The Political Page, The Market And Energy Page -- Yeah, Sometimes They Overlap -- March 19, 2018 -- Groningen To Be Cut -- Huge News For US LNG Exports

Wow, I'm off the net for one hour while biking back from the library and so much news pops up in that one hour.

First, most important: TSLA shares plunge. Hard to say why. The market in general has plunged, but there have been a lot of red flags around Tesla the past two weeks. But then this, just being reported today, at WSJ: Uber suspends driverless-car program after pedestrian killed. The Arizona test program was a big, big deal for all involved. My hunch: the shutdown will be temporary. The implications will last a lot longer. Phantom Touch, Vampire Drain, and now Pedestrian Pain.

Second, and more interesting, at least for me: Groningen natural gas field production cut decision by Mar 31: minister. Reported over at Platts.

Dutch economy minister Eric Wiebes will send a letter to the country's Cabinet containing details of a major cut to extraction levels at the Groningen gas field by March 31 at the latest.
Last Thursday, when Wiebes visited the damage claims desk in Groningen, he told local media he would send a letter about the future of gas extraction at Groningen by the end of March.

The current production quota for the 2017-18 Gas Year ending September 30 is 21.6 Bcm.

Following a 3.4-magnitude earthquake in the northern Dutch province of Groningen on January 8, with reports saying the quake was related to gas extraction, Wiebes said Groningen gas production could be cut by up to 2 Bcm in the current gas year, depending on temperatures.

Dutch gas regulator SodM also recommended a 12 Bcm/year cap on gas output from Groningen be introduced.

However, the final decision is up to Wiebes and he was expected to announce a production cut for the current gas year by March.

Groningen is not linked at the sidebar at the right; maybe it should be. LOL. It's easy to find -- just "google/search" Groningen on the blog.

Third: international Saudi Aramco IPO shelved. Will list IPO on Saudi exchange only, for time being.

• Saudi Arabia is walking back plans for a massive public share offering for state oil giant Aramco, the world's biggest oil company, on a big international stock exchange.
• Aramco is now expected to move forward with a listing on the Saudi stock exchange, with plans for an international listing at least temporarily shelved.
• Aramco said a range of international listing options were still under consideration.

Groningen Back In The News With An Update -- October 7, 2019

For previous posts on Netherlands' Groningen natural gas field, click here.

Bottom line:

• Groningen: supplies in the neighborhood of about 50% of all natural gas used by "Europe"
• earthquakes affecting the Netherlands; local folks want natural gas production from Groningen halted
• some years ago, maybe in the 2014 time frame, plans were to gradually draw down and eventually end natural gas production from the Groningen by 2030
• then the bombshell earlier this year; Groningen would shut down eight years earlier than planned; by 2022 or thereabouts
• now, we are hearing that the Dutch have no Plan B

An update at Reuters:

The Dutch government said it would not increase production at small gas fields in the Netherlands to compensate for halting production at Groningen in coming years.

The Netherlands said this month it would halt production at Groningen, Europe's largest onshore natural gas field, by 2022, eight years earlier than initially planned.

Economic Affairs Minister Eric Wiebes informed parliament on Friday that "the ending of gas extraction at Groningen in 2022 with not lead to higher production at 240 small gas fields in the Netherlands," a statement said. "The volume will in fact decrease."

In other words, no Plan B. 

Most Important Article For Friday Morning: The Dutch Decision On Natural Gas

Updates

June 25, 2017: an update, going from bad to worse? 

Original Post 

I first posted this story back on January 18, 2014.

Today, Rigzone has a five-page internet story on the fallout from this decision. It is a must-read; there are several story lines in an article this long and at least one was not mentioned: I think the Dutch may be heading toward their own energy crisis of their own making.  From Rigzone:

A recent article discussing production-related challenges for the giant Groningen natural gas field located in the northern region of the Netherlands referred to the field as a “bubble” holding an estimated 2,800 billion cubic meters (Bcm) of gas.

The field’s initial discovery well was drilled in 1952 and the field was defined by 1959. It is the largest gas field in Europe and the tenth largest in the world. The significance of Groningen was not merely its size but that its development provided knowledge to oil and gas companies about how to develop such large fields.

Additionally, the geologic knowledge from developing the field enabled the industry to open up the entire Northwest region of Europe to the hydrocarbon industry that eventually led to the development of the North Sea.

Despite its age, still today, more than 50% of all the natural gas reserves produced in Europe come from Dutch territory. Groningen has been a major source of income for the government while supplying the Netherlands and other European countries with clean energy. Estimates suggest the field has about 720 Bcm of natural gas remaining after producing roughly 2,000 Bcm over its 50-year life.

