Category:

Shell’s Canadian Oil-Sands Operations to Cut Jobs Amid Crude Oil Price Swoon

By Chester Dawson CALGARY-Royal Dutch Shell PLC said Friday it plans to cut jobs at its Canadian oil-sands operations, becoming the first major energy company to shed workers in Canada’s oil patch amid a recent swoon in global crude oil prices. Shell, which produces 250,000 barrels of oil a day from its oil-sands mines, will trim about 2% of its 3,000 workers, or about 60 positions, some of whom will be reassigned to other jobs, said company spokesman Cameron Yost. "We’re continuing to review our business to make sure that we remain competitive," Mr. Yost said. "When prices are low the importance of that is underlined," he said. The president of Shell Canada, Lorraine Mitchelmore, said in August that the company’s oil-sands business met internal yardsticks for profitability when Brent crude trades above $70 per barrel. Prices for Brent, the global oil benchmark, have spiraled lower in recent weeks, […]

Posted On : Published By : Tom Whipple
Category:

New drilling affected by oil price fall

Floor hands Jose Garza, left, Jose Salinas, center, and Omar Cano make a pipe connection on Orion Drilling Co.’s Perseus drilling rig near Encinal in Webb County, Texas, U.S., on Monday, March 26, 2012. The Perseus is drilling for oil and gas in the Eagle Ford Shale, a sedimentary rock formation underlying an area of South and East Texas. Photographer: Eddie Seal/Bloomberg *** Local Caption *** Jose garza; Jose Salinas; Omar Cano Crude lost another 11 per cent this week amid continuing worries about a supply surplus as demand slows, with the Brent benchmark falling below $50 a barrel. ICE February Brent, the global benchmark, was trading at $50 a barrel at the end of the week while US crude fell 8 per cent to $48.37. More On this topic IN Commodities Analysts said the fall in oil prices was filtering through to US shale ventures, with new drilling […]

Posted On : Published By : Tom Whipple
Category:

Are Mountrail’s Sweet Spots Past Their Prime?

This post is an update on total Light Tight Oil (LTO) extraction from Bakken in North Dakota based upon actual data as of October 2014 from North Dakota Industrial Commission (NDIC). It further presents a statistical analysis on developments of well productivity with a detailed look at developments in Parshall, Reunion Bay and Sanish. There were general improvements in LTO well productivity in Bakken during 2013. Present trends in LTO well productivity for Mountrail’s sweet spots (Alger, Parshall, Reunion Bay, Sanish and Van Hook) suggests these are past their prime. Figure 29 in this post show development in well productivity for Alger and Van Hook and figures 06, 08 and 10 for Parshall, Reunion Bay and Sanish. A common feature for Parshall, Reunion Bay, Sanish, and Van Hook is that these reached new highs in well productivity for wells started in 2013. Alger has been in general decline since […]

Posted On : Published By : Tom Whipple
Category:

Moniz: Low crude prices unlikely to change US energy policies

WASHINGTON, DC, Jan. 8 01/08/2015 Crude oil prices below $50/bbl could force some producers to reduce capital expenditures if they go on for long, but are not likely to change US energy policies, according to US Sec. of Energy Ernest G. Moniz. “We will still see increases in our oil production in 2015. It has been tempered, but should reach 9.3 million b/d,” Moniz said during a Jan. 7 discussion at the Woodrow Wilson International Center for Scholars . “If low prices persist for a long time, reductions in capex will appear down the road.” The Obama administration is trying to put together a comprehensive picture of what low oil prices mean beyond consumers driving more and buying new motor vehicles, Moniz said. “One of the obvious global issues is whether this can help get Europe’s rather sluggish economy going,” he said. “There also obviously are several countries which […]

Posted On : Published By : Tom Whipple
Category:

Mounting debt for energy firms as oil prices plummet

Mounting debt for energy firms as oil prices plummet thumbnail Energy firms have been financing new oil production by taking on large amounts of debt. When oil prices averaged over $100, that strategy made sense. But with oil at $50, most indebted firms are suddenly in crisis. In recent years oil exploration companies have taken on more debt in order to finance their operations. The level of debt in the upstream sector – excluding integrated oil companies like ExxonMobil – hit $199 billion at the end of 2014, a 55 percent increase since 2010, according to the  Wall Street Journal . Loading up on debt made sense when oil prices were high. Fracking new shale wells can be an expensive process, but when oil was averaging over $100 per barrel, the debt load for many firms didn’t seem so burdensome. Now with oil prices falling by more than half […]

Posted On : Published By : Tom Whipple
Category:

Russia likely to demand early repayment of Ukraine’s $3 billion debt: RIA Novosti

MOSCOW (Reuters) – It is "highly likely" that Russia will demand early repayment of $3 billion in debt owed by Ukraine, Russia’s RIA Novosti agency reported on Saturday, citing an anonymous government source. The source told the agency that Ukraine was in violation of a "whole series" of conditions for Russia’s loan. "In these circumstances it is highly likely that Russia will be forced in the near future to demand from Ukraine the early repayment of the $3 billion debt," the source was quoted as saying. The comments appear to contradict remarks in November by President Vladimir Putin, who told German media that Russia did not intend to demand early repayment of Ukraine’s debt as this would cause a financial collapse. The finance ministry did not answer calls for comment on Saturday. Russia lent the money in December 2013 by buying Ukrainian Eurobonds, before the overthrow of Ukraine’s pro-Moscow […]

Posted On : Published By : Tom Whipple
Category:

Statoil tightens focus on North Sea

Norwegian energy company Statoil said there’s still a long life left in North Sea field. (UPI/Shutterstock/James Jones Jr.) STAVANGER, Norway, Jan. 9 (UPI) — Producing 700 million barrels of oil equivalent since 1997, Norwegian energy company Statoil said Friday it was extending the life of a North Sea field to 2030. Statoil said it was confident life for the Norne field development in the North Sea could be extended beyond the initial closure date in 2014. The field’s operational vice president, Kristin Westvik, said 17 years of systematic maintenance left infrastructure there in good shape. "In light of this we are now considering extending Norne’s life to 2030," she said in a statement. Statoil last year said it was forced to slash costs by more than $1 billion because of the low price for crude oil. Brent, the global benchmark derived from North Sea oils, is selling for around […]

Posted On : Published By : Tom Whipple
Category:

Scotland calls for North Sea reforms

Scottish government accuses British rivals of mismanaging North Sea oil and gas sector. (UPI/Shutterstock/James Jones Jr.) EDINBURGH, Scotland, Jan. 9 (UPI) — The Scottish government wants reforms in the tax regime of the North Sea oil and gas sector to ensure long-term sustainability, the energy minister said. Scotland pegged its future during a bid for independence on revenue from oil and gas reserves in the North Sea. The bid failed last year, though Scottish Energy Minister Fergus Ewing said frustration endured in the sector. "The oil and gas industry is a strong success story for Scotland and will continue to be," he said in a late Thursday statement. "However, because of the mismanagement of oil and gas fiscal policy by the U.K. government, challenges remain and we must tackle the on-going cost pressures and the fall in oil prices head on." Ewing said the region’s energy sector needs a […]

Posted On : Published By : Tom Whipple
Category:

Oil: The Panic That Refreshes

The cure for low oil prices is low oil prices. But an important twist to that pearl of Houston wisdom is that the real cure is prices way lower than anyone expected. It is when oil drops far below levels budgeted by exploration and production companies that rigs get idled, curbing supply growth and supporting prices. Yet the U.S. oil rig count has fallen by only 8% since early October. On that front, the latest outlook for E&P spending from Evercore ISI offers some hope to a sector with precious little right now. Since 2000, they have tracked the industry’s oil-price expectations. Last year was the first time that the sector overestimated the average oil price, guessing around $90 a barrel versus the outcome of about $76. Usually, the price has come in above expectations. The sector kicked off 2015 expecting oil to average $77.55 a barrel, ISI says. […]

Posted On : Published By : Tom Whipple