Recent Articles

Frackers Collide With Traditional Oil Drillers

21 Jun 2017   Shale Oil

Supersized new oil wells are sometimes running into existing wells, a little-noticed consequence of the shale boom that has started to trigger complaints and lawsuits. The emerging problem is known as a “frack hit,” and it has flared up in Oklahoma, where a group of small oil and gas producers say more than 100 of their wells have been damaged by hydraulic-fracturing jobs done for companies like Chesapeake Energy Corp., Devon Energy…

Three Mile Island is the Latest Nuclear Power Plant to Announce Retirement Plans

21 Jun 2017   Nuclear

Source: U.S. Energy Information Administration, Nuclear power plant data , Nuclear Regulatory Commission, and IAEA Power Reactor Information System At the end of May, Exelon, the owner of the Three Mile Island Nuclear Generating Station in southeastern Pennsylvania, announced its intention to retire the plant in 2019 unless the company is given assistance by the state to help keep the plant financially viable. Exelon’s announcement marks the sixth announced nuclear retirement in the past seven years. Currently, 99 nuclear reactors at 60 nuclear power plants operate in the United States. Since the first commercial U.S. nuclear reactor came online in 1957, more than 30 nuclear reactors have retired. Some of these retired plants were test projects or experimental designs, but most provided commercial power for some portion of their operational lives. Prior to the retirement of the Crystal River, Kewaunee, and San Onofre nuclear power plants in 2013, no […]

OECD: Air pollution, urbanization offsetting gains in renewables

21 Jun 2017   Climate

Air pollution remains high globally and urban areas are expanding, showing a more comprehensive effort is needed on the environmental front, the OECD said. “While there are signs of greening growth, most countries show progress on just one or two fronts and little on the others,” OECD Environment Director Simon Upton said in a statement Tuesday. The Organization for Economic Cooperation and Development found half of its 35 member states have decoupled emissions from growth, meaning gains in carbon dioxide emissions no longer increase in tandem with gross domestic product. Few member states, however, have completely broken the link between growth, fossil fuel consumption and emissions. In a report published Tuesday, the OECD found less than 30 percent […]

From Middle East to Argentina, France’s Total bets on cheap resources

21 Jun 2017   France

As the world witnesses spectacular growth in oil and gas production from the U.S. shale deposits, the boss of French energy giant Total paradoxically says this is one area where he doesn’t want to expand. Instead, chief executive Patrick Pouyanne told Reuters he can find an edge over rivals by going after cheaper reserves elsewhere, including from shale in Argentina and deepwater wells in the Gulf of Mexico, as well as through new gas technology. “Shale oil is too expensive,” said Pouyanne, who has clinched strategic deals for Total in Brazil, the United Arab Emirates, Qatar and Iran since taking over as CEO at the end of 2015. Rapid growth in U.S. shale production has led to a sharp increase in global oil supplies that depressed prices. […]

Oil Trades Near $45 as U.S. Continues Drilling Expansion

20 Jun 2017   Prices

Rigs targeting crude in America climb for a 22nd straight week Demand to rise during third quarter, United Arab Emirates says Oil traded near $45 a barrel following a fourth weekly loss as U.S. drillers continued to add rigs, blunting OPEC-led efforts to rebalance an oversupplied market. Futures were little changed in New York after capping the longest run of weekly declines since August 2015. U.S. drillers targeting crude added rigs for a 22nd straight week, the longest stretch in three decades, according to data Friday from Baker Hughes Inc. Demand will rise during the third quarter, United Arab Emirates Energy Minister Suhail Mohammed Al Mazrouei said. Oil slumped to the lowest close in seven months on Thursday amid concerns that rising U.S. supplies will offset output cuts by the Organization of Petroleum Exporting Countries and allies including Russia. OPEC and its partners have curtailed production in an attempt […]

Oil Turns Lower as Inventory Glut Continues to Pressure Market

20 Jun 2017   Prices

Oil prices turned lower Monday, failing to hold on to earlier gains as the stubborn glut of oil in storage continued to weigh on the market. U.S. crude futures settled down 54 cents, or 1.21%, at $44.20 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 46 cents, or 0.97%, to $46.91 a barrel on ICE Futures Europe. Oil prices were pulled down by falling prices for gasoline and diesel, as well as…

Three Years On, Oil Industry Comes to Terms With Cheap Crude

20 Jun 2017   Prices

Three years after the price of crude began its rapid descent, the oil industry and investors are finally resigned to the idea of lower prices for longer, potentially ending a period of crisis for the sector. The price of Brent crude, the international benchmark, is now down 59% since it hit a closing high of $115.06 a barrel three years ago on…

