Recent Articles

Oil Futures Slide; Nymex Drops Below $100/Bbl

Filed in Prices by on 31 July 2014

Crude-oil futures extended overnight losses in Asian trade Thursday on bearish U.S. inventory data that sent the U.S. oil benchmark below the $100 a barrel mark. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $99.67 a barrel at 0430 GMT, down $0.60 in the Globex electronic session. September Brent crude on London’s ICE Futures exchange fell $0.22 to $106.29 a barrel. Overnight, Nymex lost 70 cents a barrel and Brent lost $1.21 a barrel. U.S. oil stockpiles fell by 3.7 million barrels in the week ended July 25, compared to market estimates of a 1.8 million-barrel decline, the U.S. Energy Information Administration said Wednesday. U.S. refineries continue to operate at peak summer levels, but poor U.S. refining margins especially on the Gulf coast may soon lead to run cuts or early maintenance by end-August, Societe Generale said. Lower [...]

WTI Drops Below $100 as U.S. Fuel Supplies Rise

Filed in Prices by on 31 July 2014

West Texas Intermediate dropped for a fourth day, slipping below $100 a barrel, as the dollar headed for its biggest monthly gain against the euro since last February, curbing the appeal of the commodity. Brent decreased in London. Futures fell as much as 1.2 percent in New York to the lowest since July 15. A stronger U.S. currency often dims the appeal of using dollar-priced commodities such as crude for protecting against inflation. WTI also fell after data yesterday showed U.S. gasoline supplies rose to the highest level in four months. The U.S. is considering further punitive measures on Russian business to deter President Vladimir Putin’s support for separatists in east Ukraine. “The U.S. dollar is starting to push higher, that weighs on commodity prices including oil,” Jens Pedersen, an analyst at Bank A/S in Copenhagen, said by e-mail. “Sanctions on Russia have not had an effect on current [...]

Natural-Gas Prices Fall Again as Supply Overwhelms Demand

Filed in Prices by on 31 July 2014

Natural-gas prices dropped slightly Wednesday as weather forecasts show little potential for demand growth into mid-August. Prices for the front-month September contract settled down 3.8 cents, or 1%, at $3.786 a million British thermal units on the New York Mercantile Exchange. Prices closed within 4 cents of the eight-month low closing price the market set on Monday. Natural gas has now lost value in eight of the past 10 sessions, resuming a fall that took a brief respite Tuesday in the hour before the August contract expired. Analysts had warned that Tuesday’s rally might be short-lived, tied to expiration, and that traders would return to focusing on a bearish supply-demand dynamic. Weather forecasts have been unseasonably cool for weeks, showing little potential for demand to keep up with record supply. Without air conditioners running and using gas-fire electricity, producers have turned record production from unconventional [...]

Kurds react to U.S. oil cargo

Filed in Iraq by on 31 July 2014

The federal government of Iraq can’t win its claims in the U.S. court system against Kurdish oil exports, the Kurdish natural resources minister said Wednesday. “The federal government cannot win, because our crude is legally produced, shipped, exported, and sold in accordance with the rights of the Kurdistan region as set forth in the Iraqi constitution,” Minister Ashti Hawrami said in a statement . The Iraqi federal government filed a petition in a U.S. court in Texas against a shipment of Kurdish crude oil parked off the coast of Texas. The court in turn called on U.S. Marshals to seize the oil should it enter U.S. territorial waters. U.S. State Department spokeswoman Jen Psaki said the vessel containing about 1 million barrels of Kurdish oil, United Kalavyrta, is anchored outside U.S. jurisdiction. “Our policy position remains the same, which is that we believe that oil should be transferred through [...]

Kurds Rebut Iraq’s Claim to Crude Oil Cargo Off Texas Coastline

Filed in Iraq by on 31 July 2014

Iraq ’s semi-autonomous Kurds reasserted their right to sell $100 million of crude on board a tanker off the Texas coastline after the government in Baghdad persuaded a U.S. judge to order the cargo’s seizure. The Kurdistan Regional Government wrote to the U.S. court claiming “misrepresentations” by the central government, it said in an e-mailed statement. The letter was written after Iraq’s government filed a complaint in a Houston federal court alleging that the Kurds “misappropriated” more than 1 million barrels of oil from northern Iraq. Magistrate Judge Nancy Johnson yesterday authorized marshals to seize the cargo on the tanker while the dispute is resolved. The ship, the United Kalavryta, is about 60 miles from Galveston, Texas and can only be seized should it enter U.S. territorial waters, she said. The KRG will seek compensation in any court where Kurdish oil sales are challenged, Ashti Hawrami , KRG minister [...]

Fighting in Libya threatens Western efforts to help its democracy

Filed in Libya by on 31 July 2014

Three years after Western powers helped Libyan rebels overthrow dictator Moammar Gaddafi, they have at least temporarily abandoned efforts on the ground to bolster Libya’s foundering democracy. On Wednesday, France evacuated its embassy in Tripoli, where warring militias have traded rocket and artillery fire over the past two weeks in the worst violence in the capital since Gaddafi’s ouster. French ships moved diplomats and French and other European citizens across the Mediterranean to Toulon, just days after U.S. diplomats left by road for Tunisia and then traveled to Malta, where they have set up an embassy-in-absentia. Although Britain has not formally suspended operations at its Tripoli mission, it has removed all but essential personnel and advised all citizens to leave the country. The growing turmoil marks a major setback for a country that just two years ago held its first free elections in four decades. What many Western officials [...]

