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Uganda not yet ready for oil prime time

Bank of Uganda says oil prices are too low to realize nation’s full oil potential and production targets. Photo courtesy Tullow Oil KAMPALA, Uganda, April 22 (UPI) — A weakened crude oil market means investments might not materialize in time to finance Uganda’s fledgling oil sector, the Bank of Uganda said. The Bank of Uganda said in a monetary policy report for April there are lingering questions over the nation’s oil development given the low price of oil and the investments needed to exploit the type of crude oil found in the country. "Whereas oil production had been projected to start in 2018, this date could now be pushed out even further, given that the profitability of oil investments could remain depressed in the foreseeable future," the report said. Crude oil prices are trading at around 40 percent below their June 2014 highs, forcing energy companies to spend less […]

Posted On : Published By : Tom Whipple
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Brazil’s Petrobras Reports Nearly $17 Billion in Asset and Corruption Charges

ENLARGE Petrobras’s disclosures Wednesday were part of the first audited financial statements released by the oil company in more than eight months. Photo: VANDERLEI ALMEIDA/AGENCE FRANCE-PRESSE/GETTY IMAGES RIO DE JANEIRO—Brazil’s state oil company Petróleo Brasileiro SA put a price tag on a corruption scandal that has thrown the country into political and economic turmoil, writing off $17 billion due to losses from graft and overvalued assets. The disclosures were part of the first audited financial statements released by Petrobras in more than eight months. Brazilian federal prosecutors since last year have been investigating allegations that the company’s suppliers conspired to overcharge Petrobras for major projects, funneling some of the illicit profit to former Petrobras executives and politicians in the form of bribes and illegal political donations. Petrobras Chief Executive Aldemir Bendine said in a news conference that additional revisions to the corruption-related write-downs are possible if prosecutors uncover more […]

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China imports over 230,000 T diesel for March, biggest in nearly 3 years

SINGAPORE (Reuters) – China imported more than 230,000 tonnes of diesel in March, volumes not seen in almost three years, according to latest customs data. But the move is likely related to trading rather than an improvement in domestic demand, traders said. China imported 233,055 tonnes of diesel in March, the highest monthly figure in nearly three years, the data showed. <O/CHINA2> China last regularly imported more than 200,000 tonnes of diesel in June 2012, due to firm domestic demand, traders said. The majority of the barrels in March were shipped from South Korea, with some coming from Singapore and Thailand, the data showed. <O/CHINA3> China’s last substantial imports were in December 2014 when it imported 133,603 tonnes of diesel, though the volumes were nearly half of March’s figure. Still, China remains a net exporter of diesel, shipping out 300,231 tonnes of the industrial and transport fuel in March, […]

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What Happens To US Shale When The Easy Money Runs Out?

Today we will take a look at both Whiting Petroleum (WLL) and Continental Resources (CLR) as far as their Bakken economics. Overall the numbers will show that, despite claims of low cash costs per MBOE ($16 or so for CLR) and high IRRs on $60 WTI, the facts say otherwise. In addition, the analysis will show how very high depletion rates combined with falling rig counts spells trouble for Bakken production growth despite better efficiencies per well. The analysis will be based on April presentations of both companies from which the graphs below are taken. I should note these economics are not much different from Eagle Ford, the second most prolific addition to US production growth in past years. Firstly one must understand that the easy money via QE from the Fed and zero interest rates allowed many shale players to burn free cash flow while showing operationally net […]

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CERA 2015: Resilient Marcellus gas drillers are the ‘problem’: E&P executive

Major improvements by natural gas exploration-and-production companies have allowed them to continue to drill profitably in a period of depressed prices, adding to the glut of gas and putting further pressure on prices, an E&P executive said Wednesday at the IHS CERAWeek conference in Houston. "What’s happening is that we continue to get better and get more production per rig," Kyle Mork, president of Energy Corporation of America, said in reference to the seeming paradox of growing US natural gas production despite a record low level of rigs. "We’re the problem," he said. It is common knowledge in the industry that the main reason why natural gas prices — both Henry Hub and prompt-month futures — are trading at levels not seen since 2012 is because of the phenomenal growth in US natural gas production led by the Marcellus Shale. Article continues below… Gas Daily offers the most detailed […]

Posted On : Published By : Tom Whipple
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NRC report recommends ways to overcome barriers hindering purchases of PEVs; vehicle cost, battery tech and consumer knowledge among others

