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U.S. Oil Futures Slip on Supply, Firmer Dollar

Filed in Prices by on 20 September 2014

U.S. and global oil prices diverged Friday as supply concerns weighed on U.S. prices, though both contracts posted slight gains for the week. Light, sweet crude for October delivery settled down 66 cents, or 0.7%, to $92.41 a barrel on the New York Mercantile Exchange. Prices rose 0.2% this week. Brent rose 69 cents, or 0.7%, to $98.39 a barrel on ICE Futures Europe and rose 0.4% on the week. The dollar traded near multiyear highs against a basket of currencies Friday on the potential for U.S. interest-rate increases in the future. Oil is traded in dollars, so a stronger dollar makes oil more expensive to buyers using other currencies. “The U.S. dollar is helping the crude market go down,” said Tariq Zahir, managing member of Tyche Capital Advisors in New York, adding that he has been betting on lower oil prices. U.S. prices have seen some support [...]

WTI Falls Third Day on Dollar Strength as Supply Rises

Filed in Prices by on 20 September 2014

West Texas Intermediate crude fell for a third day on rising U.S. inventories as a stronger dollar weighed on commodity prices. Brent futures rose on supply risks. Stockpiles increased last week for the first time since Aug. 8, according to the Energy Information Administration. The dollar gained as the Federal Reserve moves closer to raising interest rates . Brent widened its premium to WTI on signs of lower OPEC output. Gasoline futures jumped on surging Gulf Coast spot prices. “Oil continues to come under pressure from the idea that we have ample supplies,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford, Connecticut. “The dollar is throwing pressure on oil.” WTI for October delivery dropped 66 cents, or 0.7 percent, to end at $92.41 on the New York Mercantile Exchange . The volume of all futures traded was about 5.8 percent below the 100-day average. [...]

US Crude Falls On Worries About Glut, Brent Gains

Filed in Prices by on 20 September 2014

U.S. crude oil and Brent traded in opposite directions on Friday as a sell-off ahead of Monday’s expiration kept U.S. prices down, while discussions of OPEC cutting output put strength into the market overseas. With the two crudes trading lower in the morning, analysts and traders said much of the sell off in the WTI contract was a result of liquidation of long positions before the expiration on Monday. However, Brent saw a number of rallies through the day, pushing the arbitrage between the two grades to $6.74 <CL-LCO1=R>, the widest since Sept. 8. U.S. crude fell 66 cents to settle at $92.41 a barrel while Brent rose 69 cents to settle at $98.39 a barrel. “I think overall talk about OPEC cutting back production is giving some strength on Brent. The cuts are inevitable but who and how,” said Carl Larry, chief [...]

Cheap Oil and Expensive Oil Tankers: This Is Contango

Filed in Prices by on 20 September 2014

Energy During the last half of 2008, as the global economy ground to a halt, the price of oil fell from an all-time high of $145 a barrel to less than $40. A lot of people lost a lot of money. Just as in the stock market, though, the oil crash presented a chance to buy crude cheaper than it had been in years and might ever be again. If you had a place to store that cheap oil, you could make a lot of money when prices rebounded. Thus was born the booming demand for oil tankers, or any other place to stash low-cost crude. By January 2009, with prices still hovering around $50 a barrel, there were some 90 million barrels of crude in floating storage. The futures markets had entered something traders call contango, a fancy commodities term for the expectation that prices will rise in [...]

Natural Gas Prices Edge Lower on Strong Supply, Comfortable Weather

Filed in Prices by on 20 September 2014

Natural-gas prices closed lower on Friday for a second day, as big surpluses of the fuel and expectations of lower demand encouraged selling. Prices for the front-month October contract fell 7.3 cents, or 1.9%, to $3.837 a million British thermal units on the New York Mercantile Exchange. After a rally above $4/mmBtu to start the week, two days of losses have brought gas back toward the bottom of a 32-cent range in which it has traded for nearly all the past two months. Traders began selling on Thursday, after the U.S. government reported stockpiles grew last week faster than expected. That selling continued into Friday, traders and analysts said. Producers are refilling storage at a record rate, fast enough to get storage levels back to nearly normal, even though they started the spring at an 11-year low, according to the U.S. Energy Information Administration. Weather [...]

U.S. Hopes Face-Saving Plan Offers a Path to a Nuclear Pact With Iran

Filed in Iran by on 20 September 2014

Over the years, the United States has shown considerable ingenuity in its effort to slow Iran ’s production of nuclear fuel: It has used sabotage, cyberattacks and creative economic sanctions. Now, mixing face-saving diplomacy and innovative technology, negotiators are attempting a new approach, suggesting that the Iranians call in a plumber. The idea is to convince the Iranians to take away many of the pipes that connect their nuclear centrifuges, the giant machines that are connected together in a maze that allows uranium fuel to move from one machine to another, getting enriched along the way. That way, the Iranians could claim they have not given in to Western demands that they eliminate all but a token number of their 19,000 machines, in which Iran has invested billions of dollars and tremendous national pride. And if the plumbing is removed, experts at America’s national nuclear laboratories have told the [...]

