Recent Articles

South Korea To Begin Phasing Out Nuclear Plants

16 Sep 2017   Nuclear, South Korea

South Korea is eyeing independence from nuclear energy, to be implemented gradually over the next six decades, as it seeks to switch to safer clean energy sources. The country’s Trade, Industry, and Energy Minister Paik Un-gyu said at a conference in Seoul today that “There is a need to move away from the energy scheme of the past, which focused on promoting nuclear power plants.” So far, as part of this shift away from nuclear power and into renewables, the government shut down a nuclear power plant built in the 1970s and temporarily suspended the construction of two new ones. There are 24 nuclear reactors in operation across the country and another four under construction. The phase-out of nuclear power generation capacity was a pledge that South Korea’s president Moon Jae-in made before the elections. Last month, the Ministry of Trade, Industry, and Energy outlined the main policy points […]

China’s CNOOC Begins Oil Partner Hunt in Mexico Deep Waters

16 Sep 2017   China, Mexico

Cnooc Ltd. is searching for partners to develop oil prospects deep into the Gulf of Mexico as the Chinese giant extends its global reach. After bidding alone for exploration rights in Mexico’s first-ever deep-water auction in 2016, Cnooc is seeking deals known as farmouts, a common type of joint venture where a stake in an oil prospect is exchanged for help with drilling and production. The company has yet to choose partners, a Beijing-based spokeswoman for Cnooc said Friday. China, the world’s biggest oil consumer after the U.S., has sought a foothold in crude production everywhere from Africa to Canada as it looks to ensure supplies to its fast-growing economy. Several Latin American countries like Venezuela and Brazil have taken advantage of China’s thirst […]

Natgas pipeline builders hail U.S. okay of blocked New York project

16 Sep 2017   Pipelines

Energy traders and natural gas pipeline companies on Friday hailed a U.S. federal regulator’s decision to overturn New York’s denial of a water permit for building the Millennium Pipeline in the state. People in the industry expressed hope that the U.S. Federal Energy Regulatory Commission would be willing to override state decisions to block other pipelines, including Williams Cos Inc’s Constitution and National Fuel Gas Co’s Northern Access pipelines from Pennsylvania. These could also be approved if similar waivers are granted by FERC. FERC, which is in charge of U.S. energy regulation, now has three members, after two new commissioners were appointed by President Donald Trump. Environmental groups and other opponents of fracking blasted the decision, saying it violated the state’s authority. The New York Department of Environmental Conservation said it was reviewing whether to appeal FERC’s decision, “and will consider all legal options to protect public […]

Beaumont port still restricted after Harvey

16 Sep 2017   Oil Supply, USA

While crude deliveries by larger ships to Beaumont in Texas remain restricted after Hurricane Harvey, a workaround using pipelines can supply Exxon Mobil’s refinery there, shipping sources said. Beaumont’s port has been closed to ship traffic over 26 feet (8 meters) since Sept. 9 by the U.S. Coast Guard, because of shoaling – sediment or sand that washes up on the bottom of the waterway and hampers shipping traffic. Exxon has other options for receiving crude, as nearby discharge points at Port Arthur and Nederland are still available, and pipes can bring crude up to the refinery. Exxon, however, tends to export refined products direct from the Beaumont port dock, said Brian Hass, operations manager for shipping broker Host Agency in Beaumont. Exxon Mobil’s facility can refine 362,000 barrels of crude a day. Brent Rahe, Coast Guard vessel traffic supervisor at Port Arthur, said there’s […]

Trans Mountain oil pipeline in Canada short on safeguards

16 Sep 2017   Canada, Pipelines

The parties behind the Trans Mountain oil pipeline to Canada’s western coast haven’t yet completed what they need to for the environment, a regulator found. The National Energy Board approved of Kinder Morgan ‘s plans to triple the capacity of the network to around 890,000 barrels of oil per day in November, though vetting is still under way for some aspects. The project is part of a national effort to tap into markets outside North America as nearly all of Canada’s oil exports go to the United States. The NEB said it completed a pre-construction audit and found planners haven’t yet laid out plans regarding safety and environmental protection during the build process. “This pre-construction audit is one of […]

Trump administration working toward renewed drilling in Arctic National Wildlife Refuge – The Washington Post

16 Sep 2017   Arctic

The Trump administration is quietly moving to allow energy exploration in the Arctic National Wildlife Refuge for the first time in more than 30 years, according to documents obtained by The Washington Post, with a draft rule that would lay the groundwork for drilling.  Congress has sole authority to determine whether oil and gas drilling can take place within the refuge’s 19.6 million acres. But seismic studies represent a necessary first step, and Interior Department officials are modifying a 1980s regulation to permit them.  The effort represents a twist in a political fight that has raged for decades. The remote and vast habitat, which serves as the main calving ground for one of North America’s last large caribou herds and a stop for migrating birds from six continents, has served as a rallying cry for environmentalists and some of Alaska’s native tribes. But state politicians and many Republicans in Washington have pressed to extract the billions of barrels of oil lying beneath the refuge’s coastal plain.

