Ongoing militant attacks on hydrocarbon installations in Libya have helped stem the production of oil in the country to well below pre-2011 output levels.
“Such activity, in combination with oil embargos, has contributed to an 80 percent fall in national oil output since 2011,” said Ruth Lux, a senior consultant within JLT’s credit, political & security risk division consulting team.
For most of the last two years, oil production in Libya has been stuck at around 300,000 to 400,000 barrels per day (bpd).
This output drop is not good news for the country considering it’s one of the most dependent oil economies in the world, according to a study by Bloomberg released in January.
"Not good news" for Libya -- that its crude oil production has dropped 80% since 2011. Well, duh.
Four tankers carrying over 2 million barrels of U.S. crude are stuck at
sea and cannot discharge at a Caribbean terminal because Venezuela has
not yet paid supplier BP.
The cargoes are part of a tender [Venezuela] awarded in March to BP and China Oil.
The deal was to import some 8 million barrels of West Texas
Intermediate (WTI) crude so Venezuela could dilute its extra heavy
crudes and feed its Caribbean refineries.
Britain's BP Plc this month received a Venezuelan crude cargo from
state-run PDVSA, the
first since the companies agreed on a swap arrangement to settle pending
payments for U.S. oil shipments.
BP and China Oil won a tender launched by PDVSA in March to be
supplied with U.S. and African light oil during the second quarter of
this year. The light oil is needed to dilute Venezuela's extra heavy
output and for processing at Caribbean refineries.
After cash-strapped PDVSA did not make payments on time, BP in May
halted further discharges of cargoes of U.S. crude at the port of
Curacao.
Then a swap agreement was reached involving deliveries of Venezuelan
oil to BP as payment for the U.S. crude.
Aframax tanker Grimstad, chartered by BP and carrying some 500,000
barrels of Venezuelan Merey crude, arrived in Pascagoula Anchorage and
Lightering Area in the U.S. Gulf Coast on June 11. It has been waiting
to discharge since then.
BP has not had access to Venezuelan crude since 2013, when its unit
TNK-BP sold its stake in a crude upgrader at the Orinoco belt to
Russia's Rosneft.
BP still needs to receive more cargoes from PDVSA to cover all
payments it is owed and this is why several BP tankers have still yet to
unload in Curacao, according to traders.
As of June 29, 2.05 million barrels of U.S. crude in three tankers
are still waiting to unload, while a fourth cargo entered PDVSA's
Bullenbay terminal in Curacao this week to start delivering.
Gasoline demand, for the week ending 6/24/16: 9.709 million bopd; compared to a year ago of 9.731. Hmmmm. However, the four-week average, recent: 9.714 million bopd compared to 9.541 a year ago.
Active rigs:
6/29/2016
06/29/2015
06/29/2014
06/29/2013
06/29/2012
Active Rigs
30
77
191
189
215
Wells coming off confidential list Thursday:
30281, SI/NC, BR, Merton 21-15MBH, North Fork, no production data,
32003, SI/NC, BR, CCU Zephyr 34-34 TFH, Corral Creek, no production data,
No new permits.
Nine permits renewed --
Petro-Hunt, LLC (8), eight USA permits in section 1-153-95, McKenzie County
MRO, one Stark permit in Mountrail County
Marathon canceled three permits: a Rohde, a Litvin, and a Cross permit, all in Dunn County.
Rigs. Some time ago I suggested that when the rig count starts to go up in the Bakken it will be in small increments as small operators bring back their "one" rig; the larger operators can do a lot of drilling with what they have, and they still have a huge backlog of inactive wells and DUCs. there may be exceptions (and I may be completely wrong). Oilprice.com is reporting that Pioneer Natural Resources will increase the number of its rigs from 12 to 17 in the Permian:
Pioneer Natural Resources said in an updated 2016 outlook
issued in June that it would increase its horizontal rig count from 12
to 17 rigs in the Permian basin in the second half of the year. Pioneer
will add the first rig in September, with plans to follow that up with
an additional two rigs in each of October and November. Those rigs will
begin drilling and see initial production in early 2017.
Going from 12 to 17 is quite a jump. Pioneer Natural Resources has recently been in the news quite a bit lately. As recently as June 16, 2016, there was a story that PDX paid around $15,000 acre in the Permian.
Also, there's a tweet out today that suggest oil and gas operators in Texas "are starting to turn the corner."
For those of you who have a copy of The Sagas of Icelanders(all two of you) with the preface by Jane Smiley and the introduction by Robert Kellogg, you may be interested to know that Nancy Marie Brown has a new book out. These two books arrived today from Amazon:
Ivory Vikings: The Mystery of the Most Famous Chessmen in the World and The Woman Who Made Them, Nancy Marie Brown, c. 2015
Song of the Vikings: Snorri and the Making of Norse Myths, Nancy Marie Brown, c. 2012
If one enjoys JRR Tolkien and/or The Lord of the Rings, the Norse myths are quite rewarding.
