Awl Bidness

[trysail]

http://www.bloomberg.com/news/2013-...xtend-oilfield-life-with-expansion-plans.html




Saudi Aramco Plans ‘Massive’ Spending to Extend Field Life
By Anthony DiPaola and Yuji Okada
October 14, 2013

Saudi Arabia, the world’s largest crude exporter, is making “massive investments” as it seeks a production buffer to guard against swings in global oil prices while addressing a decline in output from its older fields.

Saudi Arabian Oil Co., the state-owned producer known as Saudi Aramco, plans to maintain spare output capacity of more than 2 million barrels a day, according to Chief Executive Officer Khalid Al-Falih. The Dhahran-based company raised its annual capital budget tenfold to $40 billion over the last decade and, in the past two years, has adjusted its daily production by more than 1.5 million barrels, he said.

“We are on track to increase the average of our conventional oil recoveries to 70 percent, which is more than double the current world average,” Al-Falih said at the World Energy Congress in Daegu, South Korea, today. “Resources are, in fact, abundant.”

Benchmark oil futures have rallied 11 percent in New York this year amid speculation Middle East unrest may disrupt shipments from a region that accounts for more than a third of global production. Saudi output increased to 10 million barrels a day last month, coinciding with a drop in supply from Libya, according to a Bloomberg survey of analysts and producers.

Global crude reserves, estimated at 1.6 trillion barrels, are equivalent to half a century of production at current rates, according to Al-Falih. Demand will rise by about 20 million barrels a day over the next two decades, he said. Daily consumption is forecast at 92.1 million barrels next year, the International Energy Agency said in an Oct. 11 report.

Spare Capacity
Saudi Arabia has the largest portion of spare capacity within the 12-member Organization of Petroleum Exporting Countries. Maintaining a cushion of unused production allows the desert kingdom to raise output to meet supply shortfalls and potentially limit price spikes.

“OPEC nations, and especially Saudi Arabia, will continue to meet all supply needs,” Ibrahim Al-Muhanna, senior adviser to the Minister of Petroleum and Mineral Resources, said today in a speech at the triennial conference. “Saudi Arabia will continue to be the supplier of last resort.”

At the same time, Saudi Arabia’s demand for natural gas risks exceeding supplies of the fuel it has available. The company started developing so-called unconventional gas resources two years ago and is ready to begin supplying a 1,000 megawatt power plant in the country’s north with fuel set to be produced through that program, Al-Falih said.

Manifa Deposit
Saudi Arabia, OPEC’s biggest producer, will maintain its output capacity at 12.5 million barrels through new fields including the offshore Manifa deposit, according to Al-Falih. Saudi Aramco also plans to add 550,000 barrels a day of capacity from the Shaybah and Khurais fields by 2017.

Manifa, which produces Arabian Heavy grade crude, and Shaybah and Khurais, which will supply lighter varieties, will help Aramco replace the oil that’s no longer being pumped from aging fields, he said yesterday.

“These are to basically allow us to relax production from the more mature fields and reservoirs and extend them, and also to rebalance our crude slates because with Manifa we’re tilting toward more heavy,” he said.

Light Crude
Shaybah will reach a capacity of 1 million barrels a day by the end of 2016 or early 2017, after adding 250,000 barrels of daily output capability, according to Al-Falih. The company will add 300,000 barrels a day of capacity at Khurais, bringing it to 1.5 million in 2017. Aramco is also adding output of 250,000 barrels of natural gas liquids at Shaybah in a project set to be complete by the end of 2014, he said.

Saudi Aramco will have more light crude for export once the new deposits start producing, Al-Falih said. The heavier output from Manifa is earmarked for new joint-venture refineries the company is developing in the coastal towns of Jubail and Yanbu.

A third oil refinery the company is building at Jazan will be completed by late 2016, Al-Falih said. The facility will produce products from light and medium crudes for export.

The company plans to build a 3,000 megawatt power plant at Jazan, he said. It awarded the contract for the supply of the turbines to Siemens AG in August. A residue gasification unit will be added at the refinery.





http://www.bloomberg.com/news/2013-...xtend-oilfield-life-with-expansion-plans.html

 

[trysail]

http://www.bloomberg.com/news/2013-10-24/oil-s-5-trillion-permian-boom-threatened-by-70-crude.html




Oil’s $5 Trillion Permian Boom Threatened by $70 Crude
By Joe Carroll and Edward Klump
October 25, 2013

Bryan Sheffield, a third-generation oil wildcatter in Texas’s Permian Basin, knows what he’ll do if crude drops to $80 a barrel: shut down half his drilling rigs and go on a takeover hunt for weaker rivals.