Iran Nuclear Talks Resume After Gap

Filed in Iran by on 20 September 2014

The first full round of nuclear talks between Iran and six world powers resumed Friday in New York after a two-month gap, with Western officials saying the coming days are critical to reaching a deal by the Nov. 24 deadline. The talks are taking place to the backdrop of the annual United Nations General Assembly meeting, meaning leaders and foreign ministers from Iran and the six powers will be in town. Western officials say they hope that will inject some needed momentum into discussions and help them answer their biggest question of whether Iran’s negotiating team has political cover to accept a major cut in Tehran’s current nuclear-enrichment program under a final deal. “We are entering the crucial phase of the…negotiations with Iran,” German Foreign Minister Frank-Walter Steinmeier told reporters Friday. “There is no more room for Iran to play for time. We are willing to offer Iran [...]

Iran, 6 powers seek to unblock nuclear talks

Filed in Iran by on 20 September 2014

With little more than two months to deadline, Iran and six world powers on Friday launched a fresh effort at narrowing stubborn differences on what nuclear concessions Tehran must agree to in exchange for full sanctions relief. The talks once again bring Iran to the negotiating table with the United States, Russia, China, Britain, France and Germany. But this time they are taking place on the sidelines of the U.N. General Assembly. That means U.S. Secretary of State John Kerry and his counterparts will likely join in, adding their diplomatic muscle to the meeting. With the clock ticking down, German Foreign Minister Frank-Walter Steinmeier said the talks had entered a “crucial phase,” and suggested Iran would be to blame if the sides failed to seal a deal. “There is no more room for Iran to play for time,” he told reporters, urging Tehran to “move [...]

Nigerian Oil Unions Halt Strike After Pension Dispute

Filed in Nigeria by on 20 September 2014

Nigeria’s oil unions called off a four-day strike, averting a threat to exports from a nation whose shipments equate to about 2 percent of global demand. The Pengassan union that represents managers and blue-collar Nupeng oil union suspended industrial action after talks with Petroleum Minister Diezani Alison-Madueke and state-owned Nigeria National Petroleum Corp. “The strike action embarked upon by Nupeng and Pengassan is hereby suspended,” according to a joint e-mailed statement today by the minister, labor leaders and NNPC. The strike started on Sept. 16 in a dispute over pensions and unions representing workers at NNPC. Nigeria is the continent’s largest oil producer and relies on the commodity for more than 70 percent of government revenue and 95 percent of foreign-exchange income. The West African nation pumped 2.3 million barrels a day of oil in August, the most since 2006, according to data compiled by Bloomberg. “The strike didn’t [...]

Mexico’s oil hedging deal exposed

Filed in Mexico by on 20 September 2014

 Gulf of Mexico crudes strengthened on concern that the conflict in Syria might spread and threaten imports from the Middle East. Photographer: Susana Gonzalez/Bloomberg Mexico’s oil hedging programme – a highly secretive deal that is the largest single trade in crude markets – appears to be unfolding in public for the first time, according to traders. The public disclosure of a large options trade on a new database has led to speculation that the country’s government has locked in a price for most of its oil exports next year. More On this topic IN Commodities Put options locking in the sale of 5m barrels of crude for at least $80 per barrel were this [...]

With 38% of Global Shale Gas Located in Regions of Water Stress, More Oversight of Fracking is Urgently Needed

Filed in Shale Gas by on 20 September 2014

Natural gas rig in the Piceance Basin in Colorado. Fracking in water-stressed areas poses risks to energy producers and communities. Photo: Energy Tomorrow/Creative Commons 2.0. As more data emerge, shale gas increasingly appears to be in the cross-hairs of the water-energy nexus, and far too little is being done to defuse impending conflicts. While  hydraulic fracturing  (or “fracking”), the process used to unleash natural gas from shale deposits, has raised serious concerns about  groundwater contamination , less attention has been given to the added competition for limited water supplies the process can bring. Each fracking well can require up to 25 million liters (6.6 million gallons) of water. A new  study  by the  World Resources Institute  (WRI), a research group based in Washington, DC, attempts to fill this knowledge gap by overlaying known recoverable resources, or “plays,” of shale gas onto maps of water stress.   The results raise concerns. [...]

Oil Companies Eye Crude Price Drop But Keep Drilling

Filed in Oil Supply by on 20 September 2014

A 13 percent slide in crude oil prices since June has eroded some of the allure of drilling U.S. shale resources and raised investor concerns, but companies are pushing ahead as prices are still above the breakeven levels that might prompt a slowdown. U.S. light sweet crude traded in New York has dropped to around $93 per barrel from $107 in late June as supplies pumped from oily rocks in Texas and North Dakota grow and a strong U.S. dollar makes imports more attractive. On Thursday, shares of Bakken operator Continental Resources Inc stumbled as much as 8 percent after the company raised its capital budget for this year by $500 million to $4.55 billion and said some well completion techniques would be costlier. The company also replaced a key executive. But oil’s [...]

