Does Russia Really Need The OPEC Deal?

15 Sep 2017   -, OPEC, Russia

OPEC and Russia are coordinating the first joint OPEC/non-OPEC deal to curb oil output since 2001, but the apparent unity in the face of lower-for-longer oil prices doesn’t disguise the fact that the cartel and Russia have separate agendas for production, expansion, and global market shares. Earlier this week, in its latest Monthly Oil Market Report, OPEC revised down its forecast for Russia’s oil supply growth by 70,000 bpd for 2018. This means an anticipated net increase of 60,000 bpd for Russia’s oil output in 2018. OPEC didn’t change its forecast for Russia’s quarterly oil supply at 10.98 million bpd for 3Q17, 4Q17 and 1Q18, assuming production of 300,000 bpd below October levels. This leads to expectations of 30,000 bpd growth this year, when OPEC projects average Russian production at 11.12 million bpd. The expected growth figures are a tiny fraction of the production of the world’s biggest oil […]

German leader sees end of the road for diesel, gasoline cars

15 Aug 2017   -

BERLIN (AP) — German Chancellor Angela Merkel says she thinks the internal combustion engines that are the mainstay of her country’s auto industry will eventually have to be phased out. Merkel told German weekly Super Illu that bans on new gas or diesel cars planned by other European countries are right in principle, but declined to say if Germany should head in that direction and if so, when. An extract of her interview published Monday quotes Merkel as saying: "I can’t give you a precise year yet, but the approach is the right one." Merkel reiterated her criticism of the car industry over the Volkswagen diesel emissions scandal, saying it was up to automakers to repair the damage done. Her comments come a month before a national election in which Merkel is seeking a fourth term.

The Arrival Of Peak Oil Demand And The Final Days For Oil

12 Aug 2017   -

Summary There are greater threats to the outlook for oil than growing OPEC or U.S. shale oil production. Peak demand growth for oil will arrive faster than commonly considered. Renewable sources of energy and electric vehicles are advancing at a rapid rate aided by significant leaps in technology. Known oil reserves are destined to become stranded assets. Oil stocks are an increasingly unappealing long-term investment. The latest gyrations in the price of crude and actions by OPEC and key non-OPEC oil producing nations continue to garner the attention of investors, market pundits and analysts alike. While the outlook for oil ( USO ) has once again shifted to one of optimism because of additional efforts by the Saudis to boost prices by reducing supplies, amid rising geopolitical tensions in Venezuela and larger-than-expected inventory draws, the long-term forecast is not as positive as pundits believe. The energy sector is undergoing […]

Russia is top China oil supplier fourth straight month in June, longest streak ever

24 Jul 2017   -

FILE PHOTO: A general view of a crude oil importing port in Qingdao, Shandong province, November 9, 2008. Stringer/File Photo BEIJING (Reuters) – Russia was China’s biggest crude oil supplier for a fourth straight month in June, its longest streak ever in the top spot, data from the General Administration of Customs showed on Monday. China’s total crude oil imports reached 36.11 million tonnes in June, or 8.79 million barrels per day (bpd), making the country the world’s largest buyer for a second month. However, imports dipped 2.9 percent from May’s purchases, the second-highest on record. Russia’s shipments to China last month rose 27 percent from a year ago to 1.27 million bpd, but were down from its record 1.35 million bpd in May, the customs data showed. The country has been China’s top oil exporter since March, its longest period ever as the biggest supplier. Russian crude exports […]

The Coming ‘Peak Oil Plateau’ And Higher Oil Prices

14 Jul 2017   -

Summary Oil demand and supply are both in the process of balancing and peaking. Oil supply will fall before oil demand, creating a period of significantly higher priced oil. OPEC and shale will be the main beneficiaries of higher oil prices. According to the EIA, global oil supply and demand are roughly in balance right now. The World Oil Outlook, put out by OPEC, is a fascinating long read that projects oil demand will reach 99.2mbd by 2021 and 109.4mbd by 2040. Its analysis takes into account demographics, economic growth, technology advances, and other factors. Among its assumptions is that “non-conventional powertrain passenger vehicles are expected to represent 22% of the car fleet by 2040, up from only 3% in 2014. Most of the growth will come from passenger BEVs, which are anticipated to increase to 141 million in 2040.” While I believe that EVs and hybrids will represent […]

Wind power’s big bet: turbines taller than skyscrapers

29 Jun 2017   -

FILE PHOTO: A crew boat passes through Horns Rev 2, a wind farm off the west coast of Denmark near Esbjerg September 15, 2009. REUTERS/Bob Strong/File Photo Wind farm operators are betting on a new generation of colossal turbines, which will dwarf many skyscrapers, as they seek to remain profitable after European countries phase out subsidies that have defined the green industry since the 1990s. The world’s three leading offshore wind operators – DONG Energy, EnBW and Vattenfall – all told Reuters they were looking to these megaturbines to help adapt to the upcoming reality with dwindling government handouts. According to interviews with turbine makers and engineers, at least one manufacturer – Siemens Gamesa – will have built a prototype megaturbine by next year and the first farms could be up and running in the first half of the next decade. These massive machines will each stand 300 meters […]

