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Oil Price Rout Seen as Threat to $1.5 Trillion of New Projects

About $1.5 trillion of potential investment in new oil projects isn’t viable with crude prices at $50 a barrel, highlighting the need to reduce costs, according to consultant Wood Mackenzie Ltd. The proposed projects, including spending on North American shale, are “now out of the money, or in starker terms, uneconomic at $50 oil,” James Webb, upstream research manager at Wood Mackenzie, said in a statement Monday. “This spend is very much at risk.” While operators want to cut costs by 20 percent to 30 percent on new projects, supply-chain savings will only achieve cuts of 10 percent to 15 percent on average, according to Wood Mackenzie. A drop of about 50 percent in crude prices over the past year has forced oil companies to cut spending and defer new projects. Brent, the benchmark for half the world’s oil, was trading at $47.78 a barrel, up 31 cents, at […]

Posted On : Published By : Tom Whipple
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Done deal for Iran nuke pact, but debate still in Congress

AP Photo/Andrew Harnik Latest News Russian opposition draws thousands to anti-Putin protest Kerry: Russian fighter jets in Syria raise serious questions Russian governor arrested in high-profile corruption case Putin moves to establish Russian military base in Belarus Russians with Western ties increasingly branded ‘traitors’ var mytd = document.getElementById(‘mytd’); var mydiv = document.getElementById(‘spnrefmoneymarkets’); if (mytd != null) {mytd.innerHTML = spnrefmoneymarkets.innerHTML; mydiv.innerHTML = ”}; Putin gives Roy Jones Jr. Russian citizenship var mytd = document.getElementById(‘mytd’); var mydiv = document.getElementById(‘spnrefmoneymarkets’); if (mytd != null) {mytd.innerHTML = spnrefmoneymarkets.innerHTML; mydiv.innerHTML = ”}; WASHINGTON (AP) — It’s a done deal, yet opponents of the Iran nuclear agreement won’t go quietly. The 60-day congressional review period has expired, and last week the State Department outlined its plan to put in place an accord that aims to prevent Iran from becoming nuclear-armed. Congress is poised to start cranking out legislation to reinstate sanctions or shore up what […]

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U.N. Atomic Inspectors Visit Iran’s Parchin Site

The head of the United Nations atomic agency and a senior official from the organization have visited Iran’s controversial Parchin military site, ending a period of almost a decade during which officials were banned from the site. In a statement Sunday, the International Atomic Energy Agency said that its director-general, Yukiya Amano, and its head of safeguards, Tero Varjoranta, were at Parchin as part of the probe into Iran’s past nuclear work. Mr. Amano also met during his weekend trip to Tehran with Iranian President Hasan Rouhani, the head of Iran’s atomic agency, Ali Akbar Salehi, Foreign Minister Javad Zarif and Iranian lawmakers. “Discussions with high-level Iranian officials focused on the continued implementation of the road map to resolve all past and present outstanding issues,” the IAEA said in a statement, referring to Iran’s past and present nuclear work. The IAEA has long been denied access to Parchin, a […]

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Saudi Stocks Drop Most in Mideast as Fed Stirs Growth Concerns

Saudi Arabian equities fell the most in the Arab world after the Federal Reserve’s decision to keep interest rates unchanged sparked concern over global growth and the price of oil capped its third week of losses. The Tadawul All Share Index fell 1.4 percent to 7,365.98 at the close in Riyadh to the lowest in almost a month, marking a seventh day of losses. Banks made up four out of the top five contributors to the decline. Abu Dhabi’s ADX General Index advanced 0.6 percent. The Bloomberg GCC 200 Index, made up of the biggest and most liquid shares in the six-nation Gulf Cooperation Council, slipped 0.6 percent. That sent the premium it commands over MSCI Inc.’s emerging markets index on a future price-to-earnings basis to the lowest in almost five months. The spread between forward 12-month P/E for the BGCC 200 Index and MSCI EM Index is the […]

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Saudi Arabia’s Crude Stockpiles at Record High as Exports Fall

