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Texas Swagger Fades Fast as Oil Town Squeezed Hard by OPEC

A floor hand signals to the driller to pull the pipe from the mouse hole on a drilling rig near Encinal, Texas. Shale wells, like those in the Eagle Ford, deplete as much as 50 percent in their first year, faster than conventional ones, putting pressure on companies to find new wells. Photographer: Eddie Seal/Bloomberg (Bloomberg) — Back in October, Jill Potts waved off concerns about falling crude prices, pointing to the long lines of trucks forming outside her oil field supply store in South Texas as evidence that the shale boom was still going strong. But then oil kept plunging — from $82.70 a barrel back on that sunny mid-October day to $70, then $60, and ultimately touching as low as $43.58 before settling at about $50 Thursday. Potts’s mood has changed. Standing inside her shop in Cuero, Texas, surrounded by industry wrenches the size of T-Rex femurs, […]

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Statoil Deepens Spending Cuts as Oil Price Rout Saps Profits

“Our financial position is robust, and we maintain a stable dividend,” Eldar Saetre, Statoil ASA’s chief executive officer, said in a statement. Photographer: Krister Soerboe/Bloomberg (Bloomberg) — Statoil ASA deepened cost cuts and halted dividend growth as Norway’s biggest energy company struggles to withstand a plunge in oil prices. The company will raise spending cuts by 30 percent to $1.7 billion from 2016 and lower capital expenditure to $18 billion this year from earlier targeting $20 billion, the Stavanger-based company said. Statoil reported fourth-quarter net operating income of 9 billion kroner ($1.2 billion), down from 43.9 billion kroner a year earlier. That missed an estimate of 26.3 billion kroner in a Bloomberg survey of analysts. Statoil followed competitors including Royal Dutch Shell Plc and Chevron Corp. in cutting billions of dollars in investments. They are seeking to protect profits after oil prices slumped by more than 50 percent in […]

Posted On : Published By : Tom Whipple
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London pressed to ban fracking

British government out of step with regional trends to place a moratorium on hydraulic fracturing. UPI/Kevin Dietsch LONDON, Feb. 5 (UPI) — An environmental advocacy group said it’s time for the British government to follow its peers and enact a moratorium on hydraulic fracturing. The Welsh parliament voted in favor of a measure proposed by Liberal Democrat assemblyman Aled Roberts to ban the shale drilling practice known commonly as fracking. The measure calls on the Welsh government to prevent fracking operations "unless it is proven to be safe for the environment and public health." Donna Hume, a campaigner with the regional Friends of the Earth, said the British government needs to follow suit . "It’s time the government stopped trying to get this damaging and unpopular industry off the ground and started prioritizing energy efficiency and renewable energy," she said in a statement Wednesday. The Scottish government in late […]

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Drilling company Maersk cuts staff

Danish oilfield services company Maersk cuts top staff to adjust to low oil price climate. Photo by Kyle Waters/Shutterstock COPENHAGEN, Denmark, Feb. 5 (UPI) — It would be "irresponsible" not to react to the low oil price climate and keep staffing levels in place, Danish oilfield services company Maersk Drilling said. Lead energy companies, from BP to Royal Dutch Shell, have announced plans to cut capital spending in 2015 as oil prices continue trading in a bear market. Though rising in recent days, the price of crude oil is about 50 percent less than June highs of about $100 per barrel. Maersk Drilling said market conditions meant there was a lower demand for offshore rigs, which meant it was forced to cut 90 positions from its head office. Chief Executive Officer Claus Hemmingsen said staff reductions were part of the effort to cut costs and improve corporate efficiency. "It […]

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Oil Traders Seen Storing Record Amounts of Fuel in European Hub

(Bloomberg) — Oil traders are keeping record amounts of fuel in independent storage tanks in Amsterdam, Rotterdam and Antwerp, the continent’s oil-shipment hub, according to a firm that monitors the terminals. A total of 5.799 million metric tons of gasoline, diesel and other processed fuels are being stored, according to data on Thursday from PJK International. That’s the most since the firm began collating the information in 1995, Pieter Kulsen, the Breda, Netherlands-based firm’s founder said by phone. A 48 percent plunge in Brent crude in 2014 helped create what’s called a contango oil-price structure, where immediate fuel prices are cheaper than those in later months. Gasoline and gasoil, a product near identical to diesel, both cost about $30 more in December than they do in February, according to data from exchanges compiled by Bloomberg. Such a gap can create an financial incentive to store. “Those two products have […]

