Recent Articles

Brent Crude Lower

Filed in Prices by on 28 August 2014

Brent crude oil was lower Thursday morning with supplies plentiful and demand limited, with oil for immediate delivery selling particularly cheap. Physical crude oil prices are weak, said VTB analyst Andrey Kryuchenkov, with North Sea grades selling at a discount to dated Brent, the benchmark. In the futures market, meanwhile, the nearest month continues to trade at a notable discount to later months–a market condition known as contango. “We believe Brent prices are well reflective of the current fundamental picture, justified by the comfortable supply-side cushion and weak refining demand in Europe,” Mr. Kryuchenkov said. The latest data from the U.S. Energy Information Administration showed a 2.1 million barrel draw in crude stocks. “A crude stock decline was driven by continuing high refinery operations, ” BNP Paribas said in a report. However, crude stocks at the Nymex delivery point of Cushing, Okla., rose for a fourth [...]

Natural-Gas Prices Rise on Smaller-Than-Expected Surplus

Filed in Prices by on 28 August 2014

Natural-gas futures are inching up Thursday after a weekly stockpile report showed a smaller surplus than expected. Producers added 75 billion cubic feet of gas to storage for the week ended Aug. 22, the U.S. Energy Information Administration said. The addition was 2 bcf smaller than the 77 bcf consensus average expectations of by analysts and brokers in The Wall Street Journal survey. Natural gas for October delivery immediately added 1.8% after the data release, on top of gains from early-morning trading. The market pulled back nearly all of that spike, but is still rising on the day, recently trading up 6 cents, or 1.5%, to $4.063 a million British thermal units on the New York Mercantile Exchange. Traders use the EIA update to gauge how quickly stockpiles are recovering from high demand that drained them to 11-year lows this past winter. Last week’s [...]

Low-carbon economy necessary, U.N. says

Filed in Climate by on 28 August 2014

Guy Ryder, director general of the International Labor Organization, and Christiana Figueres , executive secretary of the U.N. Framework Convention on Climate Change, issued a joint statement on the economic benefits of a low-carbon economy. Ahead of the climate summit scheduled later this year in New York City, the leaders said they were putting momentum behind the narrative in response to questions about the job prospects. “If properly managed, environmental sustainability can lead to more and better jobs, poverty reduction and social inclusion,” they said Wednesday. “In fact, the transition to the green economy could generate up to 60 million additional jobs over the next two decades.” A draft report published this week from the Intergovernmental Panel on Climate Change finds emissions are falling in most Western countries because of an increased use of low-carbon energy resources and improvements in energy efficiency. The rising industrialization of Asian economies, however, [...]

Violence not affecting key Iraqi oil field, says Gulf Keystone Petroleum

Filed in Iraq by on 28 August 2014

Operations at a key oil field in the Kurdish north of Iraq are “essentially uninterrupted” by violence, the top executive of Gulf Keystone Petroleum said. Peshmerga, a Kurdish military force, has fought against the Islamic State, the Sunni-led insurgency group that’s taken control over parts of northwestern Iraq and Syria. Some energy companies operating in the region have suspended operations as a security precaution . John Gerstenlauer, chief executive officer at Gulf Keystone, said operations in the region are still in service . “Our operations in the Kurdistan region … are progressing well with the two existing Shaikan production facilities producing in the range of 20,000 – 25,000 barrels of oil per day and crude oil export deliveries continuing essentially uninterrupted since late November 2013 to date,” he said. The company said it sold around 100,000 barrels of oil to the domestic market during the first half of the [...]

Iran vetting oil customers

Filed in Iran by on 28 August 2014

Iran can sell about 1 million barrels of oil per day on the international market under the terms of an agreement reached with Western powers in exchange for a commitment to curb nuclear research activity. Iranian Oil Minister Bijan Zanganeh said a five-member group vetting future oil contracts is “precise” when determining export destinations. “Many countries are willing to buy Iran’s oil, but when studies are made, we find out that there is not even $1 million in their accounts, not to mention enough money to pay for an oil cargo,” he said Wednesday. Zanganeh said the country aims to more than double its crude oil production from 2.5 million barrels per day to 5.7 million bpd within the next three years. Oil sales for the first four months of the year were up 5 percent when compared with last year, the government said.

Pemex Pursuing Tax Reimbursement After Overstating Output

Filed in Mexico by on 28 August 2014

Petroleos Mexicanos is preparing a request for the reimbursement of taxes the state-owned oil company paid on barrels it never produced. Pemex, whose taxes provide Mexico’s government with about a third of its budget, may seek the refund after over-reporting crude output for the first seven months of the year, according to investor relations head Rolando Galindo. Negotiations with the Finance Ministry could be lengthy and might not result in a reimbursement, he said in a telephone interview yesterday. The Mexico City-based producer last week reduced its year-to-date production through July to 2.34 million barrels a day from a previously reported 2.47 million, attributing the difference to water levels and measurement inaccuracies. Earlier yesterday, a person with direct knowledge of the matter said Pemex plans to ask for the reimbursement and is in the process of calculating how much it overpaid. The person asked not to be named because [...]