Today, while talking about these books to our older granddaughter on the way home from sailing camp, "Lara's Theme" (a Dr Zhivago soundtrack/CD) began to play. I mentioned that some songs are so incredible (for lack of a better word) one has trouble imagining that they were actually written by a human. Some songs seem like they have been here forever, and existed prior to humanity, perhaps written by angels.
Arianna mentioned that another song that would fit that category was the basis for a "fan fiction" book (I assume this is the book). The song was "We'll Meet Again," made famous, I guess by Vera Lynn. Arianna has that song on her iPhone playlist and is one of her favorites.
Mine, too. I have trouble not tearing up when I hear it, and thinking of ....
US gasoline consumption (implied) averaged 9.7 million b/d over last 4 wks, seasonal record, and up +173,000 on 2015 -- sets new record
US distillate consumption averaged 3.8 million b/d over last 4 weeks, very close to 2015 and 10yr avg levels US distillate stocks adjusted for consumption continue to fall rather than rise as oversupply worked down US distillate stocks fell -1.8 million bbl to 151 million bbl last week, just +14.7 million bbl (+10.8%) above 2015
US refinery throughput rose +190,000 b/d to a new seasonal record of 16.695 million b/d (up +164,000 b/d on 2015). It would be interesting to know how much of this is related to a) the French refinery strikes; and, b) the Venezuela debacle.
US gasoline stocks adjusted for consumption edged up to 24.6 days, versus 22.7 days in 2015 and 10yr avg 22.9 days.
US gasoline stocks rose +1.4 million bbl to 239 million bbl, and now +22 million bbl (+10%) over 2015 level -- by the way, a new graph is needed -- the current numbers are practically off the historical graph.
US crude oil imports returned to more normal 7.6 million b/d last week from the elevated 8.4 million b/d in prior week.
US commercial crude oil stocks fell -4.1 million bbl to 527 million bbl last week, but a new graphis still needed. Current data is almost off the historical graph
US commercial crude stocks fell more heavily than usual with YoY surplus down from +68 million to +61 million bbl
The writer argues that jump in Chinese crude oil imports may be due to rapid filling of their strategic petroleum reserve and increasing refinery operations for export, rather than an overall increase in demand due to domestic growth in GDP.
June 30, 2016: now we know why Walmart went with a month of free-shipping. Walmart is doing this in anticipation of Amazon setting July 12, 2016, as Prime Day -- a one-day sale exclusively for members of its Prime subscription shopping service.
Original Post
Some business news, without links, easy to find:
US pending home sales fell almost 4% in May; a sign of slowing in the US housing market
Walmart will give everyone a full month of free shipping; a free 30-day trial
because of Brexit, the world's second largest telecom, Vodafone, may move its headquarter out of the UK
The market: up again today; the Brexit vote was June 23, 2016. Some highlights:
T, at new highs, it appears, trading about $42.45
SRE, flirting with new highs, it appears, trading about $111.00
MDU, down a bit, but still doing well at $23.27
TSLA, investors coming back in, trading up 2.4%; now back over $206
That's ll folks -- the Brexit crisis is over -- Yahoo!Finance:
On June 17, six days before the Brits voted to leave the European Union, the S&P 500 index closed at 2,071. Today, the S&P index continued to surge, closing at ... drum roll ... 2,070.77, which when rounded takes us to 2,071. The Dow, up almost 300 points, to close at almost 17,700. On the Dow, there were 299 new 52-week highs, including my favorite, (LOL), ATT; there were 11 new 52-week lows.
Aramco, SABIC sign pact on new plant -- Bloomberg video. Previously posted. This is part of Prince Salman's "Vision 2030" plan. Previously posted. Not only is there nothing new, so far this is simply "talk." The video: lots of talk; little information.
Khurais Oil Field
Adjacent To The World's Largest Oilfield, The Ghawar Trend
Khurais Megaproject
This project was initially proposed to be completed by 2017, then pushed back to 2018, and it appears this project is now pushed back to be completed no sooner than late 2019.
Saudi Aramco is expected to make a decision in June whether to go ahead
with the $3- billion Khurais oilfield expansion project in the Eastern
Province under the present market conditions.
The company is
currently locked in negotiations with Saipem, the engineering,
procurement and construction (EPC) contractor for the $2-billion central
processing facilities (CPF) package, with a view to lowering project
costs, decelerating construction works and better cash flow management.
However,
Aramco has also said that if substantial cost savings are not possible
after the engineering phase is completed, it could cancel the whole
project. The engineering work is now being undertaken by Saipem. The
current slow-down in works has also extended the completion deadline to
late 2019.