Armed men blow up Yemen’s oil pipeline halting crude flows

Filed in Yemen by on 31 July 2014

 Armed men blew up Yemen’s main oil export pipeline on Wednesday, a local official said, halting crude flows and disrupting an important source of revenue for the impoverished state. Yemen’s oil and gas pipelines have repeatedly been sabotaged by insurgents or tribesmen since anti-government protests led to a power vacuum in 2011, causing fuel shortages and slashing export earnings. Earlier on Wednesday, Yemen raised fuel prices in an attempt to ease the burden of energy subsidies on its state finances. Sanaa earned just $671 million from exporting crude oil in January-May, down nearly 40 percent from a year earlier, as a result of the frequent bombings. The latest attack happened in the Wady Obaida area of the central oil-producing province of Maarib, halting the flow of crude to the Ras Isa oil terminal on the Red Sea, the local official said. The Maarib pipeline carries around [...]

Oil prices drive projected enhanced oil recovery using carbon dioxide

Filed in Oil Supply, USA by on 31 July 2014

 The injection of CO2 gas into oil reservoirs at high pressure forces the CO2 to mix with oil. This reduces the oil’s viscosity and causes the oil to increase in volume (swell). The result is an increase in the total cumulative volume of oil produced and in the percentage of oil-in-place that is recovered. The decision by a producer whether or not to employ this technique depends on a number of factors, including the geophysical properties of the reservoir, the oil within that reservoir, the cost of applying CO2 EOR, and the revenue received from additional production. The injection of miscible (capable of [...]

Arab Leaders, Viewing Hamas as Worse Than Israel, Stay Silent

Filed in Gaza by on 31 July 2014

 Battling Palestinian militants in Gaza two years ago, Israel found itself pressed from all sides by unfriendly Arab neighbors to end the fighting. Not this time. After the military ouster of the Islamist government in Cairo last year, Egypt has led a new coalition of Arab states — including Jordan, Saudi Arabia and the United Arab Emirates — that has effectively lined up with Israel in its fight against Hamas, the Islamist movement that controls the Gaza Strip. That, in turn, may have contributed to the failure of the antagonists to reach a negotiated cease-fire even after more than three weeks of bloodshed. “The Arab states’ loathing and fear of political Islam is so strong that it outweighs their allergy to Benjamin Netanyahu,” the prime minister of Israel, said Aaron David Miller, a scholar at the Wilson Center in Washington and a former Middle East negotiator under [...]

Gaza toll soars as Israel ‘days’ from completing tunnel hunt

Filed in Gaza by on 31 July 2014

GAZA/JERUSALEM (Reuters) – Israel pressed ahead with its Gaza offensive saying it was days from achieving its core goal of destroying all Islamist guerrilla cross-border attack tunnels, but a soaring Palestinian civilian toll has triggered international alarm. Prime Minister Benjamin Netanyahu’s security cabinet on Wednesday approved continuing the assault launched on July 8 in response to a surge of rocket attacks by Gaza’s dominant Hamas Islamists. Israel also sent a delegation to Egypt, which has been trying, with Washington’s blessing, to broker a ceasefire. A military source said some 16,000 reservists were being called up at short notice in the coming hours to relieve a similar number who would be stood down. Gaza officials say at least 1,361 Palestinians, most of them civilians, have been killed in the battered enclave and nearly 7,000 wounded. Fifty-six Israeli soldiers have been killed in Gaza clashes and more than 400 wounded. Three [...]

IMF says China’s economy to grow 7.5 pct in 2014

Filed in China by on 31 July 2014

China’s economy is expected to grow at about 7.5 percent this year with inflation kept below 3 percent, the International Monetary Fund (IMF) said on Wednesday. Despite slower investment and possible deeper adjustment in real estate activity, measures taken by authorities to support growth are “expected to bring it in line with the annual target of around 7.5 percent,” the Washington-based institution said in its annual Article IV Consultation Staff Report for China. “Consumption and the labor market are holding up well, and the global recovery is expected to support activity going forward. Inflation is forecast to remain below 3 percent,” the report added. Meanwhile, China’s external imbalances have fallen, said the IMF, as the current account surplus declined to 1.9 percent of GDP last year. Executive directors of the Fund agreed that China’s growth prospects are threatened by declining efficiency of investment, a [...]

Rosneft, PDVSA sign agreements for offshore projects

Filed in Venezuela by on 31 July 2014

OAO Rosneft and Petroleos de Venezuela SA (PDVSA) have signed a cooperation agreement for offshore projects in the Rio-Caribe and Mejillones blocks, the second stage of the Mariscal Sucre gas project ( OGJ Online, July 3, 2013 ). The companies intend to continue negotiations on key technical requirements and commercial and legal terms for establishment of joint ventures to develop Rio-Caribe and Mejillones. The parties also agreed to set up joint ventures for engineering, construction, and well servicing, and held negotiations on LNG plant construction. The signings took place during a visit to Caracas by Rosneft Pres. Igor Sechin. Rosneft and PDVSA have five joint oil production projects in Venezuela: Carabobo-2 and 4, Junin-6, PetroMonagas, Boqueron, and Petroperija.

