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Keystone XL: An elephant in the room

US President Barack Obama signs autographs after delivering the State of the Union address before a joint session of Congress on January 20, 2015 at the US Capitol in Washington, DC. Keystone XL, not mentioned by the president, looms large in rebuttals from his adversaries. Pool Photo by Mandel Ngan/UPI WASHINGTON, Jan. 21 (UPI) — While touting oil independence during his State of the Union, it was the one word missing from the address, Keystone, that drew criticism for President Obama . "Let’s set our sights higher than a single oil pipeline," is all the president said during his State of the Union address on a project at the center of the agenda for the newly-minted Republican-led Congress. At the start of the 114th Congress, Republican leaders placed Keystone XL at the top of its to-do list. The project meant formally to bring tar sands oil from Canada to […]

Posted On : Published By : Tom Whipple
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Bakken Rig Count Decreases to 163

Budget Cuts and Layoffs Mark Crisis in Region Rig Count Sharply Declines in Bakken The Bakken-Three Forks rig count decreased sharply over the past month, ending last week with a total of 163 rigs across our coverage area. This represents a drop of seven from last week and a startling 17 from only one month ago, according to the weekly report from Baker Hughes. WTI crude prices have decreased by ~$9.59 since December 19th, trading at $55.99/bbl on Monday morning. As oil prices continue to drop, reports of deeper budget cuts and layoffs are now daily news. Related: Energy Giants Announce Layoffs Related: Halcón Resources Reduces 2015 Budget The Bakken isn’t the only region to see a decline. The U.S. rig count decreased to 1,676 rigs running by the end of last week with a total of 310 rigs targeting natural gas (down 28 from December) and 1,366 targeting […]

Posted On : Published By : Tom Whipple
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Suncor Executive Says Growth Plans Based on Bullish Crude Price Outlook

A senior Suncor Energy Inc. executive said Wednesday the company won’t delay its biggest long-term growth projects because it expects crude oil prices to double from current levels within the next three to four years. “In the longer term, oil is going to go back to $90-$100,” Alister Cowan, the oil sands producer’s chief financial officer, told investors attending a Canadian Imperial Bank of Commerce conference in Whistler, British Columbia, saying that prices would rebound to that level “probably in three years or four years’ time.” That bullish outlook echoes recent comments by CEO Steve Williams, who has said he also expects oil prices to climb back to the lofty levels of last summer. U.S. oil for March delivery traded on the New York Mercantile Exchange settled Wednesday at $47.78 a barrel. Oil prices have tumbled more than 55% since June, with the steepest decline following the Organization of […]

Posted On : Published By : Tom Whipple
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Keystone Debate: Senate Votes on Dueling Climate Change Amendments

Sen. Brian Schatz (D., Hawaii) addresses his supporters at the Democratic Coordinated Election Night Celebration in Honolulu on Nov. 4, 2014. Eugene Tanner/Associated Press The Senate on Wednesday cast its first votes in at least eight years on climate change, putting lawmakers on the record about the politically contentious issue. As part of its ongoing debate over the Keystone XL pipeline, senators voted Wednesday on three nonbinding amendments addressing the scientific consensus of climate change. The Senate rejected the most contentious amendment sponsored by Sen. Brian Schatz (D., Hawaii) , which stated climate change is real and that human activity significantly contributes to it, something most scientists around the world agree is occurring. The amendments have no chance of becoming law because the underlying bill faces a veto threat from President Barack Obama . But the votes were part of a strategy by Democrats to put Republicans on the […]

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Refiners Top Off Their Storage Tanks

ENLARGE Gasoline prices are likely to average $2.33 this year, off 31% from 2014, according to the U.S. Energy Information Administration. Regular sold for $1.68 a gallon in Dellwood, Mo., on Tuesday. Photo: Getty Images The global glut of crude oil is turning into a U.S. glut of gasoline. As oil prices have tumbled during the past few months, U.S. refiners have been sucking up as much of the abnormally inexpensive crude as they can, turning it into gasoline, diesel and other fuels. Prices at the pump have plunged to almost $2 a gallon, the lowest nationwide average in more than five years. Even though U.S. drivers are filling their tanks more often, they can’t keep pace with surging gasoline supplies. So a lot of the fuel that refiners are producing is sitting in storage tanks. Gasoline inventories stood at 240.3 million barrels as of Jan. 9—the highest they […]

