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Oil set for strongest third quarter since 2004, Iraq hints at OPEC extension

20 Sep 2017   Prices

Oil rose on Wednesday, set for its largest third-quarter gain in 13 years, after the Iraqi oil minister said OPEC and its partners were considering extending or deepening supply cuts to erode an existing global surplus. Brent crude futures rose 29 cents to $55.43 a barrel by 0800 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 42 cents at $49.90 a barrel. The oil price is on course for a rise of 15.5 percent this quarter, which would make this year’s performance the strongest for the third quarter since 2004. “An improving macro-economic backdrop should spur oil demand growth over the next couple of quarters and if OPEC increases its adherence to production cuts, higher prices will come,” ANZ Research said in a note. “All things being equal, we still expect oil prices to test new highs (for 2017) by the end of […]

Oil Trades in Narrow Range

20 Sep 2017   Prices

Oil prices faltered Tuesday, giving up gains in earlier trading as investors weighed the possibility that OPEC will extend its production cuts again against the prospect of rising U.S. oil output at higher prices. U.S. crude futures fell 43 cents, or 0.86%, to $49.48 a barrel on the New York Mercantile Exchange, after climbing as high as $50.42 in earlier trading. Brent, the global benchmark, fell 34 cents, or 0.61%, to $55.14 a barrel on ICE Futures Europe. “We’re zigzagging in the range,” said Michael Hiley, a trader at LPS Futures. “We failed the highs from last week and are back down into the same range we’ve been in for three days.” Prices were buoyed in earlier trading by a weaker dollar and signals from Iraq’s oil minister that the country could be open to extending OPEC’s production-cut agreement through next year. But analysts and traders say that $50 […]

Oil edges off recent high ahead U.S. stock data, OPEC meet

20 Sep 2017   Prices

Oil prices edged lower on Tuesday, retreating from near-five-month highs in advance of data expected to show a build in U.S. crude inventories as imports resume and refineries were still restarting after recent storm activity. The market, however, remained buoyant ahead of Friday’s meeting between the Organization of the Petroleum Exporting Countries with non-OPEC producers to discuss progress of their 1.8-million barrel per day supply cut deal. OPEC’s second-biggest producer Iraq said that the group was discussing several options for its supply pact, including an extension beyond March and a further output cut. Nigeria and Libya will send representatives to the meeting despite being exempt from the current deal, two OPEC sources said. Rising output from both countries has kept a lid on price gains, prompting suggestions that they could be included in the deal. Brent crude futures LCOc1 were down 45 cents at $55.03 […]

Have Oil Markets Reached A Turning Point?

20 Sep 2017   Prices

Big Oil has been wheelin’ and dealin’ across the globe as geopolitical risks mount, and OPEC delivered a sigh of relief to crude markets with a signal that has brought the bulls out to play. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) • The EIA projects total world energy consumption will rise by 28 percent between 2015 and 2040, with most growth coming from developing countries. • Non-OECD Asia accounts for nearly two-thirds of the growth, and that category is dominated by China and India. • All major energy sources will see demand rise except for coal. Renewables post the strongest growth rate at 2.3 percent per year. Market Movers • Royal Dutch Shell (NYSE: RDS.A) said it began restarting its Deer Park refinery in Texas on Sunday, a facility that has a capacity of 325,000 bpd. ExxonMobil (NYSE: XOM) could restart most of […]

Aramco Plans to Buy Non-Saudi Crude in Global Trading Expansion

20 Sep 2017   Saudi Arabia

Saudi Aramco plans to expand its trading business by buying and selling non-Saudi crude as the world’s biggest exporter prepares for what could be a record initial public offering. (Bloomberg) — Saudi Aramco plans to expand its trading business by buying and selling non-Saudi crude as the world’s biggest exporter prepares for what could be a record initial public offering. The state-owned company is putting crude marketing and refined-product trading under the same management, according to Ibrahim Al-Buainain, chief executive officer of Saudi Aramco Products Trading Co. The enlarged unit will trade crude that it doesn’t own, helping Saudi Aramco supply refineries more efficiently and make more profit, he said. “We’ll keep selling our own oil as normal, and we want to get into trading third-party crude,” Al-Buainain, who will head the expanded unit, said in an interview in Fujairah in the United Arab Emirates. Aramco, known formally as […]

Could Kurdish Independence Spark An Oil War?

20 Sep 2017   Iraq

As the date of the Kurdish independence referendum approaches, oil industry moguls should be concerned about an oil production war between Iran and headless Iraq. The Kurds are expected to vote on their political status in late September. A vote in the affirmative would mean that Iraq would lose a chunk of its northern areas, which includes the crucial Kirkuk oilfield and its surrounding reserves. The latest news from the election committee shows that the Kurdistan Regional Government (KRG) is doing the most it can to increase international participation in the election. On Monday, authorities announced that they had removed a key requirement for diaspora voters participating in the elections. Kurds participating in the e-voting platform will no longer be required to present a ration card to be able to cast their vote through September 25 th . Iraqis who have been living abroad for several years, even decades, […]