Think about that: more than 50% of all the natural gas reserves produced in Europe come from Dutch territory. Imagine if the US shut down the Bakken, Permian, and Eagle Ford.

The article goes on:

Just over a week ago, the Dutch government announced it would reduce output from the field by about 25% in order to appease local residents concerned about the impact of earthquakes associated with the field’s production. Beginning in 1986 near the town of Assen, tremors were felt. Since then, there have been about 1,000 earthquakes recorded in the area according to the Dutch Meteorological Institute, with the largest reaching 3.6 on the Richter scale in August 2012 near the village of Huizinge. The oil and gas industry has warned of the possibility of earthquakes, ranging upwards of 4.5 to 6.0 on the Richter scale, associated with production from the Groningen field. Essentially, the earthquakes result from shifts in the subsurface of the field as gas volumes are extracted. In essence, this is a case of localized subsidence, which when it occurs can create underground tremors as the subsurface compresses.

The difference between 2013’s gas output from Groningen and the technically-feasible level needed to satisfy domestic supply is only one highlight of potential shifts that may occur within the European natural gas market with knock-on effects throughout Europe, Russia and the United States. The operator of the field, Nederlandse Aardolie Maatschappij BV, otherwise known as NAM, a 50/50 joint venture between Royal Dutch Shell (RDS.A-NYSE) and Exxon Mobil Corp. (XOM-NYSE), produces 75% of all the gas extracted on Dutch territory and about 50% of all the crude oil produced. The gas from Groningen goes to GasTerra, a Groningen-based international company that trades in natural gas, with most of the output being sold to utilities and large industries in the Netherlands, although some gas is shipped to Germany, Italy, France and the UK.

But it gets worse: the Dutch have also thrown in the towel on off-shore wind energy.

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The best song ever in the Dutch history of music. 

And I always thought I misheard the lyrics. LOL

Venus, Shocking Blue

European Natural Gas: Dutch-German Flows At Record highs -- May 27, 2020

Locator: 10010GRONINGEN.

Updates

January 8, 2024: the Dutch will go back to the Groningen. Worse cold snap in decades in Europe -- Europe could run out of the stuff with which Europeans heat their homes, including natural gas.

July 30, 2021: natural gas prices surging in Europe; severe shortage, and it could get worse. 

May 28, 2020: Natural gas prices cratering.

• pricing:
• HH: Henry Hub, US pricing
• JKM: Asia pricing
• TTF: Netherlands pricing 

Original Post

 

The blog concentrates on US shale crude oil. I've never understood natural gas very well, but, wow, there's a lot going on in natural gas, just as in the crude oil sector.

Without question, when the history is written, the tectonic changes in global energy that occurred in 2020 will certainly merit a chapter of its own.

Some odds and ends.

From ArgusMedia, data points:

• natural gas flows from Holland to Germany are hitting monthly highs, due to:
• German nuclear power plant maintenance; and, 
• incredibly inexpensive natural gas
• Dutch discount on natural gas is widest in a decade
• last year, same month (May): the Netherlands was a net importer of natural gas from Germany
• and get this: German imports increased even as Dutch power demand rose
• see Groningen at this link; or search "Groningen" on the blog; 

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Groningen

Output at Europe's giant Groningen gas field plunges in December, 2019, dents Dutch stocks -- S&P Global Platts, January 15, 2020, link here.

• Dutch gas stocks fall below 2018 levels; well below the European average
• a production cap has been put in place to prevent earthquakes linked to gas extraction at Groningen and the Dutch government plans to phase out gas extraction at the field completely by mid-2022.
• the rapid decline in production of gas from Groningen will continue to make the Netherlands increasingly dependent on LNG and pipeline gas imports from Norway and Russia

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For The Archives

This is old news but I was not interested in it at the time. But juxtaposed with this, posted a few days ago, makes it very topical:

Natural gas -- who would have thought? Oil plays with major impact on natural gas. This is very, very interesting. Anyone paying attention saw it coming but I haven't seen many analysts talking about it until now, but the monthly EIA dashboards foreshadowed it all.