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Russian exploration spending to decline

Moscow expects to spend less on the upstream sector of the oil and gas business this year, resources minister says. (UPI/Shutterstock/ekina) MOSCOW, Feb. 5 (UPI) — The amount of money geared toward the exploration side of the Russian energy sector is expected to decline, a resource minister said Thursday. Low oil prices and pressure from Western economic sanctions imposed in response to the Kremlin’s stance on crises in Ukraine are diminishing government finances. Russian Natural Resources Minister Sergei Donskoy said government support for exploration may be 15 percent less than last year. "The exploration funding from the state budget is exactly in question, rather than exploration expenditures of private companies," he said. Analysis produced in 2011 by Ernst & Young finds the existing network of fields in Russia is such that there isn’t a "pressing need" for extensive exploration programs . Russia is among the world leaders in oil […]

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S&P downgrades several Russian oil and gas companies

Moscow (Platts)–5Feb2015/813 am EST/1313 GMT Standard & Poor’s Thursday announced a number of downgrades to Russian oil and gas companies, following its downgrading of Russia’s sovereign ratings to junk last week. S&P, which like Platts is a unit of McGraw Hill Financial, lowered ratings on gas giant Gazprom and its oil arm Gazprom Neft, as well as Rosneft, Transneft and Novatek. In line with S&P’s criteria, companies which have strong links to the government cannot be rated higher than the sovereign. This is because it assumes that the government could use its power to intervene negatively, which could include burdening the company with additional taxes, dividends or other liabilities, S&P said. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily […]

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Ruble Set for World’s Best Weekly Rally on Ukraine Optimism, Oil

(Bloomberg) — The ruble headed for the strongest weekly currency rally worldwide and Russian stocks surged as oil climbed and investors wagered Ukraine talks in Moscow on Friday will ease the crisis. The currency of the world’s biggest energy exporter is shaking off its weakness at the start of the year after crude oil rebounded 27 percent from a Jan. 13 low. Oil’s earlier slump and sanctions over Ukraine have dragged the economy toward its first contraction since 2009. Talks between President Vladimir Putin and his German and French counterparts fueled bets spreading bloodshed in Ukraine can be staunched. The negotiations encourage “cautious optimism,” Tom Levinson, foreign exchange and interest rates strategist at Sberbank CIB in Moscow, said in e-mailed comments. “While Ukraine-related risks seem as great as ever, the ruble has this week been underpinned by a 15 percent rise in oil prices.” The ruble advanced 1.1 percent […]

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U.S. and Europe Working to End Ukraine Fighting

KIEV, Ukraine — With fighting intensifying in eastern Ukraine and the White House weighing whether to send arms to bolster the government’s forces, Western leaders embarked on a concerted diplomatic effort on Thursday aimed at ending a conflict that has strained relations with Russia. Despite the burst of activity, the prospects of achieving a new peace plan have been clouded by deep suspicion of Moscow’s aims in Ukraine. At the same time, the arrest in Kiev on Wednesday of a senior officer on charges of spying for Russia has raised concerns that the Ukrainian military has been infiltrated, complicating any plans for sending arms to Kiev. While the United States has provided weapons to allies in similarly unstable circumstances, including in Afghanistan and Iraq, Russia’s long historical ties to the Ukrainian military and security apparatus present an unusual challenge. “Very often one cannot tell where the F.S.B. stops and […]

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Oil Prices Slightly Higher After Heavy Losses

By Georgi Kantchev and Eric Yep LONDON–Oil prices were a touch higher on Thursday following heavy losses in the previous session as U.S. supplies continued to add to the global oil glut. Data on Wednesday showed that U.S. crude supplies had climbed to their highest level in 80 years sending oil prices down by almost 9% for the day. On Thursday, Brent crude rose 0.4% to $54.41 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures traded at $48.64 a barrel, up $0.20 from Wednesday’s settlement. Oil futures had surged 19% within a span of four trading sessions since late last week, raising hopes among oil market bulls that prices have bottomed. But on Wednesday U.S. weekly oil stockpiles rose more than expected, by 6.3 million barrels, and are currently at the highest level for this time of year in at […]

Posted On : Published By : Tom Whipple