More Kurdish oil possible, Gulf Keystone says

20 Sep 2017   Iraq

There’s enough cash flow to invest in efforts needed to increase the level of crude oil production from the Kurdish north of Iraq, Gulf Keystone Petroleum said. Gulf Keystone, which has headquarters in London, but a portfolio based in northern Iraq, in August reported total average gross production from its Shaikan oil field last year was at the upper range of its guidance. In an update on operations for the first six months of this year, CEO Jón Ferrier said work so far was in line with expectations, with gains likely in the latter half of the year. “Whilst continuing to maintain a rigorous and disciplined approach to its cost base, Gulf Keystone remains […]

Nigeria: Crude Won’t Be an Income Resource in 10 Years – Kachikwu

20 Sep 2017   Prices

The Minister of State for Petroleum Resources, Ibe Kachikwu, says the world is moving away from oil, hence, it will no longer be an income resource in 10 years’ time. Mr. Kachikwu said this in Abuja on Thursday while answering questions on “His Outlook for the Commodity in 2018.” According to him, 2018 looks like a better year for crude in terms of pricing but countries are focusing on alternative energy. He said, “Everything all added up together is showing us that towards the last quarter of 2018 we expect a better market. Does that better market translate to your 100 dollars price (per barrel)? “Never! I don’t see it, frankly I don’t see it. It’s going to take a major calamity. Largely because on the back of all these, countries are racing away from oil. “If Europe is saying in five years time, ‘we are going to exit […]

China’s Electric Vehicles Run on Coal! Yes, But …

20 Sep 2017   China, Electric Cars

China’s offhand bombshell about potentially consigning gasoline-fueled cars to the scrapheap has met, predictably, with a round of cheers and jeers . This is about one of the latter, which concerns the chart below: With coal dominating China’s electricity generation, a common refrain about electric vehicles is: What’s the point? A car fed by a wire stretching back to a coalmine doesn’t seem like much of an improvement over a gasoline pump. It’s a legitimate point. But it risks obscuring a different, more fundamental point. The question here is whether or not an electric vehicle truly results in less greenhouse-gas emissions than a traditional one with an internal combustion engine. This doesn’t just encompass how the vehicles use their energy, but also where that energy comes from and how the vehicles get built in the first place — what are sometimes called “life-cycle” emissions. The math around emissions of […]

Venezuela’s Crisis Deepens As Hurricane Approaches |

20 Sep 2017   Venezuela

Oil traders have started to divert fuel shipments from their original destination in Venezuela as Hurricane Maria approaches the Caribbean, Reuters vessel tracking data has shown. Yet the hurricane, which moves at speeds of up to 125 mph, is not the only reason Venezuela’s waters are quickly emptying of tankers. The state oil firm, PDVSA, cannot pay for the cargoes that have already been delivered.  But sitting potentially indefinitely in tumultuous waters is now no longer an option, and in a bid to place these before the hurricane reaches the Venezuelan coast, traders are rerouting the tankers towards other Latin American and Caribbean ports, to sell the fuel to paying clients. Since September 3, six vessels with a combined load of 1.8 million barrels of diesel and other oil derivatives have been moved from the Venezuelan coast. One of these had been floating in Venezuelan waters since early July and has now been directed to Trinidad. Another, loaded with fuel from Europe, set sail back to the continent, Reuters said.  Hurricane season has been most unkind this year. After Harvey, oil terminals in the Caribbean have been operating intermittently, as more hurricanes followed, notably Irma and Jose. The affected region, according to Reuters, imports some 2.5 million bpd of oil products, the bulk coming from the U.S. Gulf Coast. These imports will likely be disrupted further as Maria approaches.

U.S. natural gas prices rise as winter stocks look tight

U.S. natural gas stocks look somewhat tight after low prices this summer worked off the excess stocks that built up in the first half of the year. Current stocks are in line with the five-year seasonal average but that may not be enough given the increase in exports and the number of additional combined-cycle power plants that have become operational in 2017. The last two winters have been exceptionally mild; if this winter proves colder, which is likely simply on the basis of probabilities, inventories could come under pressure. To ration power burn this winter the price of gas for delivery at Henry Hub in January 2018 has already risen by 29 cents per million British thermal units or […]

Hurricane-related spike in gas prices ebbing

20 Sep 2017   Prices

The retail price for gasoline is coming off seasonal highs as the U.S. refining sector returns to normal after Hurricanes Harvey and Irma, AAA reports.  The motor club lists a national average price for a gallon of regular unleaded gasoline at the retail level of $2.62, down about 2 percent from last week and the lowest in more than two weeks. Retail prices spiked in early September after Hurricane Harvey forced more than a dozen refineries, including one of the largest in the country, to close down. Demand pressures later increasedwhen Hurricane Irma hit Florida, which upended the market because the state has no refineries of its own.

