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U.S. crude oil production growth helps reduce Gulf Coast imports

graph of crude oil imports to the U.S. Gulf Coast refineries, as explained in the article text In recent years, higher domestic production of light, tight crude oil has led to a reduction in crude oil imports . Certain types of crude oil have been affected more than others; for example, the increased economic availability of domestic light, tight crude oil has virtually eliminated Gulf Coast imports of light crude oil. In the past year, Gulf Coast imports of medium crude oil have also fallen because of increased production from the Eagle Ford , Bakken , and Permian regions. One of the key characteristics of crude oil is its density, measured by API gravity as established by the American Petroleum Institute . Less-dense liquids have higher API gravities. Crude oils with API gravities of 35 or above are considered light; 27 to 34 are medium; less than 27 are […]

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Status on the Bakken ”Red Queen” with Data as per April 2015

This post presents a study of developments of Light Tight Oil (LTO, shale oil) extraction for 8 companies in Bakken(ND) that as of April 2015 had added around 600 (or more) producing wells in the Bakken/Three Forks formations since January 2008. The 8 companies are; Continental Resources, EOG Resources, Hess Bakken Investments, Marathon Oil Company, Oasis Petroleum, Statoil Oil & Gas, Whiting Oil and Gas Corporation and XTO Energy . These 8 companies had around 63% of total LTO extraction from Bakken as of April 2015. The decline in the oil price has so far reduced the number of rigs drilling in Bakken and a decline in total Light LTO extraction in Bakken. This study shows there are differences in responses amongst the studied companies to the oil price decline. As with most other things, size matters, also in Bakken. Figure 1: The chart above (stacked areas) shows developments […]

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EU Extends Economic Sanctions on Russia Until End of January

LUXEMBOURG—European Union foreign ministers extended broad economic sanctions on Russia until the end of January 2016, a move designed to give the bloc time to gauge if the Kremlin will fully implement its side of February’s Minsk cease-fire and peace plan by year-end. The EU decision came without a debate among ministers, underlining that despite months of public questioning of sanctions by the likes of Greece and Hungary, the bloc remained united in opposing Russian pressure on Ukraine. That unity will continue to be tested in coming months if the fragile cease-fire holds as pressure grows within the bloc to broaden dialogue with Russian President Vladimir Putin and his government. EU officials have argued that the banking, technology and defense industry sanctions have had a significant impact in weakening Russia’s economy, helping to push the country into recession alongside a sharp drop in the oil price. The sanctions were […]

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Society calls for Scottish fracking review

Royal Society of Edinburgh calls for review of reserve potential and concerns associated with hydraulic fracturing. Photo by photostock77/Shutterstock EDINBURGH, Scotland, June 22 (UPI) — Hydraulic fracturing in Scotland could give the Edinburgh government some autonomy over the energy sector with few environmental impacts, a policy paper read. The Royal Society of Edinburgh, the premier scientific academy in Scotland, said the controversial drilling practice known also as fracking offers Scotland important options for onshore natural gas. "Onshore production of unconventional gas would allow Scotland control over all regulation surrounding extraction and production," the paper read. Fracking involves the use of water, abrasives and a trace amount of chemicals to coax oil and natural gas out of shale deposits. Critics argue the practice carries with it a significant amount of risk, ranging from an increase in minor earthquakes to contamination of regional water supplies. The society’s paper said the environmental […]

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EU welcomes 11th-hour Greek proposals in ‘forceps delivery’

BRUSSELS/ATHENS The European Union welcomed new proposals from Greek Prime Minister Alexis Tsipras as a "good basis for progress" at talks on Monday where creditors want 11th-hour concessions to haul Athens back from the brink of bankruptcy. EU chief executive Jean-Claude Juncker’s chief-of-staff spoke of a "forceps delivery" as officials worked late into the night to produce a deal ahead of a summit of euro zone leaders in Brussels that they hope can keep Greece in the currency bloc. Giving no detail of a proposal he said was also received by the European Central Bank and International Monetary Fund, German EU official Martin Selmayr tweeted: "Good basis for progress at … Euro Summit. In German: ‘eine Zangengeburt’." After four months of wrangling and with anxious depositors pulling billions of euros out of Greek banks, Tsipras’s leftist government showed a new willingness at the weekend to make concessions that would […]

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Risk of Extreme Weather From Climate Change to Rise Over Next Century, Report Says

Photo Drought in Puerto Rico has left the La Plata reservoir nearly empty. A study in The Lancet predicts a growing number of people will be affected by extreme weather over the next century. Credit Alvin Baez/Reuters WASHINGTON — More people will be exposed to floods, droughts, heat waves and other extreme weather associated with climate change over the next century than previously thought, according to a new report in the British medical journal The Lancet. The report, published online Monday, analyzes the health effects of recent episodes of severe weather that scientists have linked to climate change . It provides estimates of the number of people who are likely to experience the effects of climate change in coming decades, based on projections of population and demographic changes. The report estimates that the exposure of people to extreme rainfall will more than quadruple and the exposure of people to […]