Hurricanes Harvey and Irma lead to higher gasoline prices in Florida

16 Sep 2017   Prices, USA

Gasoline and Diesel Fuel Update Note: Prices for Miami, Florida, are unavailable for September 11, 2017 because of insufficient survey responses. Hurricane Irma significantly disrupted gasoline markets in Florida, first by prompting increased demand and then by disrupting the supply chain needed to deliver the fuel. The evacuation of people in anticipation of Hurricane Irma led to higher demand for transportation fuels and logistical challenges in supplying fuel to Florida that began before the hurricane made landfall on September 10, 2017. There are no petroleum refineries in Florida or major pipelines connecting Florida to supply centers along the U.S. Gulf Coast or from neighboring states, so Florida is almost entirely supplied by marine movements of petroleum products from domestic and international sources. Because Florida is largely dependent on marine movements of gasoline from the U.S. Gulf Coast, any threat of or actual disruption to […]

Protesters Jailed Over Natural Gas Pipeline Protest In Virginia

16 Sep 2017   Pipelines

Nineteen protestors were arrested during a protest in Richmond, Virginia, against the construction of the Atlantic Coast and Mountain Valley natural gas pipelines. The demonstration of roughly 40 people occurred outside of the Virginia Department of Environmental Quality, which is charged with granting water quality permits to the developers of the pipeline. “This is an area where we are being rocked by extreme weather. Hurricane after hurricane and the wildfires in the west. We can’t get a break. We need to tell them to stop right now and leave it in the ground,” said Jamshid Bakhtiari of the Chesapeake Climate Action Network in Virginia told a local news station . Dominion Energy, the company developing the pipeline, responded: “I think it was very disappointing that these groups thought that the best way to support the victims of Hurricane Irma was to get arrested. Our company took a very different […]

U.S. Oil Rig Count Continues To Collapse

16 Sep 2017   Shale Oil, USA

The total oil and gas rig count in the United States now stands at 936 rigs, up 430 rigs from the year prior, with the number of oil rigs in the United States decreasing by 7 this week and the number of gas rigs decreasing by 1. Canada, meanwhile, added 10 oil rigs for the week ending September 15. Oil rigs in the United States now number 749—333 rigs above this time last year. Although the number of oil rigs are still up significantly year on year, the increases slowed in the second quarter, and have reversed in the third. The first quarter 2017 saw 137 oil rigs added in the United States, while the second quarter 2017 saw 97 rigs added. In stark contrast, the third quarter, for which there are still two weeks to go, has seen the total number of rigs decrease by 7. The spot […]

U.S. Gulf Coast Refiners Are Bouncing Back

16 Sep 2017   Refining, USA

Nearly twenty days (or over 450 hours) after Hurricane Harvey made landfall between Port Aransas and Port O’Connor in Texas, there are a number of signs emerging in our ClipperData that the refinery hub of the U.S. is returning to some semblance of normalcy. Hark, here are but three such examples: Crude waiting offshore is gradually dropping after peaking at the beginning of the week at 31 million barrels – the highest since January. At the start of the week, we saw nearly 50 dirty tankers in the U.S. Gulf, as a backlog built up, ready to deliver to Texas ports as refineries restart. (Click to enlarge) Waterborne crude imports into the U.S. Gulf Coast have averaged 3 million barrels per day for 2017, until recent weeks. Arrivals dropped to close to 1mn bpd in the trading week immediately after Hurricane Harvey’s landfall, before rebounding back above 2mn bpd […]

U.S. Diesel, Heating Oil Inventories At Historical Low

16 Sep 2017   Oil Supply, USA

Even before Hurricane Harvey shut down more than 20 percent of U.S. refining capacity, U.S. diesel, jet fuel, and heating oil stocks had dropped during the summer months, for the first time since record keeping began in 1982, a Reuters analysis of EIA data showed on Friday. Distillate inventories dropped by 2.2 percent between June and September, the first ever fall in that period since 1982. To compare, distillate stocks have typically increased by an average 10 percent since 2000 during the summer months, because that’s when refiners consciously build distillate inventories to prepare for increased fall and winter demand for heating oil and harvesting. But this year, thanks to a surprisingly high summer demand of diesel, jet fuel, and heating oil, those stocks did something unprecedented—they dropped. Part of the demand was due to U.S. exports of those products, especially to Latin America. Currently, U.S. distillate stocks are […]

Eagle Ford Shale’s big operators getting output back to pre-Harvey levels

16 Sep 2017   Shale Oil

Three weeks after Hurricane Harvey slammed into the lower Texas coast and caused widespread production shut-ins, although little actual damage, in the Eagle Ford Shale play, several big upstream operators say they are at or nearly at pre-storm levels. Devon Energy said Friday its production is at pre-storm levels in the South Texas play. The Oklahoma City-based company produced 63,000 b/d of oil equivalent in the second quarter, including 36,000 b/d of crude oil and 96,000 Mcf/d of natural gas. “Post-storm inspections indicated that Devon’s producing assets and facilities sustained minimal damage,” the company said in a statement. “The company has now resumed production from all producing pads in the Eagle Ford.” Devon estimated Harvey’s total impact on its net liquids production in the Eagle Ford and selected other US areas to be a 15,000 b/d reduction in the third quarter, about two-thirds of it oil. The impact should […]

US Haynesville gas production hits 4-year high – Natural Gas

16 Sep 2017   Shale Gas

Natural gas producers in the US Southeast are beginning to yield dividends from a bid to reverse declining production in one of the region’s seemingly forgotten shale plays. Recent data from the Haynesville of Arkansas, Louisiana and Texas show production there at its highest since mid-2013. As output continues to rebound from a record low in August 2016, production from the Haynesville is already up by nearly 15%, Platts Analytics data shows.  That spectacular turnaround comes amid a rapid expansion in drilling activity which has rivaled that of even the Utica or the Marcellus. In just 12 months, rig count in the Haynesville has more than tripled.