BP’s Thunder Horse Platform Shut Temporarily On Power Issue

20 Sep 2017   Offshore

BP Plc halted production at its Thunder Horse platform in the U.S. Gulf of Mexico on Monday following a power outage, a company spokesman confirmed on Tuesday. The benchmark for sour crude rallied to its strongest in more than two years on the disruption. BP evacuated its workforce of about 300 people from the facility after the power outage as a precaution, according to the statement. Technical and essential personnel were scheduled to return to the platform on Tuesday. The platform has the ability to produce up to 265,000 barrels of oil a day, and was producing about 180,000 barrels a day as of May. BP’s four operated platforms in the Gulf can produce up to a total of 695,000 barrels of crude a day. Thunder Horse was the company’s largest producing Gulf platform in 2016. Mars Sour Crude traded at up to […]

Far From the Texas Coast, Hurricane Harvey Hits Oil Refiners

20 Sep 2017   Refining

Three weeks after Hurricane Harvey ravaged the massive fuel-making industry along the Texas coast, the region’s recovery from storm damage is starting to disrupt plans for crucial maintenance at refineries thousands of miles away from the flood zones. Harvey knocked out almost one-quarter of U.S. refining capacity in late August, sending gasoline and diesel prices soaring. The storm hit a few weeks before most of the nation’s fuel makers were set to begin seasonal shutdowns. Demand usually slows at this time of year, so it’s a good time to make repairs and install new equipment at plants that typically run all day every day. But at least 13 refineries from Louisiana to Montana with a combined 3.27 million barrels a day have delayed […]

Reducing power diversity will damage US economy: IHS Markit

20 Sep 2017   USA

A diverse energy mix including coal and nuclear power is a key requirement for US electricity generation if the country is to maintain a cost-effective power supply, IHS Markit said Tuesday. The analytical firm warned Tuesday “policy-driven market distortions” are creating a less efficient power supply that could cost the US economy 0.8% of gross domestic product and 1 million jobs. The current diversified nature of the electricity supply lowers production costs by $114 billion a year and cuts retail prices by 27%, IHS Markit said in a report. However, the current direction of investment suggests “some US power systems will have no meaningful contributions from coal or nuclear resources and a smaller contribution from hydroelectric resources.” Article continues below… Platts Megawatt Daily provides you with timely and relevant North American electric power information. This market report is a valuable asset for any player in electric power and will […]

UK oil and gas reserves will expire in 10 years

20 Sep 2017   United Kingdom

The UK’s oil industry could be entering its final decade of production, according to new research. A study of output from offshore fields estimates about 10% of the nation’s original recoverable oil and gas remains. If the predictions are correct, the UK would soon have to import all the oil and gas it needs, scientists have warned. Academics behind the work are now urging the UK Government to use more renewable energy sources, particularly offshore wind and advanced solar energy technologies. Professor Roy Thompson from the University of Edinburgh’s School of GeoSciences, who led the study, said: “The UK urgently needs a bold energy transition plan, instead of trusting to dwindling fossil fuel reserves and possible fracking. “We must act now and drive the necessary shift to a clean economy with integration between energy systems. “There needs to be greater emphasis on renewables, energy storage and improved insulation and […]

LNG facility in Lithuania to open by year’s end

20 Sep 2017   Lithuania

A state-owned port operator in Lithuania said it started work on a reloading station for support for maritime needs for liquefied natural gas. Klaipėdos nafta said it started work on an LNG reloading station after commissioning cargo delivered by a bunkering vessel owned by a subsidiary of Royal Dutch Shell. Bunkering is the ship-to-ship transfer of fuel. With international regulations calling for fewer emissions in the transportation sector, LNG serves a unique niche for maritime transport. Mindaugas Jusius, the managing director for the Lithuanian company, said the commissioning lets it test the entire LNG logistics chain at the Klaipėda seaport on the Baltic Sea, the northernmost port of its kind in Europe. “Such testing of the process for the first […]

French company Total steps into solar energy market

20 Sep 2017   France, Solar

In an announcement ahead of the French president’s speech before the U.N. General Assembly, Total said it took a greater stake in a renewable power company. The French supermajor said Tuesday it made a $284.7 million investment to take an indirect 23 percent stake in renewable power company EREN RE. Total said could eventually take the company over completely within the next five years. “EREN RE’s momentum will allow us to accelerate our growth in solar energy and move us into the wind power market,” Philippe Sauquet, the president in charge of gas, renewables and power for Total, said in a statement . “The agreement with EREN RE is a major step towards our objective of […]

The Single Biggest Player In The Electric Car Market

20 Sep 2017   China, Electric Cars

The announcement by the U.K. and France that they would prohibit the production of diesel and petrol cars by 2040 made for good headlines, but came as little surprise when you consider the pace of change in the automotive industry. China’s announcement last week that it was considering setting a timeline for phasing out traditional fuel cars will likely have a more profound effect on the development of new energy vehicles (NEV), for two reasons. First, China is already the world’s largest car market, producing over 28 million vehicles in 2016, according to the Financial Times. Significant changes in a market of that size causes more than just ripples in the global automotive market. Second, a centrally controlled command economy such as China’s has shown that policies that are robustly pursued by Beijing can achieve rapid change over short time frames. More than any other country in the world, […]