Trump to Call for U.S. ‘Dominance’ in Global Energy Production

26 Jun 2017   -, USA

President to flag historic shift as U.S. becomes net exporter Renewables and nuclear power technology also set to gain Donald Trump will tout surging U.S. exports of oil and natural gas during a week of events aimed at highlighting the country’s growing energy dominance. The president also plans to emphasize that after decades of relying on foreign energy supplies, the U.S. is on the brink of becoming a net exporter of oil, gas, coal and other energy resources. As with previous White House policy-themed weeks, such as a recent one focusing on infrastructure, the framing is designed to draw attention to Trump’s domestic priorities and away from more politically treacherous matters such as multiple investigations into Russian interference in the 2016 election. With “Energy Week,” Trump is returning to familiar territory — and to the coal, oil, and gas industries on which he’s already lavished attention. Trump’s first major […]

Russia’s Central Bank Sees Oil Prices Down To $40 In 2018-2019

17 Jun 2017   -, Prices, Russia

In view of the current price movements and the oil market outlook, Russia’s central bank is keeping its oil price forecast for this year at US$50 per barrel, and still believes that the price of oil will drop to roughly US$40 in 2018-2019, Bank of Russia Governor Elvira Nabiullina said in a statement on Friday, after the bank cut the key interest rate to 9 percent annually. Although the pace of economic recovery has somewhat exceeded the Bank of Russia’s expectations, medium-term inflation risks remain in place, governor Nabiullina said. In the medium-term, “ The external economic situation will likely remain unstable, as confirmed by the volatility of oil prices. We do not rule out that [oil] production in the US will grow and other countries, which are not parties to the agreement, will expand their supplies to the global market. Demand-side risks are also in place. They result […]

Russia-OPEC Deal Extension Hastens Decline of Oil Heartlands

1 Jun 2017   -, Russia

Output at higher-taxed West Siberian fields is dropping Rosneft, Lukoil pursuing projects with higher-margin barrels Russia’s deal with OPEC has bolstered state coffers by putting a floor under crude prices, but it’s also had one unintended consequence: depressing output in the nation’s West Siberian oil heartlands. With the Kremlin offering lower tax rates for new projects in the Caspian and East Siberia, Rosneft PJSC, Lukoil PJSC and other producers have looked elsewhere for the cuts that will allow Russia to comply with 300,000 barrels-a-day of production curbs. That means the Soviet-era fields of West Siberia. “West Siberian output is the first to go under knife,” said Alexander Kornilov, an oil analyst at Aton. “These are the least profitable barrels.” Since Russia joined forces with the Organization of Petroleum Exporting Countries, futures have rebounded from last year’s lows and the exporters have been able to earn more while pumping less. […]

Russia wants continued cooperation with OPEC, non-OPEC after oil cut deal expires

31 May 2017   -, Russia

Russia needs to work out new principles jointly with OPEC and non-OPEC nations to continue cooperation even after the current oil output cut deal expires, Russian Energy Minister Alexander Novak said on Wednesday. “It is necessary to work out new framework principles for continued steady cooperation between OPEC and non-OPEC even after the expiration of the Vienna agreements,” Novak told an energy conference with OPEC held in Moscow. (Reporting by Dmitry Zhdannikov; Writing by Dmitry Solovyov; Editing by Andrey Ostroukh)

Russian energy minister backs extending oil output curbs

9 May 2017   -

Russian Energy Minister Alexander Novak on Monday backed extending oil output curbs by leading producers, saying it would help speed up a return to a healthier market. Novak did not mention for how long he thought curbs should be extended in comments sent by the Russian energy ministry. A ministry spokeswoman, however, said one option being discussed by Russia was extending the cuts beyond the end of the year. Saudi Energy Minister Khalid al-Falih said on Monday he was confident that OPEC and non-OPEC producers would extend cuts into the second half of the year and “possibly beyond”. The Russian energy ministry spokeswoman said she could not confirm that Russia backed prolonging output cuts into 2018. The Organization of the Petroleum Exporting Countries […]

Russia takes conservative approach on the price of oil

15 Apr 2017   -, Russia

Russia is taking a conservative approach to the price of oil, pegging its scenario for growth at $40 per barrel for the nation’s benchmark Urals crude oil. “Taking into account that world oil reserves remain at a high level and intensive growth of shale oil production in the United States, we are lay[ing] down $40 per barrel price of Urals oil in our conservative scenario,” Economic Development Minister Maxim Oreshkin was quoted by Russian news agency Tass as saying. Economists at the Organization of Petroleum Exporting Countries reported Urals crude prices in March averaged $49.94 per barrel, a decline of 7 percent from the February average. All major crude oil benchmarks lost value in March, though the downturn for Urals crude […]

