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Somali Petroleum Minister Sees Start of Oil, Gas Output by 2020

(Bloomberg) — Somalia may start producing oil and gas by 2020 after exploration work showed the potential for “huge” deposits of the resources in the Horn of Africa country, outgoing Petroleum Minister Da’ud Mohamed Omar said. “We expect that Somalia will produce oil and gas in 2020 and the nation will reap enormous benefits such as alleviating the poverty and leading the country into prosperity,” Omar told reporters Wednesday in the capital, Mogadishu. He didn’t identify which oil companies are carrying out exploration work in the country. Somalia is considering its first bidding round for oil blocks since 2009 as increasing stability begins to attract more foreign investors. African Union-backed government forces have regained control of about 70 percent of the country that had fallen under the control of al-Shabaab, the al-Qaeda-linked militant group seeking to create an Islamic state in Somalia. The government is in talks with companies […]

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Nigeria: FG Cries Out Over Pipeline Vandalism

Abuja — The Federal Government on Wednesday cried out over the continuing attacks on pipelines supplying gas to power plants across the country, declaring that there are forces undermining its effort to boost power supply to Nigerians. Minister of Power, Cinedu Nebo said in Abuja that pipeline vandals are targeting gas facilities to ensure that power generation do not exceed 4,000mega watt. To check this, Nebo said Government was deploying remote sensing technologies to assist security agents to curb the menace. He, however, stressed that Government efforts would amount to nothing without the collaboration of citizens. Nebo therefore called on Nigerians to join the Government in its fight against the vandals by promptly reporting incidences of vandalism in the areas. To achieve this, Government signed a memorandum of understanding with Charlie Boy, National Association of Nigerian Students (NANS) and other youth groups to sensitize citizens on the activities of […]

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BW Offshore Says 5 Dead After Petrobras Platform Explosion

By Anna Molin Norway’s BW Offhore Ltd. (BWO.OS) Thursday said five people were killed and four are still missing following an explosion on a Petroleo Brasileiro SA vessel off the coast of southeastern Brazil. The offshore production operator and owner said all remaining crew have been accounted for and receiving medical care where needed, with two in critical condition. There were a total of 74 people onboard the platform, operated for state-run oil company Petrobras by BW Offshore. Production has been stopped and the Cidade de São Mateus FPSO unit has been shut down, BW Offshore said. For safety reasons, all employees have been taken off the unit, it added. The accident occurred shortly after midday Wednesday about 75 miles off the coast of Espirito Santo state, north of Rio de Janeiro. "This is a tragic day, and our primary focus now is on the crew and their families. […]

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Oklahoma shale booming

Oklahoma shale seen as mirroring developments in Texas and North Dakota, analysis finds. Photo by photostock77/Shutterstock Analysis from Wood Mackenzie finds the South Central Oklahoma Province, or SCOOP, to be economical with a price of West Texas Intermediate crude oil, the U.S. benchmark, as low as $41 per barrel, more than 15 percent below the current price. "The region will see drawbacks, rig counts are down in the near-term but production won’t fall off by much and we expect it to bounce back quickly in 2016," Brandon Mikael, a Wood Mackenzie analyst for the Lower 48, said in a Tuesday statement. Last year, Continental Resources, which is one of the largest operators in the Bakken oil reserve area in North Dakota, said its acreage in the SCOOP basin was a "significant" part of its growth strategy. According to oil services company Baker Hughes, shale basins in Oklahoma were among […]

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Japan plans to restart some nuclear plants in 2015 after Fukushima shutdown

Source: U.S. Energy Information Administration, International Energy Agency, METI Previously one of the world’s largest producers of nuclear-generated electricity, Japan has relied heavily on fossil fuels following the meltdown at Fukushima Dai-ichi and subsequent shutdown of the country’s nuclear fleet. In 2013, when almost all of Japan’s nuclear fleet was shut down, more than 86% of Japan’s generation mix was composed of fossil fuels. In 2014, Japan’s nuclear generation was zero. The Japanese government anticipates bringing online a few nuclear facilities in 2015. Nuclear reactor restarts could begin as soon as May 2015, as Kyushu Electric’s Sendai Units 1 and 2 in southwestern Japan received approval to restart from the Japan’s Nuclear Regulatory Agency (NRA) and local authorities in November 2014. The NRA also approved Kansai Electric’s Takahama Units 3 and 4 at the end of 2014, although these units are still awaiting authorization from the local government. The […]

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Three U.S. Oil Plants Targeted by Union Strike Report Upsets

(Bloomberg) — At least three of the nine U.S. oil refineries targeted by a nationwide strike of United Steelworkers union members have reported upsets and unplanned repairs since their workers walked out earlier this month. Royal Dutch Shell Plc’s Deer Park refinery in Texas had an upset at a fluid catalytic cracker on Feb. 8. Tesoro Corp.’s Carson plant near Los Angeles performed unscheduled repairs after a unit breakdown. Marathon Petroleum Corp.’s 451,000-barrel-a-day Galveston Bay refinery in Texas, the biggest of the plants on strike by capacity, leaked diesel from an ultracracker. The equipment failures are occurring amid the biggest strike of U.S. oil workers since 1980. United Steelworkers union members have walked out of nine U.S. refineries since Feb. 1 that account for about 13 percent of the country’s processing capacity. One of the sites affected has halted production, and a full strike of USW members would threaten […]