Leaseholders’ renewed devotion to the play comes in spite of relatively weak internal rates of return or IRRs there, which have averaged just 11% over the last year. Those returns have paled in comparison to Appalachian plays where IRRs averaged roughly 14%, in both the Utica and the Marcellus, according to data from Platts Well Economics Analyzer.  But with export demand from the Gulf Coast and Texas expected to grow by nearly 7.5 Bcf/d through 2020, a bid to grow production in the Haynesville could be longer-term play by producers seeking access to neighboring markets that are soon likely to trade at a premium.

Perry Highlights Need for Oil Reserve in Rebuke of Trump’s Plan

16 Sep 2017   USA

Hurricanes Harvey and Irma demonstrate the importance of keeping the U.S. Strategic Petroleum Reserve, Energy Secretary Rick Perry said, in a not-so-subtle rebuke to President Donald Trump. “This is a good example of why we need an SPR,” Perry said at a press conference Friday morning. The reserve, run by the federal government, is a stockpile that can hold more than 700 million barrels of crude. Trump’s budget proposal this year called for selling half the reserve, saying it was no longer useful in a time of U.S. oil surpluses. Perry made his disagreement with the president’s position clear. “I didn’t write that budget,” he said at the press conference, held with other federal officials to discuss the state of government assistance to Florida after Hurricane Irma. After […]

First-ever U.S. coal shipment arrives in Ukraine

16 Sep 2017   Ukraine

The first batch of U.S. coal sent to Ukraine could open additional doors for bilateral energy trade, the Ukrainian minister of infrastructure said. Minister Volodymyr Omelyan said Friday that, after declaring a state of emergency because of coal blockades in eastern Ukraine, his country was supported with the arrival of U.S. coal. “My dream is that other ships coming from United States would bring Tesla cars and other electric cars , and we would supply electrical batteries and high-tech components to the USA, then this cooperation will be even stronger and more promising,” he said in a statement . U.S. Cabinet officials, the U.S. envoy to Ukraine and representatives from […]

European consortium launches 4-year, $80M L3Pilot research project to test Level 3, 4 autonomous driving in 11 countries

16 Sep 2017   Electric Cars

A European research consortium under the management of the Volkswagen Group launched the four-year L3Pilot project to test the viability of automated driving as a safe and efficient means of transportation. The project focuses on large-scale piloting of SAE Level 3 functions, with additional assessment of some Level 4 functions. Thirteen European automobile manufacturers, suppliers, research institutes and universities, and small and mid-sized companies will operate 100 vehicles with 1,000 drivers under real conditions and in a wide range of applications. The technologies being tested include a broad spectrum—from parking and overtaking to driving in complex city traffic. Overall, the project will collect data in eleven European countries for assessing technical aspects, user acceptance, driving and travel behavior, and the impact of […]

How (Not) to Run a Modern Society on Solar and Wind Power Alone

16 Sep 2017   Solar, Wind

While the potential of wind and solar energy is more than sufficient to supply the electricity demand of industrial societies, these resources are only available intermittently. To ensure that supply always meets demand, a renewable power grid needs an oversized power generation and transmission capacity of up to ten times the peak demand. It also requires a balancing capacity of fossil fuel power plants, or its equivalent in energy storage. Consequently, matching supply to demand at all times makes renewable power production a complex, slow, expensive and unsustainable undertaking. Yet, if we would adjust energy demand to the variable supply of solar and wind energy, a renewable power grid could be much more advantageous. Using wind and solar energy only when they’re available is a traditional concept that modern technology can improve upon significantly. 100% Renewable Energy It is widely believed that in the future, renewable energy production will […]

Scientists warning of sand scarcity

16 Sep 2017   Economy

f you’re looking for a way to express something that’s staggeringly hard to count, you won’t find a more reliable metaphor than grains of sand. There is indeed quite a bit of it – about 7.5 quintillion grains on Earth’s beaches and deserts, according to one estimate. But if you think that this would be sufficient to supply an ever-expanding global economy with all the concrete, asphalt, glass, and semiconductors it could possibly desire, think again. Our consumption of sand is outpacing our understanding of the economics and environmental impacts of extracting, transporting, and consuming it, finds research published last Thursday in the journal Science. Out of the complexity of the global sand trade has emerged something of a butterfly effect, in which an economic decision in one place can wreak social and environmental havoc on the other side of the world. Using a holistic, interdisciplinary approach called telecoupling, […]

Oil prices set for weekly gains as demand outlook brightens

15 Sep 2017   Prices

Oil prices were lower on Friday but on course for weekly gains, the third in a row in the case of Brent, as the clean-up after hurricanes in the United States gathered pace and the outlook for demand took on a firmer tone. U.S. West Texas Intermediate crude CLc1 was down 17 cents, or 0.4 percent, at $49.72 a barrel at 0620 GMT. It briefly broke above $50 on Thursday, hitting a four-month high, and finished 1.2 percent higher at $49.89, its highest close since July 31. Brent crude LCOc1 futures were down 23 cents, or 0.4 percent, at $55.24 a barrel. They gained 0.6 percent to settle at $55.47 the previous session, the […]

