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Natural Gas Retreats on Low Demand and Strong Supply

(Adds price table at bottom) By Timothy Puko Natural gas prices gave back nearly all of the prior session’s gains on signs the market may be returning to its chronic oversupply. Prices for the front-month July contract settled down 7.7 cents, or 2.7%, at $2.773 a million British thermal units on the New York Mercantile Exchange. The July contract expired at close. The more heavily traded August contract settled down 9.6 cents, or 3.4%, at $2.77/mmBtu. Many traders may have been pushing back against strong gains from Thursday. Government data yesterday showed the smallest weekly surplus in more than two months and analysts said a long-oversupplied market had come into balance. But many feel that balance is only temporary. The U.S. Energy Information Administration also said late Thursday that production had grown 1% this week despite pipeline shutdowns for maintenance. Production is back at its near-record pace of 72 […]

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Kurds, Syrian army battle Islamic State in Syria’s Hasaka: monitor

BEIRUT Kurdish forces and the Syrian army fought separate battles with Islamic State around Hasaka city in northeast Syria overnight as the hardline group tried to capture more areas of the major urban center near the Iraqi border, a monitor said on Saturday. Islamic State launched an assault on government-held areas of Hasaka early on Thursday and the United Nations says the violence is estimated to have displaced up to 120,000 people. The Syrian Observatory for Human Rights, which tracks the conflict using sources on the ground, said the Kurdish YPG militia fought with Islamic State fighters on the outskirts of the Ghwyran neighborhood in Hasaka’s southeast overnight. Hasaka is divided into areas run separately by Syrian President Bashar al-Assad’s government and Kurdish authorities and has a mixed population of Arabs, Kurds and Christians. It is important to all sides fighting in an area that sits between Islamic State-held […]

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Gas flowing from Moroccan shale

Morocco yielding natural gas for early shale pioneers working in onshore basins. File Photo by UPI Photo/Terry Schmitt. LIMERICK, Ireland, June 26 (UPI) — Irish explorer Circle Oil, which focuses on North African reserves, said gas was flowing from its first shale well drilled into a basin in Morocco. The company said it reached a stabilized flow rate of 1.9 million cubic feet per day in its LAM-1 well in the Lalla Mimouna permit area onshore Morocco. "We are delighted that our first well on the Lalla Mimouna block has such positive results, flowing gas at significant rates," Circle Chief Executive Officer Mitch Flegg said in a statement. "The productivity of this first well is very encouraging for the expansion of Circle’s portfolio of Morocco gas fields." Morocco is one of the West African countries that have drawn interest from international energy companies eager to tap into unexploited reserves. […]

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Israel moves to ease offshore gas logjam

The Israeli government has declared development of natural gas to be an issue of national security in a move aimed at easing an antitrust logjam in place since last December. The security cabinet voted unanimously on June 25 to take administrative steps sidestepping a review by Antitrust Commissioner David Gilo into whether holdings in large gas fields offshore Israel by Delek Group and Noble Energy Inc. constitute a “restrictive agreement” under Israeli law. Gilo’s study stymied gas development, most importantly of giant, deepwater Leviathan field. Allocation of future Leviathan supply between domestic and export markets is one of several controversies related to offshore gas development in Israel ( OGJ Online, Feb. 20, 2015 ). The security cabinet move allows the government to consider a compromise agreement under which Delek and Avner Oil Exploration, a subsidiary, would sell their interests in producing Tamar gas field within 6 years as well […]

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Nigeria: Board of State Oil Company Is Dissolved After Corruption Scandal

Nigeria ’s new president, Muhammadu Buhari, on Friday dissolved the board of the state oil company from which billions of dollars is reported to be missing. A statement from the head of the Civil Service, Danladi Kifasi, announced the presidential directive regarding the Nigerian National Petroleum Co., the government agency in charge of nearly all aspects of the country’s oil industry , the seventh largest in the world. Mr. Buhari took office last month promising to halt corruption, and he said this week that Western governments had promised to help recover looted state money. The president’s action came before he has named a cabinet and amid speculation that he may be planning to take charge himself of the petroleum portfolio. A former Central Bank director last year largely blamed the state petroleum company for missing federal revenues of about $20 billion — an amount that the company disputes.