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BHP to reduce US onshore rigs by 40% by July

HOUSTON, Jan. 21 01/21/2015 Australia’s BHP Billiton will reduce its US onshore rig presence from 26 to 16 by July in response to lower oil prices . Andrew Mackenzie, BHP’s chief executive officer, explained in the company’s operational review for the half-year ended Dec. 31 that it will instead focus on improvements in drilling and completions efficiency. “Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage [in the Eagle Ford shale],” Mackenzie said. “However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production.” The company in 2011 entered the Eagle Ford—where a majority of the company’s US onshore rigs currently reside—in its $12.1-billion merger with Petrohawk Energy. The move was part of a $20-billion investment in US shale by a company whose expertise at the time was primarily in deepwater […]

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Kemp: Oil Producers’ Under-Appreciated Role in US Economy

The states at the heart of the American shale oil revolution all grew faster than the US national average over the last decade, underscoring the importance of oil production to the US economy. John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Jan 21 (Reuters) – The eight states at the heart of the American shale oil revolution all grew faster than the U.S. national average over the last decade, according to the U.S. Bureau of Economic Analysis (BEA), underscoring the importance of oil production to the U.S. economy. Gross domestic product (GDP) attributable to private industry grew at a compound annual rate (CAGR) of 1.8 percent between 2002 and 2013 for the nation as a whole, after allowing for inflation. But for the eight states at the centre of the shale oil revolution, all of which have increased their production by at least […]

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Norway draws record offshore interest

Norway sees record interest from energy companies eying its offshore reserves, but warns against unwarranted production expectations. (UPI/Shutterstock/James Jones Jr.) OSLO, Norway, Jan. 21 (UPI) — German energy company Wintershall said Wednesday there were emerging opportunities offshore Norway, where it’s one of the largest stakeholders. Wintershall said it won eight exploration licenses, serving as the operator at three, during the latest auction held by the Norwegian Ministry of Petroleum and Energy. With 50 licenses already in its books, the German oil and gas company is among the largest stakeholders in Norway. "As one of the fastest growing oil and gas companies in Norway, we are focused on turning our exploration success into developments and production," regional managing director Bernd Schrimpf said in a statement. "It is critical that we continue to replenish our license portfolio so that we can continue to operate in this way." The Norwegian government handed […]

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Russian Oil Producer Surgut’s $36 Billion Cash Pile Is Both Blessing and Curse

Recent history has shown that Russian leaders aren’t afraid to help themselves to companies they covet. And with the country’s cash squeeze growing, stock investors are worrying about which one could fall next. OAO Surgutneftegas is a name that many keep coming back to. The oil producer is sitting on $36 billion, a cash hoard that would go a long way to alleviating the financing squeeze at state-run energy company OAO Rosneft. Locked out of U.S. and European capital markets by international sanctions tied to the Ukraine conflict, Rosneft needs to pay back $19.5 billion of debt maturing this year. Surgut is hovering near a record low , having sunk 33 percent in New York trading since crude prices began plunging in June. Analysts at BCS Financial Group and UralSib Financial Corp. cite President Vladimir Putin ’s past takeovers as a key cause for concern. Putin moved to nationalize […]

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Moscow: Turkish Stream the new South Stream

Russian Foreign Minister Sergei Lavrov says Europe needs Turkish gas project, despite abandoning larger network last year. UPI/Li Tao/Pool MOSCOW, Jan. 21 (UPI) — Moscow said Wednesday a Turkish gas project will help ensure European energy security, the same reason given for the abandoned South Stream pipeline. Russian Foreign Minister Sergei Lavrov said the so-called Turkish Stream gas pipeline will do the same as a project the government in Moscow pulled off the table in late 2014. "We expect it to be realized and help enhance Europe’s energy security, therefore freeing it from problem transit states," he told reporters. Russia meets about a quarter of the natural gas needs for the European economy. The majority of that runs through the Soviet-era transit network in Ukraine, where lingering debt issues and ongoing conflict present risks to traditional energy routes. Russian officials in mid-December confirmed South Stream, touted as the answer […]

Posted On : Published By : Tom Whipple