Born to Drive project investigating self-delivering cars

20 Sep 2017   Electric Cars

About 80 million vehicles are produced around the world every year, but the logistics for transport from the factory to the end customer are extensive, costly and completely manual. A new vehicle is moved up to 30 times manually before it reaches the end customer. The Swedish research project Born to Drive has now developed a new software solution that lets the vehicles move themselves. The system was developed by Semcon in collaboration with seven other companies; a prototype is already up and running. We are seeing autonomous technology starting to become a reality in more and more industries. The technology is now ready to move from vision to practical application. The transformation […]

Oil steady on tighter Middle East supplies, as rising U.S. output weighs

19 Sep 2017   Prices

Oil markets held largely steady on Tuesday, even as OPEC producers Saudi Arabia and Iraq pointed to a reduction in supplies in line with efforts to tighten the market and prop up prices. Prices were capped by rising U.S. shale output and fears that another strong hurricane hitting the Caribbean could knock out refineries and disrupt shipping to and from the United States. Brent crude futures LCOc1, the international benchmark for oil prices, were at $55.50 per barrel at 0653 GMT, up 2 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $50.01 per barrel, up 10 cents, or 0.2 percent, from their last settlement. Iraq’s oil minister Jabbar al-Luaibi said on Tuesday that his country’s crude oil production was currently at 4.32 million barrels per day (bpd). That compares to almost 4.5 million bpd in May and June. His […]

Oil Ends Mixed as Investors Pause After Last Week’s Rally

19 Sep 2017   Prices

Oil prices were mixed Monday, with the U.S. benchmark edging up to a seven-week high and the global benchmark falling, as investors paused after last week’s rally. U.S. crude futures for October delivery settled up 2 cents, or 0.04%, at $49.91 a barrel on the New York Mercantile Exchange—their highest settlement since July 31. The more actively traded November contract fell 9 cents to $50.35 a barrel. Brent, the global benchmark, snapped a five session winning streak, falling 14 cents, or 0.25% to $55.48 a barrel. Prices were buoyed last week by data showing tightening supplies. But analysts said investors will need more convincing for the U.S. benchmark to push above the $50 mark and stay there. “I think that we need to see a drumbeat of positive information to drive the market higher,” said Gene McGillian, research manager at Tradition Energy. Hurricane Harvey, which shuttered refineries in Texas, […]

Crude oil prices brush up against apparent ceiling

19 Sep 2017   Prices

Oil prices lose momentum after running their course following hurricanes that upended dynamics in the U.S. energy sector. File photo by Monika Graff/UPI Sept. 18 (UPI) — Emerging analyst sentiment that the upside potential for the recent rally in crude oil prices is limited may be contributing to the drop witnessed early Monday. The price for Brent crude oil, the global benchmark, is up about 4 percent since the end of August, when Hurricane Harvey struck the southern coast of Texas and hit the large concentration of refiners in the region. Most of the ports in Florida that were closed by Hurricane Irma have since reopened, easing supply-side strains for a state that has no refineries of its own for gasoline supplies. As of 11 a.m. EDT, Sunday, there were three refineries still closed because of Hurricane Harvey, representing about 2 percent of total U.S. refining capacity. The lingering […]

IEA Sees Risk of Volatile Oil Prices on Weak Upstream Investment

19 Sep 2017   IEA

Lag in investment raises risk of tightened market: Atkinson IEA failed to foresee ‘technical ingenuity’ of U.S. shale A dearth of new investment in oil production is stoking a risk of tighter crude supply and unstable prices, even as demand growth is expected to slow over the next five years, according to a senior International Energy Agency official. The worldwide cushion of spare production capacity will shrink without further investment in exploration and output, Neil Atkinson, the head of the IEA’s oil markets and industry division, said at a conference in Manama, Bahrain. “There are still not enough signs of investment beginning to return, and that raises the risk of tightening of the market in the next five years and a risk to the stability of oil prices,” he said Sunday. “There is at least a possibility of going back to the situation we had 10 years ago where […]

IEA: Price Spike Coming In 2020

19 Sep 2017   IEA

The oil market has been awash in crude for more than three years, and OPEC has struggled to accelerate the rebalancing effort, but the world could be heading for a supply crunch in a few years due to the sharp fall in industry spending. The halving of oil prices from $100 per barrel before 2014 down to just $50 today has led to a corresponding plunge in upstream investment. But even as benchmark prices seem to have stabilized over the past year, with most analysts predicting gradual and modest gains in the year ahead (depending on OPEC’s actions), there’s still no sign of a serious rebound in spending levels. The problem of a shortage of supply seems very far off today, given the swift turnaround in U.S. shale and persistently high levels of crude storage. But demand continues to rise—the IEA just upgraded its demand growth estimate for 2017 […]

Global Oil Demand is Surging But That’s Still Not Enough to Fix the Oil Market

19 Sep 2017   Prices

The oil industry just can’t seem to snap out of its doldrums this year. Crude remains stubbornly low, which has stalled the industry’s attempts at a recovery. However, while weaker prices have been bad for oil producers, they’ve been great for consumers because it has kept prices for refined products like gasoline down, which is fueling robust demand growth this year. That said, this accelerating demand hasn’t been enough to propel the oil market, due in part because shale drillers have unleashed a gusher of new production. Drilling down into the latest numbers That give and take market was on display this week when the International Energy Agency (IEA) released its monthly commentary. One of the highlights of the report was recent data showing accelerated demand growth. Last quarter, for example, demand grew by 2.3 million barrels per day (Bpd), which is up 2.4% year over year thanks to […]