Analyst: Expect $30 Oil In 2018 Unless OPEC Deepens Cuts

20 Jun 2017   Prices

Oil prices could plunge to US$30 a barrel in 2018 and maintain that low price for some two years, if OPEC fails to make steeper output cuts, Fereidun Fesharaki, chairman of oil and gas consultancy FGE, said at a conference on Monday. The current OPEC cuts could be enough to keep the price of oil at around US$50 per barrel for the rest of this year, Fesharaki said at the International Association for Energy Economics conference in Singapore, as quoted by Platts . But next year, new supply is expected to overtake demand growth if OPEC doesn’t deepen the production cuts. This would send oil prices lower, according to Fesharaki. Last week, the International Energy Agency (IEA) said that non-OPEC production in 2018 would increase by 1.5 million barrels daily – a rate that would surpass the growth of global demand. Speaking at the Singapore conference on Monday, FGE’s […]

Oil Markets Unmoved By Brewing Conflict In The Middle East

20 Jun 2017   Middle East, Prices

The political standoff in the Middle East between Qatar and other powers in the Middle East enters its third week, and the conflict shows no signs of abating. On June 5, Saudi Arabia, Egypt, the UAE and Bahrain cut diplomatic ties with Qatar and also tried to close off entry to Qatar by land, sea and air. They argued that Qatar is a major funder of terrorism. U.S. President Donald Trump backed the move. “The nation of Qatar, unfortunately, has historically been a funder of terrorism at a very high level, and in the wake of that conference, nations came together and spoke to me about confronting Qatar over its behavior,” Trump said on June 9. “I decided, along with Secretary of State Rex Tillerson, our great generals and military people, the time had come to call on Qatar to end its funding — they have to end that […]

World Bank: Middle East conflicts impede climate and other objectives

20 Jun 2017   Middle East

Jordan one of the early movers on climate initiatives, though a World Bank report finds some regional crises are working against national efforts. File photo by Stephen Shaver/UPI. June 19 (UPI) — The economy of Jordan could grow on the back of green initiatives, but progress may be impeded by geopolitical shocks, a World Bank report found. An annual report on the Jordanian economy from the World Bank found shocks from crises in Syria and Iraq have stifled trade lines and pushed expansion to around 2 percent, compared with the World Bank’s estimate for the Middle East and North Africa of around 3.2 percent. Kanthan Shankar, the acting regional director at the bank, said climate and energy reforms envisioned by the Jordanian government could help offset some of the regional economic strains. “Such actions would spur job creation, reduce dependence on commodity imports, attract foreign direct investment and leverage […]

Iran expects contract developments with French major Total

20 Jun 2017   France, Iran

Iran is in the final stages of signing agreements with French energy company Total to develop parts of the giant South Pars field, Iran’s energy minister said. The French energy company, under pressure from Washington in the pre-sanctions era , was the source of Iranian frustration after showing a lack of progress in developing parts of the South Pars field in the Persian Gulf. With sanctions pressures easing in the wake of a multilateral nuclear deal, chairman and CEO Patrick Pouyanne said in February that future growth could come from projects in the Islamic republic. Total is among the major European energy companies moving into the Iranian energy sector with the recent signings of memoranda of understanding with its […]

Libya Oil Output Hits 885,000 Bpd

20 Jun 2017   Libya

Libya is producing 885,000 barrels of crude oil daily after last week it reached an agreement with German Wintershall that will see the latter restart production at fields with a combined output of 160,000 bpd, a source from the country’s oil industry told Reuters. Since the announcement of the agreement, total Libyan output has jumped by 50,000 bpd. The North African country, which has been exempted from the OPEC production cut deal, now aims to raise production to 1 million bpd by the end of next month. This plan, and the fact that it is not as far-fetched as it may have seemed a few months ago amid clashes between armed groups at some of the main oil export points in the Oil Crescent, is bound to weigh on oil prices. Last month, it was Libya whose increase in oil production drove an overall rise in OPEC output, which […]

Saudis Foil Attack By Unknown Enemy On Offshore Oil Field

20 Jun 2017   Saudi Arabia

After last week’s attack on several vessels in the Bab Al Mandab, Middle East offshore oil operations again have been hit. According to Saudi Arabia’s national news agency SPA an attack on a major offshore oil field has been prevented. Saudi military sources have reported that the Al Marjan offshore oilfield was attacked by three boats “bearing red and white flags”. Warning shots have been fired, one vessel has been captured, while two others have escaped on Friday. The Saudi military reported that the captured boat “was loaded with weapons for (a) subversive purpose.” No details were given by the Saudi officials on a possible group or country behind the attack. (Click to enlarge) The continuing remarks about a ‘red and white flag’ on the boats could however be a hint to a possible Qatari involvement, as the latter’s flag holds these colors. This would mean a direct military […]