Peak Oil – Geothermal electrical output approaches 12,000 megawatts worldwide

Filed in Geothermal by on 28 August 2014

In 2013, world geothermal electricity-generating capacity grew 3 percent to top 11,700 megawatts across 24 countries. Although some other renewable energy technologies are seeing much faster growth—wind power has expanded 21 percent per year since 2008, for example, while solar power has grown at a blistering 53 percent annual rate—this was geothermal’s best year since the 2007-08 financial crisis. Graph on World Cumulative Installed Geothermal Electricity-Generating Capacity, 1950-2013 Geothermal power’s relatively slower growth is not due to a paucity of energy to tap. On the contrary, the upper six miles of the earth’s crust holds 50,000 times the energy embodied in the world’s oil and gas reserves. But unlike the relative ease of measuring wind speed and solar radiation, test-drilling to assess deep heat resources prior to building a geothermal power plant is uncertain and costly. The developer may spend 15 percent of the project’s capital cost during test-drilling, [...]

U.S. Tightens Rules Amid Worst Barge Spills Since 2008

Filed in USA by on 28 August 2014

Tighter regulation of U.S. ships carrying record exports of diesel and gasoline is coming amid the worst year for oil spills from barges since 2008. Coast Guard rules to be issued within the next 90 days would require commercial vessels nationwide to be equipped with Automatic Identification System, or AIS, technology, which uses transponders and electronic chart displays to alert pilots to neighboring ships, according to trade group American Waterways Operators. A pending inspection regulation would bring ships more in line with trains and trucks that carry similar cargo. Growing amounts of shale oil that’s made the U.S. the world’s biggest energy producer moves through inland waterways on ships almost twice as long and that carry 10 times the load of vessels plying the same routes in the 1960s. Export traffic on the Houston Ship Channel in 2013 rose 8.8 percent to a record 109.2 million metric tons. Towing [...]

Marcellus booming, Wood Mackenzie says

Filed in Shale Gas by on 28 August 2014

Energy consultant group Wood Mackenzie describes Marcellus as the largest natural gas basin of its kind in the world when based on production. The group said there may be more than $90 billion left in value in the play based on projected output from new wells. Jonathan Garret, a researcher in the exploration and production market in the United States, said the top 20 operators in Marcellus are expected to generate $86 billion in shale value. “These operators are forecast to spend nearly $110 billion in the play and to drill over 25,000 Marcellus wells through 2035,” he said in a statement Wednesday. By 2020, Wood Mackenzie estimates Marcellus, centered largely in Pennsylvania, should produce an average of 20 billion cubic feet of equivalent per day, which it said would represent 25 percent of the total U.S. natural gas supply . Wood Mackenzie says the number of active rigs [...]

Energy Department says gas prices should fall after Labor Day

Filed in Prices, USA by on 28 August 2014

The Energy Information Administration, which crunches numbers for the Energy Department, said a decline in the price of Brent crude oil, the global benchmark, was the main driver behind lower gasoline prices in the United States. Oil prices account for more than half of the price at the pump. Brent as of Monday was priced at $100.49 per barrel, up about $1 from the previous week. For Thursday, Brent was priced at $102.72. Nationally, motor club AAA said the price for a gallon of gasoline was $3.43 per gallon, two cents lower than Monday. EIA said Monday’s price was the lowest price on the Monday before Labor Day in four years. Looking ahead, EIA said the monthly average price per gallon is expected to keep falling through the end of the year to reach $3.30 by December. “Gasoline prices often fall after Labor Day as seasonal demand wanes and [...]

Texas reviews seismic link to fracking

Filed in Shale Oil by on 28 August 2014

A Texas energy regulator said it was reviewing industry practices for hydraulic fracturing brought into question after a series of seismic events in the state. The city of Azle, which lies in the area of the Barnett shale natural gas field, has reported nearly two dozen tremors since November. A regional profile from the U.S. Geological Survey says so-called induced earthquakes , those caused by injecting fluid underground for the purpose of extracting oil or natural, may be at play in parts of Texas. Ramona Nye, a spokeswoman for the Texas Railroad Commission, told energy news website Rigzone the agency was serving as the facilitator in talks between those in the industry and researchers from Southern Methodist University. “[They] are the ones directly investigating whether there is a link between North Texas Azle area oil and gas disposal wells and seismic events in that area,” she said Wednesday. The [...]

Energy Industry Will Flourish in Independent Scotland, Says Minister

Filed in Scotland by on 28 August 2014

The role and future of oilfields off Scotland and their revenue streams have been a source of debate in the run-up to the Scottish independence referendum. BP ETAP (Eastern Trough Area Project) oil platform in the North Sea, pictured here in February, is around 100 miles east of Aberdeen, Scotland. Agence France-Presse/Getty Images ABERDEEN, Scotland—Scotland votes next month on whether to split from the U.K., and Scottish Energy Minister Fergus Ewing is trying to reassure oil companies that the country’s large energy industry will flourish after independence. “Our (energy) policy has been primarily designed by industry,” Mr. Ewing said in a recent interview, promising that won’t change in an independent Scotland. Britain’s oil and natural-gas reserves, much of them off Scottish shores in the North Sea, have become a particularly fraught flash point in the debate over independence, which culminates in a Sept. 18 referendum. Recent polling suggests Scots [...]

Rail deliveries of U.S. oil continue to increase in 2014

Filed in USA by on 28 August 2014

. The amount of crude oil and refined petroleum products moved by U.S. railroads increased 9% during the first seven months of this year compared with the same period in 2013. In July, monthly average carloadings of oil and petroleum products were near 16,000 carloads per week, according to the Association of American Railroads (AAR). The increase in oil volumes transported by rail reflects rising U.S. crude oil production, which reached an estimated 8.5 million barrels per day in June for the first time since July 1986. AAR estimates that more than half of the nearly 460,000 carloads tracked in its petroleum and petroleum products category from January through July consisted of crude oil, up from around 3% in 2009. With the average rail tank car holding around [...]

