CNN Fails To Mention How We Got Into This Bind, If, Indeed, It Becomes A Problem -- February 6, 2019

There is a relatively long article over at CNN explaining the problem that might develop due to loss of heavy oil from Venezuela. It's a pretty good article. The writer(s) fail(s) to mention that we would not be in this predicament had President Obama not killed the Keystone XL.

I'm not a bit worried. Refiners are going to have a problem but other than things will work out quite nicely. (RBN Energy comes to the very same conclusion.)

Charts are available are here.

First, Venezuela:

• we've been living with reduced supplies from Venezuela since August, 2017
• 15 million bbls/month = 500,000 bbls/day

Next, Canada:

• as far as I know, the pipeline situation out of Canada has not changed since at least 2014
• in 2014, the US imported 100 million bbls/month = 3.3 million bopd (from Canada
• most recently, same pipelines (maybe a bit more), the US imported 142 milliion bbls/month = 4.8 million bopd from Canada (yeah, CBR)
• by the way, look at the jump between September (121 million bbls) and November (142 million bbls)

So, without even getting any other country involved, it looks like we could lose the entire 500,000 bopd from Venezuela, and Canada could fill the gap (500,000 / 4.8 million = 10%,

Yeah, I think Canada could do that:

• remember: the Canadian government has imposed production caps on western Canadian oil due to depressed prices

Mexico is in about the same shape as Venezuela with regard to how much oil it can ship to the US.

Finally, Venezuela owes Russia a lot of money -- Russia will ensure that Venezuela's oil sector doesn't fail completely.

And even if Russia can't keep the Venezuelan oil sector from completely imploding, Russia and OPEC could easily make up the difference.

But we wouldn't even be here if President Obama had not killed the Keystone XL.

Fracking In England -- An Update -- February 6, 2019

Link here.

UK company Cuadrilla said on Wednesday that initial flow tests at its fracking site in northwest England showed a rich reservoir with high-quality recoverable natural gas, while it also called for the rules on tremor limits to be eased so proper appraisals could be made.

Cuadrilla started fracking at an exploration site in Lancashire in October 2018, resuming hydraulic fracturing in the UK for the first time in seven years.

Natural gas started to flow to the surface from Cuadrilla’s shale exploration well at the Preston New Road site in early November. The company, however, has had to stop operations multiple times, due to micro seismic events measuring above the threshold requiring a halt.

Unlike New York, the Brits are at least willing to try fracking. LOL. 

Canadian Hydroelectricity For Massachusetts -- An Update -- February 6, 2019

From the Portland Press Herald, via Chesto over at The Boston Globe:

Backers of a proposal to build 145-mile transmission line to send Canadian hydropower from Quebec to Massachusetts would dole out a total of $258 million in Maine over 40 years if Central Maine Power wins permission to build the line. Included in that amount would be $140 million to help Maine electric customers reduce their bills and $50 million in assistance to low-income residents. The total is $17 million more than was offered in a competing project sited through New Hampshire that dissolved last year.

Why doesn't Massachusetts simply put up 7,438 wind turbines in western Massachusetts?

NDIC's Daily Activity Report For Wednesday Will Probably Be Posted Thursday Morning -- February 6, 2019

Update On Cameron LNG Export Terminal -- "Very Close" To Start Up -- February 6, 2019

For more on the Cameron LNG export terminal, search "cameron lng" at this blog. Project officials said today that the terminal is "very close" to start-up.

List of "potential" LNG export terminals as compiled by RBN Energy at this post.

Most recent mention of the Cameron LNG export terminal was at this post.

EIA Dashboards With January, 2019, Data

When you click on the links, a PDF will likely load on your virtual desktop, with exception of the first one, "natural gas storage" which will open up in another window or another tab.

EIA dashboards:

• natural gas storage 
• EIA pdf, Bakken: https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
• EIA, pdf, Permian: https://www.eia.gov/petroleum/drilling/pdf/permian.pdf
• EIA, pdf, Eagle Ford: https://www.eia.gov/petroleum/drilling/pdf/eagleford.pdf

Permian vs Bakken:

• 10x as many rigs
• 3.8 million bopd vs 1.2 million bopd
• new-well oil production per rig
• the Permian: 555 bopd
• the Bakken: 1,450 bopd

The Bakken Shale Play: An EUR Analysis -- TGS -- September 5, 2017 -- Posted February 6, 2019

The link.

