Hedge Funds Close Bearish Crude, Gasoline Positions
Hedge fund managers have continued to cover short positions in crude oil and gasoline, helping lift prices across the petroleum complex against a backdrop of improving fundamentals. Hedge funds and other money managers reduced short positions in the five major petroleum futures and options contracts by a further 44 million barrels in the week to July 18 (http://tmsnrt.rs/2gWa6Ui). Total short positions in ICE Brent, ICE and NYMEX WTI, NYMEX gasoline, and NYMEX heating oil were cut to 350 million barrels, from a record 510 million barrels three weeks earlier.
Halliburton Beats Street on North American Demand
Halliburton Co swung to a quarterly profit that handily beat analysts' expectations, boosted by higher demand for its equipments and services in North America. Shares of the world's No.3 oilfield services provider, which supplies land drilling rigs, tubing and hydraulic fracturing services, rose 2.5 percent at $45.50 in premarket trading. Revenue from North America surged 83 percent to $2.77 billion in the quarter, due to increased demand for pumping and well-construction services in the region. U.S. oil producers added 94 rigs in the three months to June 30 as shale companies have been able to profitably pump oil even as crude prices hover below $50.
Activists Protest near Oil Rig in Norway's Arctic Sea Area
Environmental activists protested on Friday near an offshore rig contracted by Statoil in the remote Norwegian Arctic, where the firm is looking for oil and gas deposits. The Nordic country wants to open up northern areas for exploration to offset declining production in the south. Oil and gas production is Norway's leading industry, accounting for 20 percent of its economy. From the Greenpeace Arctic Sunrise ship, 11 campaigners launched inflatable boats carrying banners opposing Statoil's Songa Enabler oil rig, 275 km (170 miles) north of the Norwegian coast, in the Arctic Barents sea. One of the banners read "“The People Vs. Arctic Oil”.
Schlumberger to Acquire Majority Stake in Eurasia Drilling
Russia's Eurasia Drilling Company (EDC) said on Thursday it would sell a 51 percent stake in the company to the oilfield services provider, U.S.-based Schlumberger NV. The agreement is subject to approval by the Federal Antimonopoly Service of Russia (FAS), the company said. Financial terms of the deal were not disclosed since it is subject to approval. The agreement, if approved, would extend a strategic alliance with Schlumberger that dates to 2011, Eurasia added. EDC is an onshore and offshore drilling and well services contractor. EDC owns and operates one of the largest fleets of land drilling and workover units in the world.
Nature Group Wins Maersk Oil North Sea Contract
Oil, gas and maritime waste collection and treatment company Nature Group has secured a five-year contract with Maersk Oil in the Central North Sea. The contract will see the company mobilize offshore slop processing environmental units and operational staff to drilling rigs on contract to Maersk Oil. The work has created 10 jobs for Nature Group, both on- and offshore. The Group’s offshore slops treatment units combine a small footprint with a high treatment capacity, without the use of filtration membranes. Thanks to continued innovation and investment in research and development…
U.S. Uncompleted Well Backlog Looms over Market
U.S. oil and gas exploration and production companies are drilling new wells faster than they can be fractured and hooked up to gathering systems, creating a growing backlog of drilled but uncompleted oil and gas wells. By June, the number of drilled but uncompleted oil and gas wells across the seven largest shale plays had topped 6,000, according to estimates from the U.S. Energy Information Administration. The estimated number of uncompleted wells across the seven plays has risen by more 1,000 since December 2016, the agency reported on Monday ("Drilling productivity report", EIA, July 2017).
Lundin Extends Contract for Ocean Rig
Ocean Rig UDW, contractor of offshore deepwater drilling services, has announced that Lundin Norway AS, has declared their third option to extend the existing contract of the Leiv Eiriksson. In addition, Ocean Rig has granted Lundin 2 additional options to drill further wells in the future. As a result of these developments, the rig now has firm employment until at least the end of September of 2017 and should Lundin exercise its additional seven one-well options, currently un-declared, the rig could be employed until the first quarter of 2019. The total expected revenue backlog, including all the optional wells, is expected to be $85 million.
