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US EIA Cuts Recoverable Monterey Shale Oil Estimate By 96%

NEW YORK, May 21 (Reuters) – The U.S. Energy Information Administration (EIA) on Wednesday cut its estimate of recoverable oil in California’s Monterey shale by 96 percent, casting doubt on what was once thought to be America’s next major energy play. In what could be welcome news for environmentalists and a potentially bad omen for oil drillers, such as Venoco Inc, with large leases in the region, the EIA slashed its forecast of technically recoverable reserves, citing production difficulties from initial wells. The reserves were downgraded by 96 percent, from 13.7 billion barrels estimated by a government-funded report in 2011, to just 600 million barrels, the EIA said. A detailed report is expected to be released next month. "The EIA concluded that the technical recoverability of Monterey shale did not look as strong in 2014 because of the industry’s difficulty in producing from the region," EIA head Adam Sieminski […]

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Sanchez to buy Eagle Ford acreage from Shell for $639 million

Sanchez Energy Corp. , Houston, has agreed to acquire 100% working interest in 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Tex., from Royal Dutch Shell PLC for $639 million, effective Jan. 1. The agreement is expected to close at the end of the second quarter. The sale includes 176 operated producing wells and associated field facilities and infrastructure. The assets consist of 60 million boe of proved reserves and 24,000 boe/d of average first-quarter production, with 60% liquids. Sanchez’s total position in the Eagle Ford will amount to 226,000 acres with as many as 3,000 potential drilling locations. The company’s average production rate for this year’s first quarter will rise to 42,800 boe/d, which includes an estimated Catarina production rate of 20,000 boe/d. Total proved reserves will increase 100% to 119 million boe. The acquired assets are expected to generate a substantial amount of near-term cash flow […]

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US forecasters to predict slow hurricane season

Federal forecasters are expected to predict a slower than usual hurricane season this year. Experts from the National Oceanic and Atmospheric Administration will gather in New York on Thursday to release the agency’s outlook for the six-month storm season that officially begins June 1. Colorado State University researchers have forecast nine named storms in 2014, with just three expected to become hurricanes and one major storm with winds over 110 mph. Forecasters got it wrong last year when they predicted an unusually busy hurricane season. There were just 13 named storms and two Category One hurricanes, Umberto and Ingrid. There were no major hurricanes. Officials plan to roll out high-resolution maps that will show people where to expect storm surge. The maps were promised last year and are being implemented for the 2014 season. Storm surge was devastating to the New York area when Superstorm […]

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Winter hit consumers' pocketbooks, U.S. says

U.S. consumer bills during the last two quarters were more than 4 percent higher year-on-year because of a harsh winter, the Energy Department said. The Energy Information Administration, the statistical arm of the Energy Department, said Wednesday consumer expenses during fourth quarter 2013 and first quarter 2014 were 4.4 percent, or about $14 billion, higher than the same time last year. "Cold weather east of the Rocky Mountains led consumers to pay more to heat their homes but less to fuel their cars," EIA said . An arctic blast brought on by a weather phenomenon known as a polar vortex pushed temperatures well below the freezing point in U.S. states east of the Mississippi River for much of the winter season. U.S. consumers spent 27 percent, or $6 billion, more on heating oil and propane than the previous winter. While those fuels typically make up […]

Posted On : Published By : Tom Whipple
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Winter hit consumers’ pocketbooks, U.S. says

U.S. consumer bills during the last two quarters were more than 4 percent higher year-on-year because of a harsh winter, the Energy Department said. The Energy Information Administration, the statistical arm of the Energy Department, said Wednesday consumer expenses during fourth quarter 2013 and first quarter 2014 were 4.4 percent, or about $14 billion, higher than the same time last year. "Cold weather east of the Rocky Mountains led consumers to pay more to heat their homes but less to fuel their cars," EIA said . An arctic blast brought on by a weather phenomenon known as a polar vortex pushed temperatures well below the freezing point in U.S. states east of the Mississippi River for much of the winter season. U.S. consumers spent 27 percent, or $6 billion, more on heating oil and propane than the previous winter. While those fuels typically make up […]

Posted On : Published By : Tom Whipple
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Shell Considers Retiring California Coker Amid Shale Boom