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Society will collapse by 2040 due to catastrophic food shortages, says Foreign Office-funded study

The model, developed by a team at Anglia Ruskin University’s Global Sustainability Institute , does not account for society reacting to escalating crises by changing global behaviour and policies. However the model does show that our current way of life appears to be unsustainable and could have dramatic worldwide consequences. Dr Aled Jones, the Director of the Global Sustainability Institute , told Insurge Intelligence : "We ran the model forward to the year 2040, along a business-as-usual trajectory based on ‘do-nothing’ trends — that is, without any feedback loops that would change the underlying trend. "The results show that based on plausible climate trends, and a total failure to change course, the global food supply system would face catastrophic losses, and an unprecedented epidemic of food riots. "In this scenario, global society essentially collapses as food production falls permanently short of consumption." Plastic tree #20, Bolivia 2014 by Eduardo […]

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Oil prices nudge higher as worries ease over Greek debt

SINGAPORE Oil prices nudged higher in Asian trade on Monday, after initially falling on concerns about the outcome of a eurozone meeting on the Greek debt crisis later in the day and continuing worries about global oversupply. Prices rebounded from early lows after a European Commission official tweeted the latest proposal from Greece was a "good basis for progress" in Monday’s talks. "We’re seeing … a snap back from Friday’s losses, which were too aggressive," said Ben Le Brun, market analyst with Sydney’s OptionsXpress. Oil prices fell nearly 2 per cent on Friday over worries about a Greek debt default. "On a 24 hour basis we’ll see some volatility depending on what happens with Greece," said Ric Spooner, chief market analyst at Sydney’s CMC Markets. Brent crude for August delivery was up 8 cents at $63.10 a barrel as of 0559 GMT, after dipping as much as 52 cents […]

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Barzani term limit disputes roil Kurdistan politics

KRG President Masoud Barzani gives an interview in Erbil on June 2, 2013. (AZAD LASHKARI/Reuters) Just two months from the end of Kurdistan President Massoud Barzani’s term, politicians are scrambling to avoid a governance crisis and leadership vacuum.The president is legally barred from a third term, and Barzani was already granted a controversial two-year extension to his second term, which is about to expire. But political leaders remain deadlocked over fundamental questions of how to elect the next president and balance the presidency’s powers with those of the Cabinet and Parliament… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

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Saudi Stocks Drop on Oil as Ramadan Weighs on Mideast Markets

Saudi Arabian stocks, opened last week to foreign investors for the first time, sank the most in 12 weeks following a decline in the price of crude oil. The Tadawul All Share Index retreated 1.7 percent to the lowest level in more than two months. Al Rajhi Bank, the lender with the biggest weighting on the gauge, led the decline with a 2.9 percent drop, followed by National Commercial Bank’s 3.1 percent slide. Saudi Basic Industries Corp., the world’s top petrochemicals manufacturer by sales, dropped 2.2 percent. “It’s a reaction to the weakness of oil prices on Friday,” Sebastien Henin, the head of asset management at The National Investor in Abu Dhabi, said by telephone on Sunday. “Investors are selling as there wasn’t the spike they were expecting after the market opened up for direct foreign investment.” Foreign ownership of the kingdom’s shares was little changed at the end […]

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Tullow Oil to Settle Uganda Tax Dispute for $250 Million

Tullow Oil Plc settled a capital gains tax dispute with the government of Uganda after agreeing to pay $250 million related to a 2012 deal with Total SA and Cnooc Ltd. The company paid $142 million at the time and will pay the remaining $108 million in three equal installments, it said Monday in a statement. The first $36 million portion has already been paid with remainder due in 2016 and 2017, it said. Significant output of oil in Uganda, first discovered there in 2006, has been restrained by delays including wrangling between the East African country and companies about how much crude to process locally or export through a pipeline. Uganda has an estimated 3.5 billion barrels of crude, according to the Energy Ministry, with Tullow, Total and Cnooc planning to tap the Lake Albert fields. “In recent months, the government of Uganda has proposed welcome and necessary […]

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Nigeria: Oil Glut – Crude Differential Hits 10-Year Low

As the nagging oversupply of physical oil takes its toll, official prices for Nigerian crude have hit their lowest in at least a decade. The Nigerian National Petroleum Corp (NNPC) lowered the official selling price for its largest crude oil stream, Qua Iboe, to dated Brent plus 35 cents per barrel, the lowest differential since May 2005. Bonny Light, once in demand for its high yield of valuable motor fuels, fell to dated Brent plus 23 cents, with the differential below May 2005 levels, traders said. According to a report by Reuters yesterday, the drop follows North Sea crude, which hit a 10-year low earlier this week as all Atlantic Basin sellers, particularly those with light, sweet oil, struggle to place cargoes. "They’re playing along now, towing the line with other OPEC members to try and capture market share," said Kash Kamal, senior research analyst with Sucden. Nigeria is […]