BHI: US drilling rig count holds steady at 1,931

Filed in USA by on 20 September 2014

The US drilling rig count was unchanged at 1,931 rigs working during the week ended Sept. 19, Baker Hughes Inc. reported. A 4-unit rise in land rigs to 1,856 was offset by a 4-unit decline in offshore rigs to 62. Rigs drilling in inland waters were unchanged at 13. Oil rigs were up 9 units to 1,601, which was nullified by a 9-unit drop in gas rigs to 329. The one rig considered unclassified remains unmoved from last week. Directional drilling rigs fell 5 units to 212 while horizontal drilling rigs edged down a unit to 1,341. Canada’s rigs count lost 28 units during the week, settling at a total of 377, down 11 units compared with this week a year ago. Oil rigs comprised a majority of the loss, falling 20 units to 202. Gas rigs dropped 8 units to 175. Major states, basins Activity in the major [...]

API: Oil imports at historic low

Filed in USA by on 20 September 2014

API said in its monthly report on trends in the U.S. energy sector crude oil imports of 7.6 million barrels per day in August, the last full month for which data are available, was 6.2 percent less than last year and the lowest level for August since 1996. Total imports of petroleum productions were down 10.2 percent year-on-year. August crude oil production of 8.6 million bpd, meanwhile, was the highest for the month in nearly three decades. Production was boosted largely by output from North Dakota and Texas. In terms of demand, API said its petroleum delivery metric showed a 1 percent increase year-on-year to 19.3 million bpd, the highest in three years. “Petroleum demand last month showed slow but steady growth, mirroring economic indicators for domestic manufacturing, air travel and job creation,” said API Chief Economist John Felmy . Production of gasoline in [...]

Exxon grabs more Permian shale

Filed in Shale Oil by on 20 September 2014

Exxon Mobil said it added to its portfolio in the Permian shale basin in Texas in exchange for a portion of its field operations in California. Exxon under the terms of a non-monetary exchange with LINN Energy gets 17,000 net acres in the Permian basin in exchange for 500 acres at its Belridge field in California. Permian production increased 58 percent from 2007 to reach 1.35 million barrels per day last year, which represents 18 percent of total U.S. crude oil production. Exxon said the Belridge field is producing approximately 3,400 bpd. The Permian area will be operated by Exxon’s subsidiary XTO Energy Inc. “We continue to expand our leasehold position in a prolific area that is poised for profitable volumes,” Randy Cleveland, president of XTO Energy, said in a Thursday statement. For LINN, it said it would examine 300 potential future drilling [...]

House wants more energy in era of record production

Filed in Oil Supply, USA by on 20 September 2014

A bill that passed through the U.S. House of Representatives will bring relief to consumers feeling the “squeeze” of high gasoline prices, backers say. The House of Representatives passed a measure largely along party lines that supporters said would lower energy prices and expand U.S. energy production. House Natural Resources Committee Chairman Doc Hastings , R-Wash., said the bill came in response to bureaucratic red tape getting in the way of true U.S. energy potential . The measure is “a common sense” approach to “provide relief to hardworking Americans who are feeling the squeeze of higher gasoline and electricity prices, reduce burdensome government barriers to American energy production, and increase America’s energy security,” he said in a statement Thursday. The American Petroleum Institute, which represents the business interests of the energy sector, said permits for everything from the Keystone XL oil [...]

Surging Gas Supply Masks Risk of Winter Price Shock

Filed in Natural Gas Supply, Prices by on 20 September 2014

Gas traders betting that ample supply will limit price gains risk a repeat of last winter’s rally as forecasts for another frigid season raise the specter of supply constraints. AccuWeather Inc. and Commodity Weather Group LLC predict below-normal temperatures for much of the U.S. this winter. The price difference between gas for delivery in October and January is the narrowest for this time of year since 2000, a sign that the market views stockpiles as adequate to meet peak heating demand. Goldman Sachs Group Inc. cut its forecast for average gas prices in the fourth quarter of this year and throughout 2015 to $4 per million British thermal units from $4.25, citing a mild summer and rising production. Last winter, a polar vortex left gas supply at an 11-year low and sent futures to a five-year high. Gas inventories will enter the heating season at the lowest level for [...]

No means yes for Scotland, energy companies say

Filed in Scotland by on 20 September 2014

After a “no” vote, British energy company BP said Friday it would work closely with the governments in Edinburgh and London to boost North Sea recovery. More than half of the voters taking part in a Thursday referendum for independence from the United Kingdom chose to continue on with 307 years of unity. BP said it would stay on with its commitments in the North Sea . “BP will continue to work closely with both the UK and Scottish governments to realize our shared ambition of maximizing economic recovery from the North Sea,” the company said. Scotland said independence would have drawn in substantial oil and gas wealth in the North Sea, with power coming from renewable resources. Edinburgh touted the revenue potential on the day of the referendum. Analysis this week from Wood Mackenzie found that while most of the [...]

