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Africa Oil Boom Fades as $50 Crude Shuts Door on High-Cost Deals

Investment decisions made on less than 10% of discoveries “On the brink of a boom,” was the banner on PricewaterhouseCoopers LLP’s review of Africa’s oil industry 16 months ago. Now, oil below $50 has made more than two out of three investment projects on the continent non-viable. “Capital markets are effectively closed to the oil and gas industry” in Africa, Tony Hayward, former head of BP Plc and now chairman of Genel Energy Plc, said at a conference in Cape Town last month. “A decade of exploration, with billions of dollars invested and only limited commercial success.” When six of the 10 biggest global oil discoveries in 2013 were made in Africa, it underlined the potential of the energy riches that had lured companies from Royal Dutch Shell Plc to Exxon Mobil Corp. Governments have been slow to react as the slump in crude makes the royalties charged from […]

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Perfect Storm at Petrobras, the World’s Most Indebted Oil Company

The company has yet to reach its lofty production targets. Instead, Petrobras attained a more dubious title: the world’s most-leveraged oil company, with $127.5 billion in debt as of Sept. 30. Now, the bill is coming due. Loans of nearly $24 billion mature in 2016 and 2017. Investors and analysts are fretting about what’s next: repayment, restructuring or default. “I’ve had calls from investors in every time zone around the world,” said Sarah Leshner Carvalho, an analyst at Barclays. “There is almost no geography not involved in Petrobras bonds.” The company’s strategy of loading up on dollar-denominated debt has backfired as both the local currency and the price of oil have plunged over the past year. Last week, Petrobras reported that its total debt at the end of the third quarter was up 44% from the end of 2014 in local-currency terms to 506.58 billion Brazilian reais. That is […]

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Venezuela questions U.S. ties after oil-spying claims

Venezuelan President Nicolas Maduro calls for investigation into U.S. ties after hearing of claims intelligence officials spied in nation’s oil industry. File photo by Mohammad Kheirkhah/UPI CARACAS, Venezuela, Nov. 19 (UPI) — Venezuela’s president ordered a review of ties with Washington after uncovering allegations the United States was spying on employees at the state oil company. President Nicolas Maduro said his administration received documents suggesting the U.S. National Security Agency spied on workers with Petroleos de Venezuela , known also as PDVSA, by intercepting phone calls and emails from former Energy Minister Rafael Ramirez . Maduro was quoted by Univision as saying his administration "will initiate a comprehensive review of the relationship with the U.S. government because Venezuela is respected." The president referenced reports from The Intercept, teleSUR and the Wall Street Journal saying U.S. officials were looking into allegations of corruption at PDVSA. Many of the allegations were […]

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Fledgling U.S. LNG Exports Face Threat of China Becoming Seller

U.S. liquefied natural gas producers face an unlikely challenge as they prepare to enter global markets: China has more than it needs. The Asian nation will accept only 77 percent of contracted cargoes in 2015 as the slowest economic growth since 1990 cuts demand, according to industry consultant IHS Inc. The rest of the supply will be put up for sale amid a worldwide glut that Goldman Sachs Group Inc. says is likely to force U.S. export projects to operate at half capacity. The U.S. and China are seeking to sell cargoes just as new output equivalent to more than a third of global demand is set to flood the market over the next three years. While producers face more competition, the supply surge is a bonanza for the world’s biggest buyers , including Japan, who are benefiting from the lowest prices since at least 2010. “Chinese buyers have […]

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A Hard Landing in China Could ‘Shake the World’

China’s Golden-week National Day Holiday Brings Tourism Peak China’s slowdown is already playing out across the world, dragging down commodity prices and weighing on trade partners. And that’s while the economy is still growing at about 7 percent. So imagine what happens in a hard-landing scenario. The crew at Oxford Economics have done just that in a new report that makes stark reading for anyone with a stake in the global economy. China’s economic boom of the past 30 years means it now accounts for 11 percent of world GDP and around 10 percent of world trade. For resources, it’s an even bigger player, accounting for 11 percent of world oil demand and 40 to 70 percent of demand for other key commodities, according to the Oxford Economics research. Its financial system is massive, with its broad money supply now larger than the U.S.’s and amounting to over 20 […]

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India, not China, powering growth in fuel demand

A driver waits in a taxi for his turn to fill up his tank with diesel at a fuel station in Kolkata in this file photo taken on June 14, 2012. – China’s fuel usage tends to gather headlines as an indicator of the strength of global crude oil demand, and while this has been justified, the real growth action is happening over the Himalayas in India. India’s total demand for oil products is about one one-third of that in China, but the South Asian nation is powering up as China’s growth moderates. This isn’t entirely unexpected given that the slowdown in China’s economic growth is well known, as is the rotation toward a more service- and consumer-oriented economy from one reliant on heavy industry. India’s rapid gains in fuel consumption have seen it overtake Japan to become Asia’s second-largest crude oil importer behind China, and this growth trend […]