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Halliburton, Baker respond to DOJ queries

Standard anti-trust queries issued to Halliburton and Baker Hughes ahead of planned merger. Photo by Christopher Halloran/Shutterstock Both companies said they’ve received "expected" and "standard" requests from the Justice Department related to Halliburton’s pending acquisition of rival Baker Hughes. "Halliburton and Baker Hughes are working cooperatively with the Department of Justice as it conducts its review of the transaction, which remains subject to shareholder and other approvals, as well as customary closing conditions," the companies said in a joint statement Tuesday. Separately, the two companies are the largest of their kind. Halliburton under the terms of the deal buys all outstanding shares in Baker Hughes for $34.6 billion. Baker Hughes had initially balked at the deal when it emerged in late 2014. Before ultimately consenting to the deal, Baker Hughes Chairman and Chief Executive Officer Martin Craighead said in November he was advising shareholders against the deal after Halliburton […]

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House passes Keystone XL legislation; will test veto pen

Sen. John Hoeven, R-N.D., may face presidential showdown as Keystone XL bill moves up the steps of Capitol Hill. UPI/Kevin Dietsch The House of Representatives passed the bill with a vote of 270-152. Twenty-nine Democrats joined House Republicans in the vote for the legislation. Rep. Justin Amash, R-Mich., was the only Republican to vote against the measure. A coalition of energy groups in the United States issued letters to the House in support of the legislation, which is meant to advance the construction of the pipeline meant to cross the U.S.-Canadian border. James P. Hoffa , president of the powerful Teamsters Union, said building the pipeline would bring net benefits to the United States. "If the pipeline is not built, important socio-economic benefits will not be realized," his letter reads. The House took up a Senate bill sponsored by Sen. John Hoeven , R-N.D., to build the pipeline. Hoeven […]

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U.S. oil trade survey draws mixed reviews

Public opinion survey on trade in U.S. crude oil draws mixed reviews. Photo by nito/Shutterstock WASHINGTON, Feb. 11 (UPI) — A public opinion survey on foreign trade in U.S. crude oil, conducted for a pro-export group, was criticized as shoddy by those backed by a refinery coalition. FTI Consulting was hired by the Producers for American Crude Oil Exports to gauge public opinion on trade policies governing the U.S. energy sector. It found 69 percent of those likely voters supported policies that would allow "producers to sell crude oil to customers in countries who are trading partners" with the United States. PACE Executive Director George Baker said in statement the survey reaffirms studies by policy centers and government agencies on loosening trade policies on crude oil produced in the United States. "Each [study] has determined that crude oil exports will grow the economy and provide broad-based consumer benefits," he […]

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North Dakota Tax Trigger Getting Closer

Countdown to ND Tax Incentive The countdown has begun on North Dakota’s small oil tax trigger. This measure, which kicked in at the beginning of the month, was introduced by lawmakers to provide tax incentives to strained producers in order to ease the sting of prolonged lower crude prices. The formula for the tax trigger states that when West Texas Intermediate (WTI) stays below $52.58 (2015) for five consecutive months, then the state waives its 6.5% oil extraction tax. Since January crude prices averaged $47.98 per barrel, the trigger took affect February 1st. As long as the price stays below $52.59 for the next four months, the incentive will take effect. Once the prices inches up, the calculations start over. Related: No Income Tax for North Dakota? North Dakota state legislators jumped this week to take measures to extend the trigger through June 30, 2019. House Bill 1437 extends a smaller trigger that […]

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As Oil Price Drops, Texas Lenders Watch for Fallout

ENLARGE Banker Hugh B. "Trip" Ruckman III hasn’t lent large sums to the drillers dotting the Texas landscape near Karnes City. But his bank has lent to small hotels that rely on oil workers for much of their business. Photo: Ben Sklar for The Wall Street Journal KARNES CITY, Texas— Hugh B. “Trip” Ruckman III ’s family ties to the Karnes County National Bank date to 1901 when it started making loans to cattle ranchers and farmers in this rural community in South Texas. The mobile-home camps and sandstone-colored motels along Highway 181, where some rooms regularly cost more than high-rise hotel rooms in Houston and San Antonio, are newer additions to the local economy. So are the 18-wheelers that race down the streets and the mud-splattered pickup trucks that fill the Dairy Queen parking lot at lunchtime, their sides dotted with energy-company logos. Mr. Ruckman’s community bank doesn’t […]

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IMF unveils fresh $17.5bn Ukraine rescue plan

Christine Larage: the Ukrainian authorities are demonstrating courage to reform we’ve never seen before The International Monetary Fund on Thursday said it would provide a new four-year $17.5bn bailout for war-torn Ukraine that is expected to lead to a restructuring of Kiev’s privately-held debts so that it can shore up its public finances. The new rescue replaces a $17bn programme launched less than a year ago but abandoned when the conflict with Russian-backed separatists in Ukraine’s eastern districts worsened, undermining the country’s public finances. The IMF had distributed $4.5bn in the first programme, bringing the fund’s total commitment to Ukraine to $22bn. More On this story On this topic IN Europe With separate EU and US pledges already made — and expected promises of bilateral loans from the world’s biggest economies worth several billion dollars — the size of the financial aid package will reach $40bn. But it may […]