WTI Breaks $50 As Bullish Sentiment Builds

15 Sep 2017   Prices

Buoyed by strong global oil demand growth and reduced OPEC supply, U.S. benchmark WTI jumped above the psychologically important US$50 threshold on Thursday, topping that level for the first time in five weeks and aiming for the highest closing since the end of May. At 12:30pm EST today, WTI traded up 1.74 percent at US$50.16, while Brent was up 1.05 percent at US$55.74. Brent is now above the US$55 psychological level for the first time since May 25, when OPEC decided to extend the production cuts as-is in a move that largely disappointed a market that was expecting a firmer “whatever it takes” action. Today is the fourth consecutive day of gains for oil prices that have been enjoying a good week, in which OPEC reported lower production for August, followed by the International Energy Agency’s (IEA) assessment for strong demand growth. On Tuesday, OPEC’s Monthly Oil Market Report […]

Oil jumps to five-month high on forecasts that glut will recede

15 Sep 2017   Prices

Oil prices rose on Thursday, with Brent briefly touching a five-month high, a day after the International Energy Agency (IEA) forecast the market would continue to tighten as fuel demand increased. Brent crude LCOc1 futures were up 56 cents, or 1 percent, at $55.72 a barrel by 12:16 p.m. EDT (1616 GMT). The session high for the global benchmark was $55.99, its highest since April 13. The contract remained in technically overbought territory for a second day in a row. U.S. West Texas Intermediate CLc1, meanwhile, was up 84 cents, or 1.7 percent, at $50.14 per barrel, its first time over $50 since August. WTI touched $50.50, its highest since May 25, and surpassed its 200-day moving average. […]

U.S. oil hits $50/barrel, sterling jumps; Dow at new high

15 Sep 2017   Prices

Rising demand pushed U.S. crude above $50 a barrel on Thursday, while sterling jumped after the Bank of England said it was likely to raise interest rates for the first time in a decade in coming months. Energy shares rose on Wall Street and in Europe, but stocks were mixed worldwide. A gauge of global equity indexes fell slightly, as did the S&P 500 in the United States, while major European indexes gained and the Dow set a new closing high. West Texas Intermediate, the U.S. crude benchmark, rose more than 2 percent before paring gains after a forecast by the International Energy Agency on Wednesday and dollar weakness prompted bullish sentiment in the oil market. “Anticipation is growing that this could quicken the pace of oil market rebalancing,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London. U.S. crude […]

Global use of liquid fuels to grow by nearly a fifth by 2040: EIA

15 Sep 2017   Prices

Global use of petroleum and other liquid fuels will grow by nearly a fifth by 2040, driven by the transportation and industrial sectors, the U.S. government said on Thursday. Consumption is set to grow from 95 million barrels per day in 2015 to 104 million bpd in 2030 and 113 million bpd in 2040, according to the U.S. Energy Information Administration’s international energy outlook for 2017. That reference case would mean a 19 percent increase between 2015 to 2040. Countries outside of the Organization for Economic Cooperation and Development account for most of the increase, with demand rising by 1.3 percent per year, compared with a slight decrease for those in the group. OPEC countries will maintain or increase their combined market share of crude and lease condensate production, the EIA added. Meanwhile, renewables will remain the world’s fastest-growing energy source, with consumption increasing by […]

EIA: Coal Is Dying As Renewables Rise

15 Sep 2017   Coal

According to the Energy Information Administration’s (EIA) new International Energy Outlook for this year, Asian countries that are not in the Organization for Economic Cooperation and Development (OECD), which includes China and India, will account for more than 60 percent of the projected energy consumption growth between 2015 and 2040. Fossil fuels will still rule the day, accounting for more than three-quarters of global energy consumption through 2040, but renewables and nuclear will outpace fossil fuels in terms of growth. (Click to enlarge) The EIA sees renewables as having the biggest growth spurt, clocking in at a projected 2.3 percent per year increase in consumption between 2015 and 2040, followed by nuclear power, with consumption expected to rise 1.5 percent every year until 2040. Natural gas wins the position of fastest-growing fossil fuel in the EIA’s outlook, which projects worldwide consumption to increase 1.4 percent annually, driven by abundant […]

IEA Sees Strongest Global Oil-Demand Growth in Two Years

15 Sep 2017   IEA

Global oil demand will climb this year by the most since 2015, the International Energy Agency said, amid stronger-than-expected consumption in Europe and the U.S. The IEA, which advises most major economies on energy policy, increased its estimate for demand growth in 2017 by 100,000 barrels a day to 1.6 million a day, or 1.7 percent. The re-balancing of oversupplied world markets is continuing, it said, with OPEC supplies falling for the first time in five months and inventories of refined fuels in developed nations subsiding toward average levels. “Demand growth continues to be stronger than expected, particularly in Europe and the U.S.,” the Paris-based agency said in its monthly report. The impact of Hurricane Harvey, which struck Texas last month, on global oil markets is “likely to be relatively short-lived,” the IEA said. Local stockpiles were at “comfortable” levels before the storm hit, while releases from government reserves […]

