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Exclusive: India to import first oil to fill strategic reserves – source

NEW DELHI (Reuters) – India is set to import 8 million barrels of Iraqi oil to fill its first strategic petroleum reserve (SPR), taking advantage of cheap prices and lending some support to a market suffering from oversupply. India’s SPR purchases could temporarily help offset the impact of an expected pause in China’s strategic stocks build and the start of spring maintenance at Asian refiners. India’s oil ministry on Tuesday instructed state refiners Indian Oil Corp and Hindustan Petroleum Corp Ltd to each seek two very large crude carriers (VLCC) of Basra oil for arrival in May-June, totalling 8 million barrels, two sources familiar with the matter said. The tenders are to be issued this month and plans call for the federal cabinet to approve issuing tenders at its meeting next week, said one of the sources, who declined to be identified. A committee of directors suggested Basra oil […]

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China Plans Opening Oil Futures to World in Bid for Influence

(Bloomberg) — China plans to allow foreign investors to trade its proposed crude futures contract as the world’s second-largest oil consumer seeks to bolster its influence in determining benchmark prices. The Shanghai International Energy Exchange will allow foreign investors to trade through agents that have net capital of at least 30 million yuan ($4.8 million) or the equivalent in foreign currency, according to draft rules published on its website on Wednesday. It will accept foreign-denominated funds, standard warehouse receipts, treasury bonds and securities with “stable value and high liquidity” as collateral. China wants more control over oil pricing as its reliance on crude imports increases. The nation’s overseas shipments as a share of consumption will surpass 60 percent this year for the first time, up from 59.5 percent in 2014, according to China National Petroleum Corp. The government introduced a domestic crude futures contract in 1993, stopping a year […]

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U.S. shale oil firms brace for more pain as crude resumes slide

HOUSTON/WILLISTON, N.D. (Reuters) – With the prospect of another plunge in crude prices CLc1LCOc1 looming after two months of stability, U.S. shale oil producers may face another round of spending cuts to conserve cash and survive the downturn. A deeper retrenchment would have far-reaching effects. Additional cutbacks would further gut the already-hemorrhaging oilfield services industry and may heighten expectations for a steeper drop in U.S. crude output later this year. They would also reinforce the United States’ emerging role as the world’s "swing producer," with dozens of independent companies that can quickly ramp up production in good times and dial it back in a downturn. "If I were an oil company today, I would talk about one thing: how far can you cut costs," said Fadel Gheit, an oil analyst at Oppenheimer in New York. "They cannot control anything else." Gheit said he expected a new wave of capital […]

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Bakken production dips, surge expected near June

The Bakken needs to drill and complete 115 wells every month to maintain a production level of 1.2 million barrels of oil per day, according to Helms. PHOTO: OVERLAND PHOTOGRAPHY The current price of oil in conjunction with active or expected North Dakota-imposed tax breaks for oil and gas producers has led to the first major activity slowdown in North Dakota in several months, said Lynn Helms, director of the North Dakota Department of Mineral Resources. According to Helms, the state’s production for January fell by 3 percent compared to the previous month. With the low oil price market, rig count has also dropped. In January, the state’s rig count was down 21 from December, February followed a drop of 27, and today western North Dakota has 111 drilling rigs operating—the lowest since April 2010. The number of uncompleted wells rose from the previous month, totaling roughly 825 wells. […]

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EIA: falling rig counts affecting production in Bakken

Although production has decreased in these three shale plays, the EIA said production for the areas it provides DPR’s for was up in March, reaching 5.6 million barrels per day. PHOTO:U.S. ENERGY INFORMATION ADMINISTRATION The U.S. Energy Information Administration’s recent Drilling Productivity Report indicates a slowdown in oil production growth patterns in three key oil plays in the U.S., including the Bakken, Eagle Ford and Niobrara. The combined plays are down roughly 24,023 barrels of oil per day (bopd). The estimates cover the months of March and April, and include the first projected declines in crude production in these regions since the first issue of DPR appeared in October 2013. The DPR projects the Bakken to be producing 577 bopd in new well oil production per rig in March 2015, and 592 bopd in April 2015, a change of 15 bopd. It also predicted that overall oil production in […]

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ND’s revised oil tax revenue for 2015-17: $3.4 billion