Nigeria Loses N342 Million Daily As Eni Shuts Down Pipeline

Filed in Nigeria by on 31 July 2014

Nigeria will be losing about N342.4 million ($2.14 million) daily, as Italian oil firm, Eni, yesterday, shut down its 20,000 barrels per day crude oil pipeline in Nigeria. The shut down, according to the company, is due to sabotage on the pipeline, which had led to the interruption of 4,000 barrels a day it gets from its 20 per cent share in Nigerian Agip Oil Company. Wall Street Journal reported that Eni’s disclosure confirmed information from a local activist, who stated that pipeline had been blown up late Sunday. The activist had previously said Eni’s local operation is in a dispute with former security contractors on the project, a claim Eni spokesman failed to confirm or deny. “Uncertainty coming from places like Libya and Iraq has been offset by the fact. Physical cargoes of oil in the Atlantic Basin, Nigeria for one, remain well supplied,” Dominick Chirichella, analyst at [...]

Eni Says Some Oil Production Shut in Nigeria After Sabotage

Filed in Nigeria by on 31 July 2014

Italian oil giant Eni SpA said on Wednesday it had shut off some crude production following sabotage on a Nigerian pipeline, in a reminder oil- supply disruption risks continue beyond hot spots such as Libya and Iraq. An Eni spokesman said a pipeline it operates in the central part of Nigeria’s Niger Delta had been shut, leading to the interruption of 4,000 barrels a day it gets from its 20% share in Nigerian Agip Oil Co. That implies an overall disruption of 20,000 barrels a day form the affected part of the whole venture. Eni’s disclosure confirmed information from a local activist, who said the pipeline had been blown up late Sunday. The activist has previously said Eni’s local operation is in a dispute with former security contractors on the project. The Eni spokesman didn’t confirm or deny the dispute. Though the disruption is small, it comes at a [...]

Cash-Poor Venezuela Weighs Sale of Citgo

Filed in Venezuela by on 31 July 2014

Venezuela, strapped for cash at home and staring down costly litigation overseas, is considering a deal for its U.S.-based refinery company Citgo Petroleum Corp. as well as a stake in a refinery run with Exxon Mobil Corp. , according to a Citgo document and people familiar with the matter. People close to Petroleos de Venezuela SA, or PdVSA, say the state-run oil giant is in the early stages of considering a deal for Houston-based Citgo, which operates three refineries. It is separately shopping its 50% stake in the Chalmette refinery in Louisiana, a process that is further advanced, they said. A July 15 bond prospectus for Citgo states that PdVSA “is currently seeking to monetize its ownership interest in us.” A spokesman for PdVSA said he had no information on any potential asset sales. Exxon also declined to comment. PdVSA, the principal source of hard currency in Venezuela, is [...]

U.S. Oil Imports May Fall as Gulf Prices Drop Below Brent

Filed in Prices by on 31 July 2014

U.S. crude imports may drop from last week’s two-month high as prices on the Gulf Coast , home to 51 percent of refining capacity, slipped below Brent. Imports climbed 337,000 barrels a day in the week ended July 25, the Energy Information Administration reported today. Light Louisiana Sweet crude on the Gulf traded below Brent, benchmark for half of global oil trade, for a fourth day, according to data compiled by Bloomberg. LLS surged $4.52 a barrel above Brent on July 23, the biggest premium in one year, as strong refinery demand depleted crude inventories in the Gulf region. For the past year, the grade averaged $4.26 cheaper than Brent. Refineries slowed their operation last week amid rising fuel inventories. “This is a short-term reaction,” said James Williams , an economist at WTRG Economics, an energy research firm in London , Arkansas . “But it’s not going to hold. [...]

Hess plans IPO to fund Bakken plans

Filed in Shale Oil by on 31 July 2014

Hess Corp. said Wednesday it would use a new corporate structure to support its growth objectives in the Bakken oil reserve area of North Dakota. The company said it would form a master limited partnership that would make an initial public offering in the first quarter of 2015. “Hess intends to use the master limited partnership as the primary midstream vehicle to support its Bakken production growth,” the company said in a statement . Hess in January said it plans to spend $2.85 billion of the $5.8 billion budgeted this year for exploration and production on exploiting shale reserves, mostly in North Dakota. The company said the master limited partnership would work largely toward development of a natural gas processing plant and rail terminals in North Dakota. Oil production from the Bakken and Three Forks area of North Dakota topped the 1 million barrel per day mark for the [...]

U.S. takes steps to curb natural gas footprint

Filed in Climate by on 31 July 2014

The Sierra Club said Energy Department steps to reduce methane emissions tied to the natural gas sector are vital tools in the fight against climate change. U.S. Energy Secretary Ernest Moniz unveiled ways to minimize the amount of emissions generated from the natural gas sector. Deb Nardone, a campaign director at the Sierra Club, said the department’s efforts must be matched by equal efforts from the Environmental Protection Agency. “Together, actions by the DOE and the EPA can move the ball forward to break our reliance on all fossil fuels, including dirty fracked gas, while ushering in clean energy and energy efficiency,” she said in an emailed statement. Critics of hydraulic fracturing, known also as fracking, say the process could lead to higher emissions of methane, which could in part offset the low-carbon footprint of natural gas. Moniz unveiled a four-point plan for what he said [...]

Report: Alberta oil spill disclosure delayed

Filed in Canada, Tar Sands by on 31 July 2014

Files obtained from the Canadian government show there was a push to delay publication of information about an Alberta oil spill, a newspaper said. In mid-July, Canadian Natural Resources Ltd. published a 92-page report on the 2013 seep of more than 12,000 barrels of bitumen, the viscous form of oil found in Alberta. Canadian newspaper the Toronto Star reported Tuesday it obtained more than 100 pages of emails showing the enforcement branch of Environment Canada called on a spokesman to “limit information” released about the spill last year. The Star reports the seeps began in May 2013, but weren’t disclosed until July when the newspaper issued its accounts of the incidents. Megan Leslie, a provincial lawmaker from Halifax, told the newspaper the government of Prime Minister Stephen Harper was massaging public relations about the energy sector. “The responses (to media) don’t need to be beefed up,” she said. “Our [...]