Great maps at the link.

From the link:

This Bakken dataset is extracted from the TGS Well Performance Database containing 11,655 wells. There were three criteria for including wells in the study: horizontal and producing from the Bakken/ Three Forks shale play; completed and put on production since Jan. 1, 2008, (looking at the last 10 years of well completions); and actively producing wells.

Each well is forecasted to economic limit using the Production Forecast Module, and oil EUR is calculated for each well.

Comparing total oil EUR to remaining oil EUR shows that only 44% of the oil has been produced from these Bakken wells. About 2.6 Bbbl of oil remain.

Hart Energy.

Philadelphia Eagles Drumline Coming To Williston -- Band Day, 2019

From The Williston Herald:

The Convention and Visitors Bureau, along with the Band Day Committee, has announced the dates and guest bands for this year's event, held annually on Mother's Day weekend in Williston.

This year, it’s Saturday, May 11, and will feature some high-profile entertainment.

The CVB has brought many notable acts to Band Day, including drumlines for both the Denver Broncos and the Minnesota Vikings.

This year, the organization is bringing in a group with a unique tie to the area, the Philadelphia Eagles drumline.

North Dakota native Carson Wentz is the team's quarterback, which is one of the reasons the CVB reached out to the group. Ashley Oyloe, events and convention services coordinator for the CVB (and a die-hard Eagles fan herself), said she was excited for the opportunity to bring the drumline to Band Day and show Williston off.

Just one of many videos of the drumline:

Four New Permits -- February 6, 2019

Saudi: at $54, Saudi Arabia is not going to "make it." Some years ago, they needed $100-oil, settled for $80-oil. Most recently they have set their budget based on $80-oil and will be lucky to maintain $60-oil.

OPEC: production has dropped to lowest level since March, 2015 -- Platts survey. Data points:

• total OPEC production dropped nearly one million bopd from December to January
• lowest since March, 2015
• December: 30.86 million bopd
• January: 29.89 million bopd
• Saudi Arabia:
• January, 2019: 10.21 million bopd
• pledged ceiling: 10.311 million bopd
• lowest since May, 2018
• crude oil exports: 7.2 million bopd; down 500,000 bopd

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Back to the Bakken

Change of operator: approximately 203 wells were transferred from Enduro Operating to Cobra Oil & Gas ... more on this later. 

Active rigs:

$53.97	2/6/2019	02/06/2018	02/06/2017	02/06/2016	02/06/2015
Active Rigs	62	58	40	42	137

Four new permits:

• Operator: Oasis
• Field: Baker (McKenzie)
• Comment: Oasis has permits for a 4-well Foley Federal permit in Baker oil field, in section 13-153-101;

It looks like the NDIC is now "breaking out / separating permits for disposal wells from oil and gas wells.

Two permits renewed:

• EOG: a Clarks Creek permit in McKenzie County
• XTO: a Rough Federal permit in McKenzie County

Six producing wells (DUCs) reported as completed:

• 30726, 2,552, Bruin, Berg Trust Federal 149-98-26A-35-6H, Pembroke, t1/19; cum 20K after 14 days;
• 30727, 4,115, Bruin, Berg Trust Federal 149-98-26A-35-7H, Pembroke, t1/19; cum 19K after 14 days;
• 30728, 1,987, Bruin, Berg Trust Federal 149-98-26A-35-9H, Pembroke, t1/19; cum 6K after 7 days;
• 30729, 4,200, Bruin, Berg Trust Federal 149-98-26A-35-10H, Pembroke, t12/18; cum 18K after 16 days;
• 34087, 5,872, Equinor, Sjol 5-8F XE 1TFH, Williston, t12/18; cum 4K over 4 days;
• 34532, 1,240, Bruin, Berg Trust Federal 149-98-26A-35-8H,  Pembroke, t1/19; cum 23K over 21 days;

Gasoline Demand -- February 6, 2019

Gasoline demand, link here.