« China Steel Corporation making $46M investment in LanzaTech commercial waste-gas-to-ethanol project | Main | Toyota embraces the “Bullsh*t” about hydrogen » Vehicle cost, current battery technology, and inadequate consumer knowledge are some of the barriers preventing widespread adoption of plug-in electric vehicles, according to a new congressionally mandated report from the National Research Council. Developing less expensive, better performing batteries is essential to reducing overall vehicle cost, and a market strategy is needed to create awareness and overcome customer uncertainty, the report finds. The report recommends a range of incentives that the federal government can offer to address these and other barriers. The premise of the report—“ Overcoming Barriers to Deployment of Plug-in Electric Vehicles ”—is that there is a benefit to the United States if a higher fraction of vehicle miles traveled is fueled by electricity rather than by petroleum due to the resulting reduction in dependence […]

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Study: North Texas quakes likely linked to gas drilling

HOUSTON, Apr. 22 A seismology team in a study led by Southern Methodist University found high volumes of wastewater injection combined with brine extraction from natural gas wells was “the most likely” cause of earthquakes near Azle, Tex., during 2013-14. In an area where the seismology team identified two intersecting faults, they developed a 3D model to assess the changing fluid pressure within a rock formation in the affected area. They used the model to estimate stress changes induced in the area by two wastewater injection wells and more than 70 gas wells. “The model shows that a pressure differential develops along one of the faults as a combined result of high fluid injection rates to the west and high water removal rates to the east,” said Matthew Hornbach, SMU associate professor of geophysics. “When we ran the model over a 10-year period through a wide range of parameters, […]

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CERAWeek: Regulatory hurdles still threaten US shale, CEOs say

HOUSTON, Apr. 22 OGJ Staff Writer Leaders of prominent US shale producers came together on Apr. 21 to drive home a point that’s emerged as a primary theme during this year’s IHS CERAWeek in Houston: The urgent need to lift the export ban on US crude oil. “It’s time to give the green light to US oil exports,” stated John Hess, chief executive officer of Hess Corp. , during an upstream panel discussion alongside two other prominent US-based chief executives. Hess emphasized that the US already exports high quantities of petroleum products—3.8 million b/d in 2014 according to the US Energy Information Administration—so why not crude? “Mexico and Canada export crude,” he said. “Why not the US?” Harold Hamm, chief executive officer of Continental Resources Inc. , echoed those sentiments, but thinks “it’s going to take a while to change the mindset of Americans to one of scarcity to […]

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IHS CERAWeek: US Fracking Costs Falling Fast, May Keep Fields In Play

US oil and natural gas companies have pushed down costs of fracking a shale well faster than expected, and if the trend holds up it could allow producers to keep working in oilfields. HOUSTON, April 22 (Reuters) – U.S. oil and natural gas companies have pushed down costs of fracking a shale well faster than expected, and if the trend holds up it could allow producers to keep working in oilfields that just months ago looked uncompetitive after the oil price crash. A more than 50 percent fall in the price of crude oil since June has left oil and gas producers insisting on steep price cuts from oilfield service companies that provide everything from drilling rigs to hydraulic fracturing. Oil is trading around $55 a barrel, and most U.S. shale fields are seen as having break-even costs of $40-$70 a barrel. In fourth-quarter earnings calls, operators initially were […]

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IHS CERAWeek: Statoil Won’t Add North American Drilling Rigs This Year

HOUSTON, April 22 (Reuters) – Norwegian oil and natural gas producer Statoil ASA has no plans to add North American drilling rigs this year, an executive told Reuters on Wednesday. "I don’t see us adding rigs this year," William Maloney, Statoil’s head of North American exploration, said in an interview on the sidelines of the IHS CERAWeek conference in Houston, the world’s largest gathering of oil producers. "You don’t need as many rigs if you can drill them quicker, better, faster and safely." Pioneer Natural Resources Co Chief Executive Officer Scott Sheffield told Reuters on Tuesday his company may soon start adding rigs, a step that would mark the start of a reversal of a trend that has seen the U.S. oil rig rate halve since last September. (Reporting by Ernest Scheyder) Copyright 2015 Thomson Reuters. Click for Restrictions. WHAT DO YOU THINK?

Posted On : Published By : Tom Whipple