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Rig Trends: Idle Times Ahead for Offshore Rig Fleet

Rig owners are retiring older rigs and making plans to cold stack others in an effort to reduce costs in the current market climate. As the reality of low oil prices settles in, operators and rig owners are being forced to take hard looks at where and when they will spend money. Oil companies are reducing 2015 spending budgets significantly, which means in many cases rig contracts will not be renewed and several others are being looked at as possible early termination candidates. In turn, rig owners are having to make tough decisions on whether to continue to market or cold stack currently active rigs in addition to retiring older or long-idled rigs. In the past few months, Hercules Offshore, Diamond Offshore, Noble Corporation and ENSCO have cold-stacked a combined total of eight jackups and four semisubs. On the retirement front, since the fourth quarter of last year, Transocean […]

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Total Canadian oil production up 8 percent

One Comment on "Total Canadian oil production up 8 percent" I know the following is off topic, however it needed to be posted somewhere, in which this chief economist on CNBC explains that all this talk of the economy accelerating is wrong – when you go to the link below click on debt rattle then on the video. Great stuff! He says the economy for the last five years continues to move along at about 2% growth. http://www.theautomaticearth.com/2015/02/debt-rattle-february-11-2015/ • Truth to Power: This Man Will Never Be Invited Back On CNBC (Zero Hedge) While Steve had a number of hard to hear quotes for the CNBC anchors – such as: “There is no acceleration in underlying economic activity,” and “There’s this wrong concept that I keep on hearing about in the financial press about the acceleration in economic growth… It’s not happening!” A stunned Simon Hobbs rebuffs, “That’s a […]

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Ukraine Peace Talks Yield Cease-Fire Deal

ENLARGE Russian President Vladimir Putin, third left, shakes hands with his Ukrainian counterpart, Petro Poroshenko, as they participated in peace talks on resolving the Ukrainian crisis in Minsk, Belarus, on Wednesday. Photo: Reuters MINSK, Belarus—The leaders of France and Germany brokered a renewed deal to end Ukraine’s 10-month conflict with Russia-backed separatists, reviving and amending a failed September cease-fire agreement in marathon talks that lasted through the night. Russian President Vladimir Putin told reporters that the deal calls for a cease-fire starting on Sunday, with each side pulling back heavy weapons, as well as steps to give greater autonomy to the Russia-backed separatist regions in eastern Ukraine. Details of the agreement weren’t immediately available. The deal came after 17 hours of talks in the Belarus capital of Minsk involving Mr. Putin, French President François Hollande, German Chancellor Angela Merkel and Ukrainian President Petro Poroshenko. German Foreign Minister Frank-Walter Steinmeier […]

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Putin: Leaders agree deal for Ukraine cease-fire

MINSK, Belarus (AP) — Russian President Vladimir Putin on Thursday emerged from marathon Ukraine peace talks by announcing a new cease-fire deal, but questions remained whether Ukraine and the pro-Russian rebels have agreed on its terms. Putin told reporters that the cease-fire will be effective starting from Sunday, but he added that he and Ukrainian President Petro Poroshenko disagreed on assessing the situation in a key flashpoint. The government-controlled town of Debaltseve, a key transport hub between the two main rebel-controlled cities in the east, has been the focus of intense fighting in recent weeks as the rebels sought to encircle the Ukrainian troops there. Putin said that the rebels consider the Ukrainian forces surrounded and expect them to surrender, while Ukraine disagrees with that. He added that they agreed with Poroshenko to clarify the situation. Putin urged the warring parties to show restraint. Poroshenko said the parties agreed […]

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Deep-water wind energy coming to Germany

German wind farm readies for mid-2015 service after installation of turbines at deep-water site. Photo courtesy: E.ON With 80 wind turbines in place, German utility company E.ON said Wednesday it was one step closer to activating a deep-water wind farm off the German coast. The company said turbines were installed during the weekend at the site of the Amrumbank West wind project, situated about 20 miles northwest of the German island of Helgoland. Infrastructure construction began in January 2014. "We are confident that we will soon be able to feed electricity generated by the first turbines into the public grid as planned," Dominik Schwegmann, lead project manager of Amrumbank West, said in a statement. The project is slated for mid-2015 completion . At its peak, Amrumbank West will supply 288 megawatts of wind energy to the German grid, enough to meet the annual electricity demands of 300,000 average households. […]

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Greece, euro zone fail to agree on debt, to try again on Monday

BRUSSELS (Reuters) – Greece’s new leftist government and its international creditors failed to agree on a way forward on the country’s unpopular bailout and will try again on Monday, with time running out for a financing deal. In seven hours of crisis talks in Brussels that ended after midnight, euro zone finance ministers were unable to agree even a joint statement on the next procedural steps. Both sides played down the setback, insisting there had been no rupture. But Greek stock prices, which whipped higher after hours in New York on talk of an accord, sagged with disappointment when it emerged that Greece’s laconic new Finance Minister Yanis Varoufakis had walked away from a draft deal to extend current credit terms after conferring with fellow Greek officials. "We had an intense discussion, constructive, covering a lot of ground, also making progress, but not enough progress yet to come to […]

