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Phillips 66 lowers 2016 capex, boosts share buyback

The Phillips 66 oil refinery is viewed from the air in Carson, California August 5, 2015. U.S. refiner Phillips 66 set a lower capital budget for 2016 and raised its share buyback plan. The company said on Monday it would spend $3.6 billion in capital expenditure next year, excluding Phillips 66 Partners’ capital program. The company’s capital budget was $4.6 billion for the current year, which included $200 million for Phillips 66 Partners, according to a Simmons & Co analyst. Of the total budget, the refiner plans to invest $2 billion in its midstream business and $1.2 billion in its refining operations. The company is building a liquids export terminal at Freeport, Texas, expanding its natural gas liquids fractionator in nearby Sweeny and investing in several pipeline projects. Phillips 66 also raised its share buyback by $2 billion to $9 billion. Chief Executive Greg Garland said the company planned […]

Posted On : Published By : Tom Whipple
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Cutting Staff Pay to Keep Workers

Canadian Natural’s Primrose Lake project near Cold Lake, Alberta. As layoffs become the energy industry’s main response to low oil prices, a handful of producers are aiming to trim personnel costs without pink slips by spreading the pain among their employees. Companies including Occidental Petroleum Corp. OXY -0.76 % and Canadian Natural Resources Ltd. CNQ -2.54 % are employing hiring freezes, caps on bonuses, and even across-the-board wage cuts to preserve jobs. They and others that already have reduced payrolls—including many drilling and well servicing firms—are reluctant to slash further, say energy-industry experts. In part, they’re trying to avoid the type of skilled worker shortages that followed mass job cuts in prior downturns. But it’s also because their businesses can’t succeed without sufficient staff, especially if the downturn in oil prices reverses course. “There’s no more fat to be cut,” said Deborah Byers, a partner at consultants Ernst & […]

Posted On : Published By : Tom Whipple
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Earthquake Shakes Cushing, Okla.

OKLAHOMA CITY—Two moderate magnitude earthquakes shook northern Oklahoma on Saturday, including one near the major oil storage hub of Cushing. The strongest was a 4.5 magnitude quake recorded by the U.S. Geological Survey at 5:03 p.m. Saturday about one mile northwest of Cushing. It followed a 4.4 magnitude quake recorded at 4:20 a.m. about 18 miles southwest of Medford and about 100 miles northwest of Cushing. Crude oil stored in facilities near Cushing is used to settle futures contracts traded on the New York Mercantile Exchange. As of Oct. 2, 53 million barrels was in storage there, according to the U.S. Energy Information Administration. Bob Noltensmeyer, emergency manager for the city of Cushing, said he hadn’t received reports of significant damage although there were “shattered nerves.” “This one was pretty strong,” he said. “The whole house shook.” The U.S.G.S. also reported a 3.7 magnitude quake about 13 miles southwest […]

Posted On : Published By : Tom Whipple
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Saudi Arabia’s gambit for market share meets Yankee ingenuity

US shale oil production is a prime example of mismatching metrics leading to odd conclusions. First you need to consider spud to initial production time of oil wells as the rigs do the drilling, but the production comes later, 2-4 months. This is much longer than EIA figures ( http://www.eia.gov/petroleum/drilling/pdf/dpr_methodology.pdf ) and unadjusted ones.. Hence rigs could go to 1 tomorrow and production not fall off for months. You also get something interesting if you model 50%+ declining wells with decent lead time from drilling to production, top happens later than one might intuitively think due to run off.. More wells are being drilled per pad and increased pressure is being put into the wells, drawing it out faster but reducing overall recoverable resource. This can be seen by correctly matched well productivity in areas like Bakken, which has fallen 10%+ Rig productivity was down during the boom as […]

Posted On : Published By : Tom Whipple
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Earthquake hits near Oklahoma oil hub amid fracking regulations