Oil market fundamentals heading in right direction – Saudi’s Falih

20 Jun 2017   Saudi Arabia

File Photo – Saudi Energy Minister Khalid al-Falih attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia, June 2, 2017. Saudi Energy Minister Khalid al-Falih said the oil market is heading in the right direction but still needs time to rebalance, the London-based newspaper Asharq al-Awsat reported on Monday. “In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the cut needs time to take effect,” he told the newspaper, referring to a global deal to curb oil production. “Current expectations indicate the market will rebalance in the fourth quarter of this year, taking into account an increase in shale oil production,” he said. Asked about the recent drop in oil prices, Falih said: “Markets determine prices but are themselves driven by unpredictable variables beyond the control of producing nations.” “Short-term volatility […]

Mexico Awards 10 of 15 Blocks in Oil Auction

20 Jun 2017   Mexico

Mexico awarded 10 blocks of oil and gas for exploration and development to bidders from 10 different countries, including some of the world’s major oil companies, at an auction in the capital Monday. Of the 15 blocks offered, all of them located in shallow waters of the Gulf of Mexico, five went unclaimed, while 10 were awarded to bidders that competed based on the portion of operating profits offered to the Mexican…

China Issues Second Batch Of Oil Import Quotas For 2017

20 Jun 2017   China

China has allowed a second batch of crude oil import quotas for independent refiners and some state-held companies for 2017, setting full-year quotas at a total of 91.73 million tons, or 1.83 million bpd, according to a document by China’s Ministry of Commerce obtained by Reuters . In January this year, China issued the first batch of quotas for non-state refiners, which totaled 68.81 million tons , refining sources told Reuters back then. As many as 29 companies, including independent refiners—the so-called teapots—and trading firms, were granted quotas, the refining sources noted, quoting an official document by the Chinese authorities. Late last year, China’s Ministry of Commerce had said that the quota for non-state refiners would be kept at 87.6 million tons, or 1.75 million bpd this year, flat compared to 2016. Now the second batch of the 2017 import quotas is set at 22.92 million tons, and included […]

GAC Motor targeting 1M unit sales by 2020, 20% new energy vehicles; entering US market by 2019; transition to electric “may be quite long”

20 Jun 2017   China, Electric Cars

GAC Motor was one of the few automakers, and the only Chinese auto brand, to take the main stage at last week’s Michelin Movin’On 2017 global sustainable mobility summit in Montreal. During his talk, Yu Jun, president of GAC Motor, said that his rapidly growing company is targeting sales of 1 million units annually by 2020, with 20% of those being new energy vehicles. Yu said that GAC plans to introduce seven new energy vehicle models—including both electric and hybrid plug-in designs—to the market this year. GAC has already established its first North America R&D Center in Silicon Valley, and plans to to enter the US market no later than 2019. As the fastest growing Chinese automaker, GAC Motor has achieved 85% compound annual growth rate for six consecutive years. In the first five months of 2017, GAC Motor has already blown past previous records with 207,000 cars sold, […]

Tesla Said Close to Agreeing on Plan for China Production

20 Jun 2017   China, Electric Cars

Local plant would allow automaker to bypass 25% import tariff Tesla’s China revenue tripled to more than $1 billion in 2016 Tesla Inc. is close to an agreement to produce vehicles in China for the first time, giving the electric-car maker better access to the world’s largest auto market, according to people familiar with the matter. The agreement with the city of Shanghai would allow Tesla to build facilities in its Lingang development zone and could come as soon as this week, said the people, who asked not to be identified because the negotiations are private. Details are being finalized and the timing of the announcement could change. Tesla would need to set up a joint venture with at least one local partner under existing rules and it isn’t immediately clear who that would be. Representatives for Tesla at the company’s headquarters in Palo Alto, California, didn’t immediately respond […]

A Newcomer’s Guide to Oil and Gas: The Upstream Zoo

20 Jun 2017   Shale Oil

Here’s a breakdown of some of the “critters” you can find on a drilling rig. Drilling rigs are sophisticated machines – so sophisticated that some of them can even “walk.” Nevertheless, some components of these advanced devices that can access hydrocarbons thousands of feet below the earth’s surface are described in a decidedly “low-tech” fashion. Consider the abundance of “animal” terms below in this installment of “A Newcomer’s Guide to Oil and Gas.” (Special thanks go out to intrepid Rigzone subscriber and retired BP drilling pro Jim Jenner, who suggested a discussion of “animal” terms and provided detailed descriptions of each.) What Is a Doghouse? In oil and gas parlance, the doghouse is not an enclosure where Spot, Fido or Rover takes a nap or where husbands spend the night when they screw up. Instead, it’s a small building located on a rig floor that serves as the driller’s […]