Tanker of Texas Oil Heading to South Korea in First Sale Since 1970s Embargo

Filed in exports by on 31 July 2014

A tanker of oil from Texas set sail for South Korea late Wednesday night, the first unrestricted sale of unrefined American oil since the 1970s. How that $40 million shipment avoided the nearly four-decade ban on exporting U.S. crude is a tale involving two determined energy companies, loophole-seeking lawyers, and an unprecedented boom in American drilling that could create a glut of ultralight oil. The Singapore-flagged BW Zambesi is the first of many ships likely to carry U.S. oil abroad under a new interpretation of the federal law that bars most sales of American oil overseas. Analysts say future exports appear wide open: as much as 800,000 barrels a day come from just one of the many U.S. oil fields pumping light oil. Though U.S. policy on oil exports hasn’t changed, production of this kind of oil, known as condensate, is surging. This early shipment “is the wedge that’s [...]

Weather more than rail issues likely cause of soft US OTC prices: analyst

Filed in Coal by on 31 July 2014

Mild summer weather, not rail problems, is the biggest reason for softness in the US over-the-counter coal market, Ted O’Brien, an analyst with Doyle Trading Consultants said Wednesday. The effect is most acute in the Powder River Basin market, but it has also kept Central Appalachia prices soft. “Lots of people I talk to say you look at the weather in Texas and that dictates the direction of PRB pricing,” O’Brien said. “[Pricing] was pretty resilient coming out of the spring, even though we did have rail issues, but I think all the incremental weakness is driven by or attributed to very unfavorable weather.” In the CAPP market, it’s the same story, he said. “It’s come off, driven almost exclusively by weather,” he said. “The [barge market] probably has held up a little better than the rail contract.” In Wednesday’s session, the physically-settled CAPP barge contract (12,000 Btu/lb) for [...]

Average Price of Electricity Climbs to All-Time Record

Filed in USA by on 31 July 2014

For the first time ever, the average price for a kilowatthour (KWH) of electricity in the United States has broken through the 14-cent mark, climbing to a record 14.3 cents in June, according to data released last week by the Bureau of Labor Statistics. Before this June, the highest the average price for a KWH had ever gone was 13.7 cents, the level it hit in June, July, August and September of last year. The 14.3-cents average price for a KWH recorded this June is about 4.4 percent higher than that previous record. Average Price for a KWH of Electricity Typically, the cost of electricity peaks in summer, declines in fall, and hits its lowest point of the year during winter. In each of the first six months of this year, the average price for a KWH hour of electricity has hit a record for that month. [...]

Energy Companies Rethinking Russia After New Round of Sanctions

Filed in Ukraine by on 31 July 2014

The downing of Malaysia Airlines Flight 17 over eastern Ukraine — and the tougher round of sanctions against Russia that followed — is prompting some big multinational energy companies to take a fresh look at the ramifications of the crisis. For months, American and European energy players have continued to sign deals with Russia, maintaining a posture that business was proceeding as usual. But top industry executives are now starting to acknowledge that the escalating tensions could sharply hurt Western oil and gas giants with major investments in Russia, as well as the service companies that are key technology suppliers. “We are in the heat of a very emotional stage,” Robert W. Dudley, BP’s chief executive, told reporters on Tuesday. The company warned that further economic sanctions could harm BP’s income, production and reputation. France’s oil giant, Total, which had been among the most committed to Russia, [...]

Merkel rethink on sanctions reflects loss of trust in Putin

Filed in Ukraine by on 31 July 2014

epaselect epa04241887 German Chancellor Angela Merkel (L) meets with Russian President Vladimir Putin (R) in Deauville, Normandy, France, 06 June 2014. Merkel met with Putin for bilateral talks before the ceremony to mark the 70th anniversary of D-Day landing of Allied forces in France. D-Day marked the beginning of the advance into Europe which led to the defeat of Nazi Germany. EPA/MICHAEL KAPPELER Hours after Malaysia Airlines flight MH17 crashed in a field in eastern Ukraine, killing 298 people and igniting a geopolitical crisis, Angela Merkel reacted to the news with the same quality that has characterised much of her political life: caution. It was “too early” to discuss new sanctions against Moscow, the German chancellor said, even as claims were already surfacing that Russia-backed separatists had shot down the plane. More On this story On this topic IN Europe “These events have once again shown us that what [...]

U.S. and European companies are girding for the possible impact of

Filed in Russia, Ukraine by on 31 July 2014

U.S. and European companies are girding for the possible impact of tougher international sanctions against Moscow , with auto makers and energy giants moving to limit the Russian risks to their businesses. French oil company Total SA said Wednesday that it has stopped increasing its stake in Russia’s second-largest natural-gas producer, OAO Novatek , and will discuss the sanctions with its partners in Russian projects. A factory of Russian titanium-manufacturing company VSMPO-Avisma. Reuters “Russia is a great oil-and-gas country and we’ll have to wait and see the nature of these new sanctions first,” Total Chief Financial Officer Patrick de la Chevardière told reporters during a conference call. The European Union and the U.S. on Tuesday adopted sweeping economic sanctions against Russia, targeting for the first time sectors including Russia’s state-controlled banks and oil industry. The stronger sanctions have been driven by public outrage and Kremlin recalcitrance in the aftermath [...]