Russia’s Rosneft to fast-track gas export option in Kurdish Iraq

19 Sep 2017   Iraq, Russia

Russian energy company Rosneft says it’s put a gas export pipeline from the Kurdish north of Iraq on the fast track toward development. Photo courtesy of Rosneft. Sept. 18 (UPI) — Cooperation on pipeline infrastructure in the Kurdish region of Iraq could set the stage for gas exports to Europe, Russian energy company Rosneft said. Rosneft said it was finished with the due diligence requirements for an oil export pipeline from the Kurdish north and is in the process of finalizing the necessary legal documents. Total Kurdish oil production isn’t as robust as oil fields elsewhere in the country, though the semiautonomous Kurdistan Regional Government aims to increase its potential through exports by truck and through pipelines to the Ceyhan port in Turkey. Rosneft said Monday it was now ready to consider working with the KRG on new gas pipeline infrastructure and agreements on development could materialize by the […]

Iraq’s Supreme Court Tells Kurds to Suspend Independence Referendum

19 Sep 2017   Iraq

Iraqi Kurds fly Kurdish flags during a recent event to urge people to vote in the upcoming independence referendum in Arbil, the capital of the autonomous Kurdish region of northern Iraq. Iraq’s Supreme Court ruled Monday that the semiautonomous Kurdish region should suspend an independence referendum scheduled for next week, though the Kurds have so far ignored the court’s decision and other last-ditch efforts to stop them from carving out a new country in Iraq. Monday’s decision marks the latest opposition—both local and international—to the vote. Kurdish officials say a door is still open to postponing the referendum, which some observers see as a powerful lever to extract more aid from the West, if they are given certain unspecified concessions by the central government and Western nations. “Because the requests fulfill the legal conditions, the court has issued a ‘temporary halt decision,’” the high court said. The order came […]

The Kurdish Referendum Could Reshape Oil Markets

19 Sep 2017   Iraq

Iraq, the second-largest OPEC producer, may be facing a significant disruption to its oil exports this month. On September 25, citizens of the northern region of Kurdistan, a semi-autonomous area of Iraq, will vote in a referendum for national independence . If the referendum passes, as it is expected to, Kurdistan could begin proceedings to proclaim formal independence from Iraq, splitting the country in two. On Monday, the Iraqi prime minister Haider Al-Abadi called on the vote to be suspended until after the war against the Islamic State (IS) is concluded. Oil is at the center of it all. Kurdistan itself is rich in oil , possessing reserves equal to 45 billion barrels, and could potentially become a larger producer than Nigeria. According to figures from the KRG, Kurdistan currently exports about 600,000 barrels a day, though that number is difficult to account for. Other reports indicated it exports […]

Will Low Oil Prices End Saudi Arabia’s Gas Subsidies?

19 Sep 2017   Saudi Arabia

Although Saudi Arabia has managed to narrow its budget deficit, the Kingdom continues to feel the fiscal pressure of low oil prices, and is mulling over the phasing out of gasoline subsidies, and making gas prices level with varying international prices, Bloomberg reported on Monday, citing a person familiar with the plan. Under the plan, Saudi Arabia is said to be studying raising gasoline prices by the end of 2017 to bring them to parity with international prices—which would mean a rise of about 80 percent for octane-91 grade gasoline compared to current prices. A decision is expected this month or next, Bloomberg quoted the person with knowledge of the issue as saying. According to Bloomberg’s source, the Saudis are planning a one-time hike of gasoline and jet fuel by the end of this year, while other fuel prices would be gradually increased between 2018 and 2021. The Saudi […]

Iraq oil minister says does not see need for more output cuts now

19 Sep 2017   Iraq

Iraq does not see the need for more output cuts now, but if there is a need the country will support consensus within the Organization of the Petroleum Exporting Countries (OPEC), Iraq’s oil minister Jabar al-Luaibi said on Tuesday, Iraq’s oil supply cuts are around 260,000 barrels per day, exceeding its share of planned reduction, al-Luaibi told Reuters on the sidelines of an energy conference in the United Arab Emirates. He said also said prices in the range of $55 to $60 barrels a day are better for everyone. OPEC and other producers, including Russia, have agreed to reduce output by about 1.8 million barrels per day until March 2018 in a bid to reduce global oil inventories and support oil prices.

