foreign investment, are the first to include constitutional change, and promise to address many of the challenges that have resulted in a decade-long decline in Mexico’s oil production. Last year, Mexico produced 2.90 million barrels per day (bbl/d) of total liquids, continuing the decline from its peak of 3.85 million bbl/d in 2004. Crude oil is the most significant component of Mexico’s liquid fuels production, accounting for at least 85% of production in the past two decades. Preliminary estimates indicate April 2014 production of crude oil was about 2.5 million bbl/d, the lowest monthly average since 1995. The new reforms include the following: Create four oil and […]

Posted On : Published By : Tom Whipple
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China Oil Demand Rose 1.4% in April Versus a Year Ago

April Demand Contracted from March, Reflecting Slower Industrial Activity Singapore – May 27, 2014 China’s apparent oil demand* in April rose 1.4% compared with the same month last year to 39.92 million metric tons (mt) or an average 9.75 million barrels per day (b/d), a just-released analysis of Chinese government data showed. The year-over-year growth in apparent oil demand in April was greater than the 0.5% recorded in the previous month. On a month-over-month basis, apparent oil demand in April fell 0.7% from March. This was the third consecutive year that apparent oil demand has contracted in April from March and is counter to prior years, when demand traditionally accelerated in the second quarter. Analysts have said this is mainly because of muted pick-up in industrial activities this spring. China’s refinery crude throughput volumes in April rose 3.8% from a year earlier to 9.67 million b/d, data from China’s […]

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Japan gets first LNG cargo from Papua New Guinea

Japan will receive the first shipment of liquefied natural gas from a project led by Exxon Mobil in Papua New Guinea, project developers said. Tokyo Electric Power Co. bought the first cargo of LNG from the partnership in charge of the $19 billion facility. The Japanese energy sector has taken on more LNG in response to the shortage of power brought on by the 2011 meltdown at the Fukushima Daiichi nuclear power plant, operated by TEPCO. Construction at the LNG facility in Papua New Guinea began in 2010. Its first section went into service in April and the entire facility can produce 6.9 million tons of LNG per year. More than 400 miles of natural gas pipeline from production and processing facilities in Papua New Guinea are associated with the LNG terminal. Peter Graham, regional project director for Exxon Mobil, said in a statement the LNG delivery to TEPCO […]

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Shakeout Threatens Shale Patch as Frackers Go for Broke

The U.S. shale patch is facing a shakeout as drillers struggle to keep pace with the relentless spending needed to get oil and gas out of the ground. Shale debt has almost doubled over the last four years while revenue has gained just 5.6 percent, according to a Bloomberg News analysis of 61 shale drillers. A dozen of those wildcatters are spending at least 10 percent of their sales on interest compared with Exxon Mobil Corp.’s 0.1 percent. “The list of companies that are financially stressed is considerable,” said Benjamin Dell, managing partner of Kimmeridge Energy, a New York-based alternative asset manager focused on energy. “Not everyone is going to survive. We’ve seen it before.” Some investors are already bailing out. On May 23, Loews Corp. (L) , the holding company run by New York ’s Tisch family, said it is weighing the sale of HighMount Exploration & Production […]

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US BOEM aims for revised Chukchi Sea analysis in spring

The US Bureau of Ocean Energy Management told a US District Court in Alaska on Friday it will have a Draft Supplemental Environmental Impact Statement for the 2008 Chukchi Sea lease sale prepared by August and publication of a Final EIS by February. Under the schedule the final action, publication of the record of decision, would occur in March. Whether Shell would have time to mobilize for a 2015 summer drilling season in the Arctic is uncertain, however. "We are considering the implications of the timeline presented in the status report and continue to work with the Department of Interior. We have made no decisions on the timing for our future exploration plans offshore Alaska," Shell spokeswoman Meg Baldino said Tuesday in a statement. Shell has been exploring in the region and hopes to resume drilling in 2015 on leases the company acquired in the 2008 lease sale. The […]