US Shale Oil Output up for 8th Month at 5.6 Mln BPD -EIA
U.S. shale oil production is forecast to rise for the eighth consecutive month, climbing 112,000 barrels per day (bpd) to 5.585 million bpd in August, the U.S. Energy Department said in a report on Monday. The increase comes amid market concerns that rising shale output will dampen the Organization of the Petroleum Exporting Countries' efforts to curb a global supply glut. The U.S. shale production level would be the highest since record-keeping began in 2007, according to the EIA's monthly drilling productivity report. The Permian Basin of Texas and New Mexico, the largest U.S.
GE, Maersk Drilling Accelerate Digital Partnership
The 'digital revolution' continues in earnest in the maritime and offshore energy sectors, driven by new pilot programs with positive results such as GE (NYSE: GE) and Maersk Drilling, which announced this morning an extension of the scope of their digital partnership following the positive results of a pilot probem, with the bottom line focus of enhancing drilling productivity. During the extended partnership, Maersk Drilling and GE will expand the scope of the 2016 pilot project—one vessel, one asset, one year—to nine subsequent vessels…
Oil Edges Up as U.S. Drilling Slows
U.S. drilling growth slows but rig count still high; China's refiners process near record amounts of crude. Oil edged up to around $49 a barrel on Monday as a slowdown in the increase of rigs drilling in the United States eased concern that surging shale supplies will undermine OPEC-led cuts. U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. Rig additions over the past four weeks averaged five, the lowest since November. "The slowing pace of increases combined with massive drawdowns last week on both official crude inventory numbers from the U.S.
Trump Administration Reduces Royalty Rates for GoM Leases
The Trump administration on Thursday announced its first offshore oil and gas lease sale, offering 76 million acres (30 million hectares) in the Gulf of Mexico and reduced royalty rates for shallow-water leases to encourage drilling at a time of low oil prices. U.S. Interior Secretary Ryan Zinke said the sale on Aug. 16 would offer leases offshore Texas, Louisiana, Mississippi, Alabama and Florida for exploration and development. The sale will be the first of the administration's 2017-22 National Outer Continental Shelf Oil and Gas Leasing Program.
Xodus wins Subsurface Contract with Cairn Oil and Gas in India
Xodus Group won a contract with Cairn Oil and Gas of Vedanta Ltd. to conduct exploration and appraisal work on its Rajasthan block in north-west India over the next two years. The first stage of the work will focus on delivering new drilling prospects and an exploration drilling plan, in partnership with Cairn Oil and Gas’ in-house team. Subsequent stages, which will likely commence in 2018, will require project management of the drilling programme in the field as well as subsurface analysis of drilling results. The work will…
Trump Administration Approves Eni Plan to Drill Offshore Alaska
Eni US will become the first energy company allowed to explore for oil in federal waters off Alaska since 2015 after the Trump administration this week approved a drilling plan on leases the company has been sitting on for 10 years. The approval is conditional on Eni getting other state and federal permits, which in past cases are generally granted once BOEM gives the green light. "We know there are vast oil and gas resources under the Beaufort Sea, and we look forward to working with Eni in their efforts to tap into this energy potential," said BOEM's acting Director Walter Cruickshank.
Turkish Navy Monitoring Drilling Vessel near Cyprus
Turkey has sent two ships and a submarine to monitor a drilling vessel in the eastern Mediterranean Sea, the military said on Thursday, in a move likely to increase tension with Cyprus after reunification talks failed last week. The drilling work, a contractual obligation between Cyprus and France's Total, comes a week after the collapse of talks to reunify the divided island nation, split between ethnic Greek and Turkish Cypriots. Ankara has said it will take measures against Cyprus for engaging in gas and oil exploration around the island. It says that hydrocarbon resources in the waters around the divided island should belong to both sides.
Facebook's Zuckerberg Drills Down into North Dakota's Oil Patch
Facebook Inc Chief Executive Mark Zuckerberg toured a North Dakota drilling rig on Tuesday and peppered industry workers in the No. 2 U.S. oil-producing state with questions about automation, safety and fracking. The visit to North Dakota, which pumps about 1.1 million barrels of oil per day - more than some OPEC members - is part of Zuckerberg's plan to tour all 50 states this year and learn about their local economies and communities. While Zuckerberg, 33, is a vocal supporter of renewable energy development, he said the…
Drilling in Disputed South China Sea may Resume
Drilling for oil and natural gas on the Reed Bank in the South China Sea may resume before the end of the year, a Philippine energy official said on Wednesday, as the government prepares to offer new blocks to investors in bidding in December. The Philippines suspended exploration at the Reed Bank, which it calls Recto Bank, in late 2014, as it pursued international arbitration over territorial disputes. The bank is in waters claimed by China. Ismael Ocampo, director at the Department of Energy's Resource Development Bureau, told reporters the agency expected the suspension to be lifted in December.