Exxon Gets U.S. Sanctions Extension to Shut Russian Arctic Well

Filed in Russia by on 20 September 2014

Exxon Mobil Corp. (XOM) said the U.S. government is giving the company more time to shut its Russian Arctic well beyond the deadline for sanctions aimed at halting the $700 million project. Exxon asked Washington for an extension to allow it to continue performing shut-down work on the Universitetskaya-1 (University-1) well in Russia ’s Kara Sea to make sure the well was safe before it’s temporarily abandoned. The Irving, Texas-based company already had ceased drilling the offshore well after U.S. sanctions set a Sept. 26 deadline for ending the work. “The U.S. Treasury Department, recognizing the complexity of the University-1 well and the sensitive Kara Sea arctic environment, has granted a license to Exxon Mobil and other U.S. contractors and persons involved to enable the safe and responsible winding down of operations related to this exploration well,” Exxon said in a statement today. The most-recent round of sanctions intended [...]

EIA: Russia diversifying energy production

Filed in Russia by on 20 September 2014

Russia is looking to develop energy in hard-to-reach areas as legacy production falls from its peak, the U.S. Energy Information Administration found. EIA said Russia typically depends on oil and gas fields in West Siberia. Production there has fallen from peak production levels in the 1980s and companies like Rosneft and Gazprom Neft are looking at new prospects. Last year, Russia was the largest producer of crude oil and condensate and the second-largest producer of natural gas. Oil production in 2013 increased 1.3 percent and gas by 2.1 percent. “However, new technologies, growing Asian markets, and Western sanctions have the potential to shift the regional balance of Russian oil and natural gas production in the long term,” EIA said. Last week, Russian oil company Gazprom Neft said it reached a milestone with the production of its 1 millionth barrel of oil from the arctic [...]

Gazprom: Europe our top priority

Filed in Russia by on 20 September 2014

Though China is becoming an important business partner, the European market is the prime destination for Russian gas, the CEO of Gazprom said Friday. Chief Executive Officer Alexei Miller said Russian gas would account for 64 percent of European imports this year, up 17 percent from four years ago. “The European market is No. 1 for us, and we are Europe’s No. 1 gas supplier,” he said. Gazprom officials have expressed interest in moving deeper into a growing Asian economy in an effort to offset a stagnant European Union. Construction started this month on the 2,500-mile Power of Siberia natural gas pipeline to carry Russian gas to China. A contract between Russian natural gas company Gazprom and China National Petroleum Corp. is for 30 years and calls for 1.3 trillion cubic feet of natural gas per year. Russia’s role in the European energy sector [...]

Russian bank boss feeling sanctions pain

Filed in Russia by on 20 September 2014

Last week, the European Union enforced a new round of sanctions targeting Russian energy efforts in shale, arctic oil and deep waters. The U.S. and European governments already have imposed punitive sanctions on Russian energy companies Rosneft, Gazprom Neft and others in response to the crisis in Ukraine. Herman Gref, the director of Russian bank Sberbank, told Rossiya-24 television the sanctions, which extend into the banking realm, were taking their toll . Russian Prime Minister Dmitry Medvedev said earlier this month the government had a responsibility to support companies like Rosneft , controlled in part by the Kremlin. The European Bank for Reconstruction and Development said sanctions “have negatively affected business confidence in Russia.”

Exxon winds down Russian Arctic drilling campaign

Filed in Russia by on 20 September 2014

Cold world: sanctions against Russia have raised questions on the future of expensive projects in the Kara Sea north of Siberia Cold world: sanctions against Russia have raised questions on the future of expensive projects in the Kara Sea north of Siberia ExxonMobil , the US oil company, is winding down its drilling campaign in the Russian Arctic , making it the biggest corporate casualty of sanctions announced by the US and EU this month, by putting its $700m project on indefinite hold. The company said on Friday that the US Treasury had granted it a short term licence “to enable the safe and responsible winding down of operations”, but said there would be no further extensions. More On this topic IN Oil & Gas It added that it would be bringing to an end all activities associated with the project, a joint venture with Russia’s Rosneft , “as [...]

Russia looks beyond West Siberia for future oil and natural gas growth

Filed in Russia by on 20 September 2014

Russia was the world’s largest producer of crude oil (including lease condensate) and the world’s second-largest producer of dry natural gas in 2013. In 2013, production of crude oil and lease condensate grew by 1.3%, and production of dry natural gas grew by 2.1%. Most of Russia’s crude oil and natural gas production occurs in West Siberia, a part of central Russia that stretches from the northern border of Kazakhstan to the Arctic Ocean. However, new technologies, growing Asian markets, and Western sanctions have the potential to shift the regional balance of Russian oil and natural gas production in the long term. In 2013, production of oil and natural gas in West Siberia totaled 6.2 million barrels per day of crude oil and 21.1 trillion cubic feet (Tcf) of natural gas, respectively, down from peak production levels in the 1980s. Russian energy companies Rosneft and Gazprom Neft have increased [...]

Western Oil Companies to Continue in Russia Despite Sanctions

Filed in Russia by on 20 September 2014

Western oil companies have pledged their readiness to continue working in Russia despite Western sanctions, which have already put a brand new project into question. Speaking at an investment conference in Russia’s southern port of Sochi, Olivier Lazare, the president of Shell Russia, said the company’s strategy in Russia hasn’t changed because of the sanctions. “But of course we have to comply with the sanctions,” he said, adding that the company is seeking clarification on what the sanctions mean for its business in Russia. General director of Total E&P Russie, Jacques de Boisseson, also said the company is committed to work in Russia. “We have continued to work in spite of sanctions, this is about consistency, about long-term work, about trust with our partners,” he said. “Yes, we are used to work with sanctions. No, we don’t like to do that.” Western countries have imposed sanctions against Moscow [...]