Germany’s Backing of Russia Sanctions Marks Breach in Pivotal European Relationship

Filed in Germany, Russia by on 31 July 2014

Russian President Vladimir Putin led a cabinet meeting at his residence outside Moscow on Wednesday. Alexei Nikolsky/Press Pool Three days after the crash of Malaysia Airlines Flight 17, German Chancellor Angela Merkel spoke to Russian President Vladimir Putin for at least the 30th time since the Ukraine crisis erupted. She had a blunt message, according to people briefed on the phone conversation: Call me if you have progress to report in defusing the conflict. That was July 20. The two leaders haven’t spoken since. The silence marks a breach in perhaps the most important relationship in European geopolitics, illustrating the daunting challenges facing the West in trying to calm the crisis in Ukraine. More broadly, the frayed relationship between Ms. Merkel and Mr. Putin shows the disintegration of a decadeslong effort by both Germany and Russia to bind the World War II adversaries to each other. Mr. Putin, in [...]

Rosneft reviews next steps following sanctions

Filed in Russia by on 31 July 2014

Russian oil company Rosneft said it may have to postpone some projects because of “volatility” associated with economic sanctions. Washington announced another set of tough new sanctions on Russia in coordination with its allies in the European Union. U.S. President Barack Obama said the sanctions would target Russian banks and exports of goods and technology for the Russian energy sector in response to Moscow’s position on crises in Ukraine. “If Russia continues on its current path, the cost on Russia will continue to grow,” he said . The pressure comes more than a week after Washington issued sanctions against the financial arm of Russian gas company Gazprom, gas producer Novatek and oil company Rosneft. Rosneft Chief Executive Officer Igor Sechin , himself the target of U.S. sanctions, said the company’s strategy was impeded by sanctions. “We work under different conditions and are ready for volatility linked [...]

Rosneft Moves to Thwart EU Sanctions With Norwegian Rigs

Filed in Norway, Russia by on 31 July 2014

A Norwegian drill rig owner is supplying Russian oil giant OAO Rosneft (ROSN) and Exxon Mobil Corp. with the kind of high technology that will be barred under U.S. and European Union sanctions taking effect as soon as tomorrow. Though the EU said it will deny export licenses for equipment intended for deep-water and arctic oil production, Rosneft’s six rig leases from Seadrill Ltd. (SDRL) ’s North Atlantic Drilling (NADL) unit, signed July 29, appear to thwart sanctions intended to block Russian oil companies from obtaining Western drilling expertise. Seadrill’s unit can proceed with the Rosneft contracts, worth $4.25 billion, because they were signed before the sanctions take effect, said Rune Magnus Lundetrae, Seadrill’s chief financial officer. The drilling contracts show how the latest round of international sanctions may have only minimal impact on Russia ’s oil industry, at least in the short-term. “This is not exactly a full, [...]

Moscow fights back after sanctions; battle rages near Ukraine crash site

Filed in Uncategorized by on 31 July 2014

Russia fought back on Wednesday over new U.S. and EU sanctions imposed over Ukraine even as G7 leaders warned of further steps, while Ukraine’s government accused pro-Russian rebels of placing land mines near the site of a crashed Malaysian airliner to prevent a proper investigation. Russia announced a ban on most fruit and vegetable imports from Poland and said it could extend it to the entire European Union, a move Warsaw called Kremlin retaliation for new Western sanctions over Ukraine imposed on Russia on Tuesday. Moscow called the new EU and U.S. sanctions “destructive and short-sighted” and said they would lead to higher energy prices in Europe and damage cooperation with the United States on international affairs. The confrontation between Russia and the West entered a new phase this week, with the United States and European Union taking by far the strongest international steps yet against [...]

British shale company to set new bar

Filed in United Kingdom by on 31 July 2014

British shale gas pioneer Cuadrilla Resources said Wednesday it’s confident it can kick-start a new industry in the country in a safe manner. Cuadrilla in June deposited 21 chapters of environmental studies with the Lancashire County Council associated with plans for up to four shale gas exploration wells in the area. The company produced an 8-minute video with environmental consultant group Arup outlining the information in the documents. Cuadrilla Resources Chief Executive Officer Francis Egan said the industry would start off on the right foot. “We know shale gas exploration can be done safely, securely and in an environmental responsible way, and we will do that,” he said in a statement . Protests against Cuadrilla’s early shale efforts in the village of Balcombe last year became unruly. Last week, officials in the area balked on a separate drilling application. Less than a week later, the British [...]

Royal Dutch Shell Profit Jumps

Filed in United Kingdom by on 31 July 2014

Royal Dutch Shell PLC said second-quarter earnings more than doubled from a year earlier as the Anglo-Dutch oil and gas group benefited from higher production of liquid petroleum and higher prices for certain products. Shell said Thursday that profit for the period came in at $5.15 billion on a current cost-of-supplies basis—a measure similar to profit reported by U.S. oil companies—compared with $2.39 billion in the same period last year. Excluding one-time items, current-cost-of-supplies profit was $6.13 billion, up 33% from $4.60 billion last year. Second-quarter sales were $115.27 billion, up slightly from $114.35 billion a year earlier. “Our financial performance for the second quarter of 2014 was more robust than year-ago levels but I want to see stronger, more competitive results right across [...]