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China Cracks $64 Billion `Underground Bank’ Moving Money Abroad

China said it cracked the nation’s biggest “underground bank,” which handled 410 billion yuan ($64 billion) of illegal foreign-exchange transactions, as the authorities try to combat corruption and rein in capital outflows that have hit records this year. More than 370 people have been arrested or face lawsuits or other punishment in the case centered in eastern Zhejiang province, the official People’s Daily reported on Friday, citing police officials. The case brought the total for underground banking and money-laundering activities to 800 billion yuan since April, the newspaper said. The probe began in September last year and the police took almost a year to sort through more than 1.3 million suspicious transactions, the state-run Xinhua News Agency reported separately. The authorities froze more than 3,000 bank accounts, Xinhua said. Global Flows The case highlights the nation’s struggle to control capital outflows that have helped to send real-estate prices soaring […]

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Across the Oil Patch, Firms Are Going Bust

The collapse in oil prices has sent three-dozen companies into bankruptcy court this year—and that might not be nearly enough to balance the glutted market. Thirty-seven North American oil and gas producers have​filed chapter 11 cases in 2015, according to law firm Haynes and Boone LLP. The cases involve $13.1 billion in debt, and “industry and economic indicators suggest more producer bankruptcy filings will occur before the year is out,” the law firm said a report. ​More may well be needed to bring production back into balance with demand, some investors say. “There’s been more efficiency in the space than we all expected, and that’s helped current owners hold on a little longer,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $126 billion. “We’re not seeing as much turnover in the oil patch as we’d expect, in terms of weak hands to strong hands. […]

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Chesapeake Energy Bonds Plunge to the Lowest Ever as Oil Falls

Debt of Chesapeake Energy Corp. tumbled to a record low on Thursday as the price of oil plunged. Nine of the energy producer’s unsecured notes plummeted, some losing more than 12 cents on the dollar, as it was the most actively traded company in the junk-debt market. Credit-default swaps, which are used by investors to protect against defaults, rose to the highest ever. The company’s $1.1 billion of unsecured notes due 2017 dropped 12.2 cents to 70.75 cents on the dollar at 11:48 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. One of its biggest bonds, the $1.5 billion of floating-rate notes due 2019, fell 7.4 cents to 43.6 cents at 11:48 a.m. in New York, the data show. Five-year CDS contracts rose 5.5 percentage points to 53.5 percent upfront, according to S&P Capital IQ. Swaps are used to protect […]

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Morneau Releases Canada Fiscal Update Friday Amid Oil Price Drop

Canadian Finance Minister Bill Morneau will detail the state of play of the federal government’s finances Friday, amid worries about falling oil prices. The update won’t include the cost of new measures promised by the Liberal Party in the election campaign, according to an advisory on the finance department’s website. The world’s 11th largest economy shrank in the first half of the year as crude oil prices dropped below $50 a barrel and manufacturers struggled to rebuild U.S. orders even with the aid of a falling currency. The Parliamentary Budget Officer cut its 2015 growth forecast to 1.1 percent on Nov. 10 and projected additional deficits of C$13 billion ($9.8 billion) over three years in addition to the Liberal Party’s plan for C$25 billion of deficits.

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California’s gasoline demand slowed over the summer: Kemp

An employee unloads copper at a factory in Nantong, Jiangsu province, June 18, 2011. California motorists drive almost 1 billion miles every day, and in doing so consume around 40 million gallons of gasoline and 8 million gallons of diesel. Californians use their cars a bit less than the average U.S. resident but the state’s population is so large it is one of the largest driving markets in the world. State motorists account for 11 percent of all miles driven in the United States and consume more motor fuel than any individual country except China and Japan. State data on traffic and fuel sales are therefore often used as a proxy for national trends, but California’s gasoline consumption reflects a mix of local and national factors that are not always easy to separate. Like other parts of the United States, California has seen a surge in car and truck […]

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Takeover of Simmons ends 41-year run for ‘peak oil’ dealmaker

The takeover of Simmons & Co. by Piper Jaffray Cos. marks the end of an energy industry dealmaker founded by one of the leading champions of the “peak oil” theory, Matthew R. Simmons. Simmons was best known for his claim that the Earth was running out of crude, promoting the idea that world oil reserves were peaking in a 2005 book called “Twilight in the Desert.” He died at 67 in August 2010, on the eve of the U.S. shale boom that sent the nation’s crude output to the highest level in four decades. “The peak oil people were looking at a finite resource,” Sarah Emerson, managing director of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts, said by phone. “Their opponents said this is an industry that’s endlessly innovative. The industry has won big.” On a tour of Saudi Arabia’s oil industry in 2003, Simmons was inspired […]