Oil Heads for Weekly Gain on Speculation OPEC May Cut Production

Filed in Prices by on 19 September 2014

Brent and West Texas Intermediate crude headed for this month’s first weekly increases as the Organization of Petroleum Exporting Countries considers cutting its production target next year. Futures were little changed in London and poised for a 0.6 percent increase this week. OPEC, supplier of about 40 percent of the world’s oil, may reduce its daily quota by 500,000 barrels to 29.5 million in 2015, Secretary-General Abdalla El-Badri said in Vienna on Sept. 16. Libya halted output from the Sharara field after an attack at the Zawiya plant. “The market appears to have formed a bit of a base,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “We may also be getting close to a level where the market is a little nervous about taking more risk premium out of oil prices . There’s not a lot in there now and that leaves [...]

Oil-Price Quirk Sends Crude Out to Sea

Filed in Prices by on 19 September 2014

Sinopec leased the 3.2 million-barrel supertanker TI Europe, above, to hold crude in storage, and plans to pick up more cargoes in the coming days. Euronav Big oil companies and traders are stashing millions of barrels of crude on massive tankers bobbing in the ocean, in a bid to profit from a quirk in oil markets. Instead of moving crude from one port to another, a growing number of tankers are serving as floating warehouses for companies including Sinopec Ltd. and Vitol Group, according to people with knowledge of their operations. Other companies such as Mercuria Energy Group are using the tankers to haul crude to on-shore storage facilities, these people said. In a rare split, crude is cheaper in the spot market than in the futures market, where bets are made on where prices will be in the months ahead. By buying physical stocks of oil and immediately [...]

Natural-Gas Prices Fall on Larger-than-Expected Surplus

Filed in Prices by on 19 September 2014

Natural-gas futures closed lower Thursday after a weekly stockpile update showed a larger-than-expected surplus. Prices for the front-month October contract settled down 10.3 cents, or 2.6%, at $3.91 a million British thermal units on the New York Mercantile Exchange. The retreat put natural gas back in the middle of a 32-cent range it has traded in for nearly all of the past two months. Producers added 90 billion cubic feet of gas to storage for the week ended Sept. 12, the U.S. Energy Information Administration said. The addition was larger than the 89 bcf consensus average expectations of analysts and brokers in The Wall Street Journal survey. Traders use the EIA update to gauge how quickly stockpiles are recovering from high demand that drained them to 11-year lows this winter. Last week’s addition refilled stockpiles to 2.9 trillion cubic feet, about 13% below the five-year [...]

Islamic State Brings Saudi-U.S. Ties Into Line After Discord

Filed in Prices by on 19 September 2014

Saudi and U.S. leaders have been speaking in harmony about the threat posed by Islamic State, after a period in which the allies of 70 years frequently sounded discordant notes. The breakaway al-Qaeda group’s rampage through northern Iraq and eastern Syria has persuaded the U.S. to launch air strikes and seek Arab support for a broader campaign. Saudi Arabia hosted a coalition-building summit last week for Secretary of State John Kerry and 10 Middle Eastern states. After that session, and more than two hours of talks with King Abdullah, Kerry told reporters that “you could not have heard a more fulsome commitment to doing anything that is necessary.” Such solidarity hasn’t always characterized ties between the nations since 2001, when Saudi citizens were involved in the Sept. 11 attacks. A decade later, they split again over the Arab revolts, with Saudis blaming the U.S. for abandoning allies such as [...]

Iraqi oil exports down more than 2 percent

Filed in Iraq by on 19 September 2014

Oil ministry spokesman Assim Jihad said Thursday oil exports from the southern port city were sent to nearly three dozen international companies. August exports were down more than 2 percent from the 75.7 million barrels sent from southern port cities the previous month. SOMO is the only entity authorized to export oil from Iraq, the federal government in Baghdad says. The semiautonomous Kurdish government has exported oil taken from its northern provinces at least since May, to the frustration of Baghdad. The Oil Ministry said Thursday exports to Ceyhan from a pipeline from the restive northern Iraqi city of Kirkuk have been idled since May because of terrorist actions. Militants from the Islamic State, referred to often as ISIS or ISIL, claimed in June they took over the Baiji oil refinery , the largest in Iraq. Oil Minister Adil Abdel Mahdi visited the Baiji [...]

Iraq’s Fight Against ISIS May Fall to Provinces

Filed in Iraq by on 19 September 2014

Gov. Atheel al-Nujaifi wants his province back. Since early June, when jihadist militants swept into Nineveh Province in northern Iraq and seized control of its capital , Mosul, Mr. Nujaifi has been a man without a home. As Iraqi forces and various militias, backed by American airstrikes , have sought to beat back fighters calling themselves the Islamic State, Mr. Nujaifi has pursued his own military response, narrowly tailored toward reclaiming Mosul. He is trying to assemble a 3,000-person militia of Sunni Muslims from Nineveh Province to deploy against the militant group, also known as ISIS. “We want to give a new image to the people: that Mosul will fight ISIS with people mainly from Mosul,” he said. “The people will not accept a return of the Iraqi Army.” There are countless hurdles to this project, not least of which is that the central government in [...]