WTI Trades Near Two-Week Low Before Stockpile Data

Filed in Prices by on 30 July 2014

West Texas Intermediate crude rebounded from the lowest price in two weeks before government data that may signal the strength of fuel consumption in the U.S., the world’s biggest oil user. Brent was steady in London . Futures gained 0.6 percent in New York . U.S. crude inventories probably shrank by 1.25 million barrels to 369.8 million, a Bloomberg News survey showed before Energy Information Administration data today. Supplies dropped by 4.4 million barrels nationwide and by 914,000 at the main storage hub in Cushing, Oklahoma , the American Petroleum Institute, an industry group in Washington , was said to have reported yesterday. “The API inventories report yesterday was fairly bullish for the market, after showing a large unexpected decline of 4.4 in crude oil stocks, offering upside momentum to the WTI contract,” Myrto Sokou, senior analyst at Sucden Financial Ltd. in London, said by e-mail. WTI for September [...]

Third Oil Tank on Fire After Shelling Near Libya Airport

Filed in Libya by on 30 July 2014

Clashes between rival militias near Libya ’s national airport set a third fuel storage tank ablaze as worsening violence in the country prompted the U.S and Germany to evacuate their nationals. A call by the Libyan government for a temporary truce to tackle the fire was ignored, with militias continuing to shell the area where the fire has raged all week. The government has requested international assistance, and said that Italy had offered to help, a claim subsequently denied by the Italian foreign ministry. “However, Italy continues to evaluate all of the options to furnish aid to Libya,” the foreign ministry said in statement today. The two-week long battle outside the airport has damaged the terminal, control tower and planes parked at the facility as a weakened central government battles armed groups including Islamists and separatist militias. Libya, which holds Africa’s largest crude reserves, has been engulfed in violence [...]

Libya Says Italy to Help Fight Depot Blaze

Filed in Libya by on 30 July 2014

Libya says seven fire-fighting planes are being sent by Italy and the Italian energy giant ENI to douse the inferno at a Tripoli oil depot. Fighting between militias nearby has prompted more residents to flee. Tunisian media said Tuesday that thousands of Libyans had crossed into Tunisia to escape crossfire near Tripoli rival militias that sparked the depot blaze. The fire had spread to a second storage site on Monday. Libya’s interim government said the Italian government and ENI were sending the planes to stem the blaze. It began on Sunday night, when a rocket hit a large fuel container, compounding two weeks of fighting between the rival militias near Tripoli’s main airport. Flights have been suspended. A local air base was used instead on Monday. France, Portugal and the Netherlands became on Tuesday the latest nations to ship out their citizens or close their embassies in Tripoli. Canada, [...]

Fighters overrun Libyan special forces base

Filed in Libya by on 30 July 2014

A coalition of armed groups has overrun a major Libyan army base held by allies of a renegade general in the eastern city of Benghazi. Special forces troops of the Saiqa brigade, loyal to Khalifa Haftar, abandoned their base in southeast Benghazi on Tuesday after coming under attack, military officials and residents said. “We have withdrawn from the army base after heavy shelling,” Saiqa official Fadel al-Hassi told Reuters. The battle killed at least 30 people, according to agency reports. We have withdrawn from the army base after heavy shelling. Saiqa special forces official Fadel al-Hassi. Benghazi has suffered months-long battles between militias and forces allied with Haftar, who launched a campaign aimed at crushing what he calls “terrorists” and ”extremists” including Ansar al-Sharia. According to the official Twitter account of Ansar, a group inspired by al-Qaeda and dominant in Benghazi, said it had taken over the base. In the fighting, a jet crashed after Haftar’s [...]

Oil Market Losing Faith in Libya’s Ability to Ramp Crude

Filed in Libya by on 30 July 2014

Escalating conflicts in Libya are thwarting a revival of oil output from Africa ’s largest crude reserves after a yearlong blockade of eastern ports, just as Societe Generale SA and Barclays Plc predict rising demand. While the government said in early July that traders could buy cargoes again from Es Sider and Ras Lanuf, the biggest blocked ports, neither has shipped anything. In Tripoli, the capital, firefighters are still battling a blaze at a fuel-storage depot caused by clashes between militias that have been struggling for political power in the three years since the ouster and killing of longtime leader Muammar Qaddafi . Brent crude futures have been trading as if supplies would be ample. Near-term contracts are priced at a discount to deliveries later in the year, a pattern known as contango, since July 8, the longest stretch in four years. Societe General and Barclays are among the [...]

Tanker With Kurdish Crude Oil Beyond Reach of U.S. Marshals

Filed in Iraq by on 30 July 2014

A tanker filled with a million barrels of legally contested Kurdish crude oil is beyond the reach of a U.S. court order to seize the cargo unless it comes closer to shore, a federal magistrate said Tuesday. For now, the embattled oil tanker, shipped in defiance of Iraq’s central government, remains in limbo 60 miles off the coast of Galveston, Texas. Federal magistrate judge Nancy Johnson on Monday ordered the U.S. Marshals to seize the oil if it came ashore. But at a hearing Tuesday, she said that the tanker hasn’t come within the boundaries of the state and the court’s authority. She also said Iraq, not Houston, was the proper venue to determine who owns the oil carried on the United Kalavrvta. “Seems to me this is not a matter for the U.S. courts to tell the government–the governments–of Iraq who owns what,” she said. [...]