The World’s Largest Offshore Oil Field Is Back In Action

19 Sep 2017   Kazakhstan

Without much international fanfare, the world’s largest offshore oil field and the largest discovered in the last 40 years, Kazakhstan’s Kashagan Field, is on the verge of finally moving beyond the manifold impediments that hindered its development. Discovered in 2000, the 13 Bbbl field (38 Bbbl of oil in place) was set to begin producing in 2005, however, the first start took place only in 2013 . The joy lasted for a mere three months, then a pipeline leak on one of the artificially created islands led to a three-year production hiatus. Yet last autumn, Kashagan was producing oil again. In the absence of any further disturbances, it’s set to gradually ramp up to join the world’s Top-3 highest producing oil fields by 2035. Much of Kashagan’s past problems boil down to the technicalities of the oil field itself. It’s located in a climatically volatile region where temperatures range […]

Kurdistan gets Russian vote of confidence

19 Sep 2017   Iraq

Besieged by international pressure to delay its independence referendum, the KRG gets geopolitical backup from a Rosneft agreement to underwrite oil and gas export pipelines. Massoud Barzani, the president of Iraqi Kurdistan, lands in Moscow in February 2013. (Photo credit: Kurdistan Presidency office) The state-controlled Russian oil company Rosneft is advancing and expanding its multi-faceted energy deal with the Kurdistan Regional Government (KRG) – giving the KRG a badly needed geopolitical boost ahead of its controversial independence referendum. Rosneft is moving forward with plans to invest in Kurdistan’s crude oil pipeline to Turkey, and it has announced a new intention to finance a gas export pipeline, according to statements released Monday by Rosneft and the KRG Ministry of Natural Resources (MNR), as well as industry officials. This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or […]

Nigerian Workers Stop Oil Product Loading As Union Goes On Strike

19 Sep 2017   Nigeria

Oil workers in Nigeria stopped on Monday the loading of oil products, natural gas, and aviation fuel as the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) joined an indefinite nationwide strike of its current affiliate United Labour Congress of Nigeria (ULC), demanding better conditions and pay as well as recognition of the ULC. Electricity union workers have also joined in the strike. The ULC is a breakaway union from the Nigeria Labour Congress (NLC). ULC split from the NLC last year over power struggles, and the NUPENG oil and gas workers’ union is now affiliated with the ULC. The ULC demands to be recognized and registered as a union. It also demands that roads to oil facilities be repaired and army personnel withdrawn from security duties at the oil infrastructure installations. The government, on the other hand, says the strike is illegal. The NLC, from which ULC […]

Oil cargoes shift away Venezuela as hurricanes extend disruptions

19 Sep 2017   Venezuela

Hurricane Maria is shown in the Atlantic Ocean about 85 miles east of Martinique in this September 17, 2017 NASA handout satellite photo. NASA/Handout via REUTERS (Reuters) – Shippers are sending oil cargoes originally bound for Venezuela to other spots in Latin America and the Caribbean, in advance of coming hurricanes that threaten to further disrupt oil flows in the region, according to traders and Reuters data. After Hurricanes Harvey and Irma caused massive flooding and damage in Texas and Florida, fuel tankers floating off Venezuela’s coast have been shifted elsewhere, largely because the cash-strapped state firm PDVSA [PDVSA.UL] cannot pay for the cargoes. The latest threat for the Caribbean is Maria, now a Category 3 hurricane, which currently boasts wind speeds of 125 miles per hour (200 km per hour). The storm is expected to get stronger as it moves through the Leeward Islands later on Monday. Shippers […]

Using the E.P.A. to Prop Up Big Coal

19 Sep 2017   Coal

A closed coal mining site in Whitesburg, Ky., one of many such towns trying to develop new economic growth. The Trump administration is unflinching in its misbegotten campaign to protect the coal industry from what has become an obvious and inevitable decline. Eight months in, the administration has already killed, or is in the process of killing, rules that would prevent the dumping of coal mining wastes in streams, impose a temporary moratorium on new mine leases in the West, and reduce greenhouse gas emissions from coal-fired power plants — one of President Barack Obama’s most important efforts to resist climate change. All of this to prop up an industry whose workers would be best served not by false promises of new mining jobs, but by aggressive programs to retrain them for a changing economy. The latest ritualistic bow from Scott Pruitt, the administrator of the Environmental Protection Agency […]

Drilling Productivity Report

19 Sep 2017   Shale Oil

New-well oil production per rig barrels/day New-well gas production per rig thousand cubic feet/day Region September 2017 October 2017 change September 2017 October 2017 change Anadarko 372 376 4 2,512 2,521 9 Appalachia 129 129 – 14,238 14,179 (59) Bakken 1,192 1,204 12 1,561 1,562 1 Eagle Ford 1,075 1,026 (49) 4,006 3,968 (38) Haynesville 33 34 1 7,589 7,614 25 Niobrara 1,074 1,074 – 4,552 4,577 25 Permian 578 572 (6) 999 998 (1) Total 596 586 (10) 3,410 3,407 (3) NOTE: The rigs from DeWitt County were inadvertently left out of the total Eagle Ford rig count in the August Drilling Productivity Report . In this update, The Eagle Ford productivity and production estimates are being revised down due to two factors: the production volumes from the source were revised down and the anticipated impact from hurricane Harvey on the production, drilling, and completion activities in southeast […]

Does Canada Need More Oil Sands Pipelines?