BP confirms fire at Whiting refinery

Filed in USA by on 28 August 2014

 An overnight fire at BP PLC’s 413,000-b/d refinery in Whiting, Ind., has resulted in only minimal interruptions to operations at the site, the company said. The fire, which broke out at about 9:00 p.m. on Aug. 27 following an “operational incident” at an unidentified process unit on the north end of the complex, was extinguished at 10:55 p.m. by the refinery’s in-house fire department, BP said. No serious injuries have been reported as a result of the incident, and an employee that was taken to a local hospital as a precautionary measure has since been released, the company said. The incident has minimally impacted operations at the Whiting complex, and production of petroleum products at the refinery remains ongoing, said BP. Details regarding the precise nature of the operational incident that caused the fire or the exact unit involved were not disclosed. Last year, BP [...]

Crisis deepens as Ukraine says Russian troops back rebel advance

Filed in Ukraine by on 28 August 2014

Ukrainian President Petro Poroshenko said on Thursday that Russian forces had entered his country and the military conflict was worsening after Russian-backed separatists swept into a key town in the east. Poroshenko said he was cancelling a visit to Turkey and conferring with defense chiefs because of the “rapidly deteriorating situation” in the eastern Donetsk region, “as Russian troops have actually been brought into Ukraine”. A NATO military officer said: “We assess well over 1,000 Russian troops are now operating inside Ukraine… They are supporting separatists (and) fighting with them.” Russia says it has no involvement in the conflict between pro-Moscow rebels and the Ukrainian military, in which more than 2,200 people have been killed since April. It denies sending in weapons or troops, despite the capture of 11 soldiers inside Ukraine this week who Moscow said had probably crossed the border by accident. Russia’s envoy [...]

Ukraine Accuses Russia of Invasion

Filed in Ukraine by on 28 August 2014

Ukrainian President Petro Poroshenko said Russian forces had entered Ukraine and seized the coastal town of Novoazovsk, putting a diplomatic response to the crisis in doubt. Photo: Agence France-Presse/Getty Images Ukraine on Thursday accused Russia of invading the country, dashing hopes of progress toward a diplomatic resolution and challenging the West to respond. A senior official of the North Atlantic Treaty Organization said that more than 1,000 Russian troops were fighting alongside pro-Russian separatists in eastern Ukraine, by far the largest such force ever reported by the Western alliance. But he stopped short of calling it an invasion, saying it represented an “incursion” apparently aimed at preventing Kiev’s forces from defeating pro-Russian rebels, rather than a broader assault on Ukraine. Kiev said Russian forces have seized the coastal town of Novoazovsk and several villages near the border with Russia. Ukraine’s President Petro Poroshenko called an emergency meeting with his [...]

EU to Broach Interim Russia-Ukraine Gas Deal in Meeting Friday

Filed in Ukraine by on 28 August 2014

The European Union’s energy chief will be on a mission to broker a truce in the long-running natural-gas feud between Russia and Ukraine, and avert gas shortages in Europe this winter when he travels to Moscow Friday. After more than two months of gridlock, Günther Oettinger will discuss a possible interim deal with Russian Energy Minister Alexander Novak ahead of three-way talks as early as next week. The talks coincide with a sharp escalation in the conflict between Russia and Ukraine. On Thursday, Ukraine accused Russia of invading the country, saying Russian troops seized the coastal town of Novoazovsk and other villages along the border. During his visit, Mr. Oettinger will warn that the “worsening of the situation is counterproductive to a solution of the gas talks and could potentially harm long-term energy relations with the Russian Federation. These talks are of common interest for all sides, also for [...]

US Energy Boom Better Than Sanctions Against Russia

Filed in Ukraine by on 28 August 2014

Hess To Form MLP For North Dakota Oil, Gas Transport Assets This opinion piece presents the opinions of the author. It does not necessarily reflect the views of Rigzone. U.S. oil production is surging, and it’s helping to cripple the Russian economy. It’s a win-win situation With 40 percent of the Russian economy hinging on oil and gas sales, America’s oil and gas boom is doing more to bring President Vladimir Putin to his knees than any of the sanctions being imposed by the U.S. and Europe. Competition in the form of increased U.S. energy exports is the last thing Putin wants to see, so that’s exactly what we should do. Russia is currently the third-largest oil producer and the top exporter of natural gas, and you better believe that Putin uses these advantages to push his agenda regionally and globally. Russia needs oil prices to stay above $110 [...]

Oil Futures Slightly Lower in Subdued Trading

Filed in Prices by on 28 August 2014

By Eric Yep Crude-oil futures fell slightly in Asia Thursday as trading remained subdued in a well-supplied market. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $93.57 a barrel at 0523 GMT, down $0.31 in the Globex electronic session. October Brent crude on London’s ICE Futures exchange fell $0.13 to $102.59 a barrel. Nymex crude-oil prices didn’t react much to data that showed U.S. oil stocks fell 2.1 million barrels to 360.5 million barrels–the lowest level since Jan. 31–in the week ended Aug. 22. “A crude stock decline was driven by continuing high refinery operations,” BNP Paribas said in a report. However, crude stocks at the Nymex delivery point of Cushing, Okla., rose for a fourth successive week, by 500,000 barrels. “Record-setting liquid fuels production growth in the United States has more than offset the growth of unplanned global supply disruptions [...]