Saudi Arabia Pumped Lowest In Eight Months -- February 6, 2019; Tesla Cuts The Price On The Model 3 For The Second Time This Year

Saudi Arabia: No link. Story can probably be found easily. Platts reorts that Saudi Arabia pumped 10.21 million bbls of oil in January, an 8-month low. Look at Saudi Arabia's foreign exchange reserves. The most recent data is for December, 2018. It will be interesting to look at January, 2019, data. By the way, let's put that 10.21 million bbls into perspective. Saudi oil production at this site. Tenpointtwoone vs tenpointsevenseven: a delta of 560,000 bopd, or 5%. Also, note, about half of Saudi's production is used for domestic consumption, mostly to pay for a/c in the summer. Saudis are not using their a/c right now. The fact that Saudi produced 5% less oil than in October means absolutely nothing.

Guyana: will produce more oil than Venezuela by 2025. Peak oil? What peak oil? I remember all that hand wringing over the past ten years that the majors were not spending enough money to find new sources of oil when/if shale oil petered out. LOL. Look at this. From the Rigzone staff: offshore Guyana partners hit more pay:

Exxon Mobil Corp., Hess Corp. and CNOOC Limited have tallied two more discoveries in the Stabroek Block offshore Guyana.

Hess and ExxonMobil on Wednesday reported discoveries at the Tilapia-1 and Haimara-1 wells in the southeastern part of Stabroek. The discoveries represent the 11^th and 12^th Stabroek successes, respectively. Both wells offshore the tiny South American country were wildcats.

“These two discoveries demonstrate the continuing exploration potential on the prolific Stabroek Block and add to the previously announced gross discovered recoverable resource estimate of more than 5 billion barrels of oil equivalent,” Hess CEO John Hess said in a written statement emailed to Rigzone.

Tesla: for the second time this year, Tesla cuts the price for the Model 3.

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

The Book Page

From Genius: The Life and Science of Richard Feynman, James Gleick, c. 1992, page 141.

The Manhattan Project ....

Chicago, Berkeley, Oak Ridge, Hanford: the first outposts of the Manhattan Project eventually became permanent capitals of a national nuclear establishment. To produce purified uranium and plutonium on a scale of mere pounds would required the rapid establishment of the largest single-purpose industrial enterprise ever. 

General Electric, Westinghouse, Du Pont, Allis-Chalmers, Chrysler, Union Carbide, and dozens of smaller companies combined in an effort that would see giant new factory towns rising from the earth. 

Yet in the first uncertain months after the attack on Pearl Harbor nothing in the modest scale of nuclear research even remotely foreshadowed the impending transformation of the nation's war-making capacity.

"Types" Of Crude Oil And Crude Oil Benchmarks

Locator: 10010API.

FAQ #88 over at the "FAQs Page."

Disclaimer: some/much/all of this could be wrong. I've put this together over the years, from different sources. Information is not always confirmed and often not updated. It's for my own personal interest to help me sort this out. This should not be used by folks who are seriously invested in this issue.

April 18, 2019: Argus announces two new benchmarks: WTL (West Texas Light) and NSD (North Sea Dated).

• From the first link;
• WTI: Cushing
• WTI Permian: 40-44°API
• WTI Midland: Midland terminals (light oil, 44.1-49.9°API)
• WTL: Houston (light oil, 44.1-49.9°API)

February 7, 2019: RBN Energy has nice update regarding this subject.

February 18, 2019: see heavy oil, a primer, here.

Types / Grades / API / Sweet / Sour

NYMEX:

• light crude oil for domestic U.S. oil as having an API gravity between 37° API and 42° API 
• light crude oil for non-U.S. oil as being between 32° API  and 42° API

Canadian National Energy Board:

• light crude oil as having a density API gravity greater than 30.1°

Alberta, government; Alberta process most of Canada's oil:

• API gravity greater than 35° API

Pemex, Mexican state oil company:

• light crude oil as being between 27° API and 38° API 

This variation in definition occurred because countries such as Canada and Mexico tend to have heavier crude oils than are commonly found in the United States, whose large oil fields historically produced lighter oils than are found in many other countries.

Loop Sour: see this post.

LOOP Sour comprises US Gulf of Mexico grades Mars and Poseidon and a crude blend called Segregation 17, named after a cavern into which the Middle Eastern grades Arab Medium, Basrah Light and Kuwait Export Crude can be delivered. The grade has been most similar to Mars in terms of API gravity over the past 12 months, averaging 0.33 degree off Mars’ typical 29.44; and from a sulfur standpoint, averaging 0.02 percentage point off Arab Medium’s typical 2.53%.