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Shell finds 100 million oil barrels in deep-water Gulf discovery

Probing one of its recent discoveries in deep waters of the Gulf of Mexico, Royal Dutch Shell found 100 million barrels of oil equivalent buried at its Kaikias field, nearby three of its massive production facilities and a network of subsea pipes, the company said Wednesday. The one-year-old Kaikias discovery, about 60 miles south of the Louisiana coast in the Mars-Ursa basin, is nowhere near the size of the big-ticket deep-water oil fields that Shell uncovered in that region two decades ago. But its location near existing oil-production infrastructure make it an attractive bounty for an industry that has had to dramatically rein in exploration spending and project costs as oil prices languish under $45 a barrel. The field would be much cheaper to develop than more remote projects, far removed from the Gulf’s expansive network of pipelines that help ship crude to land. A 100-million-barrel find “is not […]

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Proof-of-principle of cost-effective methane cracking technology for H2 production without CO2; 50% cleaner than SMR, comparable to electrolysis

« ROEV Association forms to promote public EV charging interoperability | Main | Renault-Nissan Alliance installing 90 new charge spots for COP21 summit in Paris » Researchers of the Institute for Advanced Sustainability Studies ( IASS ) in Potsdam and the Karlsruhe Institute of Technology (KIT) have achieved the proof-of-principle for a innovative technique to extract hydrogen (H 2 ) from methane (CH 4 ) without the formation of CO 2 as a byproduct. At this stage, cost estimates are uncertain, since methane cracking is not yet a fully mature technology. However, preliminary calculations show that it could achieve costs of €1.9 to €3.3 per kilogram of hydrogen at German natural gas prices—without taking the market value of the solid black carbon byproduct of the process into consideration. Most of the world’s hydrogen production is currently based on conventional technologies such as steam methane forming (SMR), which also uses […]

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Report: Senators voting against EPA rules received more coal industry cash

Legislators opposing new Environmental Protection Agency efforts to mitigate climate change have received large sums of cash from the coal industry, according to an analysis released Thursday by Maplight , an independent research group that tracks the influence of money in politics. Maplight’s analysis compared coal industry donations to two groups of senators: those who recently voted to block new EPA regulations designed to limit greenhouse gas and carbon emissions, and those who voted to leave the rules intact. The group of senators who opposed the EPA rules “received, on average, 17 times as much money ($75,802) from the coal mining industry compared to senators voting against them ($4,464)” over the six year period beginning in April 2009 and ending in March of this year, Maplight said in a statement. EPA rules mandate that states cut power-plant emissions by 32 percent , compared to 2005 levels, by the year […]

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Passenger travel accounts for most of world transportation energy use

: U.S. Energy Information Administration, International Transportation Energy Demand Determinants (ITEDD-2015) model estimates Source: The transportation of people and goods accounts for about 25% of all energy consumption in the world. Passenger transportation, in particular light-duty vehicles, accounts for most transportation energy consumption—light-duty vehicles alone consume more than all freight modes of transportation, such as heavy trucks, marine, and rail. The United States was the world’s largest transportation energy consumer in 2012, the most recent year with detailed international transportation data by mode. The United States, where on-road passenger travel is especially prevalent, consumed 26 quadrillion British thermal units (Btu), or 13 million barrels of oil equivalent per day (b/d), representing 25% of global transportation energy demand in 2012. Major European countries (those in the Organization for Economic Cooperation and Development, or OECD) and China are also major transportation energy consumers, at 19 quadrillion Btu and 13 quadrillion Btu, […]

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Gasoline Most Expensive Over Oil as Refinery Profit Increases

Gasoline at the pump hasn’t been so expensive against its raw material, crude oil, since at least 2004. Regular gasoline in the U.S. has averaged $1.13 a gallon more than Brent crude, the global benchmark, so far in 2015, according to data compiled by Bloomberg based on AAA prices and Brent futures. That’s almost 20 cents a gallon higher than the average in the past 10 years. Brent crude has slumped 23 percent this year after falling 48 percent in 2014 on concern a global glut will persist as the Organization of Petroleum Exporting Countries pumps above its collective target and U.S. production stays near a three-decade high. Retail gasoline has declined less than 5 percent in 2015. The price difference has helped boost earnings of refineries including Tesoro Corp and Valero Energy Corp. Brent Prices Gasoline demand in the U.S. averaged 9.24 million barrels a day in the […]

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Chesapeake Energy Bonds Plunge to the Lowest Ever as Oil Falls

