This Was The Very Reason We Needed The Keystone -- May 6, 2016; Qatar Taps International Bond Market; Will Run A $13 Billion Budget Deficit This Year

Updates

May 6, 2016: a reader asked whether oil from the Tyler formation in North Dakota would be classified as "heavy" or "light." This is the best I could do. Bottom line: it appears that oil from the Tyler formation is probably about the same as oil from the Bakken formation.

1. At this post, at the bottom of the post, definition of "light" and "heavy" oil (can vary from country to country): http://themilliondollarway.blogspot.com/2016/01/look-west-january-2-2015.html.

2. At this post, a cut and paste from an earlier MRO link: http://themilliondollarway.blogspot.com/2010/10/tyler-formation-anotther-north-dakota.html.

September 26, 2013: MRO has rig-on-site targeting the Tyler; far southwest corner of the state. Marathon Oil provides some of this information which came from a reader, unidentified source.

• 1280-acre spacing in Slope County
• lateral lengths of 4,500 feet to 10,000 feet; vertical depth of about 7,500 feet
• EURs: 380,000
• 36°API, similar to sweet Bakken crude, which ranges between 36-44°API
• USGS Tyler conventional estimates: 15 million bbls 
• USGS has not provided estimate of unconventional Tyler potential

3. An example from a Tyler well drilled back in 1958: http://archives.datapages.com/data/ndgs/data/006/011/011.html.

Note: some links take you to very old links on the blog. My site was "hacked" years ago and I had to change URLs. No posts were lost but some "milliondollarway" links may be broken. To get to a broken "milliondollarway" post, type in "themilliondollarway." I simply added "the" to the URL. If that doesnt' make sense or you run into problems, let me know. 

On another note: many non-milliondollarway links are broken. Other sites may remove older posts; some sites have disappeared over time. 
 

Original Post

 

From the EIA today:

In 2015, more than 70% of the crude oil produced in the Lower 48 states was light oil with an API gravity above 35 degrees.

At the same time, 90% of imported crude oil was heavier, with a gravity below 35 degrees API. To accommodate increasing U.S. production of light crude oil, refineries have adjusted their imports by reducing imports of light crudes.

The differences between domestic production and imports in this key oil characteristic could bring changes to petroleum refinery operations in the United States. --- EIA 

That was the whole purpose of the Keystone XL. To bring heavy oil in from Canada. The oil and gas industry has this figured out years ago, optimizing their refineries for heavy oil from Canada, never expecting an administration to kill a simple pipeline.

It will take decades to undo what Obama did.

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Cash-Flow Neutrality At $35

Reuters/Rigzone is reporting:

Apache Corp's cost savings in the first three months of 2016 exceeded its own expectations and are likely to continue even if oilfield services costs rise.

The cost cuts mean the company could achieve its goal of cash flow neutrality for 2016 with oil prices at $35 per barrel and natural gas prices at $2.35 per million British thermal unit.

Saudi needs $60. Just saying. And Qatar? See next story.

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Qatar: Taps Bond Markets; Will Run A $13 Billion Budget Deficit This Year

Investopedia is reporting:

Qatar became the latest Gulf Cooperation Council country intending to tap international bond markets with a planned $5 billion bond. If it is launched, it will be the first bond from the country since 2011.

With the drop in oil prices, countries across the region are turning to the debt markets.

Qatar will run a $13 billion budget deficit in 2016.

Last week, Abu Dhabi raised $5 billion from its first bond sale since 2009.

Qatar has already borrowed $5.5 billion through a bank loan concluded in January 2016. Proceeds from this bond will likely be used to repay this bridge financing. Qatar 10-year yields are currently around 2.45%.

Midnight at the oasis?

Midnight At The Oasis, Maria Muldaur

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Torrance, California, Refinery Ready To Re-Start

I thought XOM sold this refinery, but the headline says it is still an XOM refinery.

The Los Angeles Times is reporting:

Exxon Mobil is expected to enter the final phases of returning its Torrance refinery to full operation this weekend, when the oil company plans to fire up a key part of the plant that helps process gasoline.

As part of its start-up procedure, Exxon Mobil plans to turn off the refinery's pollution control system for six hours, a step approved by the South Coast Air Quality Management District. That period is expected to be completed by 7 a.m. Sunday.

Either the sale was delayed, or I simply forgot. [I simply forgot; it was always scheduled to close 2Q16.] Whatever.

After Torrance is fully operational, Exxon Mobil plans to sell the plant to New Jersey-based PBF Energy. The deal is expected to close by midyear.

At least "they" spelled ExxonMobil correctly this time.