The Irrelevance Of Rig Counts -- January 24, 2018

Finally, something we've been talking about for years, others are finally noting. Via twitter:

*********************************

Majors Look At Standardization To Cut Costs

From Bloomberg:

The world’s largest energy companies plan to significantly widen a two-year effort to standardize the kit they use to pump oil and gas, hoping they can deliver significant cost savings. 

The discussions, scheduled on Wednesday for a closed-door meeting at the World Economic Forum in Davos, are the latest sign companies are seeking to tighten their belts permanently even as oil prices recover. Bespoke equipment designed on a project-by-project basis was common during the decade-long boom in crude prices, but looks less affordable after the industry’s worst downturn in a generation.

Major oil companies plan to expand their list of standardized kit to 40 from the initial four items agreed on when they started their collaboration in 2016, also at Davos.

Initially, the project included giant valves, electrical transformers, and two pieces of submerged oil well equipment. Executives believe they can reach a technical consensus with their suppliers on a new list including equipment from across the whole industry, the people said, asking not to be identified because the meeting is private.

************************************

Something Else Iceland Doesn't Have: Oil

From Bloomberg:

Iceland’s hope of finding oil offshore its coast is fading after China and Norway decided to back out of the island nation’s only remaining exploration license.

Cnooc Ltd., China’s state-controlled producer, and Petoro AS, Norway’s state-owned oil company, decided to relinquish their interest in the license.

Their junior partner, Eykon Energy ehf, says it wishes to keep its 15 percent stake, but the agency said the small explorer doesn’t have the technical or financial capacity to continue operations alone.

Iceland launched its first exploration round in 2009 as the nation was reeling from its economic collapse a year earlier. The north Atlantic island had high hopes, aiming to replicate the offshore success of Norway, western Europe’s biggest oil and gas producer. Two other blocks have already been relinquished.