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Nigeria: Four Refineries to Resume Production in July

Nigeria’s four refineries are set to roll back to life in July, the Nigerian National Petroleum Corporation has said. Ohi Alegbe, the spokesperson for the NNPC told PREMIUM TIMES on Saturday that the ongoing phased maintenance of the refineries was nearing completion and that the facilities would soon commence production. "I think by July, the four refineries should begin to work," Mr. Alegbe said. He said the two refineries in Port Harcourt are scheduled to begin to receive crude next week while those in Warri and Port Harcourt would follow shortly after. Mr. Alegbe said the turnaround maintenance of the refineries, which he said began in November 2014, was being undertaken by NNPC’s in-house engineers. "We had to resort to in-house engineers after the original builders of the refineries, who were called in to do the job, kept coming up with outrageous bills," he said. He said parts of […]

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Oil-Sands Megaproject Era Wanes as Suncor Scales Back

Oil sands in Alberta. Photographer: Ben Nelms/Bloomberg The era of the megaproject in Canada’s oil sands is fading. Crude’s price slump, pressure to get off fossil fuels and tax increases in Alberta are adding to high costs and a lack of pipelines, prompting producers from Suncor Energy Inc. to Imperial Oil Ltd. to accelerate a shift to smaller projects. Companies are deferring new mines in favor of cheaper, bite-sized drilling programs that deliver quicker returns and require less labor. The moves will help reduce cost overruns and make Canadian companies more competitive with U.S. shale producers. The trade off will be reduced production growth and a smaller economic boost for the country’s oil patch. “Capital likes certainty and it’s a bit of an uncertain world at the moment,” Steve Williams, Suncor’s chief executive officer, said June 10 in an interview at Bloomberg’s Calgary office. With crude about 46 percent […]

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Exclusive: Gazprom building global alliance with expanded Shell

ST PETERSBURG, Russia Gazprom is building a global strategic alliance with energy major Royal Dutch Shell that will include asset swaps and allow the Russian gas giant to penetrate new markets, its chief executive told Reuters. Gazprom, the world’s top gas producer, said on Thursday that Shell and its long-time gas buyers in Europe – Germany’s E.ON and Austria’s OMV – had agreed to build two new Nord Stream gas pipelines under the Baltic sea to Germany. In a rare interview, chief executive Alexei Miller said the agreement with Shell also foresaw an expansion of the firms’ joint $20 billion liquefied natural gas plant on the eastern island of Sakhalin as well as global upstream asset swaps. "Documents of such significance are signed only once every five years or maybe even 10," Miller said on the sidelines of Russia’s top forum for investors in Saint Petersburg. The deal with […]

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EU welcomes 11th-hour Greek proposals in ‘forceps delivery’

BRUSSELS/ATHENS The European Union welcomed new proposals from Greek Prime Minister Alexis Tsipras as a "good basis for progress" at talks on Monday where creditors want 11th-hour concessions to haul Athens back from the brink of bankruptcy. EU chief executive Jean-Claude Juncker’s chief-of-staff spoke of a "forceps delivery" as officials worked late into the night to produce a deal ahead of a summit of euro zone leaders in Brussels that they hope can keep Greece in the currency bloc. Giving no detail of a proposal he said was also received by the European Central Bank and International Monetary Fund, German EU official Martin Selmayr tweeted: "Good basis for progress at … Euro Summit. In German: ‘eine Zangengeburt’." After four months of wrangling and with anxious depositors pulling billions of euros out of Greek banks, Tsipras’s leftist government showed a new willingness at the weekend to make concessions that would […]

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Novak: Russian Arctic Offshore Drilling To Be Postponed To 2016 Or Later

MOSCOW, June 18 (Reuters) – Russia’s Energy Minister Alexander Novak said on Thursday that Arctic offshore drilling planned for this year will be postponed until 2016 or later. "Drilling of wells (in Russia’s Arctic offshore territory) scheduled for 2015 will be delayed to the next year and possibly even longer," Novak told Rossiya-24 state TV in an interview. He did not name specific projects. Sources previously told Reuters that Russian state oil producer Rosneft will be forced to postpone drilling a second well in the Kara Sea for at least two more years, as a result of Western sanctions over the Ukraine crisis. (Reporting by Katya Golubkova; Editing by Jack Stubbs)

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Oil Prices Fall on Firming U.S. Dollar