WTI Declines as Crude Stockpiles Expand at Cushing

Filed in Prices by on 28 August 2014

West Texas Intermediate fell for the first time in three days as crude stockpiles increased at the biggest U.S. oil-storage hub. Brent was steady in London . Futures dropped as much as 0.5 percent in New York . Supplies at Cushing, Oklahoma , the delivery point for WTI contracts, expanded by 508,000 barrels to 20.7 million last week, the Energy Information Administration reported yesterday. That’s the highest level since July. Libya may boost production to 1 million barrels a day by the end of the September, according to state-run National Oil Co. The crude benchmark “took minor losses after the weekly U.S. fuel inventory report from the EIA posted crude gains for Cushing,” Andrey Kryuchenkov , an analyst at VTB Capital in London, said in a report. “The market in London is likely to remain in the current sideways pattern.” WTI for October delivery declined as much as 43 [...]

New gas demand price driver, forecast shows

Filed in Natural Gas Supply, Prices by on 28 August 2014

Bentek Energy, a forecasting unit of energy reporting group Platts, said non-traditional and recovering sources of gas demand could pass the 5 million cubic feet per day mark by 2019. These new sources of demand, from new export facilities for liquefied natural gas to more gas-fired power plants, could be a driver in a future North American shale market. Rocco Canonica, lead author of a 50-page report on demand, said the trends show an era where cheap energy reserves sourced from shale basins in North America may be drawing to a close . “If demand growth reaches its full potential, we could expect a tighter U.S. market and upward price pressure,” he said in a statement Wednesday. The American Petroleum Institute, which represents the interests of the energy sector, said the U.S. economy would be better off with more natural gas production, particularly if producers could tap into export [...]

Kurds claim win in latest oil row

Filed in Iraq by on 28 August 2014

A Texas court ruling to dismiss an order to seize Kurdish oil parked off the U.S. coast should give potential buyers confidence, the Kurdish government said. A Texas judge had ordered U.S. Marshals to seize Kurdish oil loaded onto the United Kalavrvta tanker, parked off the coast of Galveston, Texas, in international waters. The semiautonomous Kurdish government and the federal government in Baghdad filed competing claims in Texas, though the court eventually sided with the Kurdish claims that its oil could reach U.S. ports. “The ruling of the Texas court should give confidence to buyers of Kurdistan crude oil in the United States and elsewhere,” Kurdish Minister of Natural Resources Ashti Hawrami said in a statement Tuesday. The minister said all Kurdish crude oil exports and sales are legal according to the terms spelled out in the Iraqi constitution, a claim countered by Baghdad. The U.S. government in the [...]

Fractures in Arab Gulf alliance a greater threat to oil security than Islamic State

Filed in Oil Supply by on 28 August 2014

French 15-year-olds thought to be youngest jihadis to travel to Syria In 1981 six Arab monarchies, which today control about a fifth of the world’s oil supply, formed the Gulf Co-operation Council (GCC). As the war between Iraq and Iran intensified, the Sunni Arab sheikhdoms of the Gulf peninsula – Saudi Arabia, Oman, United Arab Emirates (UAE), Kuwait, Bahrain and Qatar – originally came together in theory to form a Middle Eastern version of the European Union. Although the group has no formal political charter like the EU, it still provides the only official forum where all six leaders of these oil-rich countries can sit down together to debate and agree on mutually beneficial policies in the region. But the rise of Islamic extremism across the Middle East, America’s growing willingness to deal with Iran and lingering leadership succession issues amongst member states are now unpicking the ties that [...]

Iran Altering Reactor in Bid for Nuclear Deal

Filed in Iran by on 28 August 2014

Atomic power engineers in Iran have started redesigning a partly constructed reactor in the northwest city of Arak to limit the amount of plutonium it produces, the country’s top nuclear official said Wednesday, expressing hope that the change would help alleviate Western objections that the plutonium could be used in weapons. The official, Ali Akbar Salehi, the director of the Atomic Energy Organization of Iran, did not specify how much plutonium would be produced under the redesign of the reactor, which officials have said was constructed for the peaceful purpose of creating medical isotopes. But in remarks reported by Iran’s state-run Press TV website, Mr. Salehi said experts at the facility had offered to “redesign the heart of the reactor in order to allay the concerns of some countries.” Both plutonium and uranium can be used as the fuel of nuclear weapons . The Arak reactor is one of [...]

Backing the Kurds will stabilise Iraq

Filed in Iraq by on 28 August 2014

Since US airstrikes began on Islamic State targets in Iraq’s Kurdistan region,  a number of Western countries  have finally decided to empower and arm Iraq’s Kurds in the ever-expanding battle against the radical group. The West has finally made the right decision, as the Islamic State group can only be confronted and defeated with the help of a reliable regional ally such as the Kurds. Western support for the Kurds should be part of a long-term strategy aimed at stabilising Iraq as a whole. In other words, help the Kurds help Iraq. Iraq’s problems are the Kurds’ problems Iraq’s Kurds and Arabs can work together. The retaking of the Mosul dam through a joint Kurdish-Arab force – a dam that the Islamic State could have used to flood cities like Baghdad – proves that not only is intervention in Iraq working but also that these are reliable and organised [...]