Too hot to handle: Study shows Earth’s killer heat worsens

20 Jun 2017   Climate

Killer heat is getting worse, a new study shows. Deadly heat waves like the one now broiling the American West are bigger killers than previously thought and they are going to grow more frequent, according to a new comprehensive study of fatal heat conditions. Still, those stretches may be less lethal in the future, as people become accustomed to them. A team of researchers examined 1,949 deadly heat waves from around the world since 1980 to look for trends, define when heat is so severe it kills and forecast the future. They found that nearly one in three people now experience 20 days a year when the heat reaches deadly levels. But the study predicts that up to three in four people worldwide will endure that kind of heat by the end of the century, if global warming continues unabated. “The United States is going to […]

Coal’s Decline Spreads Far Beyond Appalachia

20 Jun 2017   Coal

Far from the mines of Appalachia, the decline of coal is hitting communities that relied on coal-fired power plants for jobs and income. During the past five years, roughly 350 coal-fired generating units shut down across the U.S., ranging from small units at factories to huge power plants, according to data from the Energy…

As Natural Gas Gains, a Taxed Grid Raises Alarm

20 Jun 2017   USA

Natural gas has become the trendy power-plant fuel in New England so quickly that it concerns the grid operator charged with keeping the region’s lights on.  On the coldest days, natural gas is in high demand for both heating homes and running power plants, taxing pipelines that supply the region. This was a major problem during a frigid winter several years ago, and gas continues its rise.   In 2000, natural gas-fired plants represented just 18% of New England’s system capacity, grid operator ISO New England said. Aided by low prices, gas grew to 44% by last year.“The markets have brought forward many new electric-generating units,” said Anne George, spokeswoman for the grid operator. “And for the most part they have been natural gas-fired generation.”

Owners of other kinds of plants keep shutting them down due to economic pressure: Massachusetts’ last coal-fired power plant just switched off, and one of three coal plants left in New England, in Connecticut, is slated to change to natural gas. The Pilgrim nuclear plant in Massachusetts is also scheduled to close.  But gas pipelines have proved challenging to build in the region, and capacity hasn’t expanded much. The grid operator has a new plan, starting next year, to offer financial rewards to generators that perform well when the system is taxed, though it acknowledged this may not be enough on the coldest days.

Methane Reduction Plan Could Seriously Harm Canadian Oil & Gas

20 Jun 2017   Air Quality, Canada

The old saying goes, “ The road to hell is paved with good intentions”. And so it goes for the myriad of new regulations, taxes and restrictions forced upon the oil industry to attempt to make it something it is not, which is a zero-carbon and environmentally benign source of hydrocarbon fuel. Carbon taxes. Corporate taxes. Emission caps. The premise is the upstream oil and gas industry is so shamelessly profitable that governments and regulators can pile on more rules and costs that somehow this industry can accommodate, absorb and survive. And still provide fuel, taxes and jobs. The newest elephant in the room the industry has not yet had to deal with is the commitment made by the governments of Canada, Alberta and U.S. to reduce methane emissions by 40 to 45 percent by 2025 with the major culprit being the usual suspect; the oil and gas industry. […]

Big Oil Steps Up Support for Carbon Tax

20 Jun 2017   Climate, USA

Some of the world’s largest oil companies and the country’s biggest auto maker are joining a group pushing the U.S. government to tax carbon in an effort to slow climate change. General Motors Co., Exxon Mobil Corp. and BP PLC are among almost a dozen companies joining the Climate Leadership Council, a new organization that advocates replacing many environmental regulations with a simplified tax on businesses that release carbon…

Shale-Related Seismic Activity Rises In Texas, Report

20 Jun 2017   Shale Oil

Oklahoma is the state that springs to mind whenever earthquakes and oil are mentioned in the same sentence, but a fresh report from the Academy of Medicine, Engineering and Science of Texas has revealed that the shale oil industry’s activity in the Lone Star State has led to changes in seismic activity. The report found that while between 1975 and 2008 the average number of quakes above a magnitude of 3 was one or two, between 2008 and 2016 it increased to 12 to 15 a year. The TAMEST task force that authored the report noted that this increase has been linked not to fracking itself, however, but to wastewater disposal wells, which is in line with findings from other studies. As to whether contaminated water from these disposal wells could seep through into subsoil aquifers that may supply drinking water, the report found that this is highly unlikely, […]

What’s Wrong With The U.S. Oil Export Boom

20 Jun 2017   exports, USA

The lead editorial in Friday’s Wall Street Journal was pure energy nonsense.’ “ Lessons of the Energy Export Boom ” proclaimed that the United States is becoming the oil and gas superpower of the world. This despite the uncomfortable fact that it is also the world’s biggest importer of crude oil. The Journal uses statistical sleight-of-hand to argue that the U.S. only imports 25% of its oil but the average is 47% for 2017. Saudi Arabia and Russia–the real oil superpowers–import no oil. The piece includes the standard claptrap about how the fracking revolution has pushed break-even prices to absurdly low levels. But another article in the same newspaper on the same day described how producers are losing $0.33 on every dollar in the red hot Permian basin shale plays. Oops. The main point of the editorial, however, is to celebrate a surge in U.S. oil exports to almost […]