Oil prices fell Friday on the firming U.S. dollar as investors tracked the latest twists in the Greek debt negotiations and braced themselves for the looming deadline in the Iran nuclear talks. Light, sweet crude for July delivery, the U.S. benchmark, lost 84 cents, or 1.4%, to $59.61 a barrel on the New York Mercantile Exchange. It finished the week down 35 cents, or 0.6%. The global Brent contract for August ended down $1.24, or 1.9%, at $63.02 a barrel on the ICE Futures Europe exchange. For the week, it lost $1.62, or 2.5%. Oil markets Friday followed a common recent pattern of taking cues from moves of the dollar, even largely ignoring an updated count on the amount of oil drilling in the U.S., analysts said. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, spend most of Friday’s session in […]

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Oil little changed, held down by demand outlook, shale output forecast

SEOUL Oil prices were little changed in thin trade on Friday, with a forecast of higher output by U.S. shale oil producers this year adding to worries over demand and preventing the market from extending the previous session’s gains. U.S. July crude CLc1 had lost 14 cents to $60.31 a barrel as of 0256 ET after closing up 53 cents on Thursday. Brent crude LCOc1 for August gained 3 cents to $64.29 after settling up 39 cents. "Without much change in fundamentals as well as changes to dollar strength, crude oil prices continue to move sideways. We believe that this would likely continue for today as we do not expect much change," Daniel Ang at Phillip Futures said. He added that oil prices were showing little sign of moving far from $60 and $64 for WTI and Brent respectively. U.S. shale oil producers have projected a rise in output […]

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The State of the Kurds

It is a time of good news for the Kurds, a people more accustomed to tragedy than to triumph. Just last week in Turkey, a political party rooted in the struggle for Kurdish rights vaulted over the 10% threshold for parliamentary representation, giving the Kurds their biggest say ever in Turkish politics. Days later, allied Kurdish fighters in Syria seized a crucial border crossing from Islamic State, thus uniting Kurdish areas that now stretch from Iraq halfway to the Mediterranean Sea. In Iraq, the Kurds repelled an assault by Islamic State last year, and their budding autonomous government in northern Iraq has taken advantage of the collapse of the Iraqi army to seize full control of the disputed northern city of Kirkuk—often dubbed the “Kurdish Jerusalem” because of its historic significance—and the all-important oil fields nearby. Amid an imploding Middle East ravaged by religious hatreds, the Kurds are providing […]

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IRAN

Iran holds the world’s fourth-largest proved crude oil reserves and the world’s second-largest natural gas reserves. Despite the country’s abundant reserves, Iran’s crude oil production has substantially declined, and natural gas production growth has been slower than expected over the past few years. International sanctions have profoundly affected Iran’s energy sector and have prompted a number of cancellations or delays of upstream oil and gas projects. Iran holds some of the world’s largest deposits of proved oil and natural gas reserves, ranking as the world’s fourth-largest and second-largest reserve holder of oil and natural gas, respectively. Iran also ranks among the world’s top 10 oil producers and top 5 natural gas producers. Iran produced almost 3.4 million barrels per day (b/d) of petroleum and other liquids in 2014 and an estimated 5.7 trillion cubic feet (Tcf) of dry natural gas in 2013. The Strait of Hormuz , off the […]

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Iran Still Supports Terrorism, State Department Finds

WASHINGTON — Iran continued its “terrorist-related” activity last year and also continued to provide broad military support to President Bashar al-Assad of Syria , the State Department said Friday in its annual report on terrorism. The State Department’s assessment suggests that neither the election of President Hassan Rouhani nor the prospect of a nuclear accord with the United States and its negotiating partners has had a moderating effect on Iran’s foreign policy in the Middle East. “In 2014, Iran continued to provide arms, financing, training and the facilitation of primary Iraq Shia and Afghan fighters to support the Assad regime’s brutal crackdown,” the report said. “Iran remained unwilling to bring to justice senior Al Qaeda members it continued to detain and refused to publicly identify those senior members in its custody,” it added. The report does not contend that Iranian officials are conspiring to kill Americans. Nor does it […]

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Iran Terrorism Highlighted by U.S. as Nuclear Deadline Looms

With a June 30 deadline looming for an agreement to curb Iran’s nuclear program, the U.S. State Department said the Islamic Republic’s terrorist activities continue “undiminished,” a finding sure to inflame opponents of any deal with the regime in Tehran. Asked if Iran can be trusted to abide by a nuclear deal while it continues terrorist activities that destabilize the Middle East, a senior State Department official on Friday said that the nuclear negotiations are important to curb Iran’s actions. If Iran agrees to nuclear curbs in exchange for relief from economic sanctions, the U.S. won’t lift sanctions on any Iranians cited for terrorism, Ambassador Tina Kaidanow, the State Department’s counterterrorism coordinator, said at a press conference. The Islamic Revolutionary Guard Corps, notorious for its involvement in terrorist activities and its control of major sectors of Iran’s economy, will remain under U.S. sanctions, Kaidanow said. Asked if entities controlled […]

