Bakken Shale Drilling
The Bakken-Three Forks rig count decreased by seven t0 180 rigs running across our coverage area by the end of last week. The NDIC notes 178 rigs are active in North Dakota, but around Continue Reading
Talisman Takes $1.37 Billion Charge on Falling Crude-Oil Price
(Bloomberg) — Talisman Energy Inc., the Canadian producer being acquired by Spain’s Repsol SA, reported about $1.37 billion in one-time charges for the fourth quarter as it reduced the value of certain assets because of slumping crude-oil prices. “The company partially impaired its investment in the Eagle Ford by $614 million due entirely to price declines, and fully impaired its investment in Block K44 in the Kurdistan region of Iraq by $234 million after determining that future investment in a capital constrained environment was unlikely,” Calgary-based Talisman said in a statement on Marketwired Tuesday. It also wrote down North Sea assets and a joint venture with Colombia’s Ecopetrol SA. Talisman joins other oil companies, including BP Plc, in lowering the value of assets after oil prices fell by more than half from a June high. The industry has cut more than $40 billion in spending and fired thousands of […]
Oil Producers Stress Surviving $50 Oil
Energy investors are focusing on what U.S. independent producers have to say in coming financial sessions about their ability to survive a period of $50 oil after many were geared up for richer crude prices. Photo: Associated Press A year ago, Houston oil and gas company Energy XXI Ltd. was getting ready to take on $1 billion in debt to buy a rival. Its stock climbed toward $24 a share. On Monday, the debt-laden company laid out its strategy for survival after that deal contributed to a $377 million loss for its December quarter. On the list: asset sales, expense cuts and cashing in oil-price contracts it signed before prices tumbled. Shares of the energy producer, which operates in the shallow waters of the Gulf of Mexico, now change hands for less than $4 apiece. “The culture of the company has changed, with more focus on cost savings and […]
A Biofuel Debate: Will Cutting Trees Cut Carbon?
Eduardo Porter Does combating climate change require burning the world’s forests and crops for fuel? It certainly looks that way, judging from the aggressive mandates governments across the globe have set to incorporate bioenergy into their transportation fuels in the hope of limiting the world’s overwhelming dependence on gasoline and diesel to move people and goods. While biofuels account for only about 2.5 percent today, the European Union expects renewable energy — mostly biofuels — to account for 10 percent of its transportation fuel by 2020. In the United States, the biofuel goal is about 12 percent by early in the next decade. The International Energy Agency envisions using biofuels to supply as much of 27 percent of the world’s transportation needs by midcentury. The reasons for such ambitions are clear: It is nearly impossible under current technology to run cars, trucks, ships and jet planes on energy generated […]
Lukoil Seeks Damages From Sinopec Over $1.2 Billion Kazakh Deal
OAO Lukoil is seeking damages from China Petroleum & Chemical Corp. through arbitration proceedings in London, saying the Chinese company breached an agreement to buy 50 percent of a Kazakh Continue Reading
Russian 2015 Car Sales Seen Plunging 35% as Economy Seizes Up
Car sales in Russia will probably fall 35 percent this year as U.S. and European sanctions over Ukraine and a ruble collapse batter the economy and raise prices, according to Continue Reading
There Is No Peak Oil–But We Are Approaching Peak Low-Cost Oil
The collapse in oil prices over the last seven months looks to destabilize the world stage by redirecting over $1.8 trillion in spending if current prices hold. While worldwide demand exceeds 92 million barrels per day , the drop in price from over $105 this past summer to under $50 translates into sizable savings for the average American. Who Gains vs. Who Loses Spread out across all industries, U.S. consumers could be looking at an extra $300 billion in savings this year, since oil touches just about every aspect of daily life in one form or another. The working poor, in particular, will be the largest beneficiaries , since energy expenses constitute a greater percentage of household income for them than for any other group. They will likely feel as though they are getting ahead, for a change, rather than continuing to slip further into the abyss . The impact of “less pain at the pump” […]
Russia Faces Battle Over Billions in Oil Taxes After Crude Slump
OAO Rosneft Chief Executive Officer Igor Sechin, a long-time associate of President Vladimir Putin, discussed the tax regime with Russia’s president last week. Photographer: Andrey Rudakov/Bloomberg (Bloomberg) — Russia, where energy production provides more than half of state revenue, is preparing for a battle with oil producers over taxing the country’s most vital industry. Oil’s rout has made an agreement last year, which reduced export taxes in return for higher levies on extraction, unworkable because the plan was based on $100 a barrel crude. Producers led by state-controlled OAO Rosneft have proposed changes to the tax regime, Deputy Energy Minister Kirill Molodtsov said in an interview. On the brink of its first recession since 2009, Russia’s state coffers are being depleted by lower energy revenue as sanctions and a plunging ruble put further pressure on the economy. While the government must maintain funds from oil, it can’t afford to […]
Who gets left with the unburnable carbon?
Christophe McGlade on who gets left with the unburnable carbon Christophe McGlade is a research associate in energy materials modelling at the UCL Institute for Sustainable Resources. He recently co-authored, with Paul Ekins, a paper called “The geographical distribution of fossil fuels unused when limiting global warming to 2°C ”, a paper whose stark call to leave the substantial majority of fossil fuels in the ground generated a lot of media coverage in recent weeks (see for example here and here ). I started by asking him to give an overview of the paper and of its key findings: “The paper is looking at the optimal use of fossil fuels if we want to have a good chance of staying below the agreed 2°C threshold. Within that, it breaks down the amount of oil, gas and coal reserves that are used and aren’t used at a regional level, so […]
Michael Lynch: Forecasts Of Oil Price Bottom And Recovery
For oil price forecasters, it is all but mandatory to start with self-deprecating humor, because the track record is so bad. Late 2013, surveys showed predictions for 2014 of $104 per barrel for Brent. Citi’s forecast of a significant drop raised eyebrows, in fact. Now, one reporter noted that expert forecasts range from $30-200, which is both true and funny, but doesn’t capture the actual expectations, primarily because of the time differential. But once prices were clearly falling, there was a rush to be the most bearish. (I suggested back in December that a floor seemed to have been reached at about $50, although at other points on the way down I believed OPEC would manage to stabilize prices at those levels.) A few have suggested that a price of $20 per barrel might be reached, albeit only briefly, while others have picked a range of $40-50, although mostly […]