Sheffield is among producers who’ve together invested $150 billion in the Permian since 2010 seeking their piece of an oil trove estimated to be worth as much as $5 trillion. As the money pours in, risks are mounting of a bust as [some] analysts... forecast crude is heading down to $70 a barrel next year, a price that would slow drilling in the most expensive U.S. shale formation.

While traditional wells have been drilled in the Permian since the 1920s, shale producers have become giddy over the potential of the region’s vast overlapping layers of oil-soaked shale rock. Pioneer Natural Resources Co. estimated the remaining yield at the equivalent of 50 billion barrels, more than any field on Earth except Saudi Arabia’s Ghawar. The varied geology, though, makes it more costly to explore and develop.

“That’s the double-edged sword,” said Benjamin Shattuck... Multiple oil zones layered one atop another provide ample potential for riches, “but you also have to be a knowledgeable and good operator in order to drill economic wells out there.”

If oil drops another 18 percent to $80 a barrel, wells in some parts of the Permian that sprawls beneath Texas and New Mexico will become money-losers, said Tim Rezvan...

Cline Shale
Energy producers on average need oil prices around $96 a barrel to break even on wells drilled in Permian layers known as the Cline Shale and the Northern Mississippian Lime, according to Mike Kelly... That compares to average break-even prices of around $78 a barrel in the Eagle Ford Shale a few hundred miles east of the Permian, and $84 in the Bakken of North Dakota. Some areas of the Permian need a price of just $70-$74, Kelly said.

The benchmark U.S. crude, West Texas Intermediate, dipped 4.8 percent this month, touching a 4-month low of $95.95 a barrel yesterday as rising U.S. production bloated stockpiles. Brent crude, the benchmark for two-thirds of the world’s oil, is averaging $108.59 this year and probably will fall to the $70-to-$80 range, Fadel Gheit [an idiot]... said without providing a time line.

Drilling Leases
Sheffield started Parsley Energy LLC with drilling leases he bought during the last oil crash of 2008, and has been focused on traditional vertical wells in shallower Permian oilfields. He estimates he’ll spend about $8 million on the company’s first horizontal well to tap one of the shale layers later this year.

Oil at $80 would mean Sheffield drills only the prospects most likely to deliver the biggest, fastest gushers. The most efficient operators can manage on lower prices, so if oil falls another $20, it will quickly weed out the higher-cost producers.

“If you look down the road, there are going to be consolidation opportunities,” said Travis Stice, chief executive officer of Diamondback Energy Inc., a Midland, Texas-based Permian explorer whose stock price has tripled since the initial offering a year ago. “I’m not sure how many small operators the Permian is going to tolerate.”

Diamondback, whose biggest shareholder is $5 billion hedge fund Wexford Capital LP, expects to double production next year to the equivalent of 15,000 to 16,000 barrels a day, Stice said during a conference call with investors and analysts yesterday. The company plans to drill 65 to 75 horizontal wells in 2014 at an average cost of $6.9 million to $7.4 million each, he said.

Flying High
For now, Permian drillers are flying high, outperforming the rest of the North American oil industry. An index of Permian-focused prospectors that includes Pioneer, Diamondback and Concho Resources Inc. climbed 80 percent this year, more than double the 33 percent gain for the broader Standard & Poor’s Oil & Gas Exploration and Production Index of 72 companies.

Athlon Energy Inc., a Fort Worth, Texas-based Permian explorer backed by private-equity firm Apollo Management, has soared 64 percent in the 12 weeks since its shares debuted.

“The Permian is all the rage on Wall Street,” Global Hunter’s Kelly said about the region named for the geologic period that began 299 million years ago.

The attraction lies in an unusual geological feature known as “stacked plays,” horizontal bands of oil- and gas-bearing stones laid down tens of millions of years ago when much of the U.S. Southwest was an inland sea.

Apache’s Permian
Apache Corp. has identified at least 35 potential zones in its Permian holdings, and it has tested about 20 so far, said John Polasek, exploration and new ventures manager for the Permian region. The Houston-based company’s employee count in the Permian is estimated to surge to 896 by year-end from 345 in 2010, according to an Apache presentation this month.

Pioneer is selling its Alaska oil and gas fields for $550 million and plans to use the proceeds to expand its Permian drilling, the company said in a statement today.

At current energy prices, Irving, Texas-based Pioneer is earning cash profit margins of $60 to $70 a barrel on some of its Permian wells, Timothy Dove, Pioneer’s president and chief operating officer, said during Hart Energy’s Executive Oil Conference in Midland on Oct. 15.