Tariff Fight Roils Argentina’s Shale Patch
Argentina needs oil rigs to develop its vast shale oil and gas resources. The United States has plenty of idle equipment laying around after its own unconventional drilling boom cooled. But moving that machinery from the plains of Texas to the windswept Patagonian desert is proving complex and costly for global oil majors who say Argentina's protectionist past is slowing efforts to spark its own shale revolution. A move by Argentina's government to cut import taxes on used oil-field equipment has sparked fierce opposition from local manufacturers…
Stena Drilling Extends Inspection Contract with Sparrows
Sparrows Group has been awarded a three-and-a-half-year extension to its inspection services contract for Stena Drilling’s global fleet of drilling vessels. The contract scope includes carrying out LOLER lifting gear surveys, potential dropped objects surveys, cargo carrying unit (CCU) and non-destructive testing (NDT) inspections as well as rig specific maintenance. As well as an extension to the contract, the scope has also been expanded to cover Stena’s entire fleet of seven vessels, including the Stena Don in Norway. Initially awarded until the end of 2017…
Oil Falls as Banks Cut Price Forecasts
BNP Paribas, Barclays chop price forecasts and oversupply keeping medium-term outlook weak. Oil prices fell on Tuesday as global oversupply encouraged several banks to cut their forecasts for crude for this year and 2018. Brent crude was down 50 cents at $46.38 a barrel by 1120 GMT. U.S. crude was 50 cents lower at $43.90. "The fundamental mood has taken a turn for the worse," Harry Tchilinguirian, head of oil strategy at French bank BNP Paribas, told Reuters Global Oil Forum. BNP Paribas slashed its forecasts for Brent by $9 to $51 a barrel for 2017 and by $15 to $48 for 2018.
Statoil Completes Two-well Exploration Drilling Campaign Off Newfoundland
Statoil, along with its partner, Husky Energy, has finalized a two-well exploration drilling program in the Flemish Pass Basin offshore Newfoundland. Both wells were drilled safely and efficiently by the Seadrill West Aquarius in the Flemish Pass Basin, located approximately 500 kilometres east of St. John’s, Newfoundland and Labrador. The two wells, located within tie-back vicinity to Statoil’s 2013 Bay du Nord discovery, did not result in the discovery of hydrocarbons. “These results are disappointing, as we had hoped to add additional optionality to the near-field area at Bay du Nord…
Oil Traders Succumb to Dangerous Despond: Kemp
U.S. Independence Day marked a turning point in the oil market, when a short-covering rally ran out of momentum and gave way to a renewed and very aggressive bear market. Hedge funds and other money managers increased their net long position in futures and options contracts linked to Brent and WTI by 46 million barrels in the week leading up to July 4 (http://tmsnrt.rs/2uInAFV). Funds increased their net long position for the first time after reducing it by a cumulative 231 million barrels over the previous four weeks, according to data from regulators and exchanges (http://tmsnrt.rs/2tzCiRh).
Oil Falls as Global Supplies Increase
OPEC may ask Libya, Nigeria to cap output. Oil fell on Monday, adding to heavy losses at the end of last week due to rising drilling activity in the United States and no let-up in supply growth from both OPEC and non-OPEC exporters. Prices dropped even as OPEC signalled it may widen its production caps to include Nigeria and Libya, whose output has recovered in recent months after being curtailed by years of unrest. Brent crude futures fell 51 cents on the day to $46.20 per barrel by 1120 GMT, while U.S. crude futures were last 49 cents lower on the day at $43.74 a barrel.