The world’s deepest oil well is over 40,000 feet deep

24 Mar 2017   -, Russia

In the world’s deepest gold mine , workers will venture 2.5 miles (4 km) below the Earth’s surface to extract from a 30-inch (0.8m) wide vein of gold-rich ore. While these depths are impressive, mining is limited by the frailty of the human body. Going much deeper would be incredibly dangerous, as limitations such as heat, humidity, logistics, and potential seismic activity all become more intense. Luckily, the oil industry does not have such human obstacles, and drilling deep into the Earth’s crust is instead limited by a different set of circumstances – how deep can the machinery and technology go before the unfathomable heat and pressure renders it inoperable? The world’s deepest oil well Today’s infographic comes to us from Fuel Fighter , and it helps to visualize the mind-boggling depths of the world’s deepest oil well, which is located in a remote corner of eastern Russia. The […]

Russian oil major says U.S. shale growth imperils OPEC deal

14 Mar 2017   -, Russia, Shale Oil

A recovery in U.S. oil output may deter OPEC and non-OPEC producers from extending production cuts beyond June and might lead to a new price war, Russia’s top oil major said on Monday. U.S. shale oil production had been in retreat as oil prices tumbled from above $100 a barrel in 2014 to below $30 in 2015, making costly fracking processes less profitable. A deal by the Organization of the Petroleum Exporting Countries with Russia and other producers to rein in output by 1.8 million barrels per day (bpd) for six months from Jan. 1 lifted prices but also encouraged U.S. firms to boost supplies. “It became evident that U.S. shale oil output has become and will remain a new global oil price regulator […]

BP Shares Surge On Reports Of Exxon Takeover Approach

11 Mar 2017   -

U.S. energy giant ExxonMobil ( NYSE:XOM ) has reportedly gauged potential interest among BP’s major shareholders regarding a possible takeover, British newspaper Evening Standard reported on Friday, sending BP’s stock ( NYSE:BP ) soaring to one-month highs in London and trading nearly 3 percent higher in New York shortly after opening. The two energy supermajors Exxon and BP have a few top shareholders in common, including BlackRock and Vanguard. According to Evening Standard, which did not specify its sources, BP is reportedly worried that it could be a vulnerable target of an offer exceeding US$145.7 billion (120 billion British pounds). Some of BP’s shareholders are believed to be not very happy with the current share price of BP in London, which is currently around 30 percent lower than what it was before the 2010 Deepwater Horizon disaster. Since the worst oil spill disaster in U.S. history, BP has often […]

British North Sea oil and gas sector still facing headwinds

8 Mar 2017   -, United Kingdom

An industry trade group sees confidence returning to the British North Sea, but lingering challenges remain for oil and natural gas. File photo by Maryam Rahmanian/UPI. March 7 (UPI) — Though the region is showing signs of recovery, a British oil and gas trade group said new investments in offshore activity are slow to emerge. A report from the trade group Oil & Gas U.K. finds total British offshore production up 5 percent from 2015 to 1.73 billion barrels of oil equivalent. That trend should continue short-term with output reaching 1.9 billion barrels of oil equivalent by 2018. That follows a 15-year period of steady declines from British waters. Deirdre Michie, the chief executive for the trade group, said confidence is returning to the North Sea. Cash flow generated by exploration and production companies is expected to move into positive territory for the first time since 2013. “However, this […]

Peak Supermajors

18 Feb 2017   -, Peak Oil

Hey everybody, Last Sunday I put together a quick presentation on the most recent oil & gas production data for the “supermajors” (Shell, Total, BP, Chevron, ExxonMobil): Introduction Today I would like to introduce my “Peak Supermajors” project. The goal of this project is to answer the question “when will we reach peak oil” by studying the production and financial health of the world’s largest oil companies. Because oil is a finite resource, its daily global production will eventually reach a peak. By measuring when individual oil companies reach peak oil, I hope to bring us closer to answering the question “when will we reach peak oil?” I am beginning my project by analyzing the largest publicly-traded companies: the “ supermajors “. These 5 companies – BP, Chevron, ExxonMobil, Royal Dutch Shell and Total – produce nearly 20% of the world’s oil and gas. They are mostly descendants from […]

Canadian Prime Minister Bans Arctic Drilling… For Now

16 Feb 2017   -

Canadian Prime Minister Justin Trudeau has defended his government’s decision to ban all drilling for oil and gas in the Arctic for the next five years—for starters—in response to a local mayor’s cries that the bank will cost jobs for communities, even though Big Oil can’t really afford to drill right now. Trudeau referred to scientific data revealing that an oil spill in the Arctic would be much more difficult to deal with than anywhere else, but left a tiny window open for the oil industry. If Big Oil comes up with technology that can guarantee safe drilling in the Arctic, the ban could be reconsidered, he said. It is clearly a window that won’t be opened in the next five years—an unrealistic timeframe for developing 100 percent safe drilling technology. In fact, it’s probably safe to say that there can be no 100 percent spill-proof drilling technology, so […]