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France’s Total Plans to Cut Jobs, Sell Assets After Big Loss

Total Chief Executive Patrick Pouyanne. ENLARGE Photo: Associated Press PARIS— Total SA plans to eliminate 2,000 jobs by 2017 and sell assets worth $5.5 billion this year as the French oil and gas group adapts its business to a world of sharply lower oil prices. The company, one of Europe’s biggest oil producers, said it would freeze the hiring of new staff at its production, refinery, and petrochemicals operations as part of plans to cut costs by $4 billion this year. Total said its aim is to reduce costs so it can turn a profit with an oil price of $70 a barrel compared with $110 a barrel last year. Crude prices have fallen by more than half to around $50 a barrel since last summer. The announcements came as Total swung to a net loss of $5.66 billion in the three months to end-December from a net profit […]

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Total to sell $5bn of assets as it cuts UK refinery capacity

Total said capacity at the Lindsey refinery in Lincolnshire would be halved France’s Total said on Thursday it would sell $5bn of assets this year and cut capacity at Britain’s Lindsey oil refinery as the European energy group reported billions of dollars in asset writedowns and slashed capital spending. The more than 50 per cent plunge in international oil prices sent adjusted net income for the fourth quarter of last year 17 per cent lower, to $2.8bn, against the same period in 2013. Total’s shares fell 1 per cent in early trading in Paris. The result was at the top end of analysts’ forecasts. However, the company took a $6.5bn impairment charge on its Canadian oil sands business, US shale gas and troubled European refining operations. That charge and other one-off items led to a headline loss of $5.7bn for the quarter, against a profit of $2.2bn the previous […]

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Germany’s green goals have profound consequences for Eon and RWE

Thousands of ordinary Germans are using renewables, which entitle them to an above-market rate for power they put into the grid Johannes Teyssen, Eon chief, hopes Eon’s successor company will be able to compete more effectively in new energy technology The solar panels Konrad Kuisle installed on the roof of his barn and milking shed have been a steady source of income for the Bavarian dairy farmer. “I installed the panels because, on the one side, I support renewable energy. But I also get something out of it,” says Mr Kuisle, who calculates the power he feeds into Germany’s electricity grid generates up to 15 per cent of his annual turnover. Mr Kuisle is just one of thousands of ordinary Germans who have scrambled to invest in renewable power as Germany pursues one of the most radical sets of energy policies in the world — which are having enormous […]

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The Problem of Debt as We Reach Oil Limits

(This is Part 3 of my series – A New Theory of Energy and the Economy. These are links to Part 1 and Part 2 .) Many readers have asked me to explain debt. They also wonder, “ Why can’t we just cancel debt and start over? ” if we are reaching oil limits, and these limits threaten to destabilize the system. To answer these questions, I need to talk about the subject of promises in general, not just what we would call debt. In some sense, debt and other promises are what hold together our networked economy. Debt and other promises allow division of labor, because each person can “pay” the others in the group for their labor with a promise of some sort, rather than with an immediate payment in goods. The existence of debt allows us to have many convenient forms of payment, such as dollar […]

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Oil Fluctuates Before U.S. Inventory Data

Crude-oil futures swung between gains and losses in Asian trade Wednesday as investors remain uncertain about oil supply levels and scrutinize data for cues. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $50.31 a barrel in recent trade, up $0.29 in the Globex electronic session. Brent crude for March delivery on London’s ICE Futures exchange fell $0.14 to $56.29 a barrel. Oil prices are under pressure due an increasing glut in global oil supply, helped by the U.S. shale revolution and steady oil production from the Middle East. A series of spending cuts by major oil companies and a drop in the number of drilling rigs deployed in the U.S. had raised hopes that supplies would be curbed, resulting in a price rally of around 20% in recent weeks. However, there is little evidence to suggest that actual oil production levels […]

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Brent holds above $56 after U.S. crude stocks rise less than expected

BEIJING (Reuters) – Brent crude held steady above $56 a barrel on Wednesday, and U.S. crude rose briefly more than $1, after a smaller-than-expected rise in U.S. crude stocks was viewed by some as a sign that a supply glut was starting to abate. The gains in futures, however, were capped by a warning from the International Energy Agency (IEA) that ample global production would still swell world inventories before investment cuts begin to significantly dent output. "The supply growth in 2015 is likely to continue unabated, albeit at a somewhat lower rate," Fereidun Fesharaki at Facts Global Energy said in a note on Wednesday. "This all means a weak market in 2015 and even lower oil prices. Demand rebound will not save the oil market," he said. Brent March crude futures had ticked up 28 cents to $56.71 by 0557 GMT, after losing $1.91 during the previous session […]

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Oil falls sharply as IEA expects inventories to rise

NEW YORK (Reuters) – Crude oil prices fell for the first time in four sessions on Tuesday after the International Energy Agency (IEA) warned that ample supplies will raise global inventories before investment cuts begin to significantly dent production. Oil stockpiles in member countries of the Paris-based Organization for Economic Cooperation and Development (OECD) may approach a record 2.83 billion barrels by mid-2015, said the IEA, advisor on energy policy to a group of Western nations. U.S. March crude futures CLc1 fell $2.84, or 5.37 percent, to settle at $50.02 a barrel, after dropping to $49.86. Brent March crude LCOc1 fell $1.91, or 3.3 percent, to settle at $56.43 a barrel, having fallen as low as $56.11. "It’s the battle of the oil outlooks playing out here," said John Kilduff, partner at New York energy hedge fund Again Capital LLC. "The IEA report is a good reminder that there’s […]