Debt of Chesapeake Energy Corp. tumbled to a record low on Thursday as the price of oil plunged. Nine of the energy producer’s unsecured notes plummeted, some losing more than 12 cents on the dollar, as it was the most actively traded company in the junk-debt market. Credit-default swaps, which are used by investors to protect against defaults, rose to the highest ever. The company’s $1.1 billion of unsecured notes due 2017 dropped 12.2 cents to 70.75 cents on the dollar at 11:48 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. One of its biggest bonds, the $1.5 billion of floating-rate notes due 2019, fell 7.4 cents to 43.6 cents at 11:48 a.m. in New York, the data show. Five-year CDS contracts rose 5.5 percentage points to 53.5 percent upfront, according to S&P Capital IQ. Swaps are used to protect […]

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Texas oil production drifts lower

Texas crude oil production down for the second straight month and parts of the state economy are softening as a result. File photo by Gary C. Caskey/UPI AUSTIN, Texas, Nov. 19 (UPI) — Preliminary data from a Texas energy regulator show crude oil production in the No. 1 producer in the nation is down for the second straight month. Data from the Texas Railroad Commission show a full-month preliminary estimate for September at 83,326,908 barrels, down about 8.3 percent from the previous month and the second straight month for a decline. Year-on-year, however, the daily production rate of 2.4 million barrels is 10 percent higher than for September 2014. The U.S. oil sector is faltering under the strain of the long slump in crude oil prices, which are down about 45 percent from this time last year. Texas, however, has shown some resiliency during the downturn, with federal reports […]

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Global Witness: Exxon’s climate issues tip of the iceberg

Exxon isn’t the only big energy company suspected of violating basic transparency measures, advocacy group Global Witness says . Photo by Katherine Welles/Shutterstock LONDON, Nov. 19 (UPI) — Exxon Mobil is just one bad apple among a bunch of companies in the extractive industry suspected of holding back on investors, Global Witness said. The New York Attorney General’s office issued a subpoena to Exxon Mobile following a series of reports claiming the company was misleading investors decades ago about the potential impact its sector had on the global climate. Accusations made against the oil company are similar to those made against the tobacco industry, in that it downplayed the threats of its products despite research acknowledging the risks. Global Witness, an advocacy group working for more corporate transparency, said Exxon’s issues are part of a broader issue on concerns about public disclosure. "The attorney general is right to investigate […]

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U.S. onshore wind power becoming mainstream

Land-based wind power now entrenched in national electricity grid, a report from the U.S. Department of Energy finds. File photo by Pat Benic/UPI WASHINGTON, Nov. 19 (UPI) — With more than 30 percent of new electricity coming from wind power, the U.S. Department of Energy said the industry is becoming entrenched in the power sector. The Department of Energy published a 24-page document highlighting trends in the renewable power sector . Wind energy, the report said, is becoming a "mainstream power source," accounting for 31 percent of all new electricity capacity added to the U.S. grid between 2008 and last year. "Wind now provides 4.4 percent of total U.S. electricity generation, 23 states have at least 500 megawatts of wind installed, and in nine states, wind exceeds 10 percent of total in-state electricity generation," the report said. As of last year, there were 65,000 MW of land-based wind power […]

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High-value oil find for Shell in Gulf of Mexico

Shell says its latest discovery in the Gulf of Mexico may be cheaper to development because it’s near existing infrastructure. Photo by James Jones Jr./Shutterstock HOUSTON, Nov. 19 (UPI) — Shell said it confirmed what it considers a high-value and significant discovery of oil in the deep U.S. waters of the Gulf of Mexico. "Kaikias is a high-value opportunity in the deep-water Gulf of Mexico, development potential could exceed 100 million barrels of oil equivalent recoverable," the company declared. U.S. and international reports indicate inland shale oil basins will decline in part because of financial pressure from lower crude oil prices. In its latest monthly market report, the Organization of Petroleum Exporting Countries said production declines from the Lower 48 may be offset by "strong growth" from the Gulf of Mexico, where year-on-year production increased 14.5 percent . Shell said the Kaikias prospect is near its existing infrastructure in […]

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Ruble Gains Fourth Day, Bonds Rise as Politics Trump Oil Woes

The ruble strengthened and bonds gained, sending yields to a one-year low, on speculation improving relations with the U.S. and Europe will lead to the easing of sanctions, outweighing concern about falling oil prices. The currency added 0.2 percent to 64.651 per dollar by 8:20 p.m. in Moscow, after weakening as much as 0.6 percent earlier. The yield on five-year notes fell 21 basis points to 9.76 percent, the lowest since October 2014. Sberbank PJSC, Russia’s biggest lender, climbed as much as 4.4 percent and closed at a two-year high. Geopolitical developments are allowing the interests of Russia to align with those of France and the U.S. in Syria, fostering greater cooperation between the former Cold War foes and boosting investor sentiment. The government has sent a resolution on forming an anti-terrorist coalition to the United Nations and expects France to support it, Russia’s Foreign Ministry spokeswoman Maria Zakharova […]

