Wednesday, August 9, 2017

BP Hits A NatGas Gusher; Petrobras: Off-Shore Oil Can Be Produced For $8/Bbl -- Peak Oil? What Peak Oil? -- August 9, 2017

Updates

Later, 7:02 p.m. Central Time: see comments below.
A reader very knowledgeable in US natural gas takes issue with two EIA prognostications. First: he disagrees that US natural gas demand will be less this year than last year. He argues that the last two winters have been unseasonably warm; this winter is forecast to be much closer to the norm, i.e., colder. If colder has predicted, then natural gas usage will increase for the 2017 - 2018 winter.

If natural gas usage increases this winter, it is very likely, the reader argues, then increased natural gas imports from Canada could offset the exports of natural gas from the southern states which might delay the US being a net exporter of natural gas later this year.

To see the reader's argument and his links to support his arguments, see the comments.
Original Post

BP reports a gusher: the Mancos play; from Bloomberg via Rigzone --
While other natural gas drillers are paying a premium for acreage in prized U.S. shale formations across Texas and Pennsylvania, BP Plc may have just found a gem in a largely ignored corner of New Mexico.
The London-based oil giant started producing from a gas well in New Mexico’s Mancos shale that could turn out to be a “significant new source of U.S. natural gas supply,” according to a statement Monday. The well averaged 12.9 million cubic feet a day in its first month, the highest output achieved in the San Juan Basin in 14 years.
Active rigs:

$49.478/9/201708/09/201608/09/201508/09/201408/09/2013
Active Rigs563373193183

RBN Energy: new US cracker demand, exports will strain ethane supply, part 2.

OPEC: apparently OPEC expects laggards to comply more fully with oil cut pact.

Natural gas: US natural gas output will be up in 2017; still below the 2015 record -- EIA.

Petrobras: Brazil's promising pre-salt offshore wells costs about $8 per bbls.

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Brazil -- On-Shore Shale Oil And Gas
A Long Way Off -- If Ever

Warning: this link will down a PDF from the EIA on your desktop -- https://www.eia.gov/analysis/studies/worldshalegas/pdf/Brazil_2013.pdf.

EIA assessment of Brazil, 2015, beginning on page 9 of the 29-page document at the link:
  • most of Brazil's most prolific petroleum basins lie offshore
  • Brazil has 18 mostly undeveloped and lightly explored sedimentary basins onshort
  • three of these 18 bases have produced significant conventional oil and gas from demonstrated source rock systems
  • the main target is the Devonian (Frasnian) marine black shale which is extensively developed in the three structurally simple basins but has relatively modest TOC (2 - 2.5%)
  • several other basins in Brazil may have shale gas and oil potential but lack proven source rock systems, are thermally immature, and/or lack sufficient public data for assessment
  • Brazil's risked, technically recoverable shale gas and shale oil resources in the three main basins have an estimated 245 Tcf and 5.4 billion bbls
  • risked, in-place shale resources are estimated to be 1,279 Tcf of shale gas and 134 billion bbls of shale oil
  • no shale-focused exploration leasing of drilling has been announced to date in Brazil
From the linked PDF, this graphic to help understand "definitions":

4 comments:

  1. --- U.S. shale breakeven price revealed around $50: Kemp ---
    https://uk.reuters.com/article/usa-shale-kemp-idUKL5N1KV3NY

    I can remember a few years back (2014-2015) when it was $80 to $100.

    The SEC forms Kemp is relying on are looking in the rearview mirror. They give us an indication of proven, demonstrated past performance.

    Shale producers, however, don't seem to be resting on their laurels. The question is whether, with even better technology and operating and business practices, they can bring that breakeven cost down even more in the future.

    Time will tell.

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  2. I don't think anyone could have predicted how fast oil prices would fall.

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  3. i have to disagree with the EIA's outlook on one point, and have serious reservations on another...

    first, on this: EIA also projected U.S. gas consumption would fall to 72.62 bcfd in 2017 from a record 75.11 bcfd in 2016
    the past two winters have seen record warmth, with population-weighted heating degree days 17% below average:
    as per Kemp: https://rjsigmund.files.wordpress.com/2017/07/march232017heatingdemandasofmarch17.jpg
    so anything close to a normal winter this year should result in a 15% jump in natural gas use for heating.
    then they say " US natural gas output will be up in 2017", and they're talking a big jump, over a billion cubic feet per day...but so far in 2017, natural gas production has been below the corresponding month in 2016, so we'd have to see a big reversal starting right now to meet that target: https://www.eia.gov/dnav/ng/hist/n9070us2m.htm

    then, if neither of those forecasts come to pass, then their forecast that we become a net exporter would go out the window too, because we'll have to import more gas from Canada to heat the northern states this winter than we'd be exporting through the southern states...

    ReplyDelete
    Replies
    1. I brought your argument to the top of the blog for those who may not read comments. Yes, I've read the same forecasts for a more normal winter (i.e., colder) this year.

      Delete