Analysis: Kurdistan’s export quest remains unfinished

Filed in Iraq by on 28 August 2014

Analysis: Kurdistan’s export quest remains unfinished In Dohuk province, a pipe-laying machine stands beside sections of 36-inch diameter steel pipe, which await welding. (PATRICK OSGOOD/Iraq Oil Report/Metrography) Nine months after inaugurating its oil pipeline to Turkey, Iraq’s autonomous Kurdistan Regional Government (KRG) is still striving to build a track record of reliable international oil sales.The KRG has scored some notable victories recently, including a U.S. court decision Monday that cleared the way for a Kurdish-chartered ship, the United Kalavryta, to offload more than 1 million barrels of Kurdish exports onto American shores. But even that progress has been equivocal: Monday’s narrow ru… 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 .

Military Skill and Terrorist Technique Fuel Success of ISIS

Filed in Iraq, Syria by on 28 August 2014

 As fighters for the Islamic State in Iraq and Syria continue to seize territory, the group has quietly built an effective management structure of mostly middle-aged Iraqis overseeing departments of finance, arms, local governance, military operations and recruitment. At the top the organization is the self-declared leader of all Muslims, Abu Bakr al-Baghdadi , a radical chief executive officer of sorts, who handpicked many of his deputies from among the men he met while a prisoner in American custody at the Camp Bucca detention center a decade ago. He had a preference for military men, and so his leadership team includes many officers from Saddam Hussein’s long-disbanded army. They include former Iraqi officers like Fadel al-Hayali, the top deputy for Iraq, who once served Mr. Hussein as a lieutenant colonel, and Adnan al-Sweidawi, a former lieutenant colonel who now heads the group’s military council. The pedigree of [...]

Islamic State Fills Coffers From Illicit Economy in Syria, Iraq

Filed in ISIL by on 28 August 2014

Islamic State militants have overrun parts of Iraq and Syrian provinces such as Raqqa, above, capturing munitions. The group, formerly known as ISIS or ISIL, raises money through extortion, oil pirating and kidnapping. Reuters The Islamic State runs a self-sustaining economy across territory it controls in Syria and Iraq, pirating oil while exacting tribute from a population of at least eight million, Arab and Western officials said, making it one of the world’s richest terror groups and an unprecedented threat. That illicit economy presents a new picture of Islamic State’s financial underpinnings. The group was once thought to depend on funding from Arab Gulf donors and donations from the broader Muslim world. Now, Islamic State—the former branch of al Qaeda that has swallowed parts of Iraq and Syria—is a largely self-financed organization. Money from outside donors “pales in comparison to their self-funding through criminal and terrorist activities,” a U.S. [...]

Islamic State Entrenches in Syrian City as Obama Mulls Next Step

Filed in ISIL by on 28 August 2014

In the Syrian city of Raqqah on the banks of the Euphrates River, Islamic State militants are busy building a capital fit for their followers. Human rights observers say they have stoned women to death for adultery, while residents report that religious textbooks have been imported for schools and the market flooded with black cloaks for girls as young as 6 years old. Even as it wages war on multiple fronts, the group has had time to focus on the details, recruit thousands into its forces and celebrate victories by parading the heads of its enemies. It’s a reflection of how entrenched the group has become in Syria and how difficult it will be to uproot it from the country where it was able to assemble and train enough forces to push into Iraq in June. U.S. airstrikes alone won’t do it and the international community doesn’t have any [...]

Tanzania positioned as LNG hub, BG Group says

Filed in Tanzaia by on 28 August 2014

BG Group said a test from an appraisal well at the Mzia discovery off the coast of Tanzania yielded a sustained gas flow rate of 101 million cubic feet per day. A similar well last year flowed at 57 million cubic feet per day. BG Group Chief Operating Officer Sami Iskandre said the results are a “critical factor as we progress design of the upstream production facilities and infrastructure” tied to liquefied natural gas development. Last year, energy consultant group Wood Mackenzie published a report saying Tanzania was a part of a growing number of emerging producers in East Africa. The report said output from Tanzania could help regional production increase from the current rate of 500,000 barrels of oil equivalent per day to 1.5 million barrels of oil equivalent. BG Group said test results from offshore developments “provided further support for a hub development to supply a potential [...]

Shell Agrees to Sell Some Nigeria Oil Blocks

Filed in Nigeria by on 28 August 2014

LONDON–Royal Dutch Shell PLC said Wednesday it had agreed to sell some of the oil blocks in Nigeria previously earmarked for disposal as the Anglo-Dutch oil group moves forward with its divestment program. Shell said last year it wanted to divest four oil licenses and a pipeline in Nigeria’s Niger Delta, where sabotage and oil theft has dogged oil companies working in the region. “We have signed sales and purchase agreements for some of the oil mining leases but not all that we are seeking to divest,” a Shell spokesman said, without providing any details. The sale process “hasn’t yet concluded,” the spokesman said. Shell remained committed to Nigeria where it plans to retains offshore production, he said. The divestment, if completed, would be part of $15 billion worth of assets Shell wants to sell by the end of 2015 as it seeks to focus on its more profitable [...]

Russia to take rubles, yuan for oil

Filed in Russia by on 28 August 2014

For exports from the Novoportovskoye field in the arctic, the company said it would accept the Russian currency, while China could use its own currency for oil delivered from the Eastern Siberia-Pacific Ocean pipeline. The switch could help the Russian economy reduce its dependency on the U.S. dollar in an era when Western economies are imposing tough sanctions on Moscow in response to the ongoing crisis in Ukraine. Gazprom Neft said it made $2.4 billion in net profits and increased production 4.1 percent during the first half of the year. The U.S. Energy Information Administration, the statistical arm of the Energy Department, said in a July brief that exports of crude oil, petroleum products and natural gas accounted for 68 percent of all export revenues for Russia in 2013. The first branch of the ESPO pipeline entered service in January 2010. Gazprom Neft started work in the arctic field [...]