US Drillers Add Oil Rigs, Pace Remains Slow
U.S. energy firms added oil rigs for a 24th week in the past 25 as the year-long drilling recovery continues but the pace of additions has slowed in recent months as crude prices declined despite OPEC-led efforts to end a global supply glut. Drillers added seven oil rigs in the week to July 7, bringing the total count up to 763, the most since April 2015, Baker Hughes energy services company said in its closely followed report on Friday. That compares with 351 active oil rigs during the same week a year ago. Drillers have added rigs in 54 of the past 58 weeks since the start of June 2016.
Renewed Slide in Oil Tests U.S. Shale Profits
U.S. independent oil and gas producers came close to breaking even during the first quarter of 2017 thanks to aggressive cost cutting and improvements in well productivity. Some shale producers claim they can drill wells profitably at prices well below $50 per barrel and in some cases below $40. But Harold Hamm, chief executive of Continental Resources , a major producer in North Dakota and Oklahoma, has said oil prices need to be above $50 to be sustainable. Prices below $40 would force producers to idle rigs again, he said in a recent interview (“Harold Hamm warns oil prices below $40 will idle U.S. drilling”, CNBC, June 28).
US to Speed Approval for O&G Exploration on Federal Land
U.S. Interior Secretary Ryan Zinke on Thursday signed an order to hold more lease sales and to speed up approving permits to explore for oil and gas on federal land, a process he said got bogged down under former President Barack Obama. The order is the latest move by the administration of President Donald Trump to make it easier to drill and mine on federal land, which Zinke said is a source of income for the government. The Interior Department's Bureau of Land Management is supposed to take 30 days to review applications for permits to drill but Zinke said the average time for processing in 2016 was 257 days.
Vietnam Renews India Oil Deal In Tense South China Sea
Vietnam has extended an Indian oil concession in the South China Sea and begun drilling in another area it disputes with China in moves that could heighten tensions over who owns what in the vital maritime region. The moves come at a delicate time in Beijing's relations with Vietnam, which claims parts of the sea, and India, which recently sent warships to monitor the Malacca Straits, through which most of China's energy supplies and trade passes. Vietnam granted Indian oil firm ONGC Videsh a two-year extension to explore oil block 128 in a letter that arrived earlier this week, the state-run company's managing director Narendra K. Verma told Reuters.
U.S. Gas Rebalances as Power Returns to Coal
The U.S. natural gas market has rebalanced with higher prices steadying production while reducing demand from electricity generators and making room for increased exports. Higher prices have averted the stock crunch many analysts feared in 2017 as a result of rising exports and the start up of a large number of new gas-fired combined cycle power plants. During the first six months of 2017, prices for next-month delivery at Henry Hub were almost $1 per million British thermal units or 46 percent higher than in the first half of 2016.
GE Closes Baker Hughes Deal, Becomes No. 2 Oilfield Service Provider
General Electric Co on Monday completed its buyout of Baker Hughes Inc, merging it with its own oil and gas equipment and services operations to create the world's second-largest oilfield service provider by revenue. With headquarters in London and Houston, the combined company will have roughly $23 billion in annual revenue and offer oilfield gear including blowout preventers, pumps, drilling, chemicals, other products and services for oil producers in 120 countries. For Baker Hughes, the deal helps it grow in size and become an even-more important player in the industry after antitrust concerns scuttled a tie-up last year with rival Halliburton Co .
U.S. Shale Producers Drilling Themselves into a Hole
U.S. shale firms are drilling themselves into a deep hole despite warnings from industry leaders about the risk of flooding the market with too much crude, says Reuters analyst John Kemp. Drilling and production are rising. Prices are declining. Companies are barely breaking even or losing money. Costs are starting to rise. And share prices are sliding. Current oil prices are not sustainable according to Harold Hamm, the chief executive of Continental Resources, said in an interview on June 28. Prices need to be above $50 per barrel to be sustainable and below $40 would force producers to idle rigs…
Oil Down as OPEC Output Outweighs U.S. Decline
U.S. drillers cut rig count for first time in 23 weeks. Oil prices eased on Monday after rising for seven sessions in a row, as evidence of increasing OPEC crude production snuffed out earlier gains made on the back of data that pointed to moderating U.S. output. Brent crude futures were down 13 cents on the day at $48.64 a barrel by 1000 GMT, off a session high of $49.15. The price rose 5.2 percent last week in its first weekly gain in six weeks. U.S. crude futures fell 4 cents to $46.00 a barrel. Drilling activity for new oil production in the United States fell for the first time since January, dropping by two rigs, while U.S.