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Saudi Arabia’s crude oil exports slip in April

KHOBAR, Saudi Arabia Saudi Arabia’s April crude exports fell by 161,000 barrels per day (bpd) as domestic refiners processed more crude, official data showed. Exports fell to 7.737 million bpd from 7.898 million in March when they hit their highest levels in almost a decade. Domestic refiners processed 2.224 million bpd, up 315,000 bpd from 1.909 million bpd in March, figures supplied by Riyadh to the Joint Organisations Data Initiative (JODI) showed. JODI compiles data supplied from oil-producing members of global organisations including the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC). Saudi Arabia has traditionally been the world’s biggest exporter of crude and the kingdom’s rapid transition into one of the largest oil refiners adds an extra dimension to global oil markets. The growth puts its national oil company Saudi Aramco’s owned or equity stakes in refining at 5.4 million bpd, at least […]

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Saudi Arabia Pumps Oil Flat Out in Citi, Goldman’s New Oil Order

Not content with the blow it’s dealt to U.S. oil drillers, Saudi Arabia is set to escalate the battle for market share by raising production to maximum levels. The world’s largest oil exporter has already increased output to a 30-year high of 10.3 million barrels a day in a bid to check growth from nations including the U.S., Canada and Brazil. It will add even more to the global glut, according to Goldman Sachs Group Inc. Citigroup Inc. predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11 million barrels, in the second half of 2015. Saudi Arabia steered the Organization of Petroleum Exporting Countries in November to protect its market share in the face of swelling U.S. crude output, rather than cut supplies to shore up prices as it did in the past. Having abandoned the role of swing supplier — […]

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Yemen Mediator Optimistic as Humanitarian Crisis Worsens

Photo Yemenis waited to buy food and water in Taiz on Friday. The United Nations secretary general, Ban Ki-moon, has appealed for a two-week humanitarian truce in honor of Ramadan, which began this week. Credit European Pressphoto Agency UNITED NATIONS — The United Nations mediator for Yemen peace talks said on Friday that four days of discussions had ended with no agreement for even a brief pause in fighting, but that he remained “optimistic,” as aid agencies warned that the humanitarian crisis enveloping the country had worsened. “We feel it requires further consultation and we can achieve it pretty soon,” said the mediator, Ismail Ould Cheikh Ahmed , a Mauritanian diplomat, at a news conference in Geneva, broadcast on the United Nations website. “I remain optimistic.” Yemen has been pummeled by Saudi-led airstrikes since late March, after Houthi rebels from the north drove the sitting president, Abdu Rabbu Mansour […]

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Oil prices expected to ‘improve’ on rising demand, low stocks: Naimi

* Saudi oil minister ‘optimistic’ about future market * Says alliance with Russia to help stabilize market * Riyadh, Moscow also sign nuclear, military deals Saudi Arabia’s oil minister Ali Naimi is confident that oil prices will rise in the coming months given the increase in global demand and the low level of commercial stocks. Naimi, cited by Saudi state news agency SPA late Thursday in St Petersburg, also said a cooperation alliance agreed with Russia earlier in the day would be for the benefit of the stability of the international oil market. Article continues below… The Platts Global Energy Awards is a competitive awards program honoring excellence and accomplishments in the global energy industry. The 17th annual awards will be presented at a black-tie gala, attracting energy industry leaders from around the world on Wednesday, December 9th, 2015 at Cipriani’s in New York. Don’t miss this opportunity to […]

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Shale Fallout Torments Nigeria as Flagship Oil at Decade-Low

The shale boom that’s reduced U.S. dependence on overseas crude is reverberating in Nigeria as Africa’s biggest oil producer cuts the pricing for its flagship grade to the lowest in a decade. The country, part of the Organization of Petroleum Exporting Countries, will sell July supplies of its Bonny Light crude at 23 cents more than Dated Brent, according to an e-mailed statement from state-run Nigerian National Petroleum Corp. That’s the smallest differential since 2005 and compares with a 50 cent premium in June and $2.55 a year earlier, data compiled by Bloomberg show. Surging output from U.S. shale formations contributed to a market glut that drove crude down almost 50 percent last year, roiling global markets as producer nations lost revenue and foreign-exchange reserves. While oil has pared losses this year, prices are still below what some producers including Nigeria and other OPEC members need to balance their […]

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Big Investors Shun Venezuela’s Flagship Oil Industry Event