Inside The World’s Most Sophisticated Refining Industry

20 Jun 2017   Refining, USA

Over the past 5 years, focus on the U.S. oil & gas sector has centered around oil production from the U.S. shale revolution while neglecting, arguably, the most important part of the US oil & gas sector: U.S. refining. The shale revolution may have put the U.S. in the top 3 oil producers in the world, but the U.S. already has the top spot with the world’s largest and most sophisticated refining industry. (Click to enlarge) In terms of size, China’s refining industry comes closest to the U.S. with over 15 million barrels per day (bbl/d) of refining capacity, but the industry operates at less than 75 percent utilization. The low utilization of Chinese refineries is because 3.5-4.5 million bbl/d of refining is done by independent “teapot” refineries that operate at 30 percent-60 percent capacity. These teapot refineries are inefficient and propped up by government regulations. In terms of […]

Switching From Coal To Solar Could Save 50,000 Lives

20 Jun 2017   Coal, Solar

Replacing coal-fired power plants with solar power installations could save as many as 51,999 lives every year, a study from the Michigan Technological University has found. This is the number of people who will in all likelihood not die of things such as asthma and congestive heart failure resulting from harmful emissions from coal-fired plants. Coal currently accounts for 30 percent of the U.S. energy mix, according to the Energy Information Administration. In terms of consumption, however, coal only accounted for 15 percent, almost all of it going into power generation. The fossil fuel is quickly losing share to natural gas, but is still a solid contributor to CO2 and other pollutants emissions – solid enough, according to the study’s authors, Emily Prehoda and Joshua Pierce, to kill more than 50,000 people on an annual basis. Switching from fossil fuels to renewables is at the core of sustainability efforts. […]

ExxonMobil Announces Breakthrough In Renewable Energy

20 Jun 2017   Biofuels

Synthetic Genomics and ExxonMobil’s partnership bore fruit on Monday, said a press release that announced the development of a modified algae strain that could push algae-based energy closer to being a commercially viable alternative energy source. The only way forward for algae-based energy to become commercial is if a high content strain that grows quickly is discovered. SG’s advanced cell engineering technologies has now managed to enhance the algae’s oil content from 20 to 40 percent, according to an official report published in the peer-reviewed Nature Biotechnology journal. The latest discovery moves the green fuel source closer to that mass market utilization. “We remain convinced that synthetic biology holds crucial answers to unlocking the potential of algae as a renewable energy source ,” said J. Craig Venter, Ph.D., Synthetic Genomics co-founder and chairman. “ We look forward to continued work with ExxonMobil so that eventually we will indeed have […]

U.S. Supreme Court Backs Chevron In $9B Ecuador Pollution Case

20 Jun 2017   Ecuador

The U.S. Supreme Court on Monday denied to hear an appeal by an American lawyer to try to collect US$8.65 billion in pollution damages from Chevron, handing a victory to the U.S. oil supermajor over a pollution judgment issued in Ecuador, which lower U.S. courts had earlier agreed had been obtained via corruption. In August 2016, a U.S. appeals court blocked the enforcement of a US$9.5-billion judgment against Chevron, upholding a lower court ruling that had found that a pollution judgment against the U.S. oil major in Ecuador was the product of fraud and racketeering, and therefore, unenforceable in the U.S. In March 2014, U.S. District Judge Lewis Kaplan ruled that the case against Chevron in an Ecuadorean court was the product of fraud and racketeering orchestrated by a New York lawyer, concluding that the judgment should not be enforced. Judge Kaplan said the case had been corrupted by […]

Fattened, Genetically Engineered Algae Might Fuel the Future

20 Jun 2017   Biofuels

The future of fuel is green, slimy, and reeks of fish. “Fish smell like fish because fish eat algae,” says Imad Ajjawi, a geneticist at the synbio company Synthetic Genomics in La Jolla, CA that grows those smelly photosynthesizers. This algae is also fatty, which probably isn’t a word you’d typically associate with the goopy, mucky organism. But scientists like Ajjawi have spent decades dreaming about algae this fat. Because fat is essentially oil, fatty algae could be the world’s most successful fuel crop. Ajjawi and his colleagues spent nearly a decade tweaking an algae genome so it produces more than twice as much fat than wild versions of the same species, and Monday they described their efforts in an article published in Nature Biotechnology . Algae are similar to plants, in that they need nutrients, carbon dioxide, and sunlight to survive. If you starve them of nutrients—think nitrogen, […]