According to the North Dakota Office of Management and Budget, the large oil extraction tax trigger will start in May 2015 and even in April 2016 based on NYMEX oil futures prices. The large trigger brings the extraction to zero percent for producers The revised oil tax revenue forecast has been issued by the North Dakota Office of Management and Budget. The updated forecast was created with the help of Moody’s Analytics and shows that the state’s total oil tax revenue during the 2015-17 biennium will be roughly $3.4 billion. In January, the North Dakota legislature predicted that oil tax revenue for the biennium would total $4.2 billion. In total, the March revenue forecast shows a difference of nearly $870 million less compared to the January forecast. The total revenue generated by the state in the upcoming biennium will be roughly $5.1 billion, according to the OMB’s update forecast. The […]

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Mont Tech researcher reinjects Bakken flared gas for EOR

To verify the plausibility of reinjecting Bakken associated gas, Montana Tech researchers had to test the miscibility (pressure at which oil and gas form single phase) required to correctly compress the captured gas back too prior to reinjection. The PHOTO: MONTANA TECH Todd Hoffman is looking to reinjected Bakken flared gas as a vehicle to drive enhanced oil recovery in the Williston Basin. Hoffman, assistant professor at Montana Tech’s petroleum engineering department, is currently in the midst of a research program focused on testing, proving and analyzing the fiscal feasibility of capturing associated gas produced during oil retrieval, compressing the captured gas at the well site and then injecting the gas back into the reservoir. The injected gas, he said, helps to increase well productivity in the same way CO2 does, and it is also stored and available for recapture when the necessary gathering infrastructure is available at the […]

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Canadian Refiners Set to Buy More U.S. Oil With Wider Discount

(Bloomberg) — Cheaper North American oil is poised to replace West African and Middle East cargoes at eastern Canadian refineries with U.S. crude prices at the lowest level compared with the international benchmark in 14 months. Imports to Canada from outside North America averaged 244,089 barrels a day this month through March 15, down 27 percent from a year earlier, according to New York-based ClipperData, which tracks tanker shipments. Canada, the world’s fifth-largest oil supplier, produces most of its oil in the western province of Alberta and exports it south to the U.S. A lack of pipelines means Canada’s eastern refineries depend on imports by tanker and train. U.S. export “volumes have been growing pretty exponentially,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said by phone Wednesday. U.S. oil is “going to Eastern Canadian refineries and displacing waterborne light crude.” U.S. crude oil […]

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Trains Slow U.S. Petroleum Shipments After Derailment

(Bloomberg) — Rail shipments of crude and refined products fell last week to the lowest level since October 2013 after a derailment shut a track in Illinois for four days. The U.S. transported 12,724 carloads of petroleum in the week of March 8-14, according to data released Wednesday by the Association of American Railroads. That’s down 10 percent from the previous week and the lowest level for March since 2012. Petroleum shipments by rail have fallen since last summer as plummeting crude prices have caused the biggest slowdown of oil drilling on record. BNSF Railway Co. shut its mainline near the town of Galena, Illinois, from March 5-9 after a derailment, causing delays and reroutings. “Commodity price pressure is slowing and will continue to slow the cadence of drilling activity, and that’s one of the drivers of crude by rail being lower,” Vincent Piazza, senior energy analyst at Bloomberg […]

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Canadian Oil Jobs Cut as Companies Slash Deeper Than 2008

(Bloomberg) — Another round of oil job cuts is rolling through downtown Calgary this week with three producers eliminating at least 650 positions in Canada as they wrestle with prices near a six-year low. ConocoPhillips is the latest, announcing Wednesday it’s terminating 200 people, about seven percent of the Houston-based company’s Canadian workforce. That follows cuts Tuesday by Talisman Energy Inc., which is eliminating 150 to 200 positions in its Calgary head office and Cnooc Ltd.’s Nexen Energy, which is reducing its Canadian headcount by 300. Cutting jobs is one lever energy companies are pulling as they reduce capital spending to adjust to lower cash flow after crude’s 60 percent slide since June. The latest measures add to thousands of jobs lost in Alberta earlier this year as producers slow development of the province’s oil sands, the world’s third-largest proven reserves. “We are seeing pretty aggressive cuts in terms […]

Posted On : Published By : Tom Whipple