Lawmakers Voice Skepticism on Iran Nuclear Deal

Filed in Iran by on 30 July 2014

 The Obama administration officials engaged in nuclear negotiations with Iran ran into a wall of skepticism at two congressional hearings on Tuesday, with members of both parties insisting on a vote on any final agreement with the Tehran government and administration officials strongly hinting that they have little intention of complying. The disagreements surfaced after Wendy R. Sherman , the under secretary of state for policy and the lead American negotiator with Iran, made the case that the four-month-long extension in negotiations agreed to by the administration, along with modest additional sanctions relief, were warranted “because we have seen significant progress in the negotiating room.” Specifically, she said the progress had been made in discussions about redesigning a plutonium reactor so that it would not produce weapons-grade fuel and converting Iran’s deep-underground uranium enrichment site, called Fordow, to another purpose. Yet Ms. Sherman also acknowledged that Iran [...]

Buyer of Kurdish oil revealed in report

Filed in Iraq by on 30 July 2014

A report Tuesday says Talmay Trading of the British Virgin Islands is scheduled to take Kurdish crude oil loaded on a tanker parked off the coast of Texas. CNBC reports the company contracted AET Offshore Services in Dallas to unload the 1 million barrels of crude oil on board the United Kalavytra, anchored off the coast of Texas . The vessel left the Turkish sea port of Ceyhan loaded with crude oil offloaded from storage facilities housing Kurdish crude oil. Kurdish oil shipments have sparked outrage from the federal Iraqi government in Baghdad, which says unilateral exports violate the nation’s constitution. The semiautonomous Kurdistan Regional Government has defended the sales , though the U.S. State Department said it sided with Baghdad on oil export issues. “We believe that Iraq’s energy resources belong to the Iraqi people and certainly have long stated that [exports] need to go through the central [...]

Algeria’s gas role questioned

Filed in Algeria by on 30 July 2014

Algeria’s role as a key supplier of natural gas to Europe should be reviewed given production declines, the European Council on Foreign Relations said Tuesday. The European Union spends an average $1 billion per day on energy imports. More than 60 percent of the region’s gas supplies come from foreign suppliers, notably Russia, Norway and Algeria respectively. A policy brief published Tuesday by the European Council on Foreign Relations said the EU has a short-sighted stance on Algeria, which should be viewed as an “unreliable partner.” Mansouria Mokhefi, special adviser for the Middle East and North Africa at the French Institute of International Relations and author of the report, said that, while Europe is eager to diversify an energy sector dependent on Russia, Algeria may not be a good backstop. “Algeria’s sharp rise in domestic energy consumption and concurrent decline in gas production suggests that Algeria [...]

Nigeria LNG says global market share slips as Bonny expansion stalls

Filed in Nigeria by on 30 July 2014

Nigeria LNG Ltd Wednesday said it was gradually losing global LNG market share due to a delay in the expansion of the six train Bonny LNG plant in the Niger Delta. The Bonny plant produces 22 million mt/year of LNG, but plans to build a seventh train and increase output to 30 million mt/year, initially from 2010, have failed to materialize. “NLNG used to be the 10th-largest supplier but it is gradually losing the market to international competitors who have continued to expand their businesses. It is therefore imperative that NLNG increases its production in order not to lose more market share,” the company’s general manager in charge of production, Chima Isilebo, said in a statement. NNPC holds a 49% interest in the Bonny plant alongside Shell (25.6%), Total (15%) and Eni (10.4%). The delay in building the seventh train has cost Nigeria $2.5 billion/year in potential revenue, as [...]

Where’s That Irish Oil, Investors Wonder Two Years Later

Filed in Ireland by on 30 July 2014

Ireland finally found treasure at the end of the rainbow, or so it seemed in 2012. After drilling in the North Celtic Sea Basin, about 40 miles off the Cork coast, Providence Resources Plc said its Barryroe oil field may hold as many as 1.6 billion barrels. The company’s shares surged, and the government hailed the first “significant” test of oil flows off Ireland for 12 years just as the nation’s debt-ravaged finances cried out for a boost. Two years later, Providence still hasn’t found a partner to develop Barryroe, production has been delayed and the company’s share price has dropped 84 percent. For Ireland, it’s turned into another stalled attempt to emulate the North Sea discoveries that transformed economies and are underpinning Scotland’s bid for independence. “Every couple of years we have the ‘black gold’ headlines, we are going to be the new North Sea,” Pat Shannon, geology [...]

Russia, China to work on floating nuclear plants

Filed in China, Nuclear, Russia by on 30 July 2014

A subsidiary of Russian state nuclear energy company Rosatom said Tuesday it signed an agreement to build floating nuclear power plants with China. “The potential use of floating nuclear power plants is significant,” Dzhomart Aliev, chief executive officer at Rusatom Overseas, said in a statement . “The design provides for two options — self-propelled or barge-mounted floating nuclear power plants.” The company signed a memorandum of intent to develop floating nuclear power plants with its Chinese counterparts, CNNC New Energy. The signing came as Chinese delegates spent a week touring St. Petersburg and Moscow. Russian interests have pivoted to the East, where Asian economic performance translates to greater demand for the energy products supporting the Russian economy. In May, Russian President Vladimir Putin and special envoy to the Far East Yuri Trutnev said they expected the region would attract as much as $65 billion in new investments. Aliev said [...]