Woodmac: Only the ‘Very Best’ Projects Sanctioned

20 Jun 2017   Offshore

Only the very best deepwater projects have been sanctioned during the oil price downturn, which speaks volumes of the Liza field’s potential. Only the very best deepwater projects have been sanctioned during the oil price downturn, which speaks volumes of the Liza field’s potential, Pablo Medina, Wood Mackenzie’s senior analyst for Latin America upstream, said in a statement sent to Rigzone. “The short time it took ExxonMobil to go from Liza’s discovery to declaring Final Investment Decision (FID) signals the competitiveness of the project, both within the company’s portfolio and globally,” Medina stated. ExxonMobil Corp revealed June 16 that it, and its partners, would spend $4.4 billion to develop part of the Liza oilfield off the coast of Guyana. Woodmac forecasts that the full development of Liza-Payara will produce over 330,000 barrels per day of oil at peak, with reserves of over 1.5 billion barrels of oil equivalent. However, […]

Russia claims new oil field discovered in the Arctic

20 Jun 2017   Arctic, Russia

Preliminary data indicate a new oil field has been discovered in an area said to hold at least a dozen promising reservoirs, Russian oil company Rosneft said. Rosneft said three core samples from the Tsentralno-Olginskaya-1 well in the northern Laptev Sea showed “high oil saturation.” “On the basis of primary studies already, it can be concluded that a new oil field has been discovered, the volume of the resource potential of which is increasing as the drilling continues,” the company said in a statement . The well was the first drilled into the area by Rosneft, which holds 28 licenses in the Russian Arctic. The company boasted that it’s success in the region has been “excellent” so far and said the preliminary […]

British North Sea target of new drilling plans

20 Jun 2017   United Kingdom

New drilling planned for the British waters of the North Sea by early 2018. The focus area is in a region targeted for development by British energy company BP. Photo courtesy of BP June 19 (UPI) — New drilling off the coast of Britain will start in April to appraise prospects west of the Shetland Islands, a drilling company said. The company, North Atlantic Drilling Ltd., said it was awarded a contract with Siccar Point Energy, an exploration and production company, to examine the waters west of Sheltand. “The contract will commence on April 1st when Siccar Point Energy will drill and test an appraisal well on the Cambo discovery with the data being used to refine the development project requirements,” the drilling company stated. “The minimum backlog for the contract is estimated at $7 million.” Siccar Point took control over the Cambo reservoir when it acquired a regional […]

US oil groups feel Russia sanctions freeze more than Europeans

20 Jun 2017   Russia, USA

Russian President Vladimir Putin this month made an emotional tribute to Christophe de Margerie, the former boss of France’s Total who was killed in an accident in 2014.  At the launch of a new gas tanker named after Mr de Margerie, Mr Putin declared him a “great friend of our country”, a sentiment that extends to many executives at Total’s European oil and gas peers.  While US energy groups stepped back from Russia in response to a sanctions regime that Washington lawmakers moved to tighten this month, rivals in the EU have held fast, ducking through loopholes in Brussels’ restrictions to keep joint ventures running.

Elizabeth Rosenberg, a sanctions expert formerly at the US Treasury and now with the Center for a New American Security, points to the “regulatory arbitrage” between the EU and US sanctions. “US firms see an uneven playing field,” says Ms Rosenberg. Since the collapse of the Soviet Union, Russia has been a glittering prize for foreign oil companies. With proved reserves of 110bn barrels of oil and 32tn cubic metres of gas, according to BP, it is one of the world’s largest holders of economically producible hydrocarbons.Sanctions slapped on Moscow in 2014 by the US, EU and other countries in response to Russia’s invasion of Crimea were aimed at cutting off the development of its new oil frontiers from western help.

Oil prices fall on further rise in U.S. drilling, signs of slowing demand

19 Jun 2017   Prices

Oil prices fell early on Monday, weighed down by high supplies despite an OPEC-led initiative to cut production to tighten the market. Signs of faltering demand stoked weak sentiment, prompting price levels comparable to when the output cuts were first announced late last year. Brent crude futures LCOc1 were down 11 cents, or 0.23 percent, at $47.26 per barrel at 0035 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 11 cents, or 0.25 percent, at $44.63 per barrel. Prices for both benchmarks are down by almost 13 percent since late May, when producers led by the Organization of the Petroleum Exporting Countries (OPEC) extended their pledge to cut production by 1.8 million barrels per day (bpd) by an extra nine months until the end of the first quarter of 2018. Traders said that the main factor driving the low prices was a steady rise in U.S. […]