Chinese oil demand declines

Filed in China by on 28 August 2014

Apparent oil demand, a reflection of how much oil goes into domestic refineries combined with net oil product imports, decreased 2.1 percent in July year-on-year. From June, apparent oil demand dropped 6.2 percent to 9.61 million barrels per day. “The weakness in China’s oil demand reflects the ongoing slowdown in its economy,” James Bourne, Platts associate editorial director for Asia news, said in an emailed statement. That’s in contrast to the Organization of Petroleum Exporting Countries, which said in its latest monthly oil market report Chinese oil demand should increase another 3.8 percent during the fourth quarter of the year. Asian economies are growing at a faster rate than other major markets. OPEC said in a 97-page annual report published earlier this year that oil demand should increase most notably in China, Thailand and Indonesia. OPEC said commercial oil inventories in China fell by 4.9 million barrels in June [...]

Labor Day gas prices cheapest since 2010

Filed in Prices, USA by on 28 August 2014

 The station on the outskirts of Somerset opened to the public on Saturday, selling regular unleaded gas for $3.36 a gallon. In the first three hours, about 75 customers fueled up at the no-frills city station, where there are no snacks, no repairs and only regular unleaded gas. The city’s mayor says he hopes the no-frills station will lower gas prices around town.(Photo: Bruce Schreiner, AP) The late summer slide in global crude oil prices will push the cost of U.S. gasoline to its lowest Labor Day level since 2010. Better yet: Prices are likely to continue dropping to 2014 lows by mid-autumn. Nationally, regular gasoline will average $3.41 a gallon — 18 cents less than 2013′s Labor Day weekend and 42 cents less than the record $3.83 average for the [...]

U.S. liquid fuels production growth more than offsets unplanned supply disruptions

Filed in Shale Oil by on 28 August 2014

 The difference between U.S. liquid fuels and crude oil production represents production of hydrocarbon gas liquids, biofuels, and refinery processing gain. Non-OPEC supply disruptions include both crude oil and liquid fuels, while OPEC disruptions include only crude oil. Growth in oil production and supply disruptions represents changes since January 2011. Record-setting liquid fuels production growth in the United States has more than offset the rise in unplanned global supply disruptions over the past few years, although differences in quality and location suggest that the substitution may not be exactly 1-for-1. U.S. liquid fuels production, which includes crude oil, hydrocarbon gas liquids, biofuels, and refinery processing gain, grew by more than 4.0 million barrels per day (bbl/d) from January 2011 to July 2014, of which 3.0 million bbl/d was crude oil production growth. During that same period, [...]

Conoco’s Bakken Production Up 19% – Q2 2014

Filed in Shale Oil by on 28 August 2014

Conoco Phillips Bakken Acreage Map Conoco Phillips Bakken Acreage Map | Click to Enlarge Liquids production volumes from Conoco Phillips’ (COP) Lower 48 assets increased by 22% year-over-year thanks largely to the Eagle Ford and the Bakken, company officials reported in their second quarter 2014 report at the end of July. COP production grew by 38% year-over-year to 208,000 boe/d in the Eagle Ford Shale and Bakken Shale plays combined. That’s ~39% of the company’s total production for its Lower 48 asset portfolio. In the Bakken alone, production grew 19% quarter-on-quarter from 43,000 boe/d to 51,000 boe/d. However, company officials expect for the rate of growth to slow in both plays in the second half of the year due to multi-pad drilling effects and weather-related issues in the fourth quarter. Read more :  Conoco Phillips’ Bakken Ford Production Up 80% in Q4 2013 to 43,000 boe/d Conoco’s EVP, Exploration and [...]

Fracking Foes Force Some Oil Drillers to Tread Lightly

Filed in Shale Oil by on 28 August 2014

A fight over fracking is looming in Texas . Another stand-off is shaping up in Colorado . Yet drillers’ reactions couldn’t be more different. In Texas, drillers are doing their noisy in-your-face fracking as usual. Meanwhile, on a small farm about an hour from the Colorado Rocky Mountains, the oil industry is giving fracking a makeover, cutting back on rumbling trucks and tamping down on pollution. Oil companies in Colorado are responding to a rising tide of resentment as local communities and environmental activists vie to impose measures to ban fracking or restrict drilling. A series of ballot initiatives and other grass roots opposition around the country is seen as threatening the booming shale industry, even in oil-friendly Texas, where the U.S. energy renaissance began. If those initiatives “continue to proliferate then companies lose access to those resources,” said David B. Spence, professor of law, politics and regulation at the [...]

North Dakota gets more gas processing capacity

Filed in Shale Gas by on 28 August 2014

“We remain committed to meeting the needs of our customers by building essential natural gas and natural gas liquids infrastructure in the Williston Basin,” Terry Spencer, president and chief executive officer of ONEOK Partners, said in a statement Tuesday. The company, which has headquarters in Oklahoma, said its gas processing capacity in the area today is five times greater than it was four years ago. More gas processing capacity in the state means less gas associated with oil deposits is burned off, or flared. North Dakota lacks the infrastructure necessary to take full advantage of natural gas associated with oil reserves in the state at the heart of the shale oil and natural gas boom. The state government said, however, that gas processing capacity has increased from 200 million cubic feet per day to 1.3 billion cubic feet per day since 2006. ONEOK said it should have 1.1 billion [...]