Low Oil Price Hurts Norway's Case for Arctic Exploration
Low oil prices mean drilling for oil and gas in an offshore zone between Russia and Norway will not bring the economic benefits Oslo had predicted, according to a report commissioned by two green groups that are suing the Norwegian state over its plans. The Nordic country wants to open up new areas for exploration in the north of the country to offset declining oil production in the south. Oil production is Norway's leading industry, accounting for 20 percent of its economy. A key part of the drive is to open up a border zone between Russia and Norway to oil firms…
OPEC Should Let Price 'Rebalance' Markets
The 1980s film “WarGames” contains an important lesson for OPEC and shale producers about the futility of trying to manage the oil market. Released in 1983, the movie blended new concerns about home computers and hacking with older concerns about the accidental start of nuclear conflict and mutually assured destruction. In the film, the U.S. Air Force's new war-planning computer, which displays an early form of artificial intelligence called Joshua, runs simulations for global thermonuclear war, trying to find a way to win. But the game becomes deadly serious when the computer seizes control of the U.S.
Oil at Two-Week High as U.S. Output Dips
Six-day bull-run is longest since April as U.S. weekly production falls most in nearly one year. Oil prices rose to a two-week high on Thursday, extending a rally into a sixth straight session after a decline in weekly U.S. production eased concerns about deepening oversupply. Crude prices slipped to the lowest in 10 months last week but have since rebounded more than 7 percent, stretching their bull-run to the longest since April. Global benchmark Brent crude futures were up 35 cents at $47.66 a barrel at 1058 GMT, having touched a two-week high of $47.83 earlier in the session. U.S.
OPEC Should Let Oil Prices Rebalance the Market
The 1980s film “WarGames” contains an important lesson for OPEC and shale producers about the futility of trying to manage the oil market. Released in 1983, the movie blended new concerns about home computers and hacking with older concerns about the accidental start of nuclear conflict and mutually assured destruction. In the film, the U.S. Air Force's new war-planning computer, which displays an early form of artificial intelligence called Joshua, runs simulations for global thermonuclear war, trying to find a way to win. But the game becomes deadly serious when the computer seizes control of the U.S.
US Shale Producers Say Spending Flexibility Is Key
U.S. shale oil producers plan to keep drilling new wells despite this month's crude price drop but expect to revisit spending should pricing remain below $45 a barrel for several months. "We will not drill into oblivion," Tim Dove, chief executive of Pioneer Natural Resources Co, told investors on Tuesday at a J.P. Morgan energy conference in New York. Pioneer, one of the biggest operators in the Permian Basin, the largest U.S. oilfield, is confident that OPEC leader Saudi Arabia will not let oil prices remain near current levels for too long, Dove said. Newer operating efficiencies allow Pioneer to continue to drill more, he said.
Ecopetrol Rubiales Oil Output Hit by Protests
Colombian state oil company Ecopetrol said on Tuesday it has suspended production at some wells in the nation's largest oil field after demonstrators seized the facility in the latest incident affecting that industry in the Andean nation. The demonstrators, who identified themselves as members of the Alto Unuma indigenous community, occupied facilities at Water Disposal Plant 6 of the Rubiales field and ordered operators to shut it down, Ecopetrol said in a statement. Eighty-one wells were closed, causing a loss of 9,500 barrels per day. Rubiales produces about 135,000 bpd, equivalent to a quarter of Ecopetrol's total production.
US Shale CEO Sees Saudi Arabia Moving to Lift Oil Prices
Saudi Arabia likely will move to boost oil prices after a recent drop in order to prop its own national finances, the chief executive of U.S. shale oil producer Pioneer Natural Resources Co said on Tuesday. Oil prices have tumbled in recent weeks despite moves by Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries last month to quell a global supply glut brought on in part by resurgent U.S. shale output. "I personally believe (the oil price) where we are right now is not sustainable. It comes in the form of two words: Saudi Arabia.