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Natural Gas Rises on Cold Spell, Rising Demand

(Updates to add price table at bottom) By Timothy Puko Natural gas closed with its first back-to-back gains in nearly a month, as an arctic chill settling over the eastern half of the U.S. raised heating-demand expectations through next week. The front-month March contract settled up 8 cents, or 3.1%, at $2.677 a million British thermal units on the New York Mercantile Exchange. Prices are up 3.8% from the 2 1/2-year low settlement from Friday during the first back-to-back gains since Jan. 13 and 14. High temperatures are unlikely to rise above 30 degrees Fahrenheit–and in some places not even into the teens–across the Northeast, Ohio Valley and Great Lakes regions, according to Weather Services International in Andover, Mass. These temperatures will be as much as 25 degrees below normal and will be part of a series of arctic fronts that sends cold air across the East for a […]

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Oil on Wild Ride; How Will It End?

NEW YORK (AP) — The price of oil is on a wild ride, and there is little agreement on where it’s headed. After falling nearly 60 percent from a peak last June, the price of oil bounced back more than 20 percent as January turned to February. Then, on Tuesday, it sunk 5 percent, closing just above $50. Oil has fallen or risen by 3 percent or more on 14 of 27 trading days so far this year. By comparison, the stock market hasn’t had a move that big in more than three years. Predicting prices is especially tricky now because the oil market has never quite looked like this. Oil price collapses of the past were triggered either by plummeting demand or an increase in supplies. This latest one had both. Production in the U.S. and elsewhere has been rising, while slower economic growth in China and weak […]

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Kurdistan budget payment imminent

Iraqi Oil Minister Adil Abdulmahdi (left), KRG Prime Minister Nechirvan Barzani (center), and KRG Deputy Prime Minister Qubad Talabani (right), in Erbil on Nov. 13, reach a deal on restarting revenue sharing payments and exports. (Source: Kurdistan Regional Government) The Kurdistan Regional Government (KRG) is set to receive a budget payment from Baghdad as soon as Iraq’s federal budget law officially takes force, despite continued uncertainty about Kurdistan’s contributions to federal oil exports.“A budget payment will be made very soon to the KRG of their share, according to the agreement that was reached, as soon as the law is made official,” said Hoshyar Zebari, Iraq’s Minister of Finance.The final step in passing the 2015 budget into l…

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OPEC down, but not out, IEA says

IEA Executive Director Maria van der Hoeven sees OPEC influence enduring, but waning in the era of U.S. shale. Photo by Anatoli Zhdanov/UPI PARIS, Feb. 10 (UPI) — OPEC’s market influence is expected to grow, but the 12-member group might not return to its pre-recession glory, the International Energy Agency said Tuesday. The Organization of Petroleum Exporting Countries said in its February market report demand for its crude oil should increase as low oil prices put downward pressure on production in U.S. shale basins. OPEC in late November opted to keep production levels static to protect a market share influenced by rising U.S. oil production. The 12-member group still holds considerable influence over the global market, but IEA Executive Director Maria van der Hoeven said its status is waning . "OPEC’s share of global production will indeed grow," she said in a statement. "But it will not revisit the […]

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Petrobras Said to Hit Drilling Snag at Biggest Brazil Find

(Bloomberg) — Petroleo Brasileiro SA halted drilling at its largest oil discovery in deep waters, two people with knowledge of the matter said, underscoring the technical challenges facing the company’s new management team. An unplanned procedure to retrieve equipment stopped work for more than a week at a well in Libra, the people said, asking not to be named because it hasn’t been made public. Rio de Janeiro-based Petrobras didn’t immediately respond to a request for comment on the incident and if it had been resolved. Commercial production is expected to start in 2020. While Petrobras expanded output to a record in December at the so-called pre-salt region that holds Brazil’s largest deposits, it has also run into drilling disruptions in the past. In 2010, it abandoned the first well it started at Libra, citing mechanical issues. In 2011, it briefly halted production at the Sapinhoa field in the […]

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Mysterious Gas Shortages in Central China Draw Official Scrutiny

10:00 am HKT AFP/Getty China’s inflation has dropped to a five-year low, spurring lots of calls from economists for stimulus measures to prop up the Chinese economy. But in the central Chinese city of Zhengzhou, the rising price of gasoline—and mysterious fuel shortages that hit the city in recent days—have dominated local attention and drawn authorities’ ire. Where did the gasoline go? It starts with pricing. Advertisement On Monday, China’s top economic planning body, the National Development and Reform Commission, announced it was raising retail prices of gasoline by 280 yuan per ton, the equivalent of about 0.21 yuan per liter. The price increase was the first time China’s government had raised fuel prices since July. Until this week, prices had been cut 13 consecutive times, reflecting the sharp fall in international oil prices. To anyone who follows oil in China, the NDRC’s decision to raise prices was no […]

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Occidental Petroleum Reduced 2015 Capex by 33%