Royal Dutch Shell Plc (RDSA) , Europe ’s biggest oil company, is considering retiring one of two coking units at its only refinery in as the company seeks to run lighter crude at the plant. The company has applied to county regulators for a permit to shut the flexicoker at the 156,400-barrel-a-day Martinez refinery northeast of San Francisco , a move that would shrink the plant’s reliance on heavy oils and cut its greenhouse-gas emissions by 15 percent, Destin Singleton, a Shell spokeswoman, said May 16. The unit helps convert the denser crude into more valuable products such as diesel and gasoline. Shell is considering the shutdown as hydraulic fracturing and horizontal drilling unleash record volumes of light oil from shale formations across the middle of the U.S. California’s refiners, lacking pipeline access to the growing crude supplies, are bringing in the most ever by rail as they work […]

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Canada moves to put toughter limits on dangerous oil trains

Emergency personnel examine the wreckage of a train derailment near Vandergrift, Pennsylvania, February 13, 2014. The 120-car Norfolk Southern Corp train carrying heavy Canadian crude oil derailed and spilled in western Pennsylvania.  In Lynchburg, Virginia, on April 30, a train carrying crude oil derailed , and some of the rail cars exploded into a ball of fire, and then fell into the James River. This was not an isolated incident. A number of explosive train derailments, including the tragedy in Lac-Megantic, Quebec , which killed 44 people, have raised the alarm about the safety of shipping oil by rail. The oil now gushing from the Bakken Shale in North Dakota and the Alberta Tar Sands has overwhelmed pipeline capacity, and millions of gallons now ride the rails, often in older tanker cars vulnerable to rupture. Increased alarm and public pressure have now pushed Canada to act. New rules announced […]

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Canada Said to Aim to Bolster Aboriginal Pipeline Support

The Canadian government is poised to take another step to boost support for pipelines as it prepares to rule on Enbridge Inc. (ENB) ’s proposed Northern Gateway project. Natural Resources Minister Greg Rickford plans to announce his department will set up a new branch office based in British Columbia to oversee discussions with aboriginal groups, two people briefed on the matter said yesterday. The announcement may take place as early as next week, said the people, who asked not to be identified because the information isn’t public. The branch will be part of the Major Projects Management Office based in Ottawa that was created in 2007 to support regulatory reviews of resource developments. Rickford’s announcement will address recommendations made in December by Douglas Eyford, a lawyer appointed by Harper to review aboriginal concerns about resource development. In his report, Eyford advised building on the Major Projects Management Office model […]

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Diesel Slumps in Europe as Russia, U.S. Imports Surge

European diesel will probably stay depressed this summer after plunging to the lowest for this time of year since 2003 amid surging imports from Russia and the U.S. Barges of diesel traded at $9 a metric ton more than the June gasoil contract on the ICE Futures Europe exchange on May 19. That’s the lowest premium in more than three months and a drop of 66 percent from April 15, according to data compiled by Bloomberg. Gasoil’s crack spread, a measure of profit to be made from refining the fuel, declined 18 percent since mid-April to about $12 a barrel on the ICE exchange today. “Europe looks extremely well supplied,” Steve Sawyer, an analyst at FGE, a consultant, said by phone from London yesterday. “I would expect both Russian and U.S. refiners to be pushing their rates during the summer and looking to Europe to dispose of the product.” […]

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Gazprom obligated to Ukraine, European president says

The European Union expects Russia to keep gas flowing through Ukraine so long as diplomatic channels are open, the European Commission president said Wednesday. European Commission José Manuel Barroso sent a letter Wednesday to Russian President Vladimir Putin. In it, he said it was important that all parties to a row over gas supplies through Ukraine remain engaged. "As long as the trilateral talks are on-going, gas flows should not be interrupted," the letter stated. "It therefore continues to be Gazprom’s responsibility to ensure the deliveries of the required volumes as agreed in the supply contracts with European companies." Gazprom in April sent its Ukrainian counterpart Naftogaz a bill for more than $11 billion for taking on less gas than contracted in 2013. Moscow has called on Kiev to pay in advance for natural gas in order to avoid a similar row in 2009 that […]

Posted On : Published By : Tom Whipple