China Jan crude oil imports at 34.03 mil mt, down from Dec’s record

14 Feb 2017   -, China

China’s crude oil imports and oil product exports in January retreated from fresh highs in December, but were still higher from the same month last year, according to preliminary data Friday from the General Administration of Customs. The country imported 34.03 million mt of crude in January, down 6.5% from the record high of 36.38 million mt in December despite surging 27.5% on the year. The 6.5% month-on-month decrease was much smaller than the 19.6% drop in January 2016 from December 2015, indicating strong import interest last month which could even extend into February, analysts said. China’s crude oil imports kept hitting record highs in December as oil companies rushed to use up import quotas. As a result inflows in December 2015 and 2016 hit 33.19 million mt and 36.38 million mt, respectively. In contrast to January 2016, oil companies preferred to buy more before crude oil prices would […]

U.S. Dependent on China for Rare Earth Minerals

14 Feb 2017   -, China, USA

An overlooked report has revealed the United States is completely reliant on imports from foreign countries, most heavily China, for rare earth minerals critical to our national security. The report, released by the United States Geological Survey, stated the United States is 100% dependent on foreign imports for at least 20 elements and minerals, including 17 classified as rare earth minerals critical to the development of high-grade magnets used in aircraft and missile systems. In addition to the use in military hardware, many rare earth minerals are critical for the development of GPS systems, satellite imaging, night vision goggles, and consumer products like smartphones and flat-screen televisions. One country has a near monopoly over exporting rare earth minerals to the United States: China. According to the report, the United States is 100% reliant on foreign countries (most notably the African nations of Gabon and South Africa) for the mineral […]

Five Energy Predictions For 2017

16 Jan 2017   -

I read an article this morning where one analyst predicted that we are in a 10-15 year bear market for oil. The analyst stated that the market is oversupplied by about a million barrels per day (it isn’t — see the charts in today’s article), that shale oil production will surge this year (it won’t), and that the OPEC agreement to cut production would fall apart (it won’t). His projection was that we will spend 2017 below $50 per barrel (bbl) and in 2018 prices will be back below $40/bbl. I disagree with this assessment. I believe we will look back in a few years at 2016 as the year the energy sector recovery got underway in earnest. I believe 2017 continues the recovery. Today, I explain how I see the energy markets shaping up this year, in the context of my 2017 predictions. 1. Crude oil will flow […]

The Future Of Oil And Gas? Look To The Past

6 Jan 2017   -

In the early days of 2017, it behooves oil and gas companies to reflect on the past, while making plans robust to an uncertain future outlook. There are several questions that should be asked: Where are we in the oil and gas price cycles? How will politics and policies affect the business outlook? What are the appropriate strategies? Learning from the Past It will not surprise any investor in oil and gas and related businesses that theirs is a cyclical business. Prices run up when supplies fall short of demand, hover on the summit for a few years, then tumble as new supply sources are developed and demand growth slows down (Figure 1). Sources: BP Statistical Review of World Energy; EIA After the collapse of 1986, oil prices remained volatile through 1990, then declined further through 1998 as production from the Middle East, Norway, Iran and Venezuela increased to […]

Trump a symptom of declining net energy

12 Nov 2016   -, Peak Oil

Energy futurist Chris Nelder explores the common ground between the Occupy movement and the Tea Party: declining energy leading to declining economic surplus. Beneath the complex narratives of the Occupy and Tea Party movements, and beneath the unfolding collapse of our complex global financial system, is a simpler narrative about energy. Yet this narrative continues to elude most observers, because they don’t understand the fundamental relationship between energy and the real economy. This week I’ll attempt to tell a simple version of that story, in the plainest possible terms, and explain the Occupy and Tea Party movements in that context. Let’s begin with some economic history. For nearly all of U.S. history up through the late 1960s, the production of energy, especially oil, had grown continuously. And economic activity, as measured by GDP, grew right along with it. At the same time, the U.S. dollar was pinned to gold, […]

Germany votes against the internal combustion engine

27 Oct 2016   -

Germany’s lower house of parliament, the Bundesrat, voted in October to ban the sale of cars with internal combustion engines by 2030. It is a resolution with no binding implications, but it did garner cross-party support. It is certainly a powerful statement of intent. Viewed from the capitals of the major oil exporting countries, it should be viewed with alarm, not that it will necessarily be achieved, but as a reminder that in combination with the technologies to deliver them, environmental targets only ever seem to get more ambitious in scope and in timing. For oil producers, the idea that some oil will be left in the ground forever is a strong motivation to produce now. Revenue maximization no longer lies in controlling supply to support prices over time because time is running out. There is no point husbanding resources for future generations that reject their use. But, in […]

New Research Finds Antarctica’s Ice Shelves Are Melting Rapidly

26 Oct 2016   -

The Crosson Ice Shelf (center) and Mount Murphy (foreground) in Antarctica. Ice shelves are sensitive… The ice that hangs off Antarctica’s western edge is melting at a faster clip than it is being replenished, according to new research published Tuesday. Researchers estimate that between 2002 and 2009, Smith Glacier lost roughly between 980 and 1,600 feet of ice thanks to increased melting at its so-called grounding zones, regions where ice goes from being on land to floating on water, creating what looks like a shelf. Understanding how ice shelves are changing is crucial to predicting sea-level rise , said Ala Khazendar, a polar scientist at NASA’s Jet Propulsion Laboratory in Pasadena, Calif., and the study’s first author. Sea-level rise is already affecting coastal cities, like Miami , and scientists think the problem will only worsen globally as the planet warms. The authors also found that between 2009 and 2014, […]