Occidental Bakken Acreage|Click to Enlarge Occidental Petroleum Corporation reported during its earnings call in late January that the company sustained a fourth quarter loss of $3.4 billion. In response to low oil prices, Occidental announced it will scale back its 2015 capital spending by 33 percent to $5.8 billion from $8.7 billion spent in 2014. In addition to the cuts, the company will also be reducing its activity in the Bakken. This confirms the news we reported in October that the company was in the process of restructuring, and looking to sell off its Williston Basin assets. Read more here . Stephen Chazen, President and Chief Executive Officer confirmed that the company “minimized our development activities in the Williston Basin, domestic gas properties, Bahrain, and the Joslyn oil sands project, as these have subpar returns in this current product price environment. These efforts should result in a reduction in the cost of […]

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U.S. Gulf Coast oil imports down

Oil imports into southern U.S. region down from historic highs, federal data show. Photo by Artens/Shutterstock Crude oil imports into the southern United States have gone from around 1.3 million barrels per day to a trickle, U.S. government data show Tuesday. A crude oil import tracking tool produced by the Energy Information Administration show a steady decrease in crude oil imports to the southern U.S. coast. "Historically, Gulf Coast refineries have imported as much as 1.3 million barrels per day of light-sweet crude oil, more than any other region of the country," EIA said in a Tuesday brief. "Beginning in 2010, improvements to the crude distribution system and sustained increases in production in the region have significantly reduced light crude imports." Gulf Coast imports come from Latin American and Canadian producers, as well as Saudi Arabia, Kuwait and Iraq. EIA data from last week show commercial crude oil stocks […]

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Gas prices rise for 15th straight day

Gasoline prices rise in the United States, but pace of increase is muted. Photo by John Angelillo/UPI Oil prices in the United States were in a free fall last year and in early 2015, with the national average price flirting with the $2 per gallon mark. A national average price for Tuesday of $2.18 per gallon is about a penny more than Monday and 12 cents more than one week ago. AAA notes gasoline prices usually turn the corner at the beginning of February as refineries enter a period of seasonal maintenance. "Refineries usually schedule maintenance during the first several months of the year when demand is relatively low, which can lead to decreased production and supplies," the motor club explained in a Monday report. Refineries are also preparing to make a summer blend of gasoline, which requires additional preparations to prevent vaporization during warmer months. That gasoline is […]

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Halliburton to Cut 8% of Workforce

ENLARGE A Halliburton Co. worker walks through an Anadarko Petroleum Corp. hydraulic fracturing site north of Dacono, Colo. Photo: Bloomberg News Halliburton Co. , the world’s second-largest oil-field services company, said Tuesday it plans to shed up to 8% of its global workforce as low oil prices force energy companies to rein in spending . The job cuts could amount to 6,400 layoffs; the company says it has more than 80,000 employees around the world. “We are faced with the difficult reality that reductions are necessary to work through this challenging market environment,” the company said in an emailed statement. Halliburton said the job cuts aren’t related to its pending acquisition of oil field rival Baker Hughes Inc., which was announced late last year. In its statement Tuesday, the company didn’t specify where in the world the layoffs would take place but said they would affect its entire line […]

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Falling Oil Prices Threaten Houston Building Boom

ENLARGE Construction giant Skanska AB is developing two office buildings in Houston’s “Energy Corridor.” The one that is nearly complete is mostly leased; the other building doesn’t yet have any tenants. Photo: Michael Stravato for Wall Street Journal HOUSTON—The jagged skyline of this oil-rich city is poised to be the latest victim of falling crude prices. As the energy sector boomed in recent years, developers flocked to Houston, so much so that one-sixth of all the office space under construction in the entire U.S. is in the metropolitan area of the Texas city. But now, the need for more offices is drying up, thanks to a drop in oil prices that has spun energy companies from an outlook of optimism and growth to anxiety and cutbacks. Oil prices have fallen by more than 50% since June. Demand for office space is “going to basically stop,” said Walter Page, director […]

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What the massive snowfall in Boston tells us about global warming

The snowfall in Boston lately is simply insane. The local bureau of the National Weather Service has tallied up the data and here’s how it looks — with all time records for snow within a 14-, 20-, and 30-day period: [Winter Climatology] Boston & Worcester breaking snowfall records, inching up to the snowiest winter ever pic.twitter.com/PGy87imCyo — NWS Boston (@NWSBoston) February 10, 2015 You could treat this as ordinary weather, or, you could think about it in a climate context. Counter-intuitive though it may sound, the fact remains that — as I have noted previously — some kinds of winter precipitation could indeed be more intense because we’re in a warming world. Consider, for instance, that sea surface temperatures off the coast of New England are flashing red , showing an extreme warm anomaly. That’s highly relevant — because warmer oceans have atmospheric consequences.  “Sea surface temperatures off the […]

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US EIA sharply cuts natural gas price targets for Q1, full year 2015

