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Gazprom readies Chinese gas pipeline

Russian natural gas company Gazprom said it’s ready to meet Chinese energy needs. Photo courtesy: Gazprom TOMSK, Russia, Feb. 13 (UPI) — Russian energy company Gazprom is conducting the route preparations needed to send gas through the Power of Siberia pipeline to China, its top executive said. Gazprom officials meet in the Siberian city of Tomsk to discuss efforts to build a pipeline to China. The company said the pipeline’s route is clear, line preparation is under way and surveys have been conducted for underwater sections. Gazprom estimates the project will require more than 120 thousand tons of large-diameter pipe. Gazprom Chairman Alexei Miller said project preparations are in full swing . "All of Gazprom’s obligations to start gas supplies to China will be performed in full and in due time," he said during Thursday’s meeting. Gazprom has a 30-year sales agreement with China National Petroleum Corp. that calls […]

Posted On : Published By : Tom Whipple
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US shale oil boom masks declining global supply

When rig count fall feeds through to output, prices should rally 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 T he surge in US shale oil production over the past five years has been truly phenomenal, but the notion that it was ushering in a new age of global oil abundance was always overdone and is looking more exaggerated by the day. One need only look at the trend in the number of rigs drilling for oil in the US — as published weekly in […]

Posted On : Published By : Tom Whipple
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Rigs Targeting U.S. Oil Decline for 10th Straight Week

(Bloomberg) — U.S. oil explorers, facing crude near $50 a barrel, idled rigs for the 10th straight week, extending an unprecedented retreat in drilling and dragging the nation’s total rig count down to the lowest level in almost five years. Rigs targeting oil in the U.S. dropped by 84 to 1,056, Baker Hughes Inc. said on its website Friday. Those seeking gas slipped by 14 to 300, the Houston-based field services company said. Miscellaneous rigs were unchanged at two. The total U.S. count fell by 98 to 1,358. Last year’s 44 percent slide in crude prices triggered a record pullback in U.S. oil drilling, sidelining more than 400 rigs within two months, erasing tens of thousands of jobs and shrinking estimated exploration and production spending by more than $116 billion. John J. Christmann, chief executive officer of the Houston-based independent explorer Apache Corp., said Thursday that the drop in […]

Posted On : Published By : Tom Whipple
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Bakken December Production Numbers

The North Dakota Industrial Commission has released the  Bakken and North Dakota  monthly production numbers for December 2014. There was a bit of a surprise as Bakken and all North Dakota production was up just over 39,000 barres per day. Bakken BPD Since Bakken production was up at almost the exact same amount as the rest of North Dakota, (Bakken up 39,080 kbd vs. 39,086 bpd for ND), suggest that all the wells being brought on line are Bakken and Three Forks rather than conventional wells. Bakken Change The North Dakota change per month, 12 month trailing average reached a new high in December of 25,006 barrels per day. That means North Dakota oil production was up an average of 25 thousand barrels per day every month in 2014. From the Director’s Cut : Nov Oil 35,647,735 barrels = 1,188,258 barrels/day Dec Oil 38,047,667 barrels = 1,227,344 barrels/day (preliminary)(NEW […]

Posted On : Published By : Tom Whipple
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This Chart Shows Why the Number of Oil Rigs May Not Matter Anymore

A drill pusher uses a torch to cut the top off a 50-gallon metal drum on an oil drilling site. The number of oil rigs drilling new wells in the U.S. has collapsed at an unprecedented rate. The weekly number has gathered a huge following as investors try to figure out when the crash in oil prices has reached its bottom. Strangely, the number may be irrelevant. Baker Hughs Weekly Rig Count Rig counts have long been used to help predict future oil and gas production. In the past week drillers idled 98 rigs, marking the 10th consecutive decline. The total U.S. rig count is down 30 percent since October, an unprecedented retreat. The theory goes that when oil rigs decline, fewer wells are drilled, less new oil is discovered, and oil production slows.  But production isn’t slowing yet. In fact, last week the U.S. pumped more crude than at any time since the 1970s. “The headline U.S. oil rig count […]