An earthquake with a magnitude of 4.5 struck near the U.S. crude oil hub of Cushing, Oklahoma on Saturday, just days after regulators imposed new rules meant to prevent temblors in the area and said more changes were possible. The Oklahoma Corporation Commission (OCC), which regulates the state’s oil and gas industry, ordered companies on Sept. 18 to shut or reduce usage of five saltwater disposal wells around the north-central Oklahoma city of Cushing. Saltwater, a normal byproduct of oil and gas work, is put into deep disposal wells that scientists say have contributed to a rash of small and medium-sized earthquakes in Oklahoma since 2009. At the time of its latest directive, the OCC said its "plan may be altered as more data is made available." On Sunday, some people on social media, fearing a quake could cause a fire or explosion in Cushing in the future, were […]

Posted On : Published By : Tom Whipple
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Peak oil round up

2015 Could Be The Year Of Peak Oil … I am now more convinced than ever that 2015 will see the peak in world crude oil production. I have very closely studied the charts of every producing nation and my prognosis is based on that study. I see many nations in steep decline and most every other nation peaking now, or in the last couple of years, or very near their peak today. These include the world’s three largest producers, Russia, Saudi Arabia and the USA. Oil Mountain (Image: D. Bacon/Shutterstock/Economist) China Peak Oil: 2015 Is the Year Domestic production looks set to peak, with some profound implications for the world market. Intense focus on the North American shale boom, Saudi Arabia, and ISIS obscures an important emerging energy trend: China’s oil production is peaking. This has profound implications for the world oil market, because China is not just […]

Posted On : Published By : ASPO-USA
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The Promise and Peril of Cheap Oil

Everyone likes $2 gasoline. But what if it’s bad for the long-term growth of the U.S. economy — and for global stability? The U.S. House of Representatives is expected to vote on Friday to do something that would have been unthinkable only a few years ago: lift the restrictions on exporting domestically produced crude oil that have been on the books since the 1970s. It’s a topic that is definitely heating up in Washington: During a Senate hearing Tuesday on energy security, in which I testified about the importance of ensuring that the 40-year-old Strategic Petroleum Reserve can continue to be effective in an emergency , the questioning was overwhelmed by senators asking U.S. Energy Secretary Ernest Moniz to lift the restriction. The move, which many U.S. oil producers cheer, comes at a bleak moment for them. A combination of surging oil supply and economic weakness sent oil prices […]

Posted On : Published By : Tom Whipple
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U.S. Oil Rig Count Slides Again

The U.S. oil rig count has dropped for six consecutive weeks. The number of U.S. oil-drilling rigs, which is viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices started falling last year. After a streak of modest growth, the rig count has now declined for six consecutive weeks. U.S. oil prices recently were up 0.4% to $49.61 and have been hovering around the $50 mark. There are now about 62% fewer rigs from a peak of 1,609 last October. According to Baker Hughes, the number of gas rigs fell by six to 189. The U.S. offshore rig count was 32 in the latest week, up two from last week and down 26 from a year ago. For all rigs, including natural gas, the week’s total declined by 14 to 795.

Posted On : Published By : Tom Whipple
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Dalrymple: North Dakota’s economy diverse

North Dakota Gov. Jack Dalrymple says economy in shale-rich state depends on more than one single industry. File Photo by Ron Sachs/Pool BISMARCK, N.D., Oct. 9 (UPI) — North Dakota’s economy is thriving because of the emphasis on diversity that extends beyond the oil and gas sector, the state’s governor said. "North Dakota’s economic growth stems from nearly every business sector, with no single industry telling the whole story of our state’s progress," Gov. Jack Dalrymple said in a statement. North Dakota is the No. 2 oil producer in the United States, producing about 1.2 million barrels per day in July, the last full month for which data are available. That’s down about 1.6 percent from the all-time high reported in December. Dalrymple touted overall prospects in the state, however, by noting the state has created 123,000 new jobs since 2004, a 36.6 percent gain, and personal income has […]

Posted On : Published By : Tom Whipple