Still, oil prices need to stay high enough to support the current rate of exploratory drilling, Dove said. There will be more pressure to make every well a gusher if prices continue falling, said Diamondback’s Stice.

Bad Day
A horizontal well in the stacked play known as the Wolfcamp costs $7 million to $7.5 million if everything operates smoothly, Stice said. One “bad day,” though, can send that cost skyrocketing to $12 million or more, he said. Wildcatters squeezed by slumping oil prices may lose their nerve and look to get out, he said.

“One of the downsides is you’re focusing a significant amount of capital in one hole and there’s a huge amount of mechanical risk,” said Kyle Hammond, CEO of FireWheel Energy LLC and a former Permian drilling chief for Exxon Mobil Corp.’s XTO Energy unit. “That’s terrifying to a small independent.”



http://www.bloomberg.com/news/2013-10-24/oil-s-5-trillion-permian-boom-threatened-by-70-crude.html

 

[trysail]

http://www.bloomberg.com/news/2013-...jumps-on-5-2-billion-gain-on-tnk-bp-deal.html



Rosneft Quarterly Net Jumps on $5.2 Billion Gain on TNK-BP Deal
By Stephen Bierman and Jake Rudnitsky
October 29, 2013

OAO Rosneft, Russia’s largest oil producer, said third-quarter profit rose eightfold from the previous three-month period after it recorded a 167 billion-ruble ($5.2 billion) gain on the value of TNK-BP.

Net income rose to 280 billion rubles from 35 billion rubles in the second quarter, the Moscow-based company said in a statement on its website. Earnings before interest, taxes, depreciation and amortization rose 41 percent to 303 billion rubles, beating the average estimate of 272 billion rubles from 13 analysts surveyed by Bloomberg.

State-run Rosneft became the world’s largest traded oil producer by volume after it completed the $55 billion purchase of TNK-BP, Russia’s third-largest producer, in March. Rosneft is also boosting its natural gas business by acquiring a stake in the SeverEnergia venture, assets from OAO Alrosa and Itera.

“We made significant progress in delivering our strategic goals,” Chief Executive Officer Igor Sechin said in the statement, noting improvements in the industry’s tax regime.

Rosneft shares jumped as much as 1.5 percent and traded up 1 percent at 256.24 rubles by 2:03 p.m. in Moscow.

Dividends, paid out at 25 percent of net income, will be supported by the accounting gain after Rosneft’s auditor, Deloitte, estimated the fair value for TNK-BP at 167 billion rubles higher than the acquisition price, Sechin said on Sept. 27 in Sochi, Russia.

Revenue increased 15 percent to 1.36 trillion rubles from the previous quarter, according to the statement.



http://www.bloomberg.com/news/2013-...jumps-on-5-2-billion-gain-on-tnk-bp-deal.html

 

[trysail]

For those in search of a good glossary of terms related to energy:
http://www.eia.gov/tools/glossary/


As an example,

Processing [refinery] gain: The volumetric amount by which total output is greater than input for a given period of time. This difference is due to the processing of crude oil into products which, in total, have a lower specific gravity than the crude oil processed.

​

 

[trysail]

Yup, it is a big deal.


​

http://www.bloomberg.com/news/2013-...ses-oil-overhaul-to-break-state-monopoly.html



Mexico Lower House Passes Oil Overhaul to End State Monopoly

By Eric Martin and Adam Williams
December 12, 2013

Mexico’s lower house passed an energy bill that ends Petroleos Mexicanos’s 75-year oil monopoly in a bid to attract foreign investment and boost growth.

Lawmakers approved the bill in general terms in a 354-134 vote late yesterday and continue to discuss minority-party challenges to specific articles. If these are rejected, the initiative will be sent to Mexico’s states, where it’s likely to receive approval from more than half of the legislatures, the threshold for changing the constitution.

The bill, passed by the Senate two days ago, would change Mexico’s charter to permit companies such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) to drill for oil for the first time since 1938. It would allow production sharing and licenses for outside companies that will also be able to log crude reserves for accounting purposes. Supporters say it will boost economic growth, while opponents say it will funnel the nation’s resource wealth to foreign investors.

“This is a very important reform, probably the most important reform of the past 30 years in economic terms,” Jorge Chabat, a political scientist at the Center for Economic Research and Teaching, a Mexico City-based university, said in a phone interview. “We will probably see many private investors coming to Mexico and many jobs generated. This is a big decision, and a big victory for Pena Nieto.”