Texas oil production up 25 percent from 2013

Filed in Oil Supply by on 28 August 2014

The Railroad Commission of Texas, the state’s energy agency, said crude oil production in July averaged 2.15 million barrels per day, up from the 1.68 million bpd reported in July 2013. The rise in production reflects a 31 percent increase in the number of drilling permits issued year-on-year. For natural gas, the commission said production of 602 billion cubic feet in June is an 8 percent increase year-on-year. Texas is the No. 1 oil producer in the nation. Combined with North Dakota, the No. 2 producer, they produced 120 million barrels of oil in April, the last full month for which data are available from the U.S. Energy Department. Texas is host to the Eagle Ford shale reserve area, one of the most prolific shale basins in the United States.

Shell Canada: Oil-Sands Mines May Not Meet Waste Targets

Filed in Canada by on 28 August 2014

The head of Royal Dutch Shell PLC’s Canadian unit Wednesday said the company may not be able to meet promised targets for reducing toxic wastes from oil sands and called for greater regulatory flexibility. Shell, which operates two major oil-sands surface mines in northern Alberta, had committed to cutting the amount of waste generated by its heavy-oil extraction projects in Canada. But the company and other producers have struggled to meet reduction targets mandated by the government and now face the prospect of penalties if those goals remain unmet. “It’s going to be very challenging” to achieve mandated reduction targets next year, said Lorraine Mitchelmore, president of Shell Canada Ltd. Growth in natural gas and oil sands is a core focus for the energy company, she said, adding the company is committed to its operations in Canada as a “multi-decade opportunity.” Ms. Mitchelmore said Shell hopes to link inland [...]

Russian-backed separatists enter southeast Ukraine town

Filed in Ukraine by on 28 August 2014

 Separatists backed by Russian soldiers have entered the town of Novoazovsk in southeastern Ukraine, a pro-government militia fighter said on Thursday. A military source said the separatist forces had also taken Savur-Mohyla, a hill east of Donetsk which gives strategic command over large areas of the territory. The sudden reverses for the Ukrainian military appeared to confirm the arrival of Russian forces to support the separatists, who have in recent weeks been under pressure from government forces in their strongholds of Donetsk and Luhansk, the east’s two main cities. “There is military equipment in Novoazovsk which came across the border two days ago from Russia,” the fighter, from the so-called Azov battalion which supports the Ukrainian army, told Reuters by telephone. “The equipment is carrying the flags of the DNR (Donetsk People’s Republic) rebels but they are regular Russian forces,” the fighter who did not wish [...]

Ukraine Reports Russian Invasion on a New Front

Filed in Ukraine by on 28 August 2014

Determined to preserve the pro-Russian revolt in eastern Ukraine, Russia reinforced what Western and Ukrainian officials described as a stealth invasion on Wednesday, sending armored troops across the border as it expanded the conflict to a new section of Ukrainian territory. The latest incursion, which Ukraine’s military said included five armored personnel carriers, was at least the third movement of troops and weapons from Russia across the southeast part of the border this week, further blunting the momentum Ukrainian forces have made in weakening the insurgents in their redoubts of Donetsk and Luhansk farther north. Evidence of a possible turn was seen in the panicky retreat of Ukrainian soldiers on Tuesday from a force they said had come over the Russian border. Russia, which has denied it is helping the insurgents, did not acknowledge the military movements. But the Russians have signaled that they would not [...]

European refiner squeeze seen in W. African crude changes

Filed in Europe, West Africa by on 28 August 2014

 European refining is pivotal in “a second wave of structural changes” pummeling West African (WAF) crude oil prices in response to growing production of light oil in North America, notes a report from the Oxford Institute for Energy Studies, London. “In a way, WAF has become the swing barrel heading into North America,” write Bassam Fattouh, the institute’s director, and Amrita Sen, chief oil analyst at Energy Aspects. Attractiveness in North America of light WAF crudes depends strongly on price differentials between West Texas Intermediate and Brent crude, they point out. In the first wave of structural change for WAF, rising production of light crude from tight-oil plays backed out imports of WAF crude on the US Gulf Coast, which fell from a high above 1.3 million b/d in 2007 to zero at the end of last year, the analysts note. Meanwhile, growth of railroad [...]

WTI Gains on Positive U.S. Economy Data, Supply Outlook

Filed in Prices by on 27 August 2014

West Texas Intermediate oil climbed as U.S. durable goods data and consumer confidence boosted economic optimism, while analysts forecast crude supplies fell. WTI gained 0.6 percent after orders for U.S. durable goods jumped in July by the most on record, while consumer confidence reached the highest level in almost seven years. A government report tomorrow will probably show U.S. crude supplies fell 2.5 million barrels last week, according to a Bloomberg survey. Russian President Vladimir Putin began talks with his Ukrainian counterpart, Petro Poroshenko, as tensions flared on the two nations’ border. “Things are getting better for the U.S. economy,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $2.6 billion, said by phone. “It’s absolutely undeniable that the U.S. is growing and that’s going to be good for fuel demand. We’ll now see if the U.S. is strong enough to be the locomotive [...]