U.S. Official Says Nuclear Talks With Iran Were Constructive

Filed in Iran by on 19 September 2014

The U.S. team negotiating a comprehensive nuclear deal with Iran were “not very optimistic” about the chances of a breakthrough in the talks, a senior U.S. official said Thursday, but bilateral discussions with Iran over the last 24 hours have been “constructive.” “Coming into New York, many of us were not very optimistic,” the official said. However, after discussions with Iran Wednesday evening and Thursday morning, “it is clear that everyone has come here to go to work.” The official said U.S. President Barack Obama is “open to” meeting with Iranian President Hasan Rouhani on the sidelines of the United Nations General Assembly next week but that there was no meeting scheduled. The official said “the choice is really Iran’s.” Mr. Obama and Mr. Rouhani held a historic 15-minute phone conversation at last year’s annual General Assembly meeting. Iran is negotiating a nuclear deal with the U.S. and [...]

Nigeria’s Power Woes Slow to Abate After Privatization

Filed in Nigeria by on 19 September 2014

Award-winning Nigerian sculptor Olu Amoda took eight months to complete The Sunflower, a giant artwork of steel and metal spoons, in his studio in Lagos, Africa ’s biggest city, because of electricity shortages. Amoda could have finished the piece in several weeks if he lived in a country with a steady power supply, such as the U.S., where he has presented works at the New York Museum of Art and Design. But he lives in Nigeria , which produces a 10th of the amount generated in South Africa even though its population of 170 million is more than three times larger. Blackouts are a daily occurrence. “In some places people ask ‘how’s the weather’,” he said. “Here my friends ask, ‘how is electricity in your area’.” While the government last year sold its power distribution monopoly and the hydro- and natural gas-powered plants it ran to attract investment needed [...]

Nigeria: Nationwide Darkness Looms As Oil Workers Cut Gas Supply to Power Plants

Filed in Nigeria by on 19 September 2014

The ongoing strike action embarked upon by workers in the oil sector has cut off gas supply to five power generating plants across the country, thereby putting the country at a potential risk of nationwide darkness.  The affected power generation plants include the 1,320mega watts (mw) Egbin power plant, 750mw Olorunsogo, 868mw Geregu and the 220mw Sapele power plants as well as the 270mw AES Independent Power Plant.

Nigeria: Oil Workers’ Strike – Motorists Queue for Petrol in Abuja

Filed in Nigeria by on 19 September 2014

Effect of ongoing nationwide strike by the oil workers was recorded on Thursday in Abuja as long queues by motorists for petrol were seen at many filling stations in the city. Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) members began an indefinite strike on Monday

Nigeria: Minister Urges Nigerians Not to Panic Over Fuel Scarcity

Filed in Nigeria by on 19 September 2014

The Minister of Labour and Productivity, Chief Emeka Wogu, on Thursday in Abuja urged Nigerians not to panic over the current fuel scarcity in the country.  Wogu made the call while speaking with newsmen on the ongoing strike by the oil and gas sectors.  The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) on Monday shut down operations nationwide.

Eni makes major oil find in Ecuador

Filed in Ecuador by on 19 September 2014

Italian energy company Eni said Thursday it made an oil discovery in Ecuador that could hold as much as 300 million barrels in place. Eni announced the discovery at the Olgan-2 exploration well. Drilling encountered a 236-foot column of crude oil and initial production tests yielded a flow rate of 1,100 barrels of oil per day. “Early estimates suggest that the Oglan discovery potentially contains about 300 million barrels of oil in place,” the company said in a statement. Ecuador has the third largest oil reserves in South America after Venezuela and Brazil. A member of the Organization of Petroleum Exporting Countries, it exports an average 388,000 bpd and produces around 526,000 bpd. Eni said the discovery was made less than 10 miles away from processing facilities already producing about 12,500 bpd. The Italian company stressed its work in the Amazon rainforest in [...]

China to drive ‘hard bargain’ on price of Canadian LNG: CNOOC official

Filed in Canada, China by on 19 September 2014

China will look to drive “a hard bargain” on prices when signing LNG off-take deals with Canadian producers in large part because of its recently signed supply deal with Russia, an official with China National Offshore Oil Corp. said Thursday. “We are in a strong position with the Russia deal and that puts us in the driver’s seat while conducting price negotiations in Canada,” Chen Wei Dong, chief energy researcher with the national oil company’s Energy Economics Institute said on the sidelines of the Canada LNG Export Conference and Exhibition in Calgary. China in May signed an deal with Russia to import 38 billion cubic meters/year of gas through a pipeline for 30 years. “We are negotiating another deal with Russia, which we are hoping to sign late this year or early 2015,” Dong said, noting the agreements are part of China’s efforts to [...]