Jun 19, 2015 Venezuela’s biggest annual gathering of oil investors used to be a memorable affair: thousands of oilmen from around the world would arrive, greeted by statuesque models, and attend whisky-fueled after-parties. The deal-making could run into the billions. This year’s event was a far cry from previous years’ bashes, where hordes of investors would clamor for a stake in the country with the world’s largest oil reserves. “It used to be much bigger,” lamented Hugo Hernández, a former head of the Venezuela Petroleum Chamber, reminiscing about the days when 40,000 participants would show up. “You know how the situation is in the country. Now many people don’t come.” Organizers said slightly more than 3,000 people visited the expo this week, including hundreds of workers from state oil giant PDVSA. Among the notable absentees were many of Venezuela’s foreign production partners. Of the more than 30 multinationals that […]

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North Dakota governor sees OPEC ceding global swing status

BISMARCK, N.D. OPEC’s decision this month to maintain existing oil output will fail to push rival producers out of the market because rising global crude demand should soon lift prices and boost drilling activity, North Dakota Governor Jack Dalrymple said. Since November, the Saudi Arabian-led cartel has held to a policy of unconstrained output, an approach many suspect is designed to flood global markets with more crude, push prices lower and punish rivals, including North Dakota, the second-largest U.S. oil producer. "It’s not surprising that Saudi Arabia would finally make a decision that they are not going to be the sole equalizer of supply and demand around the world," Dalrymple said in an interview with Reuters this week at his capitol office. "They are going to expect other countries to be part of controlling supply." Yet the strategy seems to have backfired, as producers have had to become leaner […]

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The Shale Industry Could Be Swallowed By Its Own Debt

The debt that fueled the U.S. shale boom now threatens to be its undoing. Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken Shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size. The burden is becoming heavier after oil prices fell 43 percent in the past year. Interest payments are eating up more than 10 percent of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank. “The question is, how long do they have that they can get […]

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California Has Never Experienced A Water Crisis Of This Magnitude – And The Worst Is Yet To Come

Things have never been this dry for this long in the recorded history of the state of California, and this has created an unprecedented water crisis. At this point, 1,900 wells have already gone completely dry in California , and some communities are not receiving any more water at all. As you read this article, 100 percent of the state is in some stage of drought, and there has been so little precipitation this year that some young children have never actually seen rain . This is already the worst multi-year drought in the history of the state of California , but this may only be just the beginning. Scientists tell us that the amount of rain that California received during the 20th century was highly unusual. In fact, they tell us that it was the wettest century for the state in at least 1000 years. Now that things […]

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Despite obstacles, chances grow for final Iran nuclear deal

NEW YORK/ANKARA/PARIS Iran is trying to avoid detailed commitments. The French are sticking to their tough line. And U.S. President Barack Obama faces a battle to sell any deal to a skeptical Congress. Despite those and other obstacles, negotiators appear increasingly likely to clinch an historic deal to restrict Iran’s nuclear program for at least a decade in exchange for relief from sanctions, Western and Iranian officials said. U.S. officials, including Obama, have long said they see at best a 50-50 chance of getting a deal with Iran. That remains the official line, but diplomats close to the talks tell Reuters the chances are higher than that as foreign ministers and other negotiators head to Vienna next week for the final stage of a nearly two-year process. Driving the cautious optimism, they say, is not so much progress made in overcoming sticking points as the intense political pressure on […]

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Oil, Gas Drilling Wastewater Blamed for Earthquakes in Oklahoma

Wastewater from oil and natural gas drilling that’s pumped underground for disposal is more likely to trigger earthquakes than extracting the fuel by fracking, according to a new study. The salty byproduct of hydraulic fracturing is often injected back underground where it penetrates fault lines and triggers seismic activity, said Mark Zoback , a geophysics professor at Stanford University and lead author of the study Thursday in the journal Science Advances. Fracking, in which fluids are forced underground to shatter rock and release oil and gas, presents a much lower risk, he said. The issue has gained attention in Oklahoma where a drilling boom has coincided with a surge in earthquakes measuring 3.0 or higher on the Richter scale. About 10 barrels of water are produced for every barrel of oil in Oklahoma where there were two dozen magnitude-4 earthquakes last year compared with one or two a decade […]

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U.S. Oil-Rig Count Falls to 631 in Latest Week

The number of U.S. oil drilling rigs, which is a proxy for activity in the oil industry, has fallen sharply since oil prices headed south last year. There are now about 61% fewer rigs working since a peak of 1,609 in October. Crude oil futures recently fell 2% to $59.19. OPEC recently said it would keep its production ceiling unchanged, the second time in six months it decided to take no action amid the global glut. Oil prices have traded in a tight range recently, with U.S. prices pivoting around the psychologically key $60-a-barrel level. Forecasts that the global glut of crude oil will shrink, due to growing demand and a decline in drilling, have boosted prices from multiyear lows earlier this year. But some investors remain hesitant, especially because some U.S. companies say they can increase production if prices hold above $60. According to Baker Hughes, gas rigs […]

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After Energy-Job Losses, Texas Jobs Boom in May

