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Shell Trims China Shale Venture on Sichuan Population Challenges

Royal Dutch Shell Plc (RDSA) , which signed the first shale-gas production sharing contract in China , will trim its project in Sichuan province because of geological challenges and the area’s dense population. The Anglo-Dutch company along with China National Petroleum Corp. had planned billions of dollars in investment from this year to meet the country’s energy demand, the world’s largest. Shell now plans to focus chiefly on the development of the Changbei tight gas field in the Shaanxi region. “In Sichuan progress has been slower and more difficult than we might have hoped: partly geological reasons, partly some of the challenges of operating in the very highly populated agricultural region,” Shell Chief Financial Officer Simon Henry told investors today in New York . “It’s likely it will be smaller than originally envisaged.” China may miss its 2020 target for shale-gas production as a lack of infrastructure and technology […]

Posted On : Published By : Tom Whipple
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Rail Lines Face Bottlenecks in Bakken

Oil Rail Car Image Crude Oil Rail Car | Click to Enlarge At the Surface Transportation Board (STB) hearing this week in Fargo, ND, officials from the state and other upper Midwestern states urged U.S. regulators to put pressure on railroads to fix issues that are blocking grain shipments. The culprit some believe is the oil & gas industry – in August, approximately 60% of oil produced in North Dakota was transported out of the state by rail, and some argue the railroads are favoring oil companies over agriculture. Bloomberg reported, as grain produced last year sits in storage, waiting for trains to carry it to market, the bottlenecks may get worse as an anticipated record grain harvest begins, officials warned. John Hoeven, the Republican Senator from North Dakota, said at the hearing, “the bottom line is that we need greater rail capacity to meet the growing needs of […]

Posted On : Published By : Tom Whipple
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EIA: U.S. fuel markets still rely on imports

The U.S. Energy Information Administration said exports of U.S. gasoline , jet fuel and other petroleum products averaged 3.7 million barrels per day in June, the last full month for which data are available. EIA said increased exports from the Gulf Coast accounted for 72 percent of all growth in the U.S. petroleum export market. "Despite higher total U.S petroleum product exports, the East Coast remains reliant on imports to meet regional demand for both gasoline and distillate [diesel and other fuel oils]," EIA said in a weekly report published Thursday. EIA said the East Coast market receives much of its fuel from domestic sources, though pipeline and maritime shipping constraints limit how much of the petroleum products refined elsewhere in the United States can reach the region . EIA says trade in petroleum products varies depending on supply and demand. "With U.S. refining capacity in the Gulf Coast […]

Posted On : Published By : Tom Whipple
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New oil pipeline from North Dakota proposed

Energy company Enterprise Products Partners said it’s vetting interest in a pipeline that would service North Dakota and Colorado shale oil basins. Dubbed the Bakken-to-Cushing pipeline, Enterprise said it was opening a vetting period to determine demand for capacity for a line that could carry an initial 340,000 barrels per day and expand to 700,000 bpd. The pipeline would extend about 1,200 miles and service the Bakken shale area in North Dakota, as well as the Powder River and Denver-Julesburg basins in Colorado . "This pipeline offers a reliable, safe, and economical solution that promotes continued development of some of our nation’s most prolific producing areas and reduces the need for imports of crude oil," A.J. Teague, executive vice president and chief operating officer at Enterprise, said in a statement. The United States is producing more oil than the existing network of pipelines can handle. Industry officials said transporting […]

Posted On : Published By : Tom Whipple
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BHI: US rig count posts double-digit gain for second straight week

The US drilling rig count gained 11 units to reach 1,925 rigs working during the week ended Sept. 5, Baker Hughes Inc. reported. Land rigs were up 9 units to 1,847 while rigs drilling in inland waters were up 3 units to 13. Offshore rigs edged down a unit to 65. Oil rigs were also up 9 units, bringing that total to 1,584. Gas rigs gained 2 units to 340. No unclassified rigs were gained or lost, leaving the one remaining untouched. Directional drilling rigs jumped 14 units to 224. Horizontal drilling rigs were up 3 units to 1,333. Canada’s rig count increased 5 units to 414, giving the country 25 more units compared with this week a year ago. An 8-unit rise in gas rigs to 186 was cut into by a 3-unit decline in oil rigs to 228. Major states, basins As usual, Texas led the major […]

Posted On : Published By : Tom Whipple
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Nebraska Court Hears Questions About Keystone XL Pipeline Plan