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Russia Sees Biggest Decline in Wages, Retail Sales Since 1999

Russian wages and retail sales declined by the most since 1999, a sign consumer demand will remain a weak link in the economy’s efforts to break out of its first recession in six years. Real wages fell 10.9 percent in October from a year earlier, a deeper contraction than the median estimate by economists for a 9.7 percent decrease, the Federal Statistics Service in Moscow said Thursday in a statement. The office revised down September’s wages contraction to 10.4 percent. Sales declined 11.7 percent from a year earlier after shrinking 10.4 percent the previous month. That compared with forecast of a 10 percent drop. Russian consumption, battered by persistent inflation and a weaker ruble, is lagging improvements in industry that propped up the economy last quarter. The loss of purchasing power is deepening the prospect that the recession will extend into next year as a glutted oil market leaves […]

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Oil rises slightly as bargain hunters inch into market

Towers and smokestacks are silhouetted at an oil refinery in Melbourne June 21, 2010. Oil prices rose slightly on Thursday with some investors keen to buy at what they perceive to be bargain levels, but persistent gluts of crude and refined fuel kept gains slight. Brent crude futures LCOc1 were up 23 cents at $44.37 a barrel by 0908 GMT. International benchmark Brent is still down more than 10 percent this month and 22 percent this year, having slumped from as high as $115 in 2014. "People are seeing oil at these very low levels and so they want to step in," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam. "Some have a focus on an outlook for increased demand and a view that at some point the market will balance, but the oversupply is capping gains." Any rise is seen as vulnerable, with Brent […]

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Natural Gas Keeps Falling on Inventory Revision

Natural gas futures retreated for a second-straight session from an adjustment in federal data that show inventories of the fuel are higher than previously reported. Futures for December delivery recently traded down 1.7 cents, or 0.7%, at $2.354/mmBtu on the New York Mercantile Exchange. The Energy Information Administration revised its inventory data late on Monday to show natural-gas inventories rose by 54 billion cubic feet to a record high of 3.985 trillion cubic feet in the week ended Nov. 6. The revision increased the previously reported stockpile level by 7 bcf because of a change in the agency’s methodology. The revised number pushes stockpiles closer to the psychologically important 4 tcf mark and increases fears that natural-gas storage facilities could run out of room to store the fuel. Mild weather has reduced demand for the heating fuel in recent weeks, leading to larger-than-average storage builds. The change is neutralizing […]

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Commodity markets in worse shape than in 2009, and more risks to outlook

A worker fills a car at a Brazilian Oil Company Petrobras gas station in Rio de Janeiro, Brazil, September 30, 2015. With oil, copper and coal trading around their lowest levels since the global financial crisis, some investors are betting that the bottom may be close for these critical commodities and have increased their long positions in the market. Yet those hoping for a similar strong recovery seen in 2009 need to tread with care. For industrial commodities like copper, China was the savior of markets following the 2008-09 crisis after Beijing unleashed massive economic stimulus programs to boost demand. Back then, confidence in China’s capacity to underpin demand for commodities supported a contango forward curve with copper futures contracts for later months above the spot price. But signaling a far more cautious environment this time forward prices through the first half of 2016 are trading at a discount […]

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Citigroup Says Commodity Markets Yet to Price In Rate Hike

Think the global commodity markets have fully priced in prospects for higher U.S. interest rates this year? Think again, says Citigroup Inc., which says keep an eye out for payrolls numbers due next month and prospects for an even stronger dollar. “We’re fast approaching December: we very much expect the first rate hike to take place at that point,” Ivan Szpakowski, a commodities strategist at Citigroup, told a conference in Shanghai in Thursday. “We think the market is already pricing that to some degree for sure. It’s pricing it in also to a degree. But not the full extent, not to 100 percent.” Commodities have sunk to the lowest level in 16 years as investors grapple with the prospects for the first increase in U.S. borrowing costs since 2006, a slowing Chinese economy and surpluses of everything from oil and iron ore to aluminum. Minutes of Federal Reserve meeting […]

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Saudi Oil Minister Says OPEC With Others to Stabilize Market

Saudi Arabia is working with other OPEC members and producers from outside the group to stabilize the market, Saudi Oil Minister Ali al-Naimi said. The world economy is going through an unstable situation, al-Naimi said. Crude demand is expected to rise by 1 million barrels a day every year in this decade, and the world requires more investments in oil to compensate for decline rates, he said. The decline rate of recovery at the world’s oil fields is at about 4 million barrels a day, he said. “Saudi Arabia is a very reliable supplier. We cooperate with OPEC and non-OPEC countries to stabilize the market,” al-Naimi said at a conference in Manama, Bahrain. “We need billions of dollars to continue exploration and producing oil and to invest in spare capacity to stabilize the market.” Threatened by surging production mainly from North America and Russia, the Organization of Petroleum Exporting […]