Cornerstone
The passage comes one year after President Enrique Pena Nieto took office and returned his Institutional Revolutionary Party, or PRI, to power after a 12-years hiatus. The 47-year-old leader has called the oil overhaul the cornerstone of his administration and it follows approval of an education bill to make teachers more accountable for performance, a law to spur increased telecommunications competition and an initiative to jump start bank lending.

Congress in October also passed a tax overhaul to reduce the government’s dependence on revenue from Pemex, as the state-owned oil company is known, which funds about a third of Mexico’s federal budget.

The peso strengthened 0.4 percent to 12.9839 per U.S. dollar at 3:46 a.m. in Mexico City. The nation’s stock market is closed today for a holiday.

The energy-industry overhaul should be approved by at least 17 of Mexico’s state legislatures early next year, with the first contracts based on its model ready by the end of 2014, Alexis Milo, chief economist at Deutsche Bank Securities Inc. in Mexico City, wrote in a research note.

Job Creation
The overhaul “will increase the availability of energy for Mexicans, at more affordable prices, and increase oil and natural gas production,” Eloy Cantu, a PRI lawmaker, said during the debate. It will “generate greater economic growth that will lead to job creation,” he said.

The bill is supported by the PRI, the National Action Party and the Green Party. The Democratic Revolution Party and smaller allied parties say Mexico should hold a voter referendum on whether to allow private investment in the energy industry and that the debate should have first gone through lower house committees.

PRD lawmakers and allies forced the legislative session into a cramped alternate auditorium at the lower house complex in Mexico City after seizing control of the permanent legislative chamber in a bid to prevent the bill from being debated.

‘Traitors’
“You’re traitors to your country,” Ricardo Monreal, a Citizens’ Movement lawmaker who opposes the bill, shouted at rival legislators after they assembled at the alternate location.

Manlio Fabio Beltrones, leader of the PRI in the lower house, said the PRD’s seizure of the chamber was undemocratic and that lawmakers had a right to skip the committee stage and proceed to a full house debate.

Mexico is the world’s ninth-largest oil producer, according to the U.S. Energy Information Administration, and possesses the biggest unexplored crude area after the Arctic Circle. Industry analysts and the bill’s authors say the overhaul will reverse eight years of oil output declines for Pemex and increase production to as much as 4 million barrels per day by 2025.

“With reform there will undoubtedly be a spurt of production growth as Mexico is a very rich hydrocarbon area both onshore and offshore,” Ed Morse, the New York-based head of commodities research at Citigroup Inc., said in a phone interview. “Realistically, it could double the amount of oil that Mexico produces.”

Falling Production
Mexico’s oil production has fallen 25 percent to 2.5 million barrels per day from a high of 3.3 million in 2004, according data from Pemex. Should Mexican output reach 4 million barrels daily by 2025, it could surpass Canada to become the world’s fifth-largest producer, given current production levels.

Natural gas production would almost double to as much as 10.4 billion cubic feet by 2025 from current output of 5.7 billion feet, according to the bill. The initiative could push Mexico to become one of the top-five crude exporting countries in the world and a natural gas exporter, Morse said.

Pena Nieto’s government forecasts the initiative will attract investment and spur production that will boost Mexico’s annual gross domestic product growth by 1 percentage point by 2018. The Finance Ministry projects the economy will expand 1.3 percent this year, down from 3.9 percent in each of the past two years and the least since the 2009 recession.

Board Removal
The bill also approves the removal of all five representatives of the Pemex workers’ union from the company’s board of directors. Under the new legislation, Pemex’s board would be trimmed to 10 from 15. It would consist of five government members, including the energy minister as board president, and five professional advisers.

Easing restrictions that have barred the largest international oil explorers from drilling in Mexico for three-quarters of a century will help Pemex revive output and crack vast shale formations...

Opening the oil industry to foreign drillers could unleash a wave of exploration equaling Iraq in recent years... Mexico’s deep-water prospects in the Gulf of Mexico would be attractive to Exxon and Chevron, while shale tracts would interest EOG Resources Inc. and ConocoPhillips...

‘Right Direction’
Enticing foreign investment “should jump start production and get it moving back in the right direction,” he said.

Oil at all stages of production, refining and distribution has been the legal property of the Mexican people since 1938, when then-President Lazaro Cardenas seized fields from U.S. and British companies and changed the nation’s charter. The expropriation is celebrated every March 18 and trumpeted as a point of pride in schoolchildren’s textbooks. Cardenas was from Pena Nieto’s PRI party, which ruled Mexico uninterrupted for seven decades until 2000.