19 Sep 2017   Canada, Pipelines

The claim that building more pipelines to carry Canada’s oil sands production to ports for export will unlock significantly higher prices for bitumen is not supported by either past or current market conditions, a new study shows . According to Jeff Rubin, senior fellow at the Centre for International Governance Innovation, overseas markets pay even lower prices for bitumen than in North America, so there is no economic case for additional pipeline capacity to tidewater or expanded oil sands production. In his report , Rubin says that global agreements to reduce global carbon emissions over the next three decades will also reduce the size of future oil markets, not to mention the emerging push for electric vehicles. CIGI argues that there is no economic case for additional pipeline capacity to tidewater or expanded oil sands production. As expected, the government of the province of Alberta, Canada’s oil sands production […]

Colonial Pipeline Allows Port Arthur Refiners To Ship Fuel After Harvey

19 Sep 2017   Pipelines

Colonial Pipeline, the largest fuel system in the United States, said on Monday that Port Arthur, Texas refiners can use their own pumps as a temporary solution to get gasoline and other products into its main lines. Flow rates on Colonial’s lines, which supply more than 3 million barrels a day of fuel to the populous U.S. east coast, have been sharply reduced after Hurricane Harvey caused massive floods and damaged supply points, including at Port Arthur. The Port Arthur facility connects directly to Total and Valero’s refineries in Jefferson County, Texas. Traders said that while Colonial’s move may help resume shipments from Port Arthur, flow rates through the line overall would still likely remain low until repairs are complete. Colonial did not disclose current flow rates. Repairs at the Port Arthur injection point are expected to last through the end of the month, Colonial […]

Forget Oil, Water Is New Ticket for Pipeline Growth in Texas

19 Sep 2017   Pipelines

The torrent of dirty water coming out of almost every American oil well is the next big bet for a former fund manager for billionaire Paul Allen. Getting rid of wastewater from onshore wells has become an increasingly costly problem for oil producers as U.S. crude output surged in recent years, especially in the new shale fields from Texas to North Dakota. Drillers typically get about seven barrels of water for every one of oil, and some struggle to deal with the overflow that is mostly sent by truck to disposal sites miles away. David Capobianco, a former managing director for Allen’s Vulcan Capital, is trying to change that by building pipelines to get wastewater out. His newly formed WaterBridge Resources LLC aims to be a water-management company for oilfields. The firm is considering a public share listing within a year to 18 months, taking advantage of […]

U.S. shale output set to rise for 10th consecutive month: EIA

19 Sep 2017   Shale Oil

U.S. shale production is set to rise for the 10th month in a row in October, the U.S. government said on Monday, spurred by U.S. oil prices rising above the $50 a barrel threshold. Output across seven shale plays is forecasted to rise by nearly 79,000 barrels per day (bpd) to 6.1 million bpd, according to the U.S. Energy Information Administration’s monthly drilling productivity report. North Dakota’s Bakken output is set to rise by 7,900 bpd to 1.06 million bpd, the highest since May 2016. In Texas, Eagle Ford oil output is set to fall by 9,000 bpd to 1.27 million bpd, the first monthly decline since April, the EIA said. Permian production is forecast to rise by nearly 55,000 bpd to 2.6 million bpd, the highest level in records dating back to 2007. U.S. natural gas production was projected to increase to a record […]

Reserves vs Valuations: Exxon’s Permian Predicament

19 Sep 2017   Shale Oil

The world’s largest listed oil firm, ExxonMobil, has been lagging behind other supermajors in reserve replacement ratio—a key metric in the industry that shows the amount of proved reserves a company adds to its reserve base during the year relative to the amount of oil and gas it produced. For Exxon, one of the quickest ways to add reserves is to buy a Permian-focused driller, which would be immediately accretive to reserves. However, in order for such a deal to be soundly justified financially, Exxon might need to find enough cost cuts to justify paying a premium for a potential target, says Reuters Breakingviews’ columnist Lauren Silva Laughlin . In January this year, Exxon bought companies owned by the Bass family in a deal that more than doubled the oil giant’s Permian Basin resources to 6 billion barrels of oil equivalent, after adding an estimated resource of 3.4 billion […]

Beyond peak oil

19 Sep 2017   Peak Oil

The last decade has seen a significant change in the terms of the debate around the concept of “peak oil”. Ten years ago the focus was on when oil resources would start to run out and was still based on a concept developed in the 1950s by a Shell geophysicist called M King Hubbert. Hubbert saw in the life story of an individual oil field, which rises to maximum production and then usually rapidly declines, a model that could be applied to the industry as a whole. As a finite resource, global oil would inevitably reach a point where the only prospect was decline. Numerous worthy individuals and companies believed they could identify the peak. The US Energy Department has produced an invaluable list of those predictions. In 1972, Exxon said the peak would come around the year 2000. In 1977 with typical precision Hubbert himself put it at […]

U.S. oil prices hit $50 on rising refinery demand, falling rig count

18 Sep 2017   Prices

U.S. crude oil prices rose above $50 per barrel on Monday and were near last week’s multi-month highs as the number of U.S. rigs drilling for new production fell and refineries continued to restart after getting knocked out by Hurricane Harvey. U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 10 cents, or 0.2 percent, at $49.99 by 0653 GMT, after earlier nudging above the $50 per barrel mark towards the more than three-month high of $50.50 reached last Thursday. Brent crude futures LCOc1, the benchmark for oil prices outside the United States, were at $55.66 a barrel, up 4 cents, and also not far from the near five-month high of $55.99 touched on Thursday. “Demand forecasts […]