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Oil Shale's Future: Resources Aplenty, But Challenges Loom

It is widely accepted that the combination of 3-D seismic imaging, horizontal drilling and hydraulic fracturing in shale formations has brought about a renaissance in the energy industry in recent years. However, the results have been spread out unevenly, and opinions vary as to how long drilling in shale formations can continue to drive the market. Some predict that the energy boom provided by unconventional formations will likely slow in the next few years, while others say that drilling in shale formations will continue to be a dominant force in the industry for many years – and possibly decades – to come. By 2020, gross domestic product (GDP) could be boosted by nearly $700 billion a year, and up to 1.7 million jobs could be added to the economy by 2020 – all thanks to the U.S. shale boom, according to a study by McKinsey & Co. However, while […]

Posted On : Published By : Tom Whipple
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Oil Shale’s Future: Resources Aplenty, But Challenges Loom

It is widely accepted that the combination of 3-D seismic imaging, horizontal drilling and hydraulic fracturing in shale formations has brought about a renaissance in the energy industry in recent years. However, the results have been spread out unevenly, and opinions vary as to how long drilling in shale formations can continue to drive the market. Some predict that the energy boom provided by unconventional formations will likely slow in the next few years, while others say that drilling in shale formations will continue to be a dominant force in the industry for many years – and possibly decades – to come. By 2020, gross domestic product (GDP) could be boosted by nearly $700 billion a year, and up to 1.7 million jobs could be added to the economy by 2020 – all thanks to the U.S. shale boom, according to a study by McKinsey & Co. However, while […]

Posted On : Published By : Tom Whipple
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Sky Could Fall on North Dakota's Oil if We're Not Careful, Shale Boss Says

All parties with a collective interest in seeing the North Dakota oil experiment succeed need to work together because, right now, the boss at the largest stakeholder in the Bakken shale says opponents are drawing a bead on the region. And it’s not just exploration and production that’s a concern. Oil production from the Bakken shale oil play in North Dakota is increasing at an exponential rate. State government data show production for May, the last full month for which complete information is available, was 977,051 barrels per day, a new all-time high. On April 28, Continental Resources , the largest stakeholder in the Bakken play, said the field produced its 1 billionth barrel of oil at some point during first quarter 2014. The company’s chairman, Harold Hamm, said that, at the rate things are going now, production could hit the 2 million bpd mark by the end of […]

Posted On : Published By : Tom Whipple
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Sky Could Fall on North Dakota’s Oil if We’re Not Careful, Shale Boss Says

All parties with a collective interest in seeing the North Dakota oil experiment succeed need to work together because, right now, the boss at the largest stakeholder in the Bakken shale says opponents are drawing a bead on the region. And it’s not just exploration and production that’s a concern. Oil production from the Bakken shale oil play in North Dakota is increasing at an exponential rate. State government data show production for May, the last full month for which complete information is available, was 977,051 barrels per day, a new all-time high. On April 28, Continental Resources , the largest stakeholder in the Bakken play, said the field produced its 1 billionth barrel of oil at some point during first quarter 2014. The company’s chairman, Harold Hamm, said that, at the rate things are going now, production could hit the 2 million bpd mark by the end of […]

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Chamber Study Predicts Obama Climate Rule Will Kill Jobs

The nation’s biggest business lobby says President Barack Obama ’s plan to tackle climate change could cost the U.S. economy $50 billion a year. Supporters predict it will create jobs and lower power bills. The U.S. Chamber of Commerce and Natural Resources Defense Council are both releasing economic impact studies this week, signaling that the political battle over the president’s plan will be fought over dollars and cents. For Obama, the risk is the plan gets labeled a job-killer just as campaigns heat up for an election that could determine control of the U.S. Senate . In an analysis set for release today — days before the Environmental Protection Agency unveils a proposal to cut carbon dioxide emissions from power plants — the Chamber says that an ambitious pollution-control effort could force more than a third of the coal-fired power capacity to close by 2030, resulting in economic losses […]

Posted On : Published By : Tom Whipple