‘’Would Iran, Saudi Arabia, Venezuela Cut Output?” Rosneft Chief Rejects Freeze

12 Oct 2016   -, Russia

Russian oil Russia’s state-controlled giant Rosneft will not freeze its production as part of potential non-OPEC and OPEC global efforts to prop up crude prices, Reuters quoted Rosneft’s chief executive Igor Sechin as saying , just after Russian President Vladimir Putin had stated that his country was ready to join OPEC’s attempts to rebalance the market. Russia is denying the change of heart, saying that Sechin’s words to the contrary “may be quoted out of context” , Russian TASS agency reported on Tuesday, quoting Dmitry Peskov, press secretary of the Russian President. “Indeed, the official position was presented by President Vladimir Putin that it is desirable to freeze volumes or contract them,” Peskov said. As quoted by Reuters earlier today, Sechin – when asked if Rosneft might limit its production – said late on Monday, “Why should we do it?” “Try to answer this question yourself: would Iran, Saudi […]

How Sanctions Have Benefited Russian Oil

10 Oct 2016   -

Running out of time Oil and gas producers have worked diligently to reduce the cost of their operations following the fall in crude oil prices at the end of 2014. Without $100 oil, E&P companies the world over were forced to find ways to cut costs in order to make their operations profitable. On the whole, producers have reduced opex per barrel by 9 percent, according to information from Wood Mackenzie, but a closer look shows that this is in large part due to Russia skewing the numbers. Russia has reduced opex by 30 percent, far exceeding the average. If it is removed from the data set, the average global reduction in opex is just 4 percent, and it still varies greatly by region. Canada has reduced opex by 18 percent, while Wood Mackenzie has U.S. onshore opex unchanged between 2014 and 2015. (Click to enlarge) The change in […]

THE DEATH OF THE BAKKEN FIELD HAS BEGUN: Big Trouble For The U.S.

19 Sep 2016   -

The Death of the Great Bakken Oil Field has begun and very few Americans understand the significance. Just a few years ago, the U.S. Energy Industry and Mainstream media were gloating that the United States was on its way to “Energy Independence.” Unfortunately for most Americans, they believed the hype and are now back to driving BIG SUV’s and trucks that get lousy fuel mileage. And why not? Americans now think the price of gasoline will continue to decline because the U.S. oil industry is able to produce its “supposed” massive shale oil reserves for a fraction of the cost, due to the new wonders of technological improvement. I actually hear this all the time when I travel and talk to family, friends and strangers. I gather they have no clue that the Great Bakken Oil Field is now down a stunning 25% from its peak in just a […]

Russia’s ruling party tightens its grip on lower house

19 Sep 2016   -

Russia’s ruling party has tightened its grip on the Duma after parliamentary elections on Sunday were marred by irregularities and the lowest turnout in president Vladimir Putin’s 17 years in power.  With more than 93 per cent of the vote counted, figures from the Central Election Commission on Monday showed that United Russia, the main pro-Kremlin party, had secured 54.1 per cent of votes for party lists and bagged 203 of the 255 seats allocated through single-member constituencies. That would give the party 76 per cent of the 450 seats in the lower house of parliament, up from the 53 per cent it holds now.  The results are a massive victory for Mr Putin and the Kremlin’s “political technologists”, the spin-doctors who tweaked the electoral system following street protests over fraud at the last Duma election five years ago.

View full article at www.ft.com

U.S. advances oil reserve revamp plan, potential crude sale

8 Sep 2016   -, USA

An oil storage tank and crude oil pipeline equipment is seen during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. The Obama administration has sent Congress a plan to modernize the country’s emergency oil reserve, a step that could set in motion a sale of about 8 million barrels from the stash later this year to help pay for the revamp, the Energy Department said on Wednesday. Under the $1.5-$2 billion revamp plan, three dedicated marine terminals would be added to the Strategic Petroleum (SPR), a string of 60 heavily-guarded underground caverns on the Texas and Louisiana coasts. Also, aging equipment for oil processing, firefighting and security would be fixed or replaced at the SPR, which was last updated in the late 1990s. “This equipment today is near, at, or beyond the end of its design life,” the […]

Russia’s Gazprom says may export more gas to Europe than forecast

11 Aug 2016   -, Russia

Gazprom said higher gas sales to Europe boosted its first-quarter revenue and it may export more to the region than expected this year because of lower Dutch gas output and limited shipments of liquefied natural gas from the United States. Russia’s Gazprom, the world’s top gas producer, covers around a third of Europe’s gas needs and planned to ship between 165-170 billion cubic meters (bcm) to Europe this year, up from about 159 bcm in 2015. The EU has been trying to reduce its reliance on Russian gas amid tensions with Moscow over the Ukraine crisis. Gazprom on Wednesday posted a 5 percent increase in first-quarter revenue to 1.74 trillion rubles ($26.9 billion) year-on-year, due to higher gas sales to Europe in absolute terms and despite a […]