LINCOLN, Nebraska, Sept 5 (Reuters) – Nebraska’s Supreme Court heard arguments on Friday about whether Governor Dave Heineman acted properly when he blessed a route for the Keystone XL oil pipeline, and the court’s decision could weigh on the controversial project. A lawyer for landowners who may be in the pipeline’s path hoped to persuade the seven-member panel that Heineman overreached and that a decision on the route should be left to an independent state agency. The 30-minute hearing played out in the court’s somber wood-paneled chamber. Keystone opponents who watched the proceedings from an adjacent room, were not so subdued. "It just makes sense, how can they not see that," said Shannon Graves, a Nebraska landowner who opposes the plan and was in the viewing room. At issue was a 2012 law that gave Heineman authority to approve a route for TransCanada Corp’s proposed $5.4 billion pipeline. The […]

Posted On : Published By : Tom Whipple
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Truce in Ukraine Spawns Hope, Doubt in West

Ukraine signed a cease-fire with the pro-Russian rebels on Friday. This could be a real move into ending the five-month conflict. WSJ’s Moscow Bureau Chief Greg White joins Lunch Break’s Tanya Rivero with the details. Photo: Getty MOSCOW—A tentative peace deal for Ukraine reached Friday raised hopes for a resolution of the worst East-West crisis since the Cold War, even as the U.S. and Europe beefed up sanctions aimed at pressuring Russia to leave the battlefield. After a day of continued fighting, Ukrainian forces and the pro-Russia separatists in the east of the country said they had stopped their military operations when the cease-fire went into effect at 6 p.m. local time. The deal was described as a series of 12 steps toward ending the five-month conflict that has cost at least 2,000 lives. The first step, the cease-fire, was to be followed by a prisoner exchange and delivery […]

Posted On : Published By : Tom Whipple
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North Sea Oil and Scottish Independence: where does the truth lie?

North Sea Oil and Scottish Independence: where does the truth lie? How much oil and gas is left in the North Sea? 16 billion barrels oil equivalent (boe) according to Sir Ian Wood or 24 billion boe according to Oil and Gas UK? The correct answer for official proved+probable reserves is between 8 and 9 billion boe, a figure that both DECC and Oil and Gas UK agree on. With over 9 different classes of reserves, this debate is sterile and this is not the correct question to ask. How wealthy will oil make Scotland? In 2013, the direct tax take from oil and gas production for the whole of the UK was £4.67 billion and falling. This compares with annual spending of the Scottish government (plus UK spending on Scotland) running at £65.2 billion. Hence, direct taxation of oil and gas production may account for less than 7% of the Scottish […]

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Judge’s Ruling May Encourage BP to Settle

While BP PLC has pledged to fight a federal judge’s ruling that it acted recklessly in the fatal 2010 Deepwater Horizon explosion and spill, Thursday’s decision may ratchet up pressure for it to pursue a different tack: settle. U.S. District Judge Carl Barbier found BP took irresponsible drilling risks and failed to recognize danger signs preceding the deadly accident, leaving the company open to up to $18 billion in federal Clean Water Act penalties for polluting the Gulf of Mexico. BP has called the ruling of gross negligence "erroneous." Expecting the court to find it merely "negligent"—a determination that would have cut its liability by about a fourth—BP had set aside just $3.5 billion for Clean Water Act penalties. If the ruling stands, any final penalty will be based on how much oil is determined to have been spilled and what the court decides BP did to mitigate the […]

Posted On : Published By : Tom Whipple
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BP ruling raises liability stakes for high-risk industries

NEW YORK (Reuters) – A U.S. court ruling that dramatically ramped up BP Plc’s potential penalties for the 2010 Gulf oil spill could create new liability risks not just for deep water drillers but also for other industries like mining and nuclear power generation. U.S. District Judge Carl Barbier in New Orleans, Louisiana, on Thursday found that BP was guilty of "gross negligence" ahead of the rig explosion in the Gulf of Mexico. The April 20, 2010 blast killed 11 workers and spewed millions of barrels of oil for nearly three months. The "gross negligence" designation could quadruple BP’s federal financial penalties, adding as much as $18 billion to the bill for worst offshore environmental disaster in U.S. history. BP said it would appeal the decision, arguing that "the law is clear that proving gross negligence is a very high bar that was not met in this case." Legal […]

Posted On : Published By : Tom Whipple