The Khurais Arabian Light Crude Increment project, as
it is also known, is an onshore oilfield development which was initially
discovered in 1957. By 2009, the central procession facility at Khurais
had a processing capacity of 1.2 million barrels per day (bpd) of oil
and 320 million cu ft per day (cfd) of associated gas, as well as 80,000
bpd of natural gas liquids.
Saudi Arabian Oil Co. is pressing ahead with an expansion of the
Khurais oil field despite lower crude prices and plans to double its
production of natural gas over the next 10 years.
The world’s biggest oil exporter, known as
Saudi Aramco, won’t cancel any oil, gas or refining projects, Amin
Nasser told reporters during a conference in Al-Ahsa in eastern Saudi
Arabia. Aramco is also studying a possible expansion of the country’s
largest oil refinery, Ras Tanura, which has a capacity of 550,000
barrels a day.
“Until now all of our downstream and upstream projects are continuous,” Nasser said. “No project in our programs got canceled.”
Saudi Arabia is moving ahead with the expansion of its giant Khurais oilfield but the project would move slower than originally planned because of budgetary reasons.
Since global oil prices fell sharply last year, national oil company Saudi Aramco has slowed some projects, shelving less important ones and asking for discounts on some contracts which it had awarded.
The project plans to raise Khurais' output by 300,000 barrels per day (bpd) to 1.5 mbpd, and allow it to produce 143 million standard cubic feet per day of associated gas and 34,000 bpd of natural gas liquids.
The original time frame to complete the expansion was 2017.
Industry sources told Reuters in September that Khurais expansion was delayed.
Now Saudi-based industry sources say Khurais expansion is still on but will take longer than expected, with possible completion in 2018.
"Khurais is going ahead but not as fast because of the budget," one industry source said.
The Khurais oilfield development was the largest of several Saudi
Aramco projects intended to boost the production capacity of Saudi
Arabia's oilfields from 11.3 million bpd to 12.5 million bpd by 2009.
The Khurais project as a whole covers three oilfields: Khurais, Abu
Jifan and Mazalij. The Khurais field, with an area of 2,890km² and 127km
long, located about 250km south-west of Dhahran and 300km north
south-east of Riyadh, is the biggest in the project. Abu Jifan covers
520km² south-west of Khurais and Mazalij covers 1,630km² south-east of
Abu Jifan.
In 2009, the project added 1.2 million bpd of high-quality Arabian
light crude to Saudi Arabia's export capacity. The Khurais programme
also increased the capacity of the Qurayyah seawater injection system by
4.5 million bpd of treated water for injection at the Khurais and South
Ghawar fields in 2008. The total project cost is estimated to be about
$10bn.
The drilling was completed in February 2009, ten months ahead of the
scheduled three-year duration. Production at the oilfield began on 10
June 2009.
Khurais is located on a large structural trend to the west of, and parallel to, the Ghawar trend.
Because of this superficial resemblance to Ghawar, there were high
hopes that the Khurais reservoir would be comparably large; however, it
turned out that it was much smaller and not as high quality as Ghawar,
though it is still the largest of the proposed projects.
Variable reservoir quality had also been a problem at Khurais.
Pilot-scale production at Khurais began in 1963, but the field was never
fully developed. It produces Arab light crude.
Saudi Arabian Oil Co. will complete the expansion of its Shaybah
oilfield by the end of May, 2016, allowing the biggest crude exporter in the
world to maintain its total production capacity, according to two people
with knowledge of the plan.
Shaybah’s output capacity will rise
to 1 million barrels a day from 750,000 barrels, said the people, who
asked not to be identified because the information isn’t public.
The
field, in the Empty Quarter desert near the border with the United Arab
Emirates, produces extra light grade crude with an API gravity of 42
degrees, they said.
Shaybah’s expansion will help Saudi Aramco, as
the state producer is known, keep the company’s capacity at 12 million
barrels a day, they said.
As part of Saudi Aramco’s mega projects, it is implementing expansion
plans at Shaybah field in the Empty Quarter to increase oil production
capacity and natural gas liquids (NGL) at an estimated cost of SR186.75
billion. Saudi Aramco's joint projects in the field of refining and
petrochemical production are estimated at SR131.25 billion.
The
Shaybah field expansion focuses on two major projects. First is oil
production increase by 250,000 barrels per day (bpd), for the second
time. The expansion will provide the Shaybah field with a capacity of 1
million bpd of Arabian Extra Light crude oil by April, 2016, double its
initial capacity in 1998.
Moreover, the Saudi oil company is working
to improve the design of wells to increase the average reservoir contact
to 10 km, enhancing production from the deep, tight faces of the
reservoir.
As for the second project, Saudi Aramco will construct a
new NGL plant, to meet the growing demand for petrochemical feedstock
through the extraction of high value NGL of the produced gas, which is
expected to begin in the second quarter of 2015.