“The issue of oil is embedded in the Mexican soul, in the Mexican tradition, in Mexican history,” Chabat said. Passing the overhaul through Congress “was the mother of all battles for the Mexican government, and the most important success of the Pena Nieto administration so far,” he said.



http://www.bloomberg.com/news/2013-...ses-oil-overhaul-to-break-state-monopoly.html

 

[trysail]

http://www.bloomberg.com/news/2013-12-16/north-america-to-drown-in-oil-as-mexico-ends-monopoly.html



North America to Drown in Oil as Mexico Ends Monopoly

By Joe Carroll and Bradley Olson
December 16, 2013

The flood of North American crude oil is set to become a deluge as Mexico dismantles a 75-year-old barrier to foreign investment in its oilfields.

Plagued by almost a decade of slumping output that has degraded Mexico’s take from a $100-a-barrel oil market, President Enrique Pena Nieto is seeking an end to the state monopoly over one of the biggest crude resources in the Western Hemisphere. The doubling in Mexican oil output that Citigroup Inc. said may result from inviting international explorers to drill would be equivalent to adding another Nigeria to world supply, or about 2.5 million barrels a day.

That boom would augment a supply surge from U.S. and Canadian wells that Exxon Mobil Corp. (XOM) predicts will vault North American production ahead of every OPEC member except Saudi Arabia within two years. With U.S. refineries already choking on more oil than they can process, producers from Exxon to ConocoPhillips are clamoring for repeal of the export restrictions that have outlawed most overseas sales of American crude for four decades.

“This is going to be a huge opportunity for any kind of player” in the energy sector, said Pablo Medina, a Latin American upstream analyst at Wood Mackenzie Ltd. in Houston. “All the companies are going to have to turn their heads and start analyzing Mexico.”

The revolution in shale drilling that boosted U.S. oil output to a 25-year high this month will allow North America to join the ranks of the world’s crude-exporting continents by 2040, Exxon said in its annual global energy forecast on Dec. 12. Europe and the Asia-Pacific region will be the sole crude import markets by that date, the Irving, Texas-based energy producer said.

Unprecedented Output

Exxon’s forecast, compiled annually by a team of company economists, scientists and engineers, didn’t take into account any changes in Mexico, William Colton, the company’s vice president of strategic planning, said during a presentation at the Center for Strategic and International Studies in Washington on Dec. 12.

Opening Mexico’s oilfields to foreign investment would be “a win-win if ever there was one,” said Colton, who described the move as “very good for the people of Mexico and people everywhere in the world who use energy.”

The bill ending the state monopoly was approved by the Mexican Congress Dec. 12. Before becoming law, the proposal must be ratified by state assemblies, most of which are controlled by proponents of the reform. Oil companies will be offered production-sharing contracts, or licenses where they get ownership of the pumped oil and authority to book crude reserves for accounting purposes. The contracts will be overseen by government regulators.

$15 Billion Boost

Though some foreign companies already operate in Mexico under service contracts with Petroleos Mexicanos, or Pemex, the reform could increase foreign investment by as much as $15 billion annually and boost potential economic growth by half a percentage point, JPMorgan Chase & Co. said in a Nov. 28 report.

A doubling in production as suggested by Citigroup analyst Ed Morse would put Mexican output at 5 million barrels a day, an unprecedented level for Pemex, the state oil company created during nationalization in 1938.

The U.S. and Canada are expected to produce a combined 17.6 million barrels of crude and ethanol in 2015, rising to 18.7 million in 2020 and 19 million in 2040, according to the U.S. Energy Information Administration.

During that time span, combined U.S. and Canadian demand is expected to remain stagnant at 21 million barrels a day, the Washington-based EIA said in its annual energy outlook in April.

Potential Delays

A doubling of Mexico’s output maybe be slower to realize than the most bullish predictions as companies confront barriers in accessing capital and human resources needed for development, Riccardo Bertocco, a partner at Bain & Co. in Dallas.

An increase of 1 million barrels a day in output is the most realistic upper limit of what Mexico could achieve by 2025 based on the cost for new infrastructure and competition for new fields and opportunities all over the U.S., Bertocco said in a telephone interview Dec. 12.

“The opportunities are there, but they are still far from being materialized,” he said. “The CEOs we’re speaking with are cautiously optimistic, but we don’t think it is game-changing in the short or medium term.”

Drilling in Mexico will be held back by a lack of infrastructure, such as pipelines, in some of the potential shale developments. The government will need to decide on details for development such as tax rates, royalty structures and standards for booking reserves, said Kurt Hallead, an analyst at RBC Capital Markets, in a Dec. 12 note to clients.