Why Aramco Delayed Its IPO

15 Sep 2017   Saudi Arabia

International news reports have stated that the Saudi government is currently putting together contingency plans for a possible delay to the biggest IPO ever. The listing of 5 percent of Saudi Arabia’s crown jewel, the world’s largest oil company Saudi Aramco, could bring in around $300-$400 billion, based on a valuation of Aramco at between $1.5-2 trillion. The cash generated by the IPO has already been earmarked for the coffers of the Saudi Public Investment Fund (PIF), to be used as financial support for Saudi Vision 2030, the economic diversification program proposed and pushed for by Crown Prince Mohammed Bin Salman (MBS). Doubts about the valuation have been strong, but a success story for this particular once-in-a-lifetime IPO is all but guaranteed. International interest is growing and media reports are stumbling over each other to assess, criticize or support the IPO strategy. Presently, international advisors and banks have already […]

Saudis Prepare for Possible Aramco IPO Delay to 2019

15 Sep 2017   Saudi Arabia

Government still aims for 2018, but timetable is getting tight Decision on where to list overseas may come in late October Saudi Arabia is preparing contingency plans for a possible delay to the initial public offering of its state-owned oil company by a few months into 2019, according to people familiar with the matter. While the government is still aiming for a Saudi Aramco IPO in the second half of next year, that timetable is increasingly tight for what’s likely to be the biggest share sale in history, the people said, asking not to be named discussing internal deliberations. Saudi Aramco said in statement the IPO “remains on track. The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO related work is completed to the very highest standards on time.” It didn’t give a timeframe. The comment was echoed by a Saudi government […]

Islamic State Claims It Carried Out Deadly Attack in Southern Iraq

15 Sep 2017   Iraq

Iraqi security forces inspect the site of a bomb attack at a police checkpoint on a highway near the southern Iraqi city of Nassiriya on Sept. 14. BAGHDAD—Islamic State gunmen stormed a restaurant in southern Iraq after blowing up a car bomb outside, killing more than 50 people, Iraqi officials said, including Iranian pilgrims having a meal. Thursday’s attack, along a highway near the southern city of Nassiriya, was one of the deadliest in the country in recent months and comes as Islamic State’s days of ruling over vast areas of Iraq near an end. The Sunni Muslim extremist group claimed the assault in a statement, saying three groups of fighters clad with explosive belts had killed dozens of “rejectionist idolaters”— slurs it uses to denote Shiite Muslims. An interior ministry official said a bomb had first exploded in the restaurant parking area. Gunmen disguised as members of Iraq’s […]

Iran cracks down on Revolutionary Guards business network

15 Sep 2017   Iran

Iran’s Revolutionary Guards Corps is being forced to shrink its sprawling business empire and some of its senior members have been arrested as part of President Hassan Rouhani’s attempts to curb the elite force’s role in the economy. In the past year, the guards, who have interests in sectors ranging from oil and gas to telecoms and construction, have had to restructure some holding companies and transfer ownership of others back to the state, a regime insider and a government official told the Financial Times. At least a dozen guards members and affiliated businessmen have been detained in recent months, while others are being forced to pay back wealth accrued through suspect business deals, the officials said. One manager of a large holding company affiliated to the guards was arrested a few months ago and cash worth millions of dollars was confiscated from his house, said a businessman who has worked with the guards. A brigadier general — described as the corps’ economic brain — was also arrested this year, but released on bail, the regime insider said. The crackdown, which is being conducted discreetly to avoid undermining the guards — one of the most powerful arms of Islamic republic’s regime — began last year. It started after Mr Rouhani, a pragmatist who has criticised the guards’ role in the economy, told Ayatollah Ali Khamenei, the supreme leader, about the vast wealth individuals affiliated to the 120,000-strong force had accumulated, the officials said. “Mr Rouhani has told the supreme leader that the economy has reached a deadlock because of high levels of corruption and the guards’ massive control over the economy,” said one regime insider, who is a relative of the supreme leader. “Other than economic concerns, Mr Khamenei feels the need to save the guards [from corruption] and has naturally thrown his support behind the move.”

Saudi Arabia Detains Critics as New Crown Prince Consolidates Power

15 Sep 2017   Saudi Arabia

Crown Prince Mohammed bin Salman in Riyadh, Saudi Arabia, last year. Some Saudis see some see him as a power-hungry upstart who is overturning decades of tradition. BEIRUT, Lebanon — Saudi Arabia has begun a wide-ranging crackdown against perceived opponents of the policies of the kingdom’s new crown prince, Mohammed bin Salman. Over the last week, 16 people were held, their friends, relatives and associates said in interviews. They include prominent Islamic clerics, academics, a poet, an economist, a journalist, the head of a youth organization, at least two women and one prince, a son of a former king. Some of them were taken from their homes in unannounced raids by security forces, and their computers, cellphones and personal papers were seized, the friends and relatives said. Those arrested have been held incommunicado, and it is not clear if they have been formally charged with crimes. Saudi Arabia has […]