Employment bounced back in Texas last month following recent losses, a sign that the state is weathering the slowdown in the energy industry, the Labor Department said Friday . By contrast, in North Dakota, which is also heavily reliant on energy production, employment continues to fall as the state grapples with a slowdown in energy prices. Texas added 33,200 jobs in May, the third-largest month-over-month employment increase in the country, the department said. Just two months ago, in March, Texas saw 25,400 jobs disappear . The state’s unemployment rate stands at 4.3%, down from 5.1% in May 2014. The national unemployment rate was 5.5% in May, according to the Labor Department. Since its last oil-related boom and bust cycle three decades ago, Texas has sought to diversify its economy . Much of the state’s growth has taken place in the Dallas-Fort Worth area and around San Antonio, two regions […]

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Texas Oil and Gas Production for April

The preliminary Texas RRC Production Data is out this morning. There appears to be a considerable drop in Texas crude oil production in April. All Texas RRC data in the charts below is through April 2015 and all EIA data is through March 2015. For those new to this site, the Texas RRC data is incomplete. The drooping lines will eventually, after the final data comes in, closer resemble the EIA data. Though I believe the EIA data is quite a bit too high at this point. Texas C+C It appears that, when the final data comes in that Texas will have took a huge hit in January, recovered somewhat in February and March, then took another hit this past April. Dean C+C Dr. Dean Fantazzini, with his algorithm that calculates the final production numbers, also comes to the conclusion that Texas took a hit in April production. Dean […]

Posted On : Published By : Tom Whipple
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BHI: Down just 2, US rig count posts smallest decline of 28-week slide

Posting its smallest decline of the now 28 consecutive weeks of losses, the US drilling rig count dropped just 2 units during the week ended June 19 to settle at 857 rigs working, according to data from Baker Hughes Inc. The decline over the past 6 weeks has averaged a hair more than 6 rigs/week compared with double-digit and near triple-digit declines over the previous 22 weeks. The count has now lost 1,063 units since the week ended Dec. 5 and is down 1,001 year-over-year ( OGJ Online, Dec. 5, 2014 ). In an energy update released this week, analysts at Raymond James & Associates Inc. noted that 853 well permits were issued last week, down 12 from the prior week, decreasing the 4-week average by 15 to 844. RJA tracks permitting activity as a primary indicator of rig count activity. “In the context of regular swings in permit […]

Posted On : Published By : Tom Whipple
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U.S. oil rigs decline, but up in Permian, Bakken: Baker Hughes

U.S. oil drillers this week added one rig each in the Permian and Bakken shale basins, data showed on Friday, another sign that higher crude prices are coaxing producers back to the well pad after a six-month slump in activity. Overall, drillers reduced the number of rigs by four this week, oil services company Baker Hughes Inc said in its closely followed report. It was the 28th straight weekly decline and brought the total rig count down to 631, the lowest since August 2010. The number of oil rigs in the Permian, the nation’s biggest shale oil field located in West Texas and eastern New Mexico, climbed to 232 this week, up one from the lowest level in at least four years last week, according to Baker Hughes data going back to 2011. Drillers also added one rig in the Williston section of the Bakken formation centered in North […]

Posted On : Published By : Tom Whipple
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WoodMac: Western Canadian liquids production on upward trajectory starting in 2016

Wood Mackenzie Ltd. believes the economics of core areas within shale plays in western Canada will yield comparable returns to key producing plays in the US Lower 48. “Our western Canadian liquids production forecast is underpinned by an increasing commodity price environment and growing demand for oil sands diluent. We anticipate an upward trajectory in volumes beginning in 2016 and peaking in 2021 with the Montney, Duvernay, and Cardium formations driving volumes,” said Peter Argiris, WoodMac upstream analyst in Calgary. While WoodMac’s liquids growth outlook remains positive, there is a potential downside to the forecast. “One factor that is currently front of mind is the supply-infrastructure constraints from the lighter end of the NGL stream,” Argiris said. “Propane supply is at historic levels and we have seen material price declines as a result. How this affects the remaining NGL stream (apart from diluent) from a pricing-infrastructure capacity perspective could […]

Posted On : Published By : Tom Whipple
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Big Trucks Face New Standards on Fuel Efficiency

WASHINGTON—The government on Friday proposed new carbon-emissions standards for big trucks as part of President Barack Obama ’s broad climate-change agenda, a move many in the trucking industry cautiously support as a way to save money on fuel. The Environmental Protection Agency and the Transportation Department jointly announced draft standards for big vehicles ranging from garbage trucks to 18-wheelers, as well as from vans and buses to heavy-duty pickup trucks. “In 2014, trucking spent nearly $150 billion on diesel fuel alone,” said Glen Kedzie, a vice president of the American Trucking Associations. “So the potential for real cost savings and associated environmental benefits of this rule are there.” EPA Administrator Gina McCarthy The administration is proposing two broad categories of standards for big trucks: one for the load-pulling tractor unit of large so-called semitrailers and one for the trailer it hauls. The tractor standard will require that a truck […]