Regulator Inexperience

It will take time to organize and conduct bidding rounds for licenses, and additional exploration, such as seismic tests, will need to be done, Hallead said.

“We are not expecting any significant impact from the reform to be felt in the next two years,” he wrote in the note.

Foreign oil companies will face a backlash from Mexicans opposed to sharing the nation’s oil wealth, said Ricardo Monreal Avila of Movimiento Ciudadano Party, who sees the reform as violating Mexico’s constitution.

“We are going to see serious problems in the operations of these reforms. Indigenous communities and places chosen by foreign companies for extraction, will not allow them on their property.There are going to be serious operational problems.”

Investment Choices

The first assets that will attract foreign investment will be mature oilfields drilled decades ago and reservoirs that need injections of steam or carbon-dioxide to coax more crude out of the ground, Medina said. Deep-water prospects, shale and other technically-challenging endeavors will follow later, he said.

The level of investor interest will be partly determined by which assets Pemex chooses to keep and which it will put up for auction, Medina said.

The Chicontepec field northeast of Mexico City may be among the richest prizes Pemex surrenders after its problems overcoming low pressure and disconnected crude deposits that have limited output, Medina said. Production that has averaged about 60,000 barrels a day could be lifted to more than 100,000 by an international producer experienced in handling such fields, he said.

Chicontepec is just one of the over-budget, long-delayed projects for which Pemex will be eager to find partners, said Jose Antonio Prado, a former general counsel of Mexico’s energy ministry and Pemex official.

“The Mexican state will be able to incorporate private participants in projects that are already in force as well as new opportunities,” said Prado, now a partner at the law firm Holland & Knight LLP in Mexico City.

Deep Water

The reforms are especially important to open up exploration in Mexico’s deep-water fields, where additional capital, as well as better technology and expertise are needed, Carlos Solé, a Houston-based partner at Baker Botts LLP, said in a telephone interview. Pemex estimated the country’s deep-water Gulf of Mexico prospects may hold the equivalent of 26.6 billion barrels of crude.

Onshore, the potential is even greater with more than 60 billion untapped barrels, according to a Pemex presentation last month.

Some of the potential shale production sits across the border from Texas’s prolific Eagle Ford formation. The most resource-rich area studied so far is around the city of Tampico, a coastal city about 300 miles south of the bottom tip of the Texas border.

“I can’t tell you the amount of banks and investment funds coming from the U.S. and Europe that have been talking to us and are trying to have an expectation of what’s going to happen with the energy reform,” Prado said. “All those guys are going to be in Mexico next year in various forms trying to seek new opportunities.”




http://www.bloomberg.com/news/2013-12-16/north-america-to-drown-in-oil-as-mexico-ends-monopoly.html

 

[Busybody]

oil

is

a

limitless

commodity

 

[Ajax_Prime]

oil

is

a

limitless

commodity

Sadly, that is incorrect.

 

[Busybody]

You are mistaken

 

[trysail]

If I was a betting man, I'd be inclined to bet that either (1) the price of petroleum is going to fall or (2) the price of natural gas is going to rise or (3) some combination of (1) and (2) was likely to occur.

http://alfred.stlouisfed.org/graph/alfredgraph.png?&chart_type=line&graph_id=&category_id=&recession_bars=On&width=800&height=480&bgcolor=%23B3CDE7&graph_bgcolor=%23FFFFFF&txtcolor=%23000000&ts=8&preserve_ratio=false&fo=ve&id=GASPRICE_OILPRICE&transformation=lin_lin&scale=Left&range=Custom&cosd=1993-01-01&coed=2010-11-01&line_color=%230000FF&link_values=&mark_type=NONE&mw=4&line_style=Solid&lw=1&vintage_date=2010-12-24_2010-12-24&revision_date=2010-12-24_2010-12-24&mma=0&nd=_&ost=&oet=&fml=b%2Fa&fq=Monthly&fam=avg&fgst=lin​

I was wrong.

But— I don't bet on forecasts (even my own and, most assuredly, not on those of others).


http://alfred.stlouisfed.org/alfredgraph.png?g=q8z


​

 

[Ajax_Prime]

You are mistaken

I am in the business. I assure you, I'm not.

 

[Busybody]

I am an investor in and consultant to many oil companies

OIL IS LIMITLESS

doesn't mean holes don't go dry

means every year, MORE oil is found then used

every year MASSIVE AMOUNTS are found that dwarf Saudi fields


OIL ALSO REPLENISHES ITSELF

 

[RoryN]

One cannot "fly" to Mars.

Why can't the right fringe come up with a meme that isn't completely retarded?