The Reported Death of Peak Oil Has Been Greatly Exaggerated

6 Aug 2016   -, Peak Oil

World C+C using EIA data, but substituting the Russian Ministry of Energy Data for Russia shown in the chart below. The monthly peak was 81, 047 kb/d in Nov 2015. The centered 12 month running average is also shown with a peak at 80,642 kb/d in Sept 2015. The annual decline rate since the Nov 2016 peak has been 4.2% per year or about 3.4 Mb/d over a 12 month period if the rate does not change before Nov 2016. That would imply 77.6 Mb/d by Nov 2016. Output was 79,784 kb/d in April 2016, I believe the decline rate will level off by Oct at around 78.5 +/- 0.5 Mb/d. By Dennis Coyne Note that non-Petroleum comments should mostly be in this thread. A separate petroleum thread will be posted soon. I created an optimistic scenario for future emissions based […]

Shell’s New Sensors Could Reduce Exploration Costs Dramatically

13 Jul 2016   -, Oil Supply

Offshore Oil Rig Searching for oil and gas is an activity with uncertain success—an activity with a bit less uncertainty were it not for 3D seismic surveying. And this uncertainty could be reduced even further, thanks to technological advancements that Shell is currently testing. Seismic surveying is the first step in any oil and gas exploration project. It’s an expensive undertaking that requires scattering thousands of sensors on the ground and then analyzing the data they register about the subterranean rock makeup that may or may not include oil and gas-bearing formations. Besides expensive, seismic surveying is also quite cumbersome and complex. The sensors that transmit subterranean data need to be connected by cables, which takes time and requires an enormous amount labor and equipment. All this may be about to change with a Dutch company’s novel seismic sensor that was developed as part of a hunt for gravitational […]

Fossil Fuel Industry Risks Losing $33 Trillion to Climate Change

12 Jul 2016   -, Oil Supply

The fossil fuel industry risks losing $33 trillion in revenue over the next 25 years as global warming may drive companies to leave oil, natural gas and coal in the ground, a Barclays energy analyst says. (Bloomberg) – The fossil fuel industry risks losing $33 trillion in revenue over the next 25 years as global warming may drive companies to leave oil, natural gas and coal in the ground, according to a Barclays Plc energy analyst. Government regulations and other efforts to cut carbon emissions will inevitably slash demand for fossil fuels, jeopardizing traditional energy producers, Mark Lewis, Barclays’s head of European utilities equity research, said Monday during a panel discussion in New York on financial risks from climate change. His comments are part of a growing chorus calling for more transparency from oil and gas companies about how their balance sheets may be affected by the global shift […]

VW Group strategy calls for >30 new BEVs by 2025 with annual EV sales of 2-3M units; mobility services

17 Jun 2016   -

« Local Motors debuts first self-driving vehicle using IBM Watson Internet of Things for Automotive | Main Volkswagen Group CEO Matthias Müller presented the company’s new new strategic plan—TOGETHER – Strategy 2025—in Wolfsburg. With regard to vehicles and drivetrains, the new strategy places special emphasis on e-mobility. The Group is planning a broad-based initiative in this area: it intends to launch more than 30 purely battery-powered electric vehicles (BEVs) over the next ten years. The Company estimates that such vehicles could then account for around a quarter of the global passenger car market. The Volkswagen Group forecasts that its own BEV sales will be between two and three million units in 2025, equivalent to some 20 to 25 percent of the total unit sales expected at that time. Although the electrification initiative takes center stage in the Group’s future drivetrain strategy, the combustion engine remains important, Müller said. Combustion […]

Shell CEO Faces Long Haul in Bid to Pass Exxon as Top Oil Major

Royal Dutch Shell Plc Chief Executive Officer Ben Van Beurden spelled out his main goal last week — surpass Exxon Mobil Corp. to become the best-performing oil major. “I am determined to get us to that number one place,” he said after outlining the company’s long-term strategy in London. “I want to create a world class investment case for Shell and our shareholders.” There are signs Van Beurden is winning over some investors following his record $54 billion acquisition of BG Group Plc. Shell has closed the gap on Exxon for total shareholder returns, which accounts for share prices, dividend payouts and buybacks, after lagging behind for five years. Still, the Anglo-Dutch explorer trails its U.S. rival on a range of other metrics from return on capital and assets to cash flow. “In the past 15 to 20 years Shell has fallen behind […]