Posted On : Published By : Tom Whipple
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Feds may open arctic Alaska to drillers

Shell signs two-year commitment to lease Seattle port for drilling program after Washington hints at opening parts of Alaskan waters for exploration. Photo: Don Wilson/Port of Seattle. The federal government published its final environmental impact statement on a lease plan first unveiled in 2008. The lease was tied in up the court system amid complaints about the extent of environmental vetting. "We remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration in this unique, sensitive and often challenging environment," Interior Secretary Sally Jewell said in a statement. The U.S. 9th Circuit Court of Appeals in San Francisco ruled early last year the Interior Department did not properly evaluate the scale of oil production that could result in the Chukchi Sea when it sold more than $2.6 billion in development leases in the environmentally sensitive area in 2008. The ruling stemmed from a […]

Posted On : Published By : Tom Whipple
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U.S. oil sector slowing, on and offshore

Weak oil market impacting operations in the onshore and offshore sectors of the United States. Photo courtesy: Apache Corp. A steady increase in U.S. oil production has pushed crude oil markets toward the supply side, pushing crude oil prices to less than 50 percent of their June highs above $100 per barrel. That’s forced companies from BP to those in the oil services industry like Halliburton to cut spending and staff. Rig company Hercules Offshore said revenue generated from work in the U.S. waters of the Gulf of Mexico declined 33 percent year-on-year to $90.2 million. For full-year 2014, the company reported a $216 million loss from continuing operations. President and Chief Executive Officer John Rynd said the weak market was reflected in the fourth quarter and the downturn should continue in 2015 until commodity prices improve. "The significant decline in crude oil prices during the fourth quarter exacerbated […]

Posted On : Published By : Tom Whipple
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Bakken Rig Count Slides to 126

Occidental Bakken Acreage|Click to Enlarge The Bakken-Three Forks rig count decreased by nine t0 126 rigs running across our coverage area by the end of last week. In recent Bakken news, 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. Read more: Occidental Petroleum Reduced 2015 Capex by 33% The U.S. rig count fell another 98 to 1358 rigs running by the end of last week. A total of 300 rigs were targeting natural gas (down 14 from the previous week) and 1056 were targeting oil in the U.S. (84 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.). 129 rigs are running in the Williston Basin across MT, ND, and SD. […]

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Threatened Canadian Rail Strike Seen Weakening Heavy Oil Prices

(Bloomberg) — Canadian crude prices near a six-year low may weaken further should workers at Canadian Pacific Railway Ltd carry through with threats to strike this weekend. The company faces a work stoppage as soon as Feb. 15 by Teamsters Canada Rail Conference and Unifor Local 101R, which represent a combined 5,000 workers. Canadian Pacific will deploy managers “to maintain a reduced freight service” on its Canadian lines. Canadian oil companies have increasingly relied on rail cars to deliver crude produced in Alberta to refineries as far away as the U.S. Gulf Coast. Canadian Pacific delivered 110,000 carloads of crude last year, 22 percent more than in 2013, according to company data. Without “enough trains operating, I could see how it will delay the deliveries of crude shipments,” Dinara Millington, a vice president at the Canadian Energy Research Institute, said by phone Friday. “The prices of WCS could decline […]

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ConocoPhillips Mulling Sale of Western Canada Gas Properties

Employees torque a pipe at a wedge well at Christina Lake, a situ oil production facility half owned by Cenovus Energy Inc. and ConocoPhillips, in Conklin, Alberta, Canada. Photographer: Brent Lewin/Bloomberg (Bloomberg) — ConocoPhillips is considering the sale of properties that account for about 20 percent of its production in Western Canada outside the oil sands. The largest U.S. independent oil and natural gas producer is weighing whether to sell properties spread across British Columbia, Alberta and Saskatchewan in 2015, according to a copy of a marketing document seen by Bloomberg. Production from the properties is mostly gas and amounts to the equivalent of about 31,000 barrels of oil a day after royalties. The company hopes to select advisers for the process soon, Kristen Ashcroft, a company spokeswoman, said in a phone interview Friday. The sale is part of the company’s regular review of its assets across the region, […]

Posted On : Published By : Tom Whipple