Saudi Arabia’s crude stockpiles rose to a record in July after exports by the world’s biggest oil shipper declined for the third time in four months. Commercial petroleum stockpiles increased to 320 million barrels, the highest since at least 2002, from 319.5 million barrels in June, according to data Sunday on the website of the Riyadh-based Joint Organisations Data Initiative. Crude exports slumped 1.2 percent to 7.28 million barrels a day after hitting a record 7.9 million barrels in March. Overseas shipments declined every month since then except in June. Brent crude oil prices have slumped 17 percent this year as Saudi Arabia led the Organization of Petroleum Exporting Countries in boosting production to keep market share amid a global supply glut. The failure of producers to cut output fast enough may require prices to fall near $20 a barrel to clear the surplus, Goldman Sachs Group Inc. estimates. […]

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Nigerian Oil Group Secures $1.2 Billion to Develop Wells

IBADAN, Nigeria–The state-run Nigerian National Petroleum Corporation has secured $1.2 billion to drill wells offshore and onshore under a joint venture with Chevron Nigeria, the NNPC said Sunday. Nigeria has been criticized for failing to meet obligations to its oil JV partners, which has affected efforts to reach production targets of over 4 million barrels a day and reserves to 40 billion barrels. The $1.2 billion package will finance the development of 23 onshore and 13 offshore wells. The NNPC/CNL Joint Venture is the third largest oil producer in Nigeria, the statement said. Nigeria, Africa’s largest oil producer, relies on crude exports for over 90% of its foreign exchange earnings and 70% of government revenue, according to the International Monetary Fund.

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Another Contender Emerges in Battle for China Oil Market Spoils

The race among the top sellers of crude to the world’s biggest energy-consuming nation got a little tighter last month. Iraq overtook Russia to become the third-largest supplier to China, while Oman edged past Iran in sales of oil to Asia’s biggest economy. Saudi Arabia kept the lead in the race even as its shipments slipped, data from General Administration of Customs in Beijing on Monday show. Cargoes from Angola rose, helping the African producer hold onto the No. 2 spot. China remains the main safeguard against a further price meltdown as a drive to boost its strategic petroleum reserve helps alleviate a market glut. As a shale boom in the U.S. shrinks America’s need for overseas crude, producers are competing to supply the world’s second-biggest oil consumer, which is forecast by the International Energy Agency to account for about a quarter of growth in global demand next year. […]

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Peak Oil Has More To Do With Oil Prices Than You May Think

The Origins of Peak Oil Awareness The scientific study of peak oil began in the 1950′s, when Shell geophysicist M. King Hubbert reported on the evolution of production rates in oil and gas fields. In a 1956 paper Hubbert suggested that oil production in a particular region would approximate a bell curve, increasing exponentially during the early stages of production before eventually slowing, reaching a peak when approximately half of a field had been extracted, and then going into terminal production decline. Hubbert applied his methodology to oil production for the Lower 48 US states and offshore areas. He estimated that the ultimate potential reserve of the Lower 48 US states and offshore areas was 150 billion barrels of oil. Based on that reserve estimate, the 6.6 million barrels per day (bpd) extraction rate in 1955, and the 52.5 billion barrels of oil that had been previously produced in […]

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Volkswagen Chief Apologizes for Breach of Trust After Recall

Photo Martin Winterkorn, the chief executive of Volkswagen, speaking before the start of the International Motor Show in Frankfurt. Credit Odd Andersen/Agence France-Presse — Getty Images FRANKFURT — The chief executive of Volkswagen apologized on Sunday for what he said was a breach of trust that resulted in the company’s being accused by the United States authorities of illegally installing software in its diesel-power cars to evade standards for reducing smog. “I personally am deeply sorry that we have broken the trust of our customers and the public,” Martin Winterkorn, the chief executive of the German automaker, said in a statement . The Environmental Protection Agency has ordered Volkswagen to recall nearly half a million vehicles, and the company could face billions of dollars in fines. Mr. Winterkorn said the company would “cooperate fully” with the authorities and order its own independent investigation into the accusations. In his statement, […]

Posted On : Published By : Tom Whipple