Houthis Threaten Saudi Oil Tankers

15 Sep 2017   Saudi Arabia, Yemen

Houthi leader Abdel-Malek al-Houthi said his rebel alliance would begin attacking Saudi oil tankers should the Kingdom begin an offensive against the key Yemeni port of Hodeidah, according to a new report by Reuters. “We could target Saudi oil tankers and we could do anything, we have not done this before,” he said. The speech, which was televised across the Houthi leader’s territory, added that Yemeni missiles could reach the Emirati capital of Abu Dhabi, as well as anywhere in Saudi Arabia, though Reuters reports that the group’s technical capability to enforce such a threat is questionable. Abdel Malek insisted that Yemen fired a test missile towards Abu Dhabi earlier this month. The UAE is no longer safe for the country’s citizens, the leader said. Two years of civil war between Houthi rebels and Saudi-backed President Abdrabbuh Hadi has left Yemen’s economy wrecked. The KSA is on a mission […]

Shell accelerates Iraq drawdown with Majnoon exit

15 Sep 2017   Iraq

Negotiations begin over handing back the Majnoon operatorship, months after stake in West Qurna 1 was put up for sale, highlighting one major oil company’s resistance to Iraq’s tough terms. The Majnoon contract being initialed by Shell Vice President Mounir Bouaziz on Dec. 20, 2009. (BEN LANDO/Iraq Oil Report) NEW YORK/BASRA – Royal Dutch Shell is further reducing its exposure to the Iraqi oil sector, announcing Wednesday that the company has reached an initial deal with Iraq’s Oil Ministry to leave the nearly eight-year-old Majnoon oil field project. Shell is also in the process of selling its 20 percent stake in the ExxonMobil-operated West Qurna 1 field, part of the company’s global effort to leave projects that have lower upsides. This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial […]

Baker Institute expert: crude-oil production increase a risky strategy for Saudi Arabia

15 Sep 2017   Saudi Arabia

« German government awards €4.1M to Fastned to build 25 fast charging stations | Main | Mobileye and Munich Re partnering to reduce commercial fleet collisions » A number of factors are pushing Saudi Arabia to raise its crude-oil production capacity, but the wide range of potential outcomes suggests that such an increase is a risky strategy for the kingdom and the global environment, according to a new article by an expert from Rice University’s Baker Institute for Public Policy. Most notably, a rise in Saudi crude-oil output could trigger a damaging period of global oversupply, said Jim Krane, the Wallace S. Wilson Fellow for Energy Studies in the Baker Institute’s Center for Energy Studies. This glut could be exacerbated by future carbon taxes and other policy restrictions on fossil fuels, he said. Krane’s paper is published in the journal Energy Policy . As recently as 2015, Saudi energy […]

Nigeria: Oil Production Dips to 1.3mbd Over Vandalism, Says NNPC

15 Sep 2017   Nigeria

An average of 700,000bpd of crude oil was deferred in 2016 due to pipeline sabotage, this brought Nigeria’s production down to as low as 1.3 million barrels per day from 2.2 million barrels targeted for the period. At an average price of $52 per barrel, the country differed about $13.286 billion (N4.05 trillion). The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, stated this in a keynote address at the maiden edition of the Nigerian International Pipeline Technology and Security Conference (NIPITECS 2017) in Abuja yesterday. He said Year-To-Date 2017; NNPC had recorded 27 breaching incidents on the Trans Niger Pipeline (TNP), adding that for the Trans Forcados Pipeline (TFP) with a capacity of 300,000bpd, 17 breaches were recorded in 2016. NNPC also suffered at least 15 breaching incidents on the TFP, while charging members of the Pipeline Professionals’ Association of Nigeria (PLAN) to […]

BP sees strong profits in renewed Azeri oil contract

15 Sep 2017   Azerbaijan

A deal by BP to extend oil production-sharing in Azerbaijan by 25 years is profitable at current oil prices even after paying a signing bonus and cutting foreign companies’ stake in the project, Chief Executive Bob Dudley said. The pact between a BP-led consortium and Azerbaijan to continue developing the Azeri-Chirag-Guneshli (ACG) offshore fields until 2050 comes as the oil and gas company prepares to boost production sharply by the end of the decade. Under the deal, BP and its partners cede part of their stake to Azerbaijan’s national energy company SOCAR and pay the government a $3.6 billion signing bonus. BP’s stake falls to 30.37 percent from 35.8 percent but it will remain the operator. The initial agreement, signed in 1994, was dubbed by […]

Billions more barrels of oil possible from Azerbaijan

15 Sep 2017   Azerbaijan

A contract for the largest oil complex offshore Azerbaijan could lead to billions of dollars in investments and billions more in oil barrels, analysis finds. British energy company BP led a consortium of international partners in extending a contract with the Statoil Oil Company of the Azerbaijan Republic for the Azeri-Chirag-Gunashli field in the Azeri waters of the Caspian Sea. Since the initial production sharing contract was signed in 1994, the oil field has produced more than 3 billion barrels of oil and delivered more than $125 billion in net profits to Azerbaijan. Under the terms of new contract, SOCAR takes another 11 percent stake in the development to 25 percent and the international partners pay $3.6 billion to an […]