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Pentagon targeting trucks, rigs in assault on Islamic State oil funding

U.S.-led air strikes have hit at least 177 targets in the Islamic State’s main oil-producing region over the past month, as Washington intensifies efforts to disrupt a key revenue source estimated to provide more than $1 million a day to the militant group. Those strikes include 116 oil tanker trucks hit by coalition forces earlier this week as the United States targeted the vehicles for the first time in the wake of last Friday’s suicide and shooting attacks in Paris claimed by Islamic State. The stepped-up bombing campaign has also targeted oil and gas separation plants, oil rigs, pumps and storage tanks, according to a Reuters tally of air strikes provided by the Pentagon since Oct 22. The campaign marks a more aggressive U.S. approach. Such targets had previously been considered off limits by the U.S.-led coalition as it sought to avoid civilian casualties and limit the damage to […]

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Kurdish oil reaches Baltic, targets Russian markets

Iraq’s semi-autonomous region of Kurdistan has begun targeting Baltic crude markets in north-western Europe, rivaling traditional Russian supplies and increasing an oil glut in the region, trading sources said and shipping data showed. At least three vessels with Kurdish oil arrived in the Baltic ports of Gdansk in Poland and Butinge in Lithuania in October-November, traders told Reuters. "These are the first Kurdish barrels going to Europe’s north," a source with a trading house told Reuters. Kurdistan this week for the first time detailed its oil exports operations, explaining how it bypassed Baghdad since 2014. It says its exports are now going to as many as 10 countries but it is premature to disclose final destinations as Iraq’s state oil firm Somo is still threatening to take buyers to court. Reuters previously reported Kurdish oil has reached Israel and Hungary. The arrival of Kurdish barrels further intensifies the fight […]

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OPEC Targets U.S. Shale, But Hits Canada Instead

A bucket loader digs for oil sands at a mine in this aerial photograph taken near Fort McMurray, Alberta, Canada, on June 4, 2015. OPEC took a swing at U.S. shale and knocked down Canada. Threatened by surging production from North America, the Organization of Petroleum Exporting Countries has been pumping above its quota for 17 months as it seeks to take market share from higher-cost regions. The resulting 60 percent price crash is hitting Alberta harder than Texas. Canadian producers are struggling to cut the cost of extracting bitumen from the oil sands, and their other wells are failing to match the efficiency gains of U.S. rivals, a Bloomberg Intelligence analysis shows. While output keeps rising in the Permian Basin, the largest U.S. shale play, companies are slowing output from wells in Alberta and have shelved 18 oil-sands projects during the downturn, according to ARC Financial Corp. “OPEC […]

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Nigeria: Minister Orders DPR to Distribute Hoarded Fuel Free to Nigerians

The Minister of State for Petroleum Resources, Ibe Kachikwu, on Tuesday directed the Department of Petroleum Resources to seal off fuel stations found to be hoarding petroleum products and dispense the petroleum free to the public. The Minister gave the directive after a working visit to some retail outlets in Abuja. "I have instructed DPR that if they discover any fuel station involved in hoarding, they should sell the products for free to customers around there," he said. "It is not just sealing the station that is the answer. It is penalizing them when they do these things. I hope the message goes out loud and clear." Meanwhile, the Minister has scheduled a session on Wednesday with key operators in the downstream sector of the petroleum industry, namely the Major Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association, as well as Jetty and Tank Farm Owners Associations. […]

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Nigeria hit by fresh round of fuel shortages due to payment dispute

* Outstanding subsidy claims still to be approved by Assembly * Fuel marketers being denied credit facilities by banks * Substantial backlog of gasoline offshore WAF Nigeria has been hit by a fresh round of fuel shortages after the country’s main fuel marketers were denied credit facilities by banks, and as a result have had to delay placing orders for clean cargoes of gasoline under the government’s fourth-quarter import program, marketers said Wednesday. Sources said these shortages have risen as the payment of Naira 413 billion ($2.1 billion) to domestic fuel marketers in outstanding subsidy claims for gasoline imports have still not been approved by the central bank. Article continues below… Exchanging value in the oil markets We would like to offer you a free one week subscription to one of the following reports: The government pays a subsidy on gasoline imports, which is the difference between the landing […]

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China’s unloved steel industry is starting down painful road