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

Benchmarks

Much, but not all, information below comes from wiki.

WTI

• A wide variety of benchmark crude oils worldwide are considered to be light. The most prominent in North America is West Texas Intermediate (WTI):
• API gravity of 39.6° API; lighter than Brent, but not by much
• sulfur: 0.24% (sweet oil is defined as oil with sulfur content less than 0.5%)

Brent Crude

• "basket" changed in early 2017 due to older fields depleting
• Platts will add Norway's Troll to the basket of four British and Norwegian crude grades which is already uses to assess dated Brent from January 1, 2018
• this will join Brent, Forties, Oseberg, Ekofisk, or BFOE as they are known
• Troll: a light, sweet crude; operated by Statoil (also contributes to the Oseberg, Statfjord, Gullfaks, Grane and Asgard streams)
• the most commonly referenced benchmark oil from Europe is Brent Crude, which is
• 38.06° API

Dubai Crude

• the third most commonly quoted benchmark is Dubai Crude, which is 31° API
• this is considered light by Arabian standards but would not be considered light if produced in the U.S.

Murban Crude:

• became a "thing" after sanctions on Russia cut Russia oil to the US
• light sour; very similar to Bakken (light) but much more sulfur content
  
• see blog entry here;
  

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

Others

Saudia Arabia's Ghawar field:

• the largest oil field in the world, Saudi Arabia's Ghawar field
• light crude oils ranging from 33° API to 40° API (see above; most would consider Saudi oil to be medium/heavy; and sour

Alaska North Slope: from XOM -- 

• 31.4°
• sulfur: 0.96%

Bakken:

36 to 44 degrees API. The quality of this oil is excellent, almost identical to WTI. The benchmark crude oil is West Texas Intermediate, which is 40 degrees API sweet crude. It is the benchmark because it requires the least amount of processing in a modern refinery to make the most valuable products, unleaded gasoline and diesel fuel.

North Dakota Spearfish: 36°

• presentation, Corinthian, undated, perhaps early 2014 
• sulfur content: 0.8% to 1%

Mexico: generally heavy to medium-light; sulfur content

• Isthmus: 21.8°.3.3% sulfur
• Maya: 33.4°; 1.35% sulfur
• Olmeca: 37.3°; 0.84% sulfur

Iraqi: heavy oil

Crude oil found in Iraq varies significantly in quality, with API gravities generally ranging from 22° (heavy) to 35° (medium - light).

Over 70% of national oil reserves are below 28° API  and the International Energy Agency (IEA) predicted in its 2012 report on Iraq that future production is likely to include a larger share of heavier crudes. However some of the crudes produced at the Taq Taq field in the norther semi-autonomous Kurdistan region are as light as 48° API, dubbed by Reuters as "champagne crude." See Taq Taq here.  

Guyana: heavy oil; comparable to Mexico. Update here.

Guyana’s crude supply with a gravity ranging from 28-33.5 API might complement the current pool of heavier crudes that are available from other imports or the Gulf of Mexico.

California: heavy oil; pdf here -- old data, from 2004, but type of oil probably has not changed

• Kern County: heavy oil with 1.2% sulfur; accounts for 75% of California's on-shore production
• Los Angeles Basin: heavy oil; sulfur content 1.7% to 2.0%
• Off-shore: intermediate for the most part, 18° (heavy) to 36° (medium-light)

Ecuador: heavy oil; 24.1°

Seeks low-sulphur, light oil, September 1, 2015:

Net crude exporter Petroecuador issued a tender to import 30 million barrels of light sweet crude over the course of a year in an attempt to maximize diesel and gasoline production when its Esmeraldas refinery comes back online in the fourth quarter, market sources said Tuesday.

Petroecuador is seeking 30 million barrels of low sulfur crude oil with an API gravity of 28 degrees to be delivered in a one-year period, according to a tender issued late Monday.

The state-owned oil company is seeking the barrels "in order to optimize the Esmeraldas refinery operations, once the revamping has been complete," the tender said. 

Venezuela: heavy oil, similar to Canadian oil sands.