Canadian firefighters make progress against fire in oil sands region

20 May 2016   -, Tar Sands

Firefighters made progress against a wildfire in the Fort McMurray region of northern Alberta on Thursday as a shift in winds pushed it away from communities and oil sands facilities. The massive blaze covered 505,000 hectares (1.2 million acres), up from 483,000 on Wednesday. On Thursday, it moved across the border to the neighboring province of Saskatchewan, but Alberta wildfire officer Chad Morrison said cooler weather and rain would aid efforts to get it under control. “I can report that we saw a trace of rain this morning, so that’s actually helped our firefighting efforts,” he added. Morrison said the burned area equals the total consumed in last year’s entire fire season. The blaze, which hit […]

Long-term oil shortfall predicted by Wood Mackenzie

28 Apr 2016   -, Oil Supply

 Global supply-side pressures could reverse within 20 years as low crude oil prices crimp spending on exploration and production, Wood Mackenzie finds. For the fifth week in a row, oil services company Baker Hughes reported a decline in rig activity in North America, with a 2 percent drop to 431. Last year’s count for the week ending April 22 was 932. Lower oil prices means less capital is available for energy companies to invest in exploration and production activity. If that situation doesn’t improve, experts with analysis group Wood Mackenzie said in an emailed report the global oil market may face long-term shortages. “Over 7,000 conventional fields have been discovered in the last 15 years and, although […]

Expected decrease in Lower 48 oil production is partially offset by rising GOM output

21 Apr 2016   -, Oil Supply, Shale Oil, USA

In response to continued low oil prices, onshore crude oil production in the Lower 48 states is expected to decline from an average of 7.41 million barrels per day (b/d) in 2015 to 6.46 million b/d in 2016 and to 5.76 million b/d in 2017. Increased production from the federal Gulf of Mexico (GOM) is not enough to offset those declines, with total projected U.S. production falling from 9.43 million b/d in 2015 to 8.04 million b/d in 2017. The sharp decline in oil prices since the fourth quarter of 2014 has had a significant effect on drilling in the United States. The number of active onshore drilling rigs in the Lower 48 states fell 78% (from 1,876 to 412) between the weeks ending on October 31, 2014, and April 15, 2016, according to data […]

How Earth itself has dramatically upped the stakes for the Paris climate accord

21 Apr 2016   -, Climate

From crippling droughts to rising seas, scientists warn of global warming impacts. Representatives from more than 150 countries will gather at the United Nations on Friday to officially sign a global accord aimed at slashing greenhouse gas emissions and slowing climate change. But in the four months since that historic pact was negotiated in Paris, a drumbeat of grim scientific findings has underscored that staving off the worst consequences of global warming may take far more aggressive actions. The first three months of 2016 were the warmest on record in 136 years — by large margins. The massive Greenland ice sheet has melted this spring to an extent that scientists say they’ve never seen this early. New research suggested that if high levels of emissions continue unabated , sea levels could rise by nearly twice as much as expected by the end of this century. A global coral bleaching […]

Brent signals traders to release oil stocks: Kemp

20 Apr 2016   -, Prices

Crude oil storage helped commodity traders and refiners make strong profits last year and in the first quarter of 2016 but now the price structure which made it possible is evaporating. In a typical storage strategy, known as “cash and carry”, traders buy physical crude and put it into storage in a tank farm, or more rarely on a tanker at sea. Traders simultaneously sell crude futures for a nearby contract, hedging their exposure in case prices fall while the oil is stored. As the futures contracts near expiry, traders buy them back and sell more contracts for a date further in the future. The strategy continues until the trader is ready to release the stocks back to the market. But the strategy only works if the futures market trades in contango, with contracts near expiry […]

Retail gasoline prices showing some stability

13 Apr 2016   -, Prices, USA

A high level of supplies on the U.S. market helped push retail gasoline prices lower despite a rally in crude oil prices, motor club AAA reported. AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.05 per gallon, a slight increase from Monday, but relatively equal to the price reported one week ago. The motor club reported retail gas prices have been on the rise for the better part of five weeks, increasing for 28 of the last 35 days. Prices at the pump are higher by 13 cents on average compared with one month ago. That trend mirrors global crude oil prices, which are holding steady […]

Goldman Sees Russia Oil Output Rising Amid Doha Freeze Talks

9 Apr 2016   -, Prices, Russia

Oil and the Doha Meeting Russian oil and condensate production will rise through 2017, even as the nation prepares for talks on an output freeze with other producers, according to Goldman Sachs. Russian output will climb to 11.2 million barrels a day this year from 11.1 million barrels in 2015 due to a weak ruble, low-cost deposits and a tax rate that adjusts to lower prices, Goldman analysts including Geydar Mamedov said in a research note dated April 7. Production is projected to increase to 11.4 million barrels a day […]

World Bank taking bolder climate steps

9 Apr 2016   -, Climate

The World Bank said it was standing ready to offer its unique leverage on the global stage to help address the growing challenges of climate change. Laura Tuck, a vice president in charge of sustainable development at the World Bank, said the effort to control climate change should be broad in scope and move beyond immediate energy measures to include sectors ranging from transportation to disaster risk management. “The World Bank is in a unique position to work with countries to develop the solutions that build their resilience to climate impacts, protect their people and environment, and reduce their emissions,” she said in a statement. Even as transportation needs keep fossil fuels at the forefront of the energy sector, the […]