A worker walks past a pile of steel pipe products at the yard of Youfa steel pipe plant in Tangshan in China’s Hebei Province November 3, 2015. – Nobody is happy with China’s steel sector, certainly not producers in the rest of the world complaining about dumping and not even the Chinese, who are battling increasing losses amid a supply glut. But the question remains as to whether enough is being done, or is likely to be done, to resolve the situation. Record low prices, increasing calls from the rest of the world’s steelmakers for measures to halt the flow of cheap Chinese exports are adding to China’s steel woes. And this pressure is only likely to increase in coming months, as shown by claims in Australia that not only are Chinese steel imports killing the local industry, they may end up killing locals by being of inferior quality. […]

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In Guyana, a Land Dispute With Venezuela Escalates Over Oil

Photo A military parade in Georgetown, Guyana, this month. Guyana is in a dispute with Venezuela that dates to the 19th century over two-thirds of its land. Credit Meridith Kohut for The New York Times BARTICA, Guyana — At a little tin-roofed beer joint on the west bank of the Essequibo River, Rawle Huggins relaxed on a wooden bench and considered his tiny country’s escalating border spat with its much bigger neighbor, Venezuela . “Here is Guyana ,” said Mr. Huggins, a sometime gold miner, referring to the land beneath him and everything around it. “I don’t live in Venezuela . I live in Guyana . They live,” he added, gesturing beyond the jungle that fringes the town, “over there.” Bartica (pronounced BAR-ti-ca), a two-and-a-half-hour journey by car and boat from Guyana’s capital, Georgetown, is the jumping-off point for what the Guyanese call “the interior,” a sparsely populated region […]

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Xi strongly condemns IS for Chinese hostage death

MANILA, Nov. 19 (Xinhua) — Chinese President Xi Jinping on Thursday strongly condemned the Islamic State (IS) group for killing a Chinese national and expressed his deep sympathy to the victim’s family. Xi made the remarks on the sidelines of the 23rd Asia-Pacific Economic Cooperation Economic Leaders’ Meeting in the capital city of the Philippines . "Terrorism is the common enemy of human beings," Xi said, adding that China firmly opposes terrorism of all forms and will resolutely crack down on any terrorist crime that challenges the bottom line of human civilization. China on Thursday confirmed the death of a Chinese hostage Fan Jinghui who had been held by the IS, saying the criminal must be brought to justice. Expressing condolences for Fan’s death and deep sympathies to his family, Foreign Ministry spokesman Hong Lei said, "the Chinese government strongly condemns the atrocity against humanity and the criminals must […]

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United States and China advance policies to limit CO2 emissions

Source: U.S. Energy Information Administration, International Energy Statistics China and the United States are the two countries with the most energy-related carbon dioxide (CO2) emissions, together accounting for about 40% of global emissions in 2012. Late last year, China and the United States each announced intended nationally determined contributions (INDCs) to mitigate their respective greenhouse gas (GHG) emissions, but there is still uncertainty in each country’s ability to meet those targets. Further efforts to reduce GHG emissions will be discussed at the upcoming United Nations Climate Change Conference in Paris. The United States, which had previously set a goal of reducing GHG emissions by 17% from 2005 levels by 2020, has proposed in its INDC to bring emissions 26% to 28% below the 2005 level by 2025. China’s INDC proposes to achieve the peaking of its CO2 emissions around 2030, making best efforts to peak early. China’s INDC also […]

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China Cuts Natural-Gas Prices to Spur Demand

Sinopec natural-gas transmission facilities in Sichuan province BEIJING—China’s government on Wednesday moved to shore up ailing demand for natural gas across its economy with deep pricing cuts aimed at spurring greater use by domestic industry. The cuts, announced by the National Development and Reform Commission, China’s top economic planner, slashed benchmark city-gate prices by 0.7 yuan ($0.11) per cubic meter for industry and commercial users. Analysts said the move, expected for the past several months, effectively equaled a 28% cut in average city-gate prices nationwide. The cuts are important, not least because they signal Beijing is serious about weaning its reliance on coal as part of cleaning up China’s economy. At the same time, the price cuts could slow domestic exploration and production of shale deposits in western China, analysts said. City-gates prices refer to the prices local distributors pay pipeline operators such as PetroChina Co., and have a […]

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TransCanada will grow without Keystone XL

TransCanada says it will remain resilient in North American energy sector despite fallout from Keystone XL decision. Photo by tcly/Shutterstock CALGARY, Alberta, Nov. 18 (UPI) — Pipeline company TransCanada said it had $9.75 billion worth of projects on tap that will expand its North American footprint despite recent political setbacks. "Our $50 billion portfolio of high-quality, long-life energy infrastructure assets are expected to continue generating stable and predictable results through various market conditions," Russ Girling, TransCanada’s president and chief executive officer, told investors in Toronto. In its third quarter earnings report, the Canadian pipeline company said earnings of $337 million were 2 percent lower than third quarter 2014. For the nine months ending Sept. 30, earnings of $970 million were down 7.6 percent year-on-year. That beat some of its peers in an energy sector struggling to endure through a depressed oil economy. Girling said his company was performing well, […]