The NGL plant
project also includes a major upgrade to increase the power generation
capacity to more than 1 GW by installing four cogeneration units, seven
single cycle units, and a 50 km transmission line with the ability of
230 kilovolt.
Stripper wells, or wells that produce small volumes, represent an important but decreasing share of total U.S. oil and natural gas production. These wells are characterized as producing no more than 15 barrels of oil equivalent per day (boe/d) over a 12-month period.
EIA estimates that there were about 380,000 stripper oil wells (so called because they are stripping the remaining oil out of the ground) in the United States operating at the end of 2015, compared to about 90,000 nonstripper oil wells. --- EIA
Under the BLM's preferred alternative, Newfield Exploration Co.
would, over a period of 16 years, drill all 5,750 oil and gas wells it
proposed. That plan relies on directional drilling to reduce the
project's footprint in an already affected field covering 119,000 acres
south of Myton.
The infill project is needed to recover remaining oil
and gas with new wells and by injecting water into hydrocarbon-bearing
formations to coax further production over the 40- to 50-year life of
the project.
Utah's largest oil producer, Newfield already
operates about 3,400 wells there, on 40-acre spacings. By drilling many
new wells from existing pads, the infill project would concentrate its
impacts to spots already served by existing roads and pipelines. These
provisions are needed to protect habitat and the Pariette Wetlands.
Other data points:
no sage grous in this particular are
two rare species of cactus
prairie dogs (which have been doing directional burrowing without BLM permission)
A major part of the fall in oil prices last year was driven by concerns over the rising production levels of Iran.
Analysts reassured the markets that it would take a couple of years for Iran to get production back to pre-sanctions levels.
Iranian oil production has rebounded much faster than many analysts ever anticipated as the chart below shows.
Iranian oil production has rebounded much faster than many analysts ever anticipated as the chart below shows. At this point, Iran is roughly back to pre-sanctions production levels. Score one against analysts who expected the process to take years.
The result is that there's probably very little additional crude
that's going to come online from Iran. The country already is pumping
as fast as it can, and frankly its post-sanctions export program has
been at best minimally successful. Again, this is a ding on conventional
wisdom that suggests Iran's production would have a significant impact
on the market share of other major oil producers.
This is probably a
large part of what has driven Saudi commentary that the oil glut has disappeared.
Iran
believes it can move from producing 3.5 million barrels per day (mb/d)
in May to 4.8 mb/d by 2021, but to do that the country needs $70 billion
in foreign capital to hit the target.
Saudi Aramco is expected to make a decision in June whether to go ahead
with the $3- billion Khurais oilfield expansion project in the Eastern
Province under the present market conditions.
The company is
currently locked in negotiations with Saipem, the engineering,
procurement and construction (EPC) contractor for the $2-billion central
processing facilities (CPF) package, with a view to lowering project
costs, decelerating construction works and better cash flow management.
However,
Aramco has also said that if substantial cost savings are not possible
after the engineering phase is completed, it could cancel the whole
project. The engineering work is now being undertaken by Saipem. The
current slow-down in works has also extended the completion deadline to
late 2019.
The Khurais Arabian Light Crude Increment project, as
it is also known, is an onshore oilfield development which was initially
discovered in 1957. By 2009, the central procession facility at Khurais
had a processing capacity of 1.2 million barrels per day (bpd) of oil
and 320 million cu ft per day (cfd) of associated gas, as well as 80,000
bpd of natural gas liquids.
*****************************
In Politics As In Sports, Timing Is Everything
Peaking Too Soon
At least one poll shows Trump and Hillary in a dead heat.
Surprise,
surprise. Workers in Britain, many of whom have seen a decline in their
standard of living while the very rich in their country have become
much richer, have turned their backs on the European Union and a
globalized economy that is failing them and their children.
And
it’s not just the British who are suffering. That increasingly
globalized economy, established and maintained by the world’s economic
elite, is failing people everywhere. Incredibly, the wealthiest 62 people on this planet own
as much wealth as the bottom half of the world’s population — around
3.6 billion people. The top 1 percent now owns more wealth than the
whole of the bottom 99 percent. The very, very rich enjoy unimaginable
luxury while billions of people endure abject poverty, unemployment, and
inadequate health care, education, housing and drinking water.
Could this rejection of the current form of the global economy happen in the United States? You bet it could.
During
my campaign for the Democratic presidential nomination, I’ve visited 46
states. What I saw and heard on too many occasions were painful
realities that the political and media establishment fail even to
recognize.
In the last 15 years, nearly 60,000 factories in this country have closed, and more than 4.8 million
well-paid manufacturing jobs have disappeared. Much of this is related
to disastrous trade agreements that encourage corporations to move to
low-wage countries.
His "facts" may or may not be accurate. His plan for fixing the problems are dead wrong.