BP Doubles Down on Deepwater
About 300 BP workers commute 150 miles here by helicopter, from the Louisiana coast to a deep-sea drilling platform that can produce more oil in a day than a West Texas rig can pump in a year. On the deck of Thunder Horse, they work two-week shifts, drink seawater from a desalination plant, and eat ribs and chicken ferried in by boat. On the ocean floor, robots provide remote eyes and arms as drills extract up to 265,000 barrels per day. "There's a whole city below us," said Jim Pearl, Marine Team Leader on the platform. This is just one of the four Gulf of Mexico platforms on which BP has staked its future in U.S. oil production.
Hedge Funds Holding Near-Record Short Petroleum Positions
Oil prices have been rising gently during the past four trading sessions despite concerns about the continued rise in the U.S. rig count and enormous excess inventories. Front-month Brent futures prices are up by about $2 a barrel since touching a low of $44 on June 21, which could herald a break in the downtrend that had been in place since late May. Rising prices most likely reflect hedge funds covering some short positions rather than a fundamental reappraisal of the outlook for supply, demand and inventories. Hedge fund managers have become progressively more bearish about petroleum prices in recent weeks (http://tmsnrt.rs/2ti1hd0).
Naftogaz asks for China Energy Loan Extension
Ukrainian state energy company Naftogaz has asked a Chinese state bank to extend the deadline by which Naftogaz must submit project proposals to qualify for a loan worth $3.5 billion, the chief executive of a Naftogaz subsidiary said on Monday. It is the latest twist in a long-running saga over a loan agreement that Ukraine, under a previous president, had signed with the China Development Bank (CDB) in 2012. According to previous interviews with officials, squabbles between ministries and Naftogaz have held up the proposals. Ukraine was supposed to submit plans for how it would use the money by June 25 but has asked for an extension until Aug.
Oil Edges up Again, but U.S. Supplies Worry
U.S. drilling activity continues to rise; OPEC's supply cuts undermined by higher U.S. output. Oil edged up for a third straight session on Monday, climbing off last week's seven-month lows but with gains capped by the relentless rise in U.S. supply and bloated global inventories. Investors in U.S. crude futures and options increased their bets against a further rise in prices, as the number of U.S. oil rigs in operation hit its highest in over three years. U.S. shale oil output is up around 10 percent since last year, while places like Brazil have also hiked output.
YPF Says Technology Lowering Its Shale Costs
Longer horizontal wells and technology improvements will help Argentine state-run oil company YPF SA lower costs at its most productive shale field, but better infrastructure is still needed in the remote Vaca Muerta play, an executive said. The breakeven price at the Loma Campana field is $43 per barrel and falling while development costs are $12.90 per barrel and expected to fall to $10 next year, said Pablo Bizzotto, executive manager at YPF's unconventional resources unit. "Ten dollars is world-class compared with the Permian" shale field in Texas…
US Oil Rig Count Climbs for 23rd Week
U.S. energy firms added oil rigs for a record 23rd week in a row, extending a year-long drilling recovery as producers boost spending on expectations crude prices will rise in future months despite this week's decline to a 10-month low. Drillers added 11 oil rigs in the week to June 23, bringing the total count up to 758, the most since April 2015, energy services firm Baker Hughes Inc said in its closely followed report on Friday. That is more than double the same week a year ago when there were only 330 active oil rigs. Drillers have added rigs in 52 of the past 56 weeks since the start of June 2016. U.S.
Greece Approves Trio of Drillers for Offshore Contracts
Greece approved applications submitted by a consortium of Total, ExxonMobil and Hellenic Petroleum for oil and gas exploration and drilling off the island of Crete, its energy ministry said on Friday. The ministry also approved an application submitted by Greece's sole oil producer Energean Oil for offshore drilling in western Greece, the ministry said. Greece's oil and gas resources management company will launch a tender for licences to drill in the respective blocs by the end of next month, aiming to conclude the procedure by the end of the year. Reporting by Angeliki Koutantou
Big Oil turns to Big Data for Drilling Economies
In today's U.S. shale fields, tiny sensors attached to production gear harvest data on everything from pumping pressure to the heat and rotational speed of drill bits boring into the rocky earth. The sensors are leading Big Oil's mining of so-called big data, with some firms envisioning billions of dollars in savings over time by avoiding outages, managing supplies and identifying safety hazards. The industry has long used sophisticated technologies to find oil and gas. But only recently have oil firms pooled data from across…
Oil Market Flashes Warning About Stock Levels in 2018
Oil traders have become increasingly doubtful that OPEC will manage to cut crude stocks down to the five-year average in 2018 and keep them there. Calendar spreads for Brent futures throughout the rest of 2017 and 2018 have weakened significantly since OPEC agreed to roll over its production allocations at the end of May. Calendar spreads (price differences between futures contracts for delivery in different months) are closely linked to the expected level of oil inventories. Physical traders and refiners use spreads to hedge oil stored at tank farms and refineries as well as onboard ships in transit or acting as floating storage.