Washington (Platts)–10Feb2015/441 pm EST/2141 GMT Pointing to continuing downward pressure on US natural gas prices, the Energy Information Administration on Tuesday reduced its Henry Hub spot price estimate for the first quarter of 2015 by 34 cents to $2.89/MMBtu. In its latest monthly Short-Term Energy Outlook, the agency made similar adjustments to its January estimates for the spot price in 2015, cutting its forecast 39 cents to $3.05/MMBtu, and in 2016, also down 39 cents to $3.47/MMBtu. EIA noted that the Henry Hub spot price for January averaged just $2.99/MMBtu, a decline of 49 cents from December "and the first monthly average price under $3/MMBtu since September 2012." The agency now expects monthly average spot prices to remain south of $3/MMBtu through the winter and below $4/MMBtu until the fourth quarter of 2016. For this winter heating season, EIA sees the Henry Hub spot price averaging $3.34/MMBtu, well below […]

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EIA: US gasoline prices to average $1/gal less in 2015 vs. 2014

HOUSTON, Feb. 10 02/10/2015 US regular gasoline retail prices are expected to average $2.33/gal in 2015, down from $3.36/gal in 2014, according to the Energy Information Administration’s (EIA) latest Short Term Energy Outlook (STEO). As a result, the average household is now expected to spend about $750 less for gasoline in 2015 compared with last year, EIA says. The projected regular gasoline retail price increases to an average of $2.73/gal in 2016. Driven largely by falling crude oil prices , US weekly regular gasoline retail prices averaged $2.04/gal on Jan. 26, the lowest since Apr. 6, 2009, before increasing to $2.19/gal on Feb. 9. Brent, WTI prices unchanged EIA’s price outlook is unchanged from last month’s forecast ( OGJ Online, Jan. 13, 2015 ). The administration expects Brent crude prices will average $58/bbl in 2015 and $75/bbl in 2016, with 2015 and 2016 annual average West Texas Intermediate prices […]

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Halliburton to Cut Thousands of Jobs as Oil Slumps

NEW YORK, Feb 10 (Reuters) – U.S. oil services company Halliburton said on Tuesday it expects to cut potentially more than 6,000 jobs across the globe because of a "challenging market environment" resulting from low oil prices. Halliburton, the latest in a growing list of major oil industry companies laying off workers because of a worldwide glut of crude, said it expects to let go 6.5 percent to 8 percent of its 80,000-strong workforce, amounting to between 5,200 and 6,400 jobs. The number includes the 1,000 jobs that had been cut in the eastern hemisphere in the fourth quarter of 2014, a company spokeswoman said. Halliburton said the impact of the layoffs would be across all company operations, but it did not offer specifics. Oil prices have dropped about half to $50 a barrel since June because of the global glut of oil, forcing many companies to reduce spending. […]

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Kemp: US Businesses Brace For Oil Investment Downturn

John Kemp is a Reuters market analyst. The views expressed are his own LONDON, Feb 10 (Reuters) – Oil and gas production is fundamental to the U.S. economy. The sharp downturn in prices will have a negative impact on business investment in the short term before the positive impact on consumer spending takes over further down the line. Oil and gas producers accounted for almost $1 in every $8 of new business investment in the U.S. economy in 2013, according to new data published by the Census Bureau. Businesses engaged in oil and gas extraction invested $159 billion in wells, structures and equipment in 2013, according to the Annual Capital Expenditures Survey, the latest edition of which was published on Feb. 5 ( http://link.reuters.com/dur93w ). Companies engaged in oil and gas production support activities invested a further $20 billion, taking the oil and gas sector’s share of economy-wide new […]

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Oil Drilling Slows as Crude Price Drops

The International Energy Agency describes a lasting bounce in oil prices as “inevitable.” But lower Chinese oil imports, persistent oversupply and Saudi laissez-faire may endanger the recovery. Photo: AP The U.S. oil boom is slowing down as drillers cut back in response to lower crude prices, according to new data set to be released on Wednesday. Companies drilled 28% fewer oil wells in January across the continental U.S. than they did last June, before oil prices started falling from more than $100 a barrel to about $50 today, according to the study by Rice University’s Baker Institute for Public Policy. But the amount of new crude they can pump from wells drilled in January totals an estimated 515,000 barrels a day, only 8.5% less than from the wells drilled in June, according to data provided for the study by DrillingInfo, an analytics firm. Energy mavens around the world are […]

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Voices in Arlington, Texas Unify to Protect Environment and Community From Fracking

Liveable Arlington, a new Texas grassroots environmental group, joins the growing number of anti-fracking groups forming around the world. The group was established at the end of January, as the battle to impose stricter ozone standards intensifies and the call for fracking bans and tighter ordinances on industry increase nationwide. Arlington, Texas, a Dallas suburb, sits atop the natural gas rich Barnett Shale. ”Once Arlington was known as a bedroom community. Now we are in the forefront of a potentially dangerous industrial experiment,” Ranjana Bhandari, one of the co-founders of Liveable Arlington, told DeSmogBlog. “We have lived with fracking all around us for many years now and have experienced its negative effects on air quality, public health, and now the earthquakes,” she says. Ranjana Bhandari, co-founder of Livable Arlington, in her backyard. ©2013 Julie Dermansky Bhandari and her family are among the few residents who turned down Chesapeake Energy […]