Venezuela Suspends Trade In U.S. Dollars

15 Sep 2017   Venezuela

Venezuela has told oil traders it will no longer accept or offer U.S. dollars in payment for crude oil and fuels, the Wall Street Journal reports , citing sources familiar with the developments. As a result, traders have started converting dollars into euros, and PDVSA’s foreign partners operating in the country may have to switch to euros as well. At the same time, Reuters reports , Venezuela yesterday suspended the sale of U.S. currency through its Dicom auction system that President Nicolas Maduro said the government will use to switch from dollars to a basket of other currencies. The decision comes on the heels of fresh U.S. sanctions that effectively aim to tie Caracas’ hands with the issue and sale of new debt, which increases the danger of it defaulting on existing loans. As a counter move, Caracas is moving to a combination of yuans, Russian rubles, and euros […]

India Plans Larger Oil Auctions as Modi Pursues Import Cuts

15 Sep 2017   India

“We want to create a lot of E&P companies in India,” said the head of the country’s oil regulator. (Bloomberg) — India will offer larger areas with higher oil and natural gas reserves in the next auction of discovered fields later this year as Prime Minister Narendra Modi’s government seeks to curtail rising crude oil imports. “The next round would be meatier, bigger and players can expect even better fields,” Atanu Chakraborty, head of oil regulator Directorate General of Hydrocarbons, said in an interview. “The reserves are twice of that we offered in the first auction round, on a very conservative estimate.” India last year offered 67 small oil and gas fields holding about 625 million barrels of reserves in its first auction in six years allowing new entrants such as drugmakers and engineering companies to try their hand at boosting local production. The government also relaxed rules by […]

Brazil’s Pre-Salt Areas Attract 17 Major Oil Bidders

15 Sep 2017   Brazil

As many as 17 companies have registered to bid next month in two rounds of exploration license awards in Brazil’s pre-salt layer, Brazilian Oil and Gas Secretary Marcio Felix said on the sidelines of an event on Thursday. Brazil is eager to award new exploration licenses in the most promising blocks in its pre-salt layer as it tries to boost its economy and attract more foreign investment. Before Felix gave the exact number of the different bidders in the two rounds, the country’s oil and gas regulator ANP had previously said that 10 firms had expressed interest to take part in the second round, with 15 companies registering to bid in the third round. Now the exact number is known—17—and all are major oil firms, Reuters quoted Felix as saying. Interest in pre-salt areas by majors has grown since Brazil removed in October last year the requirement by law […]

U.S. shale sector at critical price threshold: Kemp

15 Sep 2017   Shale Oil

Forward U.S. oil prices for 2018 have climbed back above $50 per barrel, a level that should be high enough to stabilize drilling activity over the next two months. But if prices continue their current upward trend, shale firms will almost certainly interpret that as a sign to increase output and begin ramping up their drilling programs again. Shale drilling has proved very sensitive to changes in the value of West Texas Intermediate (WTI) crude, especially the forward prices shale firms rely on to hedge production and reduce their risks. Between February 2016 and January 2017, the progressive increase in forward prices encouraged shale producers to boost output by hiring extra drilling rigs ( tmsnrt.rs/2jsXK7g ). The number of rigs drilling for oil, which had been falling during the […]

Alberta anticipates oil sands production boom

15 Sep 2017   Canada, Tar Sands

Through one of the largest investments in provincial history, expansions to an oil sands project in Alberta triggers big gains in output, its premier said. Alberta Premier Rachel Notley was on hand for a ribbon-cutting ceremony to mark the start of a $1.6 billion (USD) expansion project led by Japan Canada Oil Sands Ltd. At its Hangingstone project in Fort McMurray, the expansion will use steam to help improve oil production from the current rate of 1,000 barrels per day to 20,000 bpd by the middle of next year. “Good jobs for Albertans, billions of dollars in new investment and a growing economy — that’s what this expansion project means,” Notley said in a statement […]

Supermajors Prepare For A Permian Bidding War

15 Sep 2017   Shale Oil

BHP announced their plans to divest their U.S. shale assets, including a 123,000-acre position in the heart of the Delaware Basin. This acreage position, in terms of a pricing evaluation, could rival the Exxon acquisition of the Bass family’s assets, which totaled over $5.6 billion. We are anticipating a bidding war between supermajors. To break down this gem of an acquisition target, we wanted to analyze comparable transactions in the basin along with key data points to understand the upside of BHP’s Delaware acreage position. (Click to enlarge) Trying to predict a fair dollar-per-acre price for any acreage in the Delaware is tough, but the two transactions that we wanted to compare were Exxon’s purchase of BOPCO and WPX’s purchase of RKI. Both of these were multibillion-dollar acreage positions offset of BHP in the Delaware, with relatively similar production. RKI was sold in July of 2015, and BOPCO in […]

Alberta Banking On An Oil Sands Boom

15 Sep 2017   Canada

Alberta Premier Rachel Notley cut the ribbon that marked the official opening of an oil sands expansion project near Fort McMurray on Wednesday. The new project is expected to produce 20,000 bpd of oil by mid-2018, thanks to a US$1.64 billion (2 billion Canadian dollars) investment. Japan Petroleum Exploration Co (Japex) and Nexen Energy ULC—a wholly owned subsidiary of China’s CNOOC— started last month the production of ultra-heavy crude oil from the Hangingstone Oil Sands Project. Japex and Nexen launched production using the Steam-Assisted Gravity Drainage (SAGD) method, at a current bitumen production rate of 1,000 bpd. After wells get switched to full production mode, the companies expect production volume at the Hangingstone project to reach 20,000 bpd by the second half of 2018. Japex’s subsidiary, Japan Canada Oil Sands Limited (Jacos), holds a 75- percent interest in the project and is its operator, while Nexen owns the other […]