Chinese shale gas growth slow but steady

Filed in China, Shale Gas by on 19 September 2014

Beijing said it expected to get at least 60 billion cubic feet of natural gas per day from shale deposits by 2020. Production this year will be around 1.5 bcf, but could increase tenfold within the next two years. “If measures are appropriate, there is hope that production can reach 40 bcm – 60 bcm, accounting for roughly a fifth of total gas output,” Peng Qiming, director of exploration of the Ministry of Land Resources, said Wednesday. The Chinese government said its consumption of natural gas should increase as it embraces a low-carbon economy. By 2020, Beijing expects the share of natural gas in the energy mix should be about 10 percent, about double the current footprint. An August briefing from the U.S. Energy Information Administration says China may hold the largest reserves of technically recoverable shale natural gas in the world. Technical and [...]

Japan’s Idled Reactors, Weak Yen Drive Deficit on Energy

Filed in Japan, Nuclear by on 19 September 2014

Few are as eager as Prime Minister Shinzo Abe to see Japan ’s idled nuclear reactors brought back into operation. Since the country flicked off the switch to its nuclear energy program a little more than a year ago, expensive energy imports, particularly of liquefied natural gas, have worsened trade deficits. That’s placed an extra burden on an economy that contracted at an annualized rate of 7.1 percent in the second quarter, its worst showing since 2009, Bloomberg Businessweek reports in its Sept. 22 issue. Abe’s push to restore Japan’s 48 functioning reactors faces deep opposition from a public that can’t forget the radiation leaks from the Fukushima Dai-Ichi reactor complex following an earthquake and tsunami in 2011. Revelations of the regulatory lapses that led to the leaks galvanized local governments to keep Japan’s other reactors idle after they were shut down for scheduled maintenance. By September 2013 the country was without [...]

U.S. oil production up 10 percent year-on-year

Filed in Oil Supply, USA by on 19 September 2014

U.S. crude oil production for the second week in September was more than 10 percent higher than the previous year, government data show. The U.S. Energy Information Administration said in a weekly petroleum report total U.S. crude oil production for the week ending Sept. 13 was 8.6 million bpd, a 12.6 percent increase from the same week in 2013. The increase in U.S. crude oil production has generated debate over the durability of legislation enacted in response to the oil embargo from Arab members of the Organization of Petroleum Exporting Countries that limits crude oil exports from the United States. Supporters of lifting the ban say it will increase U.S. leverage overseas and push the price of petroleum products like gasoline lower. Opponents question those claims and argue more exports would come with environmental consequences. EIA data show overall crude oil imports into the [...]

Keystone Pipeline Cost Expected to Double, TransCanada CEO Says

Filed in Pipeline by on 19 September 2014

A TransCanada Keystone Pipeline pump station operates outside Steele City, Neb., in this March 2014 file photo. Reuters WASHINGTON— TransCanada Corp.’s chief executive said the cost to build the Keystone XL pipeline, currently estimated at $5.4 billion, is expected to double by the time the U.S. government completes its review of the largest part of the project. Russ Girling, chief executive of the Calgary, Alberta,-based company, in an interview this week said he expects the project’s cost could increase to a “number that gets you into the high single digits to a 10 number.” He was hesitant to say the project’s cost could double. “I was actually trying to avoid saying those words,” Mr. Girling said. “Obviously, the costs have increased significantly.” The pipeline, which would send Canadian oil sands to the Gulf Coast, has faced delays and has become a political flash point in the nation’s debate over [...]

Continental Resources unveils new Springer Shale play in Oklahoma

Filed in Shale Oil, USA by on 19 September 2014

Continental Resources unveiled results of the Springer Shale on Thursday, a new Oklahoma oil play that could help boost the state’s already growing production to levels not seen in decades. The Springer, chiefly sited in Grady and parts of Garvin counties at 12,500-foot depths, is yielding top-notch initial output rates and economic returns, company managers said Thursday in webcast remarks during Continental’s 2014 Analyst Day in Oklahoma City. The company’s results in the Springer, combined with its own and the industry’s mounting production at the South Central Oklahoma Oil Play and output from other formations in the state’s subsoil, is adding to Oklahoma’s already mounting production of 345,000 b/d in June, according to US Energy Information Administration data. “Oklahoma could potentially become the nation’s [third-highest] oil-producing state,” Continental CEO Harold Hamm said in opening the 2014 event, its first such investor gathering in two [...]

North Dakota Governor Sees Oil Production Dip From Flaring Rule Change

Filed in Shale Oil by on 19 September 2014

Some of North Dakota’s oil companies likely will experience a production dip starting next month as they try to meet aggressive new flaring standards, Governor Jack Dalrymple said on Thursday. Flaring, the wasteful burning of natural gas that is extracted alongside crude, has become a widespread problem in the state, the nation’s second-largest oil producer. In an effort to curb the problem, which harms quality of life and reduces tax revenue, state regulators will require companies to flare no more than 26 percent of produced gas starting Oct. 1, with standards tightening in the future. If producers fail to meet the standards, they will have to curb production. “A lot of people were surprised we took that step because there are going to be some operators impacted by this,” Dalrymple, a Republican, [...]

The Next Logical Step For Natural Gas Supplies?