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Canadian rail company eyes takeover of U.S. rival

Rail company Canadian Pacific makes unsolicited bid for U.S. rival Norfolk Southern. Photo by Steven Frame/Shutterstock CALGARY, Alberta, Nov. 18 (UPI) — Rail company Canadian Pacific said it made an offer to U.S. rival Norfolk Southern Corp. to join forces to create a new transcontinental transit entity. Canadian Pacific said it was "proposing a business combination that would create a transcontinental railroad with the scale and reach to deliver improved levels of service to customers and communities while enhancing competition and creating significant shareholder value." Merging the two rail companies would create a network stretching to the southern U.S. border and across most of Canada . The industry, following its peers in the oil and gas pipeline sector, has faced challenges because of a decrease in coal shipments and changing needs for oil and gas transit. Last week, industry research group Genscape said leasing rates for rail car model […]

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Murkowksi: White House an Alaskan oil killer

Sen. Lisa Murkowski, chair of the Senate energy committee, says the White House is in part to blame for decisions made by major energy companies to leave Alaska offshore programs behind. File photo by Kevin Dietsch/UPI ANCHORAGE, Alaska, Nov. 18 (UPI) — It’s the president’s fault that another major energy company has folded up its tent and left Alaska behind, the chair of the Senate energy committee said. Norwegian energy company Statoil announced it was abandoning its leases in the Chukchi Sea and closing its offices in Anchorage, Alaska. Statoil’s decision followed a similar move by Royal Dutch Shell. "I am very concerned that, for the second time in as many months, a major company has decided to walk away from Alaska because of the uncertainty surrounding our federal government’s support for Arctic development," U.S. Sen. Lisa Murkowski , R-Alaska, chair of the Senate Committee on Energy and Natural […]

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Bakken Production Down 4.6% Over 2014

bakken EIA For the first time in more than a decade, Bakken’s oil production is showing a year-over-year decline. Related: OPEC’s Plan to Squeeze out U.S. Shale: Is it Working? Thanks to the shale oil boom, the Bakken region has experienced years of unprecedented growth with each year dwarfing the year before. But things have changed since oil prices crashed one year ago. The U.S. Energy Information Administration (EIA) released their latest drilling productivity report showing production across all the shale basins are in decline. The report estimates that in October 2015, the Bakken Shale produced 1.16 MMbpd (million barrels per day) of crude oil—1.8% less than the production levels in September 2015 and 4.6% lower than production was one year previously. This is the first time in over a decade that the production trends have gone backward. have reversed. Related: Marathon Oil Shifts Focus to U.S. Shale Total […]

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TransCanada Withdraws Nebraska Application for Rejected Keystone XL Pipeline

The Calgary-based pipeline operator called the move a “pause” while it considers the next steps for the controversial project, which TransCanada said it remained committed to completing. The company submitted an application with Nebraska’s Public Service Commission in October, but the bid for state approval was overtaken by a federal government decision against Keystone XL. “We believe it is inappropriate to ask the Commission to continue to move forward on a process that has legally set time lines, while we continue to consider our next course of action,” company spokesman Matt Cooper said in a statement. President Barack Obama rejected the pipeline on Nov. 6 some seven years after TransCanada requested federal permission for the project, which would link crude-oil producers in Western Canada to refineries on the U.S. Gulf Coast. Mr. Obama said the Keystone XL pipeline wasn’t in the national interest of the U.S. and would undermine […]

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U.S. Crude Supplies Rose Modestly; Refinery Activity Up

U.S. crude stockpiles rose less than expected in the week ended Nov. 13, while refinery activity increased, according to data released Wednesday by the U.S. Energy Information Administration. Crude-oil stockpiles increased by 252,000 barrels to 487.3 million barrels, marking an eighth-straight week of increases, the EIA said. Analysts surveyed by The Wall Street Journal had predicted supplies would rise by 2 million barrels on the week. Oil stored at Cushing, Okla., the delivery point for U.S. stocks, rose by 1.5 million barrels to 56.9 million barrels, the EIA said in its weekly report. Gasoline stockpiles rose by 1 million barrels to 214.3 million barrels, the EIA said in its weekly report. Analysts had predicted gasoline stockpiles would fall by 900,000 barrels from the previous week. Distillate stocks, which include heating oil and diesel fuel, fell by 791,000 barrels to 140.3 million barrels, and remain in the middle of their […]

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Fed minutes point to December rate rise

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