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U.S. Oil-Rig Count Falls to 628 in Latest Week; Gas Rigs Rise

By Angela Chen The U.S. oil-rig count fell by three to 628 in the latest week, according to Baker Hughes Inc., marking the 29th straight week of declines. 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 were recently down by less than 1% to $59.61 a barrel. U.S. oil prices have gained 13% this year on expectations that the global glut of crude oil is due to shrink. U.S. commercial crude-oil supplies fell by 4.9 million barrels in the week ended June 19, according to the U.S. Energy Information Administration. That was the eighth straight week of stockpile draws since inventories hit a record high in April, the longest streak of drawdowns since the […]

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Asia oil pricing change to raise trade volumes

SINGAPORE Oil pricing agency Platts is changing how it assesses oil product values in Asian trade from July 1 in a move traders expect to boost volumes and encourage the use of regional oil storage facilities built at a cost of billions of dollars. The change in how fuel oil, diesel, jet fuel and gasoline are assessed for loadings out of Singapore and Malaysia takes a borderless approach similar to that in the world’s largest oil storage hub Amsterdam-Rotterdam-Antwerp (ARA). The main change is that from July in Platts’ free-on-board (FOB) Singapore price assessments – the basis for most contract and spot deals done in Asia – traders at the time of making a bid or offer for a cargo will no longer specify a loading point in Singapore or southern Malaysia. Daily trade activity will instead be classified as FOB Straits – although price assessments will still be […]

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Guyana Assures Exxon Venezuela Dispute Won’t Slow Oil Exploration

By Kejal Vyas When it comes to Exxon Mobil Corp.’s recent oil discovery off the coast of Guyana, one that Venezuela claims as its own, Guyanese President David Granger has a clear message for the U.S. company: Full speed ahead. Mr. Granger, who took office days before Exxon announced the significant find last month, said that he met with officials from the company–which was contracted by Guyana–and offered assurances that exploration work won’t be interrupted, despite Venezuela’s recent revival of a century-old claim on two-thirds of Guyana’s territory. Guyana, a former British colony of 750,000 people and South America’s only English-speaking nation, is counting on diplomacy and the help of regional allies to resolve the matter. A Paris arbitration tribunal in 1899 had set the internationally recognized boundaries, but Venezuela sixty years later rejected the findings saying it was cheated. "We’re not going to send the navy out there […]

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Argentina and China lead shale development outside North America in first-half 2015

map of Neuquen Basin and Sichuan Basin, as explained in the article text As recently as last year, only four countries in the world were producing commercial volumes of either natural gas from shale formations (shale gas) or crude oil from tight formations (tight oil): the United States and Canada, and more recently, Argentina and China. Beyond these four countries, other countries have started exploring hydrocarbons from shale and other tight resources, but they are still short of reaching commercial production. The 2013 World Shale Gas and Shale Oil Resource Assessment , produced by EIA and Advanced Resources International (ARI), noted large shale deposits in China and Argentina. Exploration and drilling is already underway in these countries. For the last two years, China has drilled more than 200 wells, and Argentina has drilled more than 275 wells. Each country has the potential to significantly increase production of shale gas […]

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EPA’s New Fracking Study: A Close Look at the Numbers Buried in the Fine Print

When EPA’s long-awaited draft assessment on fracking and drinking water supplies was released, the oil and gas industry triumphantly focused on a headline-making sentence: “We did not find evidence of widespread, systemic impacts on drinking water resources in the United States.” But for fracking’s backers, a sense of victory may prove to be fleeting. EPA’s draft assessment made one thing clear: fracking has repeatedly contaminated drinking water supplies (a fact that the industry has long aggressively denied). Indeed, the federal government’s recognition that fracking can contaminate drinking water supplies may prove to have opened the floodgates, especially since EPA called attention to major gaps in the official record, due in part to gag orders for landowners who settle contamination claims and in part because there simply hasn’t been enough testing to know how widespread problems have become. And although it’s been less than a month since EPA’s draft assessment […]

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