Filed in Natural Gas Supply by on 19 September 2014

A California-based company claims that it has found a commercially viable technique to directly convert natural gas into liquid fuels or petrochemical building blocks. “Natural gas is the next logical step for the energy and chemistry industry,” said Rahul Iyer, vice president of corporate development with Siluria Technologies, which is partnering with world-class refining and petrochemical companies to roll out its catalytic processes for producing ethylene and liquid hydrocarbon fuels or fuel blend stocks. Last month, Siluria announced that it raised nearly more than $30 million in a financing led by Saudi Aramco Energy Ventures (SAEV) – the venture investment arm of Saudi Arabia’s national oil company – in its fourth stage of financing, also known as a Series D financing round. In addition to SAEV, Siluria has partnered with Brazil-based petchem manufacturer Braskem and the German-headquartered gases and engineering firm The Linde Group to commercialize its oxidative coupling [...]

Oil Clogging U.S. Railways Seen Limiting Exports of Grain

Filed in Shale Oil by on 19 September 2014

Shipping companies probably will miss out on exports from the record U.S. grain harvest because the shale-oil boom is clogging up rail lines to ports. While the U.S. will reap the most crops ever, fourth-quarter export cargoes will be 15 percent lower than last year, according to RS Platou Markets AS, a Norwegian bank specialized in shipping. Rates for Panamaxes, the most commonly used vessels for grains, averaged $7,574 a day this year, headed for the lowest level since at least 1999, Baltic Exchange data show. The U.S. shale-oil boom means energy shipments are dominating rail networks at the expense of grains. The Association of American Railroads says crude moved by rail almost doubled last year. The bottlenecks may persist because the Energy Department is predicting the most oil output in 45 years in 2015. “If you’re an owner, you’re banking on a bumper season of exports,” Erik Nikolai [...]

Russia’s rich feel chill wind from the Kremlin

Filed in Russia by on 19 September 2014

Few will invest in a country that uses state power so arbitrarily It is hard to imagine a worse moment for the Kremlin’s inner circle to launch an attempt to strong arm one of Russia’s wealthiest men out of a multibillion-dollar asset. For Tuesday’s house arrest of Vladimir Yevtushenkov , number 15 on the country’s rich list, on money-laundering charges, looks to be exactly that. If it is ever to achieve its ambition of catching up with more advanced economies, Russia urgently needs investment – both foreign and domestic – in new capacity and enhanced productivity to restart stalled growth. Yet even before it launched its military adventures in Ukraine , Russia’s rich preferred investing their profits in foreign assets, London mansions or Liechtenstein trusts to ploughing them into new Russian factories. More On this story On this topic Editorial The Kremlin’s undeclared war in Ukraine has sparked escalating [...]

Sanctions extend influence of hardmen in Putin’s Kremlin

Filed in Russia by on 19 September 2014

The skyscrapers of Moscow City business district, center, stand beyond the illuminated towers of Red Square and the Kremlin in Moscow, Russia, on Thursday, July 17, 2014. OAO Rosneft, Russia’s biggest oil company, natural gas producer OAO Novatek and OAO Gazprombank, the third-largest lender, are among those hit by the penalties, the U.S. Treasury Department said. Photographer: Andrey Rudakov/Bloomberg Russia’s business community and economic officials are in shock over the arrest of Vladimir Yevtushenkov , one of the country’s leading industrialists, and they are afraid. When Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, the country’s big business club, sent a petition in support of Mr Yevtushenkov to President Vladimir Putin, he thought it wiser to do so by courier than in person. More On this story On this topic IN Europe Mr Yevtushenkov, one of the country’s richest men and main shareholder of the conglomerate [...]

EBRD: Sanctions hurting Russia

Filed in Russia by on 19 September 2014

The U.S. and European governments have imposed punitive sanctions on Russian energy companies Rosneft, Gazprom Neft and others in response to the crisis in Ukraine . Last week, the European Union increased the pressure with sanctions on deep water energy operations, arctic oil exploration and shale projects. The European Bank for Reconstruction and Development said the sanctions were taking a toll on the Russian economy. “The Western sanctions, combined with uncertainty about their possible escalation in the future, have negatively affected business confidence in Russia, constrained the ability of corporations and banks to access international debt markets, and contributed to capital flight,” the bank said in a briefing. The Kremlin last week said it was the duty of the government to support the energy sector during what Rosneft Chief Executive Officer Igor Sechin said were difficult operating conditions. In terms of Ukraine, the EBRD [...]

Scrap South Stream, Europe says

Filed in Russia by on 19 September 2014

Russian energy company Gazprom touts South Stream as a pipeline that would help support European energy security by avoiding geopolitically sensitive territory in Ukraine. Russia meets about a quarter of Europe’s gas needs, though the bulk of those supplies run through the Soviet-era transit network in Ukraine. Members of the European Parliament passed a resolution Thursday expressing support for the ratification in Kiev of an association agreement with the EU. A cease-fire in eastern Ukraine appears to be holding, the resolution said, but it could break given recent Russian aggressions. “EU sanctions are just and must be stepped up,” the resolution said. For South Stream, members of Parliament had their reservations, calling on “EU countries to cancel planned energy sector agreements with Russia, including the South Stream gas pipeline.” European Energy Commissioner Guenther Oettinger in June said the South Stream project should be put [...]