IEA Sees Risk of Volatile Oil Prices on Weak Upstream Investment

18 Sep 2017   IEA

Lag in investment raises risk of tightened market: Atkinson IEA failed to foresee ‘technical ingenuity’ of U.S. shale A dearth of new investment in oil production is stoking a risk of tighter crude supply and unstable prices, even as demand growth is expected to slow over the next five years, according to a senior International Energy Agency official. The worldwide cushion of spare production capacity will shrink without further investment in exploration and output, Neil Atkinson, the head of the IEA’s oil markets and industry division, said at a conference in Manama, Bahrain. “There are still not enough signs of investment beginning to return, and that raises the risk of tightening of the market in the next five years and a risk to the stability of oil prices,” he said Sunday. “There is at least a possibility of going back to the situation we had 10 years ago where […]

Sub-$50 Oil Could Kill Shale

18 Sep 2017   Prices, Shale Oil

Oil prices are at their highest levels in months on the back of strong demand and some key supply outages around the world. But the next price movements are unclear, as is the response from U.S. shale. As the International Energy Agency (IEA) noted last week, global oil supply fell in August by about 720,000 bpd—a large contraction after months of sizable gains. Much of that is probably temporary, particularly in the U.S. and Libya, two countries that saw unexpected outages. But the demand story is arguably more important: the IEA upgraded its demand forecast for the year, as consumption has surprised on the upside. WTI is now back in the vicinity of $50 per barrel, while Brent topped $55 per barrel in recent days—its highest level since the beginning of 2017. But that doesn’t mean that the price gains will continue. There are a few reasons to be […]

Iran’s Khamenei warns U.S. against ‘wrong move’ on nuclear deal

18 Sep 2017   Iran, USA

Iran will not be bullied by the United States and will react strongly to any “wrong move” by Washington on Tehran’s nuclear deal, Supreme Leader Ayatollah Ali Khamenei said on Sunday. U.S. President Donald Trump said on Thursday that Iran was violating “the spirit” of the 2015 deal under which it got sanctions relief in return for curbing its nuclear program. State television quoted Khamenei as saying Iran was standing firm “and any wrong move by the domineering regime regarding the (nuclear accord) will face the reaction of the Islamic Republic.” Washington extended some sanctions relief for Iran on Thursday under the nuclear deal with world powers but said it had yet to decide whether to maintain the agreement. Trump must make a decision by mid-October whether to certify that Iran is complying with the deal, known as the Joint Comprehensive Plan of Action (JCPOA). If […]

Saudis May Raise Domestic Gasoline Prices by 80%

18 Sep 2017   Saudi Arabia

Plan would boost gasoline to parity with international prices Increases in other Saudi energy prices seen early next year Saudi Arabia is considering a plan to raise domestic prices for gasoline and jet fuel in November at the latest, as the world’s biggest oil exporter pushes a program to curtail spending and reduce dependence on crude after a global slump in prices. The government would boost gasoline to parity with varying international prices under the plan, according to a person with knowledge of the matter. At current price levels, this could result in a hike for octane-91 grade gasoline to about 1.35 riyals per liter (0.36 cents) from 0.75 riyals, or an increase of about 80 percent, the person said, asking not to be identified because the matter isn’t public. The government plans to delay increases in other energy prices until early 2018, the person said. Authorities are expected […]

Russia’s Rosneft clinches gas pipeline deal with Iraq’s Kurdistan

18 Sep 2017   Iraq, Russia

Russian oil major Rosneft ( ROSN.MM ) will invest in gas pipelines in Iraq’s Kurdistan, expanding its commitment to the region ahead of its independence vote to help it become a major exporter of gas to Turkey and Europe. Kurdistan has been exporting oil independently from the central government in Baghdad since 2014 and Kremlin-controlled Rosneft joined the list of buyers this year, lending the semi-autonomous region hundreds of millions of dollars in loans guaranteed by future oil sales. Now Rosneft is widening its investments to gas by agreeing to fund a natural gas pipeline in Kurdistan, Rosneft and the Kurdistan Regional Government (KRG) said on Monday. Two sources close […]

Dubai awards $3.9 billion solar energy contract to Shanghai Electric, ACWA Power

18 Sep 2017   Solar

Dubai’s state energy utility awarded a $3.9 billion contract to build and run a 700 megawatt solar power plant to a consortium comprising Shanghai Electric and Saudi Arabia’s ACWA Power, the government said on Saturday. The project will feature a 260-metre (850-foot) tower receiving focused sunlight, the world’s tallest such tower, the government said. The consortium bid to supply electricity to Dubai for 7.3 U.S. cents per kilowatt hour. The first stage of the project is due to be commissioned in late 2020. It is part of the Mohammed bin Rashid al-Maktoum Solar Park, a vast complex which is projected to generate 1,000MW by 2020 and 5,000MW by 2030. The government aims to use the solar park and other energy sources to increase the share of clean energy in Dubai’s power output to 7 percent by 2020, 25 percent by 2030 and 75 percent by 2050. […]