EIA's Weekly Petroleum Report -- February 6, 2019

Sour demand? This is more interesting than the EIA weekly report. From Platts -- 

Strong demand for sour crude grades helped boost LOOP Sour deliveries in January.

In a recent report from the Louisiana Offshore Oil Port, the company said LOOP Sour demand nearly tripled month on month, increasing by some 620,000 barrels to more than 985,000 barrels, which is about 32,000 b/d. It was the largest volume of LOOP Sour crude pulled from the Louisiana storage cavern since September.

A shortage of sour crudes along the US Gulf Coast has inverted the typical sweet-sour relationship globally. Additionally, US sanctions on Venezuela could further increase demand for sour grades.

LOOP Sour comprises US Gulf of Mexico grades Mars and Poseidon and a crude blend called Segregation 17, named after a cavern into which the Middle Eastern grades Arab Medium, Basrah Light and Kuwait Export Crude can be delivered. The grade has been most similar to Mars in terms of API gravity over the past 12 months, averaging 0.33 degree off Mars’ typical 29.44; and from a sulfur standpoint, averaging 0.02 percentage point off Arab Medium’s typical 2.53%.

Comment: when President Obama killed the Keystone XL, he really screwed things up for the American consumer. He really screwed things up for Canada. It's obvious he had no idea what he was doing. 

EIA's weekly petroleum report: oilprice.  With regard to pricing, oilprice covers all bases.

EIA's weekly petroleum report, link here: pending.

• US crude oil inventories: increased by 1.3 million bbls -- essentially flat in the big scheme of things
• US crude oil inventories: at 447.2 million bbls, 6% above the five-year average
• the five-year average continues to increase
• refineries operating at 90.7% capacity -- very, very low
• gasoline/distillate production: flat line
• US crude oil imports: pretty much unchanged
• gasoline product supplied over past four weeks: up about 1.6% -- pretty much background noise
• distillate product supplied over past four weeks: up by 6.4% -- probably reflects demand for heating oil this past winter
• jet fuel supplied over same four-week period: unchanged from a year ago

Time to re-balance? Won't happen in my lifetime:

Week	Date	Change w-o-w	In Storage	Weeks to RB to 350 Million Bbls
Week 0	November 21, 2018	4.9	446.9	N/A
Week 1	November 28, 2018	3.6	450.5	N/A
Week 2	December 6, 2018	-7.3	443.2	N/A
Week 3	December 12, 2018	-1.2	442.0	Never at this rate
Week 4	December 19, 2018	-0.5	441.5	Never at this rate
Week 5	December 28, 2018	0.0	441.4	Never at this rate
Week 6	January 4, 2019	0.0	441.4	Never at this rate
Week 7	January 9, 2019	-1.7	439.7	A long, long time
Week 8	January 16, 2019	-2.7	437.1	Won’t happen in my life time
Week 9	January 24, 2019	8.0	445.0	Won’t happen i my life time
Week 10	January 31, 2019	0.9	445.9	Won’t happen in my life time
Week 11	February 6, 2091	1.3	447.2	Won’t happen in my life time

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

The Shirley MacLaine Page

Lobo reincarnated as SUSTO?

Me and You and a Dog Named Boo, Lobo
Susto: an American indie rock band from Charleston, South Carolina, formed ~ 2014.

Lobo: born and raised in Florida, musical career began in 1961.

Wednesday, February 6, 2019 T+35 -- Something About To Break? Stay Tuned

Something about to break? The EIA weekly report will be released in about 20 minutes.

From twitter, ten minutes ago, about 10:00 a.m. CST: 

Crudehead is a most reliable source over on twitter. Later: I have no idea what Crudehead was talking about. The EIA's weekly report was unremarkable.

**********************************
The Dog Page

While waiting for the EIA release, go to YouTube and put the video on "loop" and play continuously for twenty minutes.

Too cute for words, sent to me by a reader.

Keeping Texas Great -- Making America Great Again -- February 6, 2019

Oh by the way, did you all see the most recent "trade deficit" numbers? From CNBC no less.