Statoil Cleared to Use Cap-X Drilling Technology – for Now
A ban on Norway's Statoil using a pioneering drilling technology in the Barents Sea was lifted after a plaintiff failed to post security in a patent dispute, a lawyer said on Thursday. A Stavanger court earlier in June upheld an injunction on the technology's use, pending payment of a 20 million Norwegian crown ($2.35 million) security by privately owned NeoDrill. NeoDrill was unable to post the security due to its "very limited economic position". But it was open to finding a commercial solution with Statoil, Kyrre Tangen Andersen, a lawyer representing NeoDrill, told Reuters in an email.
ATR Opens Facilities in Kazakhstan
ATR, a Centurion company, has opened a new base in Kazakhstan as the company looks to capitalize on recent business growth in the region. The business will initially employ 12 new personnel, 10 of which are local content, with plans to double the team over the next 12 months. The purpose-built facilities at Aktau include offices, workshops and a yard area with the location selected to enable the company to support clients operating in the Caspian region. The decision to increase its presence in the country comes after ATR secured…
UK Mulls Revisiting Oldest North Sea Blocks
Britain wants oil and gas drillers to recover pockets of gas that are more difficult to reach in a part of the North Sea where drilling for fossil fuels started over 50 years ago. Britain's oil regulator, the Oil and Gas Authority (OGA), said on Thursday that some 3.8 trillion cubic feet (tcf) of tight gas remain in the southern North Sea, one of the world's oldest offshore gas extraction areas that has produced more than 40 tcf. Drilling activity in Britain's North Sea has been at a record low for two years as weak oil prices make projects less attractive.
Faroe Islands Looks to Restart Hunt for Oil and Gas
Oil companies are interested in restarting the hunt for oil and gas in the scarcely explored seas off the Faroe Islands neighbouring the more mature UK North Sea, the head of the Faroese Geological Survey said. No economically viable discoveries have been made on the Faroese shelf but the tiny nation hopes to entice energy firms to restart exploration as it shows them new geological data in London on Wednesday. "Oil firms have in many ways shown interest. We are having meetings, they buy data from us, visit us on the Faroe Islands ... So there is an interest and they are looking at the possibilities," survey director Niels Christian Nolsoe said.
Cenovus Facing Tough Market for Critical Asset Sales
Cenovus Energy Inc's efforts to sell C$5 billion ($3.8 billion) of energy assets, already facing a rocky road because weak oil prices are depressing the appetite for deals, has become complicated by the surprise departure of its chief executive officer, fund managers said. Brian Ferguson's announcement on Tuesday that he will step down as CEO in October is the latest sign of tumult within Canada's oil sands industry, which has seen international oil majors dump $22.5 billion in assets this year alone. It follows Cenovus' unpopular…
Norway Offers Record Number of Arctic Exploration Blocks
Norway offered a record number of blocks for oil and gas exploration in the Arctic Barents Sea on Wednesday, brushing off concerns about the risks of drilling in the remote, icy environment. The oil ministry proposed 102 blocks, comprising 93 in the Barents Sea and nine in the Norwegian Sea, despite calls from the Norway's Environment Agency to remove about 20 blocks near Bear Island, an important nesting site for Arctic birds. The application deadline for Norway's 24th Arctic licensing round is Nov. 30 and the aim is to announce awards during the first half of 2018, the ministry said.