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Why rig cuts won’t save oil

The sharp drop in U.S. oil rig counts has helped lift crude prices off their lows, but it won’t slow production or alleviate oversupply, Goldman Sachs said. “The decline in the U.S. rig count likely remains well short of the level required to slow U.S. shale oil production to levels consistent with a balanced global market,” Goldman said in a note Tuesday. “Lower oil prices will be required over the coming quarters to see the U.S. production growth slowdown materialize.” It estimates the current rig count will bring production growth from the Big-three shale basins — Permian, Eagle Ford and Bakken — to 615,000 barrels a day in the fourth quarter of this year, while continued productivity growth may push that as high as 690,000 barrels a day. Which, not how many It’s about which rigs are getting cut. U.S. crude production was estimated at around 8.6 million barrels […]

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U.S. oil output ‘party’ to last to 2020: IEA

LONDON (Reuters) – The United States will remain the world’s top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth. The agency also said in its Medium Term Oil Market report that oil prices LCOc1, which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilize at levels substantially below the highs of the last three years. Oil prices deepened their decline after the Organization of the Petroleum Exporting Countries in November shifted strategy and declined to cut its own output, choosing to retain market share that has been eroded by rival supply sources such as U.S. shale oil. But IEA Executive Director Maria van der Hoeven, launching the report in London, said while OPEC may win back […]

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Ukraine Fighting Continues Ahead of Key Meeting

ENLARGE A bus station hit during shelling between Russian-backed separatists and the Ukrainian government forces in Donetsk on Wednesday. Photo: Associated Press Heavy fighting continued in eastern Ukraine on Wednesday, just hours before leaders were expected to gather for a high-stakes summit to negotiate a cease-fire in the 10-month conflict between pro-Russia separatists and Kiev. Lower-level talks were scheduled to resume early Wednesday in the Belarusian capital of Minsk, the foreign ministry said, in an effort to hammer out the basics of a deal that could be finalized later in the day by the leaders of Russia, Ukraine, Germany and France if an agreement appeared close. “There are a number of problems which remain to be resolved…but it is very likely to go ahead,” French Foreign Minister Laurent Fabius told France Inter radio early Wednesday, according to news agency reports, referring to the leaders’ summit. “It is really a […]

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Gazprom Has Financial Clout to Survive Russian Crisis, CFO Says

(Bloomberg) — OAO Gazprom, Russia’s largest company, has the strength to weather the country’s economic crisis, according to its chief financial officer. The state-run gas exporter cut its debt by 10 percent last year, has a cash pile of about $20 billion and is benefiting from the ruble’s declines, Gazprom’s Andrey Kruglov said. The company’s board will review its 840 billion ruble ($13 billion) budget for this year later this month and Gazprom plans “additional stress tests” using oil at $40 and $50 a barrel, Kruglov said in an e-mailed response to questions. The company sees no need to ask for state aid, he said. Russia economy has been whacked by the collapse in oil and the plunge in the ruble, yet export-focused companies like Gazprom are seeing profits supported because they earn revenue in dollars while paying most costs in local currency. That’s helping to offset oil’s drop, […]

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Low oil price global economic threat, Russia says

Russia’s finance minister expects low oil prices to have widespread economic impacts. (UPI/Shutterstock/ekina) Low oil prices may have an aggregate negative impact on the health of the global economy, Russian Finance Minister Anton Siluanov said Tuesday. Siluanov told reporters from the sidelines of the summit for the Group of 20 major economies in Istanbul the impact of low oil prices, for importers and exporters alike, would be negative . "The cumulative effect from the current steep fall of prices for resources may enfeeble the aggregate demand in world economy and this in turn will slow down its growth rates," he said. A blog posted last week by economists at the International Monetary Fund found low oil prices will boost economic growth short-term, as consumers save on energy costs, but mid-term risks are present in terms of national monetary policy planning. Exporters will lose and importers will win in the […]

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As Extreme Weather Increases, A Push for Advanced Forecasts

With a warmer atmosphere expected to spur an increase in major storms, floods, and other wild weather events, scientists and meteorologists worldwide are harnessing advanced computing power to devise more accurate, medium-range forecasts that could save lives and property. Like a pipeline in the sky, the plume of sodden tropical air advanced mile-high above the Pacific Ocean, heading toward the California coast. This “atmospheric river” — a long, narrow band of concentrated water vapor — carried the moisture equivalent of about 15 Mississippi Rivers. When it made landfall, it dumped a massive amount of rain on the densely populated stretch of California from San Francisco to Los Angeles, unleashing floodwaters, causing landslides, and cutting off power to hundreds of thousands of homes and businesses. Atmospheric rivers fuel some of western North America’s most intense and destructive winter storms, and this one, slamming California last December, was a big one. […]

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How Russia Plans To Retaliate For The Saudi-Driven Collapse In Oil`

A week ago we explained that yet another conspiracy theory, one involving virtually every geopolitical hotzone, from Saudi Arabia, to Russia, the United States, Qatar, Syria, ISIS, and Ukraine, has become fact when our speculation from last September , namely that the plunge in oil was an choreographed move between the US and the Saudis (even if Kerry realized – we hope – that it meant a recession for the US energy producing states and a collapse in the only vibrant US industry of the past decade: shale), one seeking to dislodge Russian control over the Syrian government and to facilitate the passage of a Qatar pipeline under Syrian territory. This is what the NYT said: “Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria, using its dominance of the global oil markets at a […]

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