Rosneft Shows Crude Resilience, Shielded by Weak Ruble

1 Apr 2016   -, Russia

Russian state-controlled oil company OAO Rosneft reported a slight increase in full-year net profit, shielded from plunging oil prices that battered the results of western oil producers by a weakening ruble and a tax system that eases as prices fall. Rosneft, the world’s largest listed crude producer, said Thursday that net income rose 2% to 355 billion rubles (about $6.1 billion) in the year to end-December. Other global oil groups such as Exxon Mobil Corp. and Royal Dutch Shell PLC reported significantly poorer results on lower oil prices , down to around $40 a barrel at the end of last year from nearly $70 at the start. Rosneft’s results demonstrate the resilience of Russia’s oil industry, a critical source of revenue for the federal budget when the economy is also being squeezed by western […]

The big bust in the oil fields

26 Mar 2016   -, Shale Oil, USA

He’d borrowed from banks and investors and retirement funds, all in a frenzied mission to drill for oil and gas, and by the time Terry Swift realized he’d gone too far, this was his debt: $1.349 billion. His company, founded by his father almost 40 years earlier, had plunged into bankruptcy and laid off 25 percent of its staff. Its shares had been pulled from the New York Stock Exchange. And now Swift was in a company Chevrolet Tahoe, driving back to the flat and dusty place where his bets had gone bust. Swift was coming to this energy-rich strip of South Texas trying to grapple with how much blame he shouldered for the failure of his company. A low-key and historically cautious oil chief executive who eschews private […]

Russia has less than three decades of oil remaining

18 Mar 2016   -, Prices, Russia

“Our recoverable oil reserves are about 29 billion tons. These are the ones that could theoretically be extracted from the subsoil. Crude oil production (without condensate) preliminarily amounted to about 505 million tons in 2015. Such reserves will last for 57 years,” the head of the ministry Sergey Donskoy told Rg.ru. “However, the volume of proved reserves (we know exactly their whereabouts, quantity and how to extract them), according to experts, is only half of that, about 14 billion tons. The proved reserves will last for only 28 years,” he added. According to Donskoy, Russia’s oil production will inevitably start to decline by 2020. The share of hard to extract oil will grow, as traditional resources will start to deplete. This will also make the extraction more expensive, he said. “That’s why we won’t stop the exploration work,” Donskoy added. Oil exploration is complicated by collapsing crude prices that […]

Moody’s to withdraw from Russian domestic market – FT.com

10 Mar 2016   -

Moody’s is withdrawing from the Russian domestic market as global rating agencies are caught in a dilemma between new Russian laws and western sanctions.  Moody’s said on Wednesday that it would withdraw domestic credit ratings in Russia following “legislative changes and other potential restrictions” that affect the business of providing national scale ratings by its joint venture in the country, Moody’s Interfax Rating Agency.  Once ratings are withdrawn, the MIRA joint venture will close.  The decision from Moody’s marks the most drastic reaction so far to new Russian regulation of credit rating agencies, but highlights the risk that the country’s financial markets may become more isolated from global markets amid the tit-for-tat fallout of western sanctions against Moscow.  National-scale ratings assess the creditworthiness of issuers and financial obligations within a country. Under legal amendments approved last year that take effect in 2017, Moscow will allow agencies to issue local ratings only through a subsidiary in the country that agrees to certain conditions, including a guarantee not to withdraw ratings under external political pressure.  The legislation also requires central bank approval of the assignment and withdrawal of local ratings.

View full article at www.ft.com

Why ARPA-E Needs to Grow Up

8 Mar 2016   -, USA

It’s hard not to get caught up in the optimism on the exhibition hall at the ARPA-E Innovation Summit, which is taking place this week in the D.C. area. Nearly every booth features a promising—indeed, potentially revolutionary—energy technology concept or prototype.  But it’s also hard to ignore the fact that very few of the projects the Department of Energy’s six-year-old agency has funded have made a commercial impact. And with venture funding for energy startups in short supply, it’s worth asking: should the government do more to help commercialize transformative energy technologies?  President Obama clearly thinks the answer is yes. His latest budget request for the Department of Energy includes a 21 percent increase for 2017 in clean-energy R&D funding. That includes a 20 percent increase in funding for ARPA-E, which is charged with identifying and investing in promising early-stage technologies. Obama also proposed a so-called “ARPA-E Trust” for developing “larger-scale investment-ready outcomes,” which would begin with $150 million in funding in fiscal 2017 and provide $1.85 billion over five years to ARPA-E.

View full article at www.technologyreview.com

Oil Rebounds From 12-Year Low

12 Feb 2016   -, Prices

Oil-futures prices on the New York Mercantile Exchange rebounded Friday on short-covering after touching a more than 12-year low the previous day. Light, sweet crude futures on Nymex for delivery in March traded at $27.68 a barrel at 0500 GMT, up $1.47 in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose $1.73 to $31.79 a barrel. Prices touched a low of $26.05 a barrel a day ago, the…