Oil Trades Near $45 as U.S. Continues Drilling Expansion

19 Jun 2017   Prices

Rigs targeting crude in America climb for a 22nd straight week Demand to rise during third quarter, United Arab Emirates says Oil traded near $45 a barrel following a fourth weekly loss as U.S. drillers continued to add rigs, blunting OPEC-led efforts to rebalance an oversupplied market. Futures were little changed in New York after capping the longest run of weekly declines since August 2015. U.S. drillers targeting crude added rigs for a 22nd straight week, the longest stretch in three decades, according to data Friday from Baker Hughes Inc. Demand will rise during the third quarter, United Arab Emirates Energy Minister Suhail Mohammed Al Mazrouei said. Oil slumped to the lowest close in seven months on Thursday amid concerns that rising U.S. supplies will offset output cuts by the Organization of Petroleum Exporting Countries and allies including Russia. OPEC and its partners have curtailed production in an attempt […]

Three Years On, Oil Industry Comes to Terms With Cheap Crude

19 Jun 2017   Prices

Three years after the price of crude began its rapid descent, the oil industry and investors are finally resigned to the idea of lower prices for longer, potentially ending a period of crisis for the sector. The price of Brent crude, the international benchmark, is now down 59% since it hit a closing high of $115.06 a barrel three years ago on…

Déjà Vu: Shale To Kill Oil Prices Once Again

19 Jun 2017   Prices

The U.S. shale industry is in danger of killing of the very rally that it had hoped to take advantage of. Shale production is up more than 700,000 bpd since bottoming out in September 2016, rising steadily to 9.33 million barrels per day (mb/d) in June, according to the latest weekly estimates from the EIA. The International Energy Agency says that U.S. oil production could end 2017 up 920,000 barrels per day (bpd) from a year earlier. Most analysts expect the production gains to continue into next year – the IEA says shale could grow by another 780,000 bpd. Those figures, if they came to pass, would likely prevent any rally in oil prices. But the industry might not get that far because they could push down prices this year, which could potentially choke off their ambitious production plans. “The growth outlooks proposed by many oily E&Ps appear tenuous […]

UAE energy minister sees no need for extraordinary OPEC talks

19 Jun 2017   Prices

The OPEC logo is seen outside their headquarters in Vienna, Austria May 24, 2017. The United Arab Emirates energy minister said on Saturday he saw no need for an extraordinary meeting of the Organization of the Petroleum Exporting Countries ahead of regular talks in November. OPEC holds its next regular meeting in Vienna on Nov. 30. “No one is talking about extraordinary. We are at the beginning of the agreement, I think we need to give it a little bit of time,” Suhail bin Mohammed al-Mazrouei told reporters in Dubai. OPEC and non-members led by Russia decided on May 25 to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude. Mazrouei also said he expected demand for oil to pick up in the third quarter of the year. “The third quarter is coming and the holidays are coming and […]

Oil market fundamentals heading in right direction – Saudi’s Falih

19 Jun 2017   Prices, Saudi Arabia

File Photo – Saudi Energy Minister Khalid al-Falih attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia, June 2, 2017. Saudi Energy Minister Khalid al-Falih said the oil market is heading in the right direction but still needs time to rebalance, the London-based newspaper Asharq al-Awsat reported on Monday. “In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the cut needs time to take effect,” he told the newspaper, referring to a global deal to curb oil production. “Current expectations indicate the market will rebalance in the fourth quarter of this year, taking into account an increase in shale oil production,” he said. Asked about the recent drop in oil prices, Falih said: “Markets determine prices but are themselves driven by unpredictable variables beyond the control of producing nations.” “Short-term volatility […]

Qatar won’t cut gas to UAE: Qatar Petroleum CEO

Saad al-Kaabi, chief executive of Qatar Petroleum, gestures during a news conference in Doha, Qatar, December 11, 2016. Qatar will not cut off gas to the United Arab Emirates despite a diplomatic dispute and a “force majeure” clause in its contract, the chief executive of Qatar Petroleum told Al Jazeera network, two weeks after some Gulf Arab states severed ties with Doha. CEO Saad al-Kaabi said that although there was a “force majeure” clause in the agreement on the Dolphin gas pipeline, which links Qatar’s giant North Field with the UAE, Qatar would not stop supplies for other reasons. “The siege we have today is a force majeure and we could close the gas pipeline to the UAE,” he said. “But if we cut the gas, it does great harm to the UAE and the people of the UAE, who are considered like brothers … we decided not to […]

Iran sees gas deal with Total within weeks: minister

Iran expects to sign a long-delayed gas deal with French oil major Total ( TOTF.PA ) in the next few weeks, Iranian Oil Minister Bijan Zanganeh was quoted as saying on Saturday. “Iran and Total are summing up the discussions on signing the contract for the development of phase 11 of South Pars, and this is almost in the final stages,” said Zanganeh, quoted by the oil ministry’s news website SHANA. “The contract … will be signed before the end of the (current) government,” Zanganeh said. Re-elected in May, President Hassan Rouhani is expected to form his new cabinet in August. Total’s chief executive Patrick Pouyanne said in late May that the company planned to conclude the South Pars gas deal before […]