Now back to the keeping Texas great / making American great again --- that $10-billion Texas LNG project gets the "green light," as they say. From the Rigzone staff, data points:

• Golden Pass LNG export project -- BHGE gets the contract.
• Sabine Pass, TX
• partners: ExxonMobil (30%) and Qatar Petroleum (70%)
• the companies formally announced their decision at a ceremony Tuesday in Washington, D.C., in the presence of U.S. Secretary of Energy Rick Perry, Qatar’s Minister of State for Energy Affairs Saad Sherida Al-Kaabi and other officials
• won't be the last Qatar investment in the US
• part of Qatar's announcement to invest $20 billion in the US energy sector
• Golden Pass will produce 16 million tons of LNG/year
• construction: 9,000 jobs
• 200+ permanent jobs
• COP had been part of the original deal, but pulled out

Note: DOE has granted Golden Pass LNG authorization to export to countries that have free trade agreements with the United States as well as those that do not, according to the project website. In addition, the project received authorization from the Federal Energy Regulatory Commission in 2016.

"Oil Supermajors Smash Analyst Estimates" -- Bloomberg -- February 6, 2019

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. 

Data points:

• four companies (did not include COP): $43 billion in cash flow 4Q18
• France’s Total SA, the fifth member of the oil-supermajor group, reports earnings February 7, 2019 (tomorrow)
• cash flow is the highest in four years
• 12-month rolling cash flow continues to point upward
• not just downstream, midstream; it's also upstream 
• at least one analyst expects the sector to generate record free cash flow in 2019
• BP surged the most in almost three years after its profit beat even the most optimistic analyst estimate
• Shell’s cash payout of almost $15.7 billion was the largest in the world
• making money as if "we" have $100-oil; in fact, $50-oil

From Bloomberg via Rigzone:

The world’s biggest oil companies are pumping out cash like crude’s at $100 a barrel again, and investors love it.

Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp. and BP Plc smashed analysts’ earnings estimates for the fourth quarter, giving investors assurance that their dividends and buybacks are secure even with oil trading near $60.

Those companies together generated close to $43 billion of cash flow from operations, the highest in more than four years. They achieved this despite a deep slump in crude prices at the end of the year, maintaining returns by keeping a tight grip on spending and squeezing more out of projects at lower prices.

"The 12-month rolling cash flow continues to point upwards, and I think that’s what’s important,” said Oswald Clint, an analyst at Sanford C. Bernstein Ltd. “It isn’t just refining-led improvements, it isn’t just an upstream oil price, it’s widespread across the businesses.”

Clint expects the sector to generate record free cash flow in 2019, the second year in a row.

The market rewarded the companies’ efforts. BP surged the most in almost three years after its profit beat even the most optimistic analyst estimate. Shell’s B shares gained 3.6 percent when it reported earnings on Jan. 31, while Exxon and Chevron increased by a similar amount on Feb. 1. France’s Total SA, the fifth member of the oil-supermajor group, reports earnings Feb. 7.

The group’s strong performance comes at a crucial time. They need to remain attractive for shareholders who stuck with them through a years-long downturn because of the reliability and size of their dividends. Shell’s cash payout of almost $15.7 billion was the largest in the world, besting its Big Oil rivals and other corporate giants such as Apple Inc. and AT&T Inc.

A New Tag: Refinery_Light -- February 6, 2019

This is really, really cool. Regular readers know the story behind the heavy oil - light oil - Keystone XL story.

About a week ago, January 31, 2019, I noted that the solution to the problem: the majors need to build American refineries optimized for light oil. At that link it was noted that Chevron will acquire a refinery to  do just that:

Chevron will acquire all the outstanding shares and equity interests of Pasadena Refining System, which includes the Texas refinery with 110,000 b/d of nameplate capacity and associated trading arm PRSI.

The deal is expected to close by June 2019.

"This expansion of our Gulf Coast refining system enables Chevron to process more domestic light crude, supply a portion of our retail market in Texas and Louisiana with Chevron-produced products, and realize synergies through coordination with our refinery in Pascagoula," said Pierre Breber, Executive Vice President of Chevron Downstream and Chemicals.

Now this. On that same day, I posted a story about a new million-bbl pipeline from the Permian to the coast. It turns out there is more to the story. From oilprice:

But the pipeline also came after Exxon gave a separate final investment decision on another project.