Energy Regulators Say EPA’s Climate Rule Poses Grid Challenges

Filed in USA by on 30 July 2014

President Barack Obama ‘s proposed rule to curb carbon emissions from the nation’s power plants could raise costs and affect reliability in the U.S. electricity system, federal regulators told Congress. But the commissioners of the Federal Energy Regulatory Commission, the government agency charged with overseeing the electric grid and other parts of the nation’s energy infrastructure, also said at a House hearing that the government has a responsibility to act on climate change. As part of Mr. Obama’s climate agenda, the Environmental Protection Agency is proposing to cut carbon emissions from the electricity sector by 30% by 2030 based on emissions levels in 2005. States are expected to comply with the rule by using cleaner, though potentially more expensive, energy. Utility companies are already shifting away from coal because of the natural-gas boom and other environmental regulations. The rule is expected to accelerate the trend, which could put pressure [...]

As cash flow flattens, major energy companies increase debt, sell assets

Filed in Oil Supply by on 30 July 2014

Cash from operations for major energy companies has flattened in line with flat crude oil prices, which have had the lowest price volatility in years. Based on data compiled from quarterly reports, for the year ending March 31, 2014, cash from operations for 127 major oil and natural gas companies totaled $568 billion, and major uses of cash totaled $677 billion, a difference of almost $110 billion. This shortfall was filled through a $106 billion net increase in debt and $73 billion from sales of [...]

EIA: Firms with flattened cash flow increase borrowing to meet spending

Filed in Oil Supply, USA by on 30 July 2014

 In line with the lowest price volatility in years and stable crude oil prices, cash flow from operations for major energy companies has flattened. Data compiled from quarterly reports suggest that, for the year ending Mar. 31, cash from operations for 127 major oil and gas companies totaled $568 billion, and major uses of cash totaled $677 billion, generating a gap of almost $110 billion, according to a recent study by the US Energy Information Administration . The study noted that to fill the shortfall and increase the overall cash balance, major energy companies have increased net debt by $106 billion and gained proceeds of $76 billion from asset sales. EIA also noted that, during the past 3 years, the gap between cash from operations and major uses of cash has widened in recent years from a low of $18 billion in 2010 to $100-120 [...]

EU Aims at Russian Banks, Technology in Widest Sanctions Yet

Filed in Ukraine by on 30 July 2014

The European Union curbed Russia’s access to bank financing and advanced technology in its widest-ranging sanctions yet over President Vladimir Putin ’s backing of the rebellion in eastern Ukraine. EU governments agreed today in Brussels to bar Russian state-owned banks from selling shares or bonds in Europe and restricted the export of equipment to modernize the oil industry, a key prop for Russia’s economy, two EU officials told reporters. New contracts to sell arms to Russia and the export of machinery, electronics and other civilian products with military uses will also be banned. “The political implications of the escalation in tensions are likely to cast a further chill over relations between Russia and the West,” Citigroup Inc. analysts including Eric Lee and Tina Fordham said in a note to clients before the EU decision. “Economic costs are starting to bite, but it could be a while before the economic [...]

EU and U.S. announce new sanctions on Russia over Ukraine

Filed in Ukraine by on 30 July 2014

 The European Union and the United States on Tuesday announced further sanctions against Russia, targeting its energy, banking and defense sectors in the strongest international action yet over Moscow’s support for rebels in eastern Ukraine. The measures mark the start of a new phase in the biggest confrontation between Moscow and the West since the Cold War, which worsened dramatically after the downing of Malaysian flight MH17 over rebel-held territory on July 17 by what Western countries say was a Russian-supplied missile. “If Russia continues on this current path, the costs on Russia will continue to grow,” President Barack Obama said in Washington. “Russia’s actions in Ukraine and the sanctions that we’ve already imposed have made a weak Russian economy even weaker,” he said. In Brussels, diplomats said ambassadors from the 28-member European bloc agreed to restrictions on trade of equipment for the oil and defense [...]

Siemens to BP Prepare for Downward Russia Business Spiral

Filed in Ukraine by on 30 July 2014

BP Plc , Siemens AG and Renault SA are among European companies preparing for a downward turn in their Russian business following the European Union’s decision to impose its widest-ranging sanctions yet over President Vladimir Putin ’s involvement in eastern Ukraine. EU leaders announced plans yesterday to restrict the export to Russia of equipment to modernize the oil industry and forbid the sale of machinery, electronics and other civilian products with potential military uses. New arms contracts with Russia are also not allowed. The sanctions will have a direct impact on companies like Siemens, which may no longer be able to sell oil equipment to Russia, and an indirect effect on many others like Renault, which expects the country’s auto market to contract more than 10 percent in 2014 as consumers hold back purchases. BP, owner of 20 percent of state-backed OAO Rosneft , yesterday warned of risks to [...]

Russia’s central bank supports sanctions targets

Filed in Ukraine by on 30 July 2014

Russia’s central bank promised to support financial institutions hit by U.S. sanctions as stocks took a tumble in Moscow on Wednesday. In an online statement, the bank promised to “take adequate measures” to support targeted institutions. Russia’s state-owned VTB bank – Russia’s second-largest – was down 0.5 percent on Wednesday morning. Other major banks that were left unscathed by sanctions – such as the country’s largest, Sberbank – were trading higher. Russia’s MICEX benchmark index added 2.3 percent from its previous closing. U.S. officials said Tuesday that roughly 30 percent of Russia’s banking sector assets are now constrained by sanctions. The move comes after Malaysia Airlines Flight 17 was shot down over eastern Ukraine. Western officials accuse pro-Russian separatists of bringing down the plane with a missile supplied by Moscow. The West also halted future sales to lucrative Russian economic sectors, with the U.S. announcing plans [...]