Traders Hunt for Shale's Pain Threshold: Kemp
Crude prices are likely to remain under pressure until there are signs the number of rigs drilling for oil in the United States is stabilising or reversing lower. U.S. exploration and production firms have hired 530 extra drilling rigs since the end of May 2016 - 431 to target oil and 99 to focus on gas - according to oilfield services firm Baker Hughes. As a result, U.S. crude and natural gas liquids production is forecast to increase by 780,000 barrels per day (bpd) in 2017 and by more than 1 million bpd in 2018, according to the U.S. Energy Information Administration (EIA). U.S.
Oil Faces Worst H1 Since 1997
Oil steadied on Wednesday, paring earlier losses, but was set for its largest price slide in the first half of any year for the past two decades, as investors discounted evidence of strong compliance by major producers with a deal to cut global output. August Brent crude futures were flat at $46.02 a barrel by 1107 GMT, having fallen earlier to seven-month lows. U.S. crude futures for August delivery were up 4 cents at $43.55, having hit their lowest since September on Tuesday. So far this year, oil has lost 20 percent in value, its worst performance for the first six months of the year since 1997.
Ex-chief of Bolivian State Oil Firm Detained for Questioning
The former president of Bolivian state oil company Yacimientos Petroliferos Fiscales Bolivianos was detained for questioning by prosecutors in La Paz, days after he was sacked by the government over allegations around a flawed contract process. He is being investigated for "anti-economic conduct," contracts that were harmful to the state, undue use of influence, concealment, and failure to comply with duties, said Castellon. "I am innocent. I have not committed any irregularity," Acha told reporters before his arrest. He is due to attend a hearing as soon as Tuesday.
Offshore Gas Safety atop the Agenda for Martek Marine
Maritime industry technology specialists Martek Marine say it is setting the bar high when it comes to offshore gas safety. The company has developed a first-of-its-kind gas sampling system for a new moored floating production unit, which forms part of the Jangkrik Complex gas fields development in Indonesia. The system has been developed to dramatically improve offshore crew safety through the use of advanced gas sampling technology. The worst offshore disaster in history, the Piper disaster on July 6, 1988, involved a series of gas explosions which destroyed the Piper Alpha oil platform in the North Sea, killing 167 men.
Innovators Toil to Revive Canada Oil Sands
In the boreal forests and on the remote prairies of Alberta, a handful of firms are running pilot projects they hope will end a two-decade drought in innovation and stem the exodus of top global energy firms from Canada's oil sands. They are searching for a breakthrough that will cut the cost of pumping the tar-like oil from the country's vast underground bitumen reservoirs and better compete with the booming shale industry in the United States. If they fail, a bigger chunk of the world's third-largest oil reserves will stay in the ground.
Oil Prices at Seven-month Lows as Supplies Weigh
OPEC supply jumps in May as Libya, Nigeria output recover; U.S. production also feeds glut. Oil prices fell to seven-month lows on Tuesday after news of increases in supply by several key producers, a trend which has undermined attempts by OPEC and other producers to support the market through reduced output. Benchmark Brent dropped $1.29 to a low of $45.62 a barrel, its weakest since Nov. 15, two weeks before OPEC and other producers agreed to cut output by 1.8 million barrels per day (bpd) for six months from January. Brent was trading around $46.76, down $1.15, by 1205 GMT. The U.S.
OPEC Should Heed Achnacarry Lessons: Kemp
OPEC members are struggling to protect their revenues in the face of renewed competition from U.S. shale producers and other suppliers outside the organisation. OPEC's revenues from petroleum exports have fallen to just $446 billion in 2016 from $1.2 trillion in 2012 ("Annual Statistical Bulletin", OPEC, 2017). But past experience strongly suggests OPEC's effort to stabilise oil inventories and prices while protecting its market share will fail. Since the beginning of the modern petroleum industry, periods of high prices and concern about supplies running out have alternated with episodes of low prices and oversupply.
US Oil Rig Count Continues to Rise
U.S. energy firms added oil rigs for a record 22nd week in a row in a year-long drilling recovery but the pace of those additions has slowed in recent months as crude prices dropped to 2017 lows despite OPEC-led efforts to end a global supply glut. Drillers added six oil rigs in the week to June 16, bringing the total count up to 747, the most since April 2015, energy services firm Baker Hughes Inc said on Friday. That compares with 337 rigs in the same week a year ago. The pace of those additions, however, has slowed over the past two months with the decline in crude prices. U.S.