A123 Systems invests in solid-state battery technology company Solid Power

15 Sep 2017   Electric Cars

A123 Systems LLC, a developer and manufacturer of advanced lithium-ion batteries and systems, has invested in Solid Power Inc., a developer of solid-state battery technology. Solid Power’s technology combines an exceptionally high capacity cathode with a high capacity lithium metal anode in combination with a high ionic conductivity solid separator. The battery materials are 100-percent inorganic and possess no flammable or volatile components. The Solid Power batteries provide substantially higher energy than conventional lithium ion (2-3X greater) while also enabling lower cost systems due to the potential for eliminating many of the costly safety features typically associated with lithium-ion systems. Solid Power’s technology has been recognized as a game-changer by several global automakers and the investment from A123 will help power the ongoing development of the company’s cell […]

Trump Administration will Waste Billions by Disregarding Science in Hurricane Recovery

15 Sep 2017   Climate

The Trump administration is consciously choosing to reject climate science in its plan to rebuild from superstorms Harvey and Irma. And that means their reconstruction of Houston and Florida will squander billions of taxpayer dollars and put Americans who rebuild at risk in the future. In stunning remarks during Monday’s White House press briefing , Homeland Security Adviser Tom Bossert told reporters that the administration does not take seriously the “cause” of climate change. “I will tell you that we continue to take seriously the climate change — not the cause of it, but the things that we observe,” Bossert said. “And so there’s rising flood waters — I think one inch every 10 years in Tampa — things that would require prudent mitigation measures.” But the problem is that if you don’t take seriously the cause — human activity and carbon pollution from burning fossil fuels — then […]

Valero Houston Plant Underestimated Harvey Benzene Leak

15 Sep 2017   Refining

Valero Energy Partners’ Houston refinery suffered a hurricane-related spill Aug. 27 from a light crude storage tank, the Environmental Protection Agency said. The chemical plant that released a cloud of a carcinogenic chemical amid Hurricane Harvey and its aftermath in Houston’s Manchester neighborhood in August emitted far more of the chemical than it had previously disclosed, environmental regulators said Thursday. The plant, Valero Energy Partners ’ Houston refinery, suffered a hurricane-related spill Aug. 27 from the damaged roof of a light crude storage tank, the U.S. Environmental Protection Agency concluded in an investigation. Valero initially reported to the state that because of the spill, seven pounds of the carcinogenic chemical benzene were released into the air. Subsequently, Valero “has informed the EPA that it believes it significantly underestimated the amount of [volatile organic chemicals] and benzene released in its original report to the State of Texas Environmental Electronic Reporting […]

EIA projects 28% increase in world energy use by 2040

15 Sep 2017   USA

Source: U.S. Energy Information Administration, International Energy Outlook 2017 The U.S. Energy Information Administration’s latest International Energy Outlook 2017 (IEO2017) projects that world energy consumption will grow by 28% between 2015 and 2040. Most of this growth is expected to come from countries that are not in the Organization for Economic Cooperation and Development (OECD), and especially in countries where demand is driven by strong economic growth, particularly in Asia. Non-OECD Asia (which includes China and India) accounts for more than 60% of the world’s total increase in energy consumption from 2015 through 2040. Through 2040, the IEO2017 projects increased world consumption of marketed energy from all fuel sources, except for coal demand, which is projected to remain essentially flat. Renewables are expected to be the fastest-growing energy source, with consumption increasing by an average 2.3% per year between 2015 and 2040. The world’s second fastest-growing source of energy […]

Sources Say Trump’s Citgo Sanctions Are Working

15 Sep 2017   Venezuela

Trading sources say President Donald Trump’s new sanctions against Venezuela’s American refining unit, Citgo, have succeeded in making it difficult for the PDVSA subsidiary to order crude for its facilities, a new Reuters report says. Oil distributors now require Citgo to provide prepayment letters or bank letters of credit, instead of allowing the company to employ the standard practice of ordering raw supplies on open credit. Citgo’s refineries produce 750,000 barrels per day of oil, sources said. The company owns three facilities: one in Illinois, one in Texas, and one in Louisiana. Together, they represent 4 percent of American fuel capacity. A pair of Canadian suppliers explained that their companies could not trade with Citgo directly anymore, resorting to third-party sales to avoid a credit risk. Another banker familiar with the matter put it this way: “This is not a credit issue, nobody thinks Citgo is unwilling to pay. […]

Seasonal factors help Russia over-comply with OPEC pledge

15 Sep 2017   Russia

Seasonal factors and maintenance at an Arctic oil field in Russia may be contributing factors to its compliance with an OPEC-led production deal, data show. Russia said oil production declined more than it committed to the Organization of Petroleum Exporting Countries as part of a market balancing effort. Total Russian oil production for the year is holding steady, but still represents a slight increase from the average last year. Calculations from commodity pricing group S&P Global Platts show total Russian oil production for August was down 337,000 barrels per day from the 11.24 million barrels per day in October, the month that OPEC uses to gauge compliance. That means, by Platts’ estimates, Russia is 112 percent in compliance. A report sent to UPI […]

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 […]