 

[trysail]

I am an investor in and consultant to many oil companies

OIL IS LIMITLESS

doesn't mean holes don't go dry

means every year, MORE oil is found then used

every year MASSIVE AMOUNTS are found that dwarf Saudi fields


OIL ALSO REPLENISHES ITSELF

Don't continue. You're making a fool of yourself.

 

[thør]

Looks like half of the UK will be open for shale plays.

 

[Busybody]

Don't continue. You're making a fool of yourself.

Oil replenishes itself

Oil is limitless

More oil is discovered then used every year

Only LIBZ n Dumz are idiots enough not to know

Deal with it

 

[Ajax_Prime]

Oil replenishes itself

Oil is limitless

More oil is discovered then used every year

Only LIBZ n Dumz are idiots enough not to know

Deal with it

Then why isn't oil free, Mr. Consultant? Or I'll make it even easier on you, why isnt it a uniform price worldwide?

 

[trysail]

Oil replenishes itself

Oil is limitless

More oil is discovered then used every year

Only LIBZ n Dumz are idiots enough not to know

Deal with it

Let us know when you locate some abiogenic petroleum. You'll be extremely rich and popular as well as the toast of geophysics and petroleum geology.

 

[trysail]

http://en.ria.ru/images/18013/67/180136732.jpg


​

 

[Busybody]

Then why isn't oil free, Mr. Consultant? Or I'll make it even easier on you, why isnt it a uniform price worldwide?

that's DUMB

 

[trysail]

http://www.bloomberg.com/news/2014-...s-show-drilling-trumps-obama-putin-spats.html




Exxon Russia Ambitions Show Oil Trumps Obama-Putin Spats

By Stephen Bierman
January 2, 2014

As Barack Obama and Vladimir Putin argue over human rights in Russia and the fate of fugitive U.S. intelligence analyst Edward Snowden, the countries’ biggest oil companies are preparing to drill for giant oil discoveries together in the Arctic Ocean.

Exxon Mobil Corp. and OAO Rosneft are set to start their first Arctic well this year, targeting a deposit that may hold more oil than Norway’s North Sea. It will kick off a series of landmark projects and cement an alliance begun in 2011. They also plan to frack shale fields in Siberia, sink a deep-water well in the Black Sea and build a natural gas-export terminal in Russia’s Far East.

“We have a unique partnership,” Glenn Waller, Exxon’s Russian chief, said in an interview in Moscow. “They have the world’s biggest reserves and we have the largest market capitalization.”

The deepening alliance shows the two governments’ fractious relationship is no bar to America’s most valuable energy company investing billions in Russia. For Rosneft Chief Executive Officer Igor Sechin, the Irving, Texas-based company brings financial heft and the expertise needed to drill offshore in some of the world’s harshest conditions for rigs.

“There’s a whole stack of reasons why it’s good that Rosneft is working with Exxon,” said Richard Sakwa, an associate fellow at Chatham House in London, who writes on Russia’s oil industry. “There’s technology and management. Between Sechin and Exxon, there’s a degree of trust being built up that can be nothing but to the good” to both and to Russia.

Pressure for Discoveries

Exxon CEO Rex Tillerson has said his company’s output will drop 1 percent this year, a third straight annual drop, putting pressure on to find new reserves. Tillerson’s decision to expand work in Russia is a switch from his predecessor’s policy.

A decade ago, then-Chief Executive Officer Lee Raymond said he’d be reluctant to invest more after Putin’s government moved against OAO Yukos Oil Co., once Russia’s largest oil producer. Yukos’s assets were confiscated to pay tax claims and billionaire owner Mikhail Khodorkovsky was imprisoned.

Today, Rosneft operates Yukos’s largest fields and is run by Sechin, the former deputy Prime Minister and a man Khodorkovsky said orchestrated his demise. Khodorkovsky was released last month after Putin pardoned him. He had spent more than a decade in jail.

After swallowing smaller rival TNK-BP earlier this year, Moscow-based Rosneft now produces 5 percent of the world’s oil, with more than 30 billion barrels of proven reserves. Russia’s overall oil and gas condensate output rose 1 percent to a post-Soviet record of 523.28 million tons in 2013, the Energy Ministry said today. That’s about 10.5 million barrels a day.

‘Chosen Few’

“From Exxon’s point of view, if you want to do business in Russia, you have to do business with one of the chosen few, and Rosneft is clearly first among equals,” said Ed Chow, a senior fellow at the Center for International Strategic Studies. “Up till now, compared to Shell and Total, they have been pretty cautious on Russia,” he said, comparing Exxon to Royal Dutch Shell Plc and France’s Total SA.