Posted On : Published By : Tom Whipple
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BP to Pay Rosneft $750 Million for Part of Siberian Oilfield

BP Plc will pay OAO Rosneft $750 million for a stake in an East Siberian oil producer, following Royal Dutch Shell Plc’s plans to expand a natural gas export project in Russia. BP will take a 20 percent stake in Taas-Yuriakh Neftegazodobycha LLC in Russia’s Far East, according to statements from Rosneft and BP. The companies will also jointly explore areas in Siberia and, if successful, form a venture with Rosneft holding 51 percent. Holdings in their German refineries will be reorganized as well, the partners said. Europe’s two biggest oil companies are looking for increased access to Russia’s vast energy reserves and their proximity to the markets of China and Japan even as the world’s second-biggest oil and gas producing nation seeks to maintain sales to Europe in the face of U.S.-led sanctions. BP reset its Russia strategy two years ago when it swapped its half in TNK-BP […]

Posted On : Published By : Tom Whipple
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Russian fury at Belgium asset seizure in Yukos oil case

Mikhail Khodorkovsky and his partners sued the Russian state after Yukos was broken up Russia has protested to the Belgian ambassador over the seizure of Russian state assets in Belgium – a move triggered by a court ruling over the now-defunct Yukos oil firm. The ambassador was told that the asset seizure was "an openly hostile act" that "crudely violates the recognised norms of international law". Last year a court told Russia to pay Yukos shareholders $50bn (£32bn) in compensation, after Yukos’s break-up. A Russian state firm took over Yukos. Last July an international arbitration court in The Hague said Russian officials had manipulated the legal system to bankrupt Yukos, and jail its boss, the oligarch Mikhail Khodorkovsky. Wider seizures France has also seized Russian state accounts in about 40 banks, along with eight or nine buildings, AFP news agency reports. And a legal application has also been filed […]

Posted On : Published By : Tom Whipple
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China to Design New Russian High-Speed Railway

ST. PETERSBURG, Russia—China has signed up to design a high-speed railway between the Russian cities of Moscow and Kazan, one of the first concrete examples of the new business with China that Russian officials have been pursuing with renewed vigor since falling out with the West. A unit of Russia’s state-owned JSC Russian Railways signed a contract Thursday with the design unit of China’s state-controlled China Railway Group 601390 -9.92 % to come up with the plans for a 770 kilometer high-speed rail between the two Russian cities. The Chinese firm will work alongside two Russian companies for on the designs for a total cost of 20.8 billion rubles ($383 million) over the next two years, according to Russian Railways. Once the designs are developed, a separate tender will be held for the actual construction of the rail link, which Russian Railways expects to cost 1.06 trillion rubles ($19.5 […]

Posted On : Published By : Tom Whipple
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EU Says Existing Gas Pipelines From Russia More Than Enough

LUXEMBOURG—Existing gas pipelines from Russia already more than meet the European Union’s existing and future needs, the European Commission said Friday, a day after OAO Gazprom OGZPY -1.82 % and several Western energy companies said they would double the capacity of a pipeline to Germany. The tentative agreement with Royal Dutch Shell RDS.A -0.17 % PLC, Germany’s E. ON AG EONGY -2.24 % and Austria’s OMV AG OMVKY 2.10 % would allow Gazprom to ship an extra 55 billion cubic meters of gas to Europe every year through the Nord Stream pipeline via the Baltic Sea and forms another attempt by Moscow to avoid Ukraine as a transit route. The EU currently imports about one third of its gas from Russia, with almost half of that coming through Ukraine. Moscow has been working to reduce its dependence on Ukraine as a transit country , arguing that Kiev, with which […]

Posted On : Published By : Tom Whipple
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BP, Rosneft Sign Production, Exploration, Refining Pacts

Rosneft Chief Executive Igor Sechin, Russia’s most powerful oil official, signed a raft of deals Friday at the St. Petersburg International Economic Forum, including further production, exploration and refining agreements with BP. They come a day after another Russian energy company affected by sanctions, OAO Gazprom , OGZPY -1.82 % inked a preliminary deal with three European firms, including Royal Dutch Shell RDS.A -0.17 % PLC, to expand a pipeline to Germany. U.S. and European sanctions over Russia’s interventions in Ukraine prevent Rosneft from raising credit in the West or accessing Western technology for tapping shale and arctic reserves, but don’t prevent asset sales and purchases. The U.S. has also imposed personal restrictions on Mr. Sechin. The deals announced on Friday cement the strategic alliance between Rosneft and BP, which owns a nearly 20% stake in the Russian company. BP is taking a 20% stake in Taas-Yuryakh Neftegazodobycha in […]

Posted On : Published By : Tom Whipple