On Tuesday, the oil major said it was moving forward on a near-doubling of its Beaumont, Texas refinery, adding a 250,000-bpd crude unit that would process light sweet oil from the Permian. The facility already has the capacity to refine 365,644 bpd, and the expansion could make Exxon’s Beaumont facility the largest refinery in the country. Saudi Aramco’s Motiva Enterprises refinery in Port Arthur currently ranks in the top spot with a capacity of 603,000 bpd. Once Exxon is finished with its expansion – slated for 2022 – the Beaumont facility will have a capacity of 615,644 bpd.

Even that is only part of Exxon’s plans for the region. Last year, Exxon unveiled its “Growing the Gulf” campaign, which consisted of massive refinery expansions on the Gulf Coast, including in Baytown, Beaumont and Baton Rouge. The entire initiative included $20 billion in planned spending across 11 refining, chemical and petrochemical projects along the Gulf Coast over a 10-year period.

The refinery expansions should be viewed in the context of Exxon’s plunge into the Permian. After arriving late to the scene, ExxonMobil has quickly become one of the largest shale drillers in West Texas and New Mexico. In early 2017, Exxon spent nearly $6 billion to acquire huge tracts in the Permian, which doubled the company’s holdings in the basin. 

Put this in the context of Saudi Arabia's woes and it's an even bigger story. 

And then this reminder: Rystad Energy names ExxonMobil the top oil, gas producer of 2018.

February 6, 2019 -- Happy (Chinese) New Year, T+35 -- Day 12 Of Open Border Negotiations

Politics: let's get this out of the way first. From Powerline -- Elizabeth Warren's registration card / Texas law license -- registered as an American Indian -- in her own handwriting. She does not dispute this is legitimate, not a forgery. It also explains the recent news that Warren (privately) apologized to a Native American group.

Okay, so, that's out of the way.

SOTU address. I did not see it. Apparently even Occasional-Cortex gave the president a standing ovation at one point during the speech. For the archives.

Only One Well Comes Off Confidential List Today And It's A .... DUC -- Wednesday, February 6, 2019 -- Happy (Chinese) New Year

Only one well comes off the confidential list today -- Wednesday, February 6, 2019: 24 wells for the month; 126 wells for the quarter

• 34047, SI/NC, MRO, Lucas 34-35TFH, Bailey, no production data,

Active rigs:

$53.31	2/6/2019	02/06/2018	02/06/2017	02/06/2016	02/06/2015
Active Rigs	62	58	40	42	137

RBN Energy: US crude export upgrades at Moda's Ingleside terminal. Where in the world is Amad? Track Amad here. Last position received thirteen hours ago, February 2, 2019, at at 5:47 local time (UTC +4). Currently off the east coast of Madagascar. Archived.

U.S. crude oil exports from Gulf Coast ports are soaring — in January they averaged well over 2 MMb/d — and when you’re moving large volumes long distances by water, there’s no vessel as efficient as a Very Large Crude Carrier (VLCC). A number of midstream companies are planning costly offshore terminals that could fully load 2-MMbbl VLCCs, but jobs like that take years, and Moda Midstream is in no mood to wait.

Since it acquired Occidental Petroleum’s (Oxy) Ingleside marine terminal near Corpus Christi last September, Moda has been adding new tankage and loading equipment to enable it to load up to 1.25 MMbbl onto a VLCC within 24 hours from arrival to departure, then send the supertanker out to the deep waters of the Gulf for a quick top-off via reverse lightering. Upon completion of further expansion programs, the terminal’s loading capabilities will reach a combined 160 thousand barrels per hour (Mb/hour) among its three berths. Today, we discuss recent and near-term enhancements at Texas’s newest VLCC loading facility. 

The ability for U.S. crude exporters to at least partially load supertankers from land-based ports along the Gulf Coast is a relatively nascent development. The Louisiana Offshore Oil Port (LOOP), which is located 17 miles off the coast of Port Fourchon, LA, in waters 110 feet deep, has been receiving VLCCs loaded to the gills with 2-MMbbl of imported crude since the early 1980s, and first tried its hand at fully loading a VLCC for export last February. LOOP has since loaded and sent out another 10 VLCCs. But loading these crude-carrying behemoths from a land-based terminal is a much more challenging process, mainly because of port draft limits. A water depth of at least 75 feet is needed to fill a VLCC to its brim, and extensive government approvals and maintenance budgets are needed for companies to dredge that deep.