WTI Trades Near Three-Day High Before Supply Data

Filed in Prices by on 27 August 2014

West Texas Intermediate traded near a three-day high before a government report forecast to show crude stockpiles dropped for a second week in the U.S., the world’s biggest oil consumer. Brent advanced in London. Futures rose 0.3 percent in New York. Crude inventories probably shrank by 2.5 million barrels to 360 million last week, according to a Bloomberg News survey before data from the Energy Information Administration today. The American Petroleum Institute was said to have reported that supplies fell by 1.3 million barrels. Iran is joining efforts to back Iraqi Kurds battling Islamic State militants who have captured swathes of northern Iraq. “That crude draw from last night did support WTI a little,” Andrey Kryuchenkov , an analyst at VTB Capital in London, said by e-mail. Prices will “hold well” if the Energy Department data is similar, he said. WTI for October delivery was at $94.12 a barrel [...]

Natural Gas Closes Lower on Uncertainty Over Warming Forecast

Filed in Prices by on 27 August 2014

By Timothy Puko NEW YORK–Natural-gas prices closed lower Tuesday with traders unconvinced that a warming forecast would translate into a significant increase in demand. The front-month September contract settled down 2.6 cents, or 0.7%, to $3.911 a million British thermal units on the New York Mercantile Exchange. The more actively traded October contract settled down 3 cents, or 0.8%, to $3.949/mmBtu. September options expired at close and the contract expires Wednesday. Both contracts flip-flopped around unchanged on a lot of mixed signals, primarily from the weather, analysts said. Though most forecasts showed another spurt of summer heat coming in early September, that wasn’t a unanimous prediction. The warmer forecasts also included signs that cooler fronts could break up or limit the heat likely to hit the south and east. “Without the forecast (for heat) being extended into the first three weeks of September, we don’t really have enough momentum…to [...]

U.S. Mobilizes Allies to Widen Assault on ISIS

Filed in Iraq by on 27 August 2014

The United States has begun to mobilize a broad coalition of allies behind potential American military action in Syria and is moving toward expanded airstrikes in northern Iraq, administration officials said on Tuesday. President Obama, the officials said, was broadening his campaign against the Sunni militants of the Islamic State in Iraq and Syria and nearing a decision to authorize airstrikes and airdrops of food and water around the northern Iraqi town of Amerli, home to members of Iraq’s Turkmen minority. The town of 12,000 has been under siege for more than two months by the militants. “Rooting out a cancer like ISIL won’t be easy, and it won’t be quick,” Mr. Obama said in a speech on Tuesday to the American Legion in Charlotte, N.C., using an alternative name for ISIS. He said that the United States was building a coalition to “take the fight to these barbaric [...]

Iraq crisis worsens Jordan’s economic woes

Filed in Jordan by on 27 August 2014

- As violence escalates in Iraq, neighbouring Jordan is facing a dire economic situation. Trade between the two countries, once a pillar of the Jordanian economy, has dropped dramatically. “The situation is disastrous, as our exports have almost stopped,” said Nabeel Rumman, president of the Association of Investors in the Free Zone. Jordanian and foreign investors are not taxed in Jordan’s free zones to encourage trade. Through the free zones, companies were exporting $120m worth of cars and other goods each month to Iraq, according to Rumman, who estimated that the group’s monthly losses total approximately $78m. “Only a few investors have shipped basic things like food and medicine [to Iraq] during the past couple of months,” Rumman told Al Jazeera. Iraq previously imported 20 percent of Jordan’s total exports , and in 2013, exports from Jordan to Iraq totalled approximately $1.25bn, according to the Jordan Chamber of Industry [...]

Islamists in Iraq Rely on Mines, Booby Traps in Battlefield Strategy

Filed in Iraq by on 27 August 2014

Islamic State militants are using mines and IEDs to thwart Kurdish Peshmerga forces trying to dislodge them from positions in northern Iraq. WSJ’s Tamer El-Ghobashy reports from the scene. JALAWLA, Iraq—Islamic State insurgents have planted land mines and other explosives to stall a Kurdish push to retake this town, an unfolding battlefield strategy that foes describe as built on patience, the element of surprise and a willingness to take losses. The fighters borrowed the tactic from their predecessors, al Qaeda in Iraq, who used improvised explosive devices, or IEDs, to prevent U.S. forces from retaking ground during the decadelong war that ended in 2011. The strategy has proved effective. Last week, Iraqi troops were slowed by mines planted along highways into the city of Tikrit, causing a stalemate in a renewed counteroffensive against Islamic State fighters there. Repeated Iraqi military attempts to retake Tikrit, a city of about a [...]

DNO Targets Kurdish Oil Exports in Market Opened by U.S. Ruling

Filed in Iraq, USA by on 27 August 2014

DNO ASA (DNO) , the oil producer focused on northern Iraq , said a U.S. court ruling has opened a market for Kurdish crude and it could make its first independent export sales by the end of the year at international prices. A U.S. district judge in Houston yesterday ruled that the semi-autonomous Kurdistan Regional Government can take 1 million barrels of crude ashore in Texas even though Iraq’s central government claims ownership of it. That’s “good news” for DNO, which has been cleared by the KRG to export oil independently, Executive Chairman Bijan Mossavar-Rahmani said. “That opens up a market, and we’ll walk into that market as well,” he said today in Stavanger, on Norway ’s west coast. “It’s not just a legal matter or political matter, it’s also a matter of having refineries take this oil, run it through their refineries and see how it works.” DNO, [...]