Diplomatic relations between the U.S. and Russia soured in 2013 after the Obama administration imposed a travel ban on certain Russian officials over alleged human rights violations, after which Russia banned U.S. citizens from adopting Russian children. Later, Obama skipped a meeting with Vladimir Putin over Russia’s decision to shelter Snowden, the National Security Agency whistle-blower. The companies don’t find all of this to be an obstacle.

“We are very happy about the progress and pace of our strategic cooperation,” Rosneft said in a statement to Bloomberg. “Our companies are long-term partners.”

$3.2 Billion Budget

The Arctic’s Kara Sea, where Rosneft will drill its first well this year, may potentially hold 85 billion barrels of oil equivalent, a number about equal to Russia’s existing, proven oil reserves, according to BP Plc. The first well alone will target a geological structure that may hold 9.4 billion barrels. Norway’s proven reserves are 7.5 billion barrels. Only drilling will determine what part of the prospect is proven.

The companies have committed to spending $3.2 billion exploring three blocks in the Kara Sea and the deepwater Black Sea. They have also added licenses to explore areas of the Arctic’s Laptev and Chukchi Seas.

Onshore, Exxon and Rosneft are targeting so-called tight oil which may reach 9.2 billion barrels within Siberia’s Bazhenov shale formation, according to Rosneft.

The Russian government has supported the partnership, this year writing into law a separate tax regime for offshore drilling, while cutting extraction duties for tight oil.

Sakhalin Promise

The Dec. 1 rollback of OAO Gazprom’s monopoly on exports of liquefied natural gas, or LNG, makes space for Rosneft and Exxon’s slated $15 billion LNG plant on Sakhalin Island.

That may give a venture started in the 1990s between the companies the means to sell natural gas and condensate in fields off the coast of Sakhalin Island.

Integration between Rosneft and Exxon has also moved forward on the corporate level after the strategic alliance was signed in 2011. The following year, Zeljko Runje left his post as Exxon Mobil Russia vice president running Sakhalin-1 operations to join Rosneft as vice president for offshore operations.

In addition, earlier this year, Rosneft tapped Donald Humphreys, a former Exxon Mobil senior vice president, as an independent director on its board.

The diplomatic spats are unlikely to derail business relationships, according Chris Weafer, managing director of the Macro Advisory consultancy.

“Most big U.S. companies, especially those making long-term strategic decisions, dismiss Russia-U.S. politics as something of a soap opera with frequent script changes,” said Weafer.




http://www.bloomberg.com/news/2014-...s-show-drilling-trumps-obama-putin-spats.html

 

[thør]

I see the French are invading England.

 

[trysail]

It is potentially a very big deal.



​

http://www.bloomberg.com/news/2014-...acking-giant-russian-shale-oil-formation.html




Shell Venture Starts Fracking Giant Russian Shale Oil Formation
By Stephen Bierman
January 13, 2014

Royal Dutch Shell Plc and OAO Gazprom Neft began a drilling campaign to assess the potential of Siberia’s Bazhenov formation, reckoned to be one of the world’s largest deposits of shale oil.

Salym Petroleum Development, the venture between Shell and Gazprom Neft, has started drilling the first of five horizontal wells over the next two years that will employ multi-fracturing technology, according to a statement today.

The Bazhenov layer, which underlies Siberia’s existing oil fields, has attracted Shell and Exxon Mobil Corp. (XOM) because it’s similar to the Bakken shale in the U.S., where advances in drilling technology started a production boom. Exxon will also start a $300 million pilot project drilling in a different part of the Bazhenov with OAO Rosneft (ROSN) this year.

“This is a big theme for Russia,” according to Ildar Davletshin, an oil and gas analyst at Renaissance Capital in Moscow. “Bazhenov holds as much resources as has been produced in Russia to date. The question is what portion of it can be recovered and at what cost.”

The first horizontal well follows three years of study on the prospect, which included three vertical wells, 3D seismic, coring and well logging in the Upper Salym area, according to the Salym statement.

“Bazhenov development is an important element of our growth strategy,” Oleg Karpushin, head of Salym Petroleum Development, said in the statement. “We hope that the pilot project will allow us and our shareholders to make a decision about moving to a large-scale development of the Bazhenov formation in the Salym fields.”




http://www.bloomberg.com/news/2014-...acking-giant-russian-shale-oil-formation.html

 

[trysail]

http://www.bloomberg.com/image/iKlgGU9E1dw0.jpg


​

 

[trysail]

http://www.npr.org/assets/multimedia/2014/01/ND/flare.gif


​