OPEC Deal In Jeopardy As Libyan Oil Output Nears 1 Million Bpd

19 Jun 2017   Libya, OPEC

Libya—whose production has been hampered by civil unrest, political divides, and oil export terminals blockades over the past few years—is now targeting to further increase its oil output. Its most immediate goal is to reach 1 million bpd of production by the end of July, which would further complicate OPEC’s desperate efforts to reduce global inventories and prop up oil prices. And its ambitions seem plausible. Just last month, when OPEC was discussing rolling over the output reduction deal, production-cut-exempt Libya hit its highest daily production level since 2014. Earlier this week, OPEC reported that total cartel production in May was actually higher than in April, with Libya the biggest single contributor to that increase. Analysts warn, however, that Libya’s output increase is not a for-sure thing. Production could sharply drop again, given the political rivalry between factions and the fragile security situation in country. Both scenarios—that Libya could […]

South Korea Is Powering Down Its Nuclear-Energy Industry

19 Jun 2017   Nuclear, South Korea

SEOUL—South Korea, one of the world’s largest producers of nuclear electricity, is shifting away from the industry. President Moon Jae-in said Monday the country would scrap plans to build additional nuclear-power plants and wouldn’t seek to extend the life of existing ones. Mr. Moon made the comments in a speech at a ceremony marking the…

Innovators toil to revive Canada oil sands as majors exit

19 Jun 2017   Canada, Tar Sands

In the boreal forests and on the remote prairies of Alberta, a handful of firms are running pilot projects they hope will end a two-decade drought in innovation and stem the exodus of top global energy firms from Canada’s oil sands. They are searching for a breakthrough that will cut the cost of pumping the tar-like oil from the country’s vast underground bitumen reservoirs and better compete with the booming shale industry in the United States. If they fail, a bigger chunk of the world’s third-largest oil reserves will stay in the ground. Canada’s oil sands sector has become one of the biggest victims of the global oil price crash that began in 2014 when top OPEC producer Saudi Arabia flooded the market with cheap crude to drive […]

Daniel Yergin on U.S. Oil’s Global Impact

19 Jun 2017   Shale Oil, USA

Daniel Yergin says the boom in shale in concentrated areas like the Permian Basin, Texas and New Mexico is changing the global energy position of the U.S. “You go to Asia. You go to Europe. You go to the Middle East. They realize the position of the U.S. in the world is different today because of this change in our energy position. Among other things, the sanctions on Iran would not have worked had it not been for shale, because you could not have replaced the Iranian oil that was taken off the market. And so now instead of just OPEC and non-OPEC, you have the big three. You have Saudi Arabia, you have Russia, and you have a country called the United States.” — Daniel Yergin, vice chairman, IHS Markit

Oil Sands Output Growth Second Only To Shale

19 Jun 2017   Canada, Tar Sands

Canada’s Mordor, as environmentalists like to call the oil sands, is notorious for how “dirty” oil extraction is there. It’s also notorious for how expensive it is to extract. The dirt argument, which concerns the energy intensity of oil sands production compared to other oil extraction methods, has been partially refuted : some oil production in California is dirtier than oil sands. The price argument is also being refuted by the producers themselves: oil sands extraction is becoming cheaper, and it is rising. Oil sands production has historically had some of the highest production prices in the industry due to the complexity of the process that turns bitumen into fluid crude oil. Like their peers in the shale patch, however, oil sands miners were motivated to increase their efficiency during the recent price crash. The results from this boost are now becoming evident. Earlier this week, the Canadian Association […]

Daimler vs Tesla: The Electric Truck War

19 Jun 2017   Electric Cars

As Tesla prepares to jump into the electric truck market, Daimler is poised and ready to take on the competition. Daimler, the parent company of Mercedes-Benz, has been investing heavily in the global truck business for years. The German automaker now has five commercial truck brands: Mercedes-Benz Trucks, Freightliner Trucks, Mitsubishi FUSO, Western Star, and BharatBenz. Freightliner has 40 percent market share in the U.S. heavy duty vehicle market. In an April Twitter post, Tesla CEO Elon Musk said that a Tesla semi-truck reveal has been set for September. And that the company’s truck team has done “an amazing job. Seriously next level.” As for a pickup truck, that will be rolling out in 18 to 24 months from April, Musk said. Tesla is preparing to meet demand in global markets like the U.S., Europe, and China, where vehicle emissions rules are getting tighter. Most of these trucks are […]

Russia’s Rosneft says oilfield discovered offshore Eastern Arctic

19 Jun 2017   Russia

Russia’s largest oil producer Rosneft said on Sunday it had found an oilfield in the Laptev Sea in the eastern Arctic. “The result of the drilling at the Khatanga license block allows Rosneft to be considered the discoverer of (oil) fields in offshore Eastern Arctic,” the company said in a statement. (Reporting by Vladimir Soldatkin; Editing by Mark Potter)