At the linked article:

• Shell is exiting natural gas play in Pennsylvania
• Swepi LP, E&P arm of Netherlands-based Royal Dutch Shelll
• selling its Pennsylvania assets to National Fuel gas Co for $541 million
• 450,000 acres in northern PA, along with 350 wells
• $541 million / 450,000 acres = $1200 / acre
• in the dry gas area that does not produce ethane
• Shell looking for ethane to turn into plastic at its petrochemical plan under construction in Potter, PA
• the new Pennsylvania Petrochemicals Complex
• 6,000 construction jobs; 600 permanent employees
• and that connects the Bakken dot -- remember all those Bakken stories about ethane rejection?
• Shell burst onto the Appalachian scene in 2020 with a blockbuster acquisition of Marshall-based East Resources
• $4.7 billion deal
• ushered in a wave of megadeals that brought the world's majors to Pennsylvania
• many are now leaving
• Chevron is looking to sell its Appalachian portfolio; 890,000 acres in the Marcellus and Utica 
• Pennsylvania, West Virginia and Ohio

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Very Familiar?

Chris Stapleton's Tennessee Whiskey and Etta James' I'd Rather Go Blind.

Tennessee Whiskey, Chris Stapleton
From wiki:

American singer-songwriter Chris Stapleton recorded an R&B-influenced cover of the song for his debut studio album Traveller released in 2015.bStapleton first sang his version on the spur of the moment while the band were playing during a soundcheck before a show in Charlottesville, Virginia.

Now Etta James:

I'd Rather Go Blind, Etta James
I've posted the Etta James song numerous times on the blog. See Tell Mama / FAME, Muscle Shoals, Alabama at wiki.

I love the ease of finding / playing music with all the new technology (iTunes; Alexa, etc) but I do have to admit when listening to Etta James after midnight, I do miss the days of the vinyl LP. There's something to be said for a library of cardboard slips, with the great cover art, and the liner notes inside.

If I had had all the money in the world, I would have built a huge house with one huge room dedicated to hanging all those great album covers. For one list of the top 50 greatest album covers, link here. See if your favorite album cover made the list. Mine did not. Having said that, it would be impossible to limit the list to fifty.

One section of one wall would have been devoted to the Blondie album covers. I still have four of them stored away somewhere.

Long ago, in a faraway place, in a previous life, a wonderful woman, well before I ever heard of Etta James, but it's Etta James that transports me back to that time and place. Pretty amazing.

Reason #35 Why I Love To Blog -- The Groningen Is Back In The News -- June 25, 2017

Updates

June 26, 2017: Study: Fracing, saltwater disposal have limited seismic impact. From Oil & Gas Journal:

Research from a University of Alberta geophysicist suggests hydraulic fracturing and saltwater disposal have limited impact on seismic events.

A team of researchers led by Mirko Van der Baan found no state- or province-wide correlation between increased hydrocarbon production and seismicity after reviewing 30-50 years of earthquake rates from US states North Dakota, Ohio, Pennsylvania, Texas, West Virginia, and Canadian provinces Alberta, British Columbia, and Saskatchewan.

They also discovered that human-induced seismicity is less likely in areas where fewer natural earthquakes occur. The lone exception was Oklahoma, where seismicity rates have changed dramatically in the last 5 years, with strong correlation to saltwater disposal related to increased hydrocarbon production.

They need to study the Groningen. LOL.

Original Post 

Had I not blogged, I doubt I ever would have ever even known about the Groningen. But here it is again, in the WSJ, and another reason why I love to blog.

For decades, the giant Groningen gas field beneath the flat, green farmland in the north of this country counted among the greatest prizes for Exxon Mobil Corp. XOM 0.65% and Royal Dutch Shell RDS.B 0.43% PLC.

Then the earthquakes started.

The exploitation of Groningen—the biggest gas field in Europe—has been causing tremors for over two decades, rattling a bucolic province with no previous history of quakes and exposing two of the world’s biggest energy companies to a criminal probe and rising reconstruction bills.

Amid a public outcry, the Dutch government has imposed increasingly strict limits that have more than halved Groningen’s gas production since 2013. Now, authorities are proposing another 10% cut in hopes of further reducing earthquakes. And a Dutch public prosecutor is preparing to open a criminal investigation into responsibility for the earthquakes.

Groningen was expected to be one of the world’s largest gas producers for decades to come. Last year, it made up almost 10% of both Exxon and Shell’s total gas production globally and its reserves are among the companies’ largest undeveloped resources.

Again, as usual, the comments are most interesting, though somewhat disappointing considering this is in the WSJ.

Of All The Gin Joints In All The Towns In All The World, She Walks Into Mine; The Decision Has Been Made: The Keystone XL Will Not Be Approved By This Administration -- Tea Leaves; And It Never Rains In Southern California

What a great evening. All caught up with my blogging, and then I saw another great story on the Keystone XL 2.0 North.

But first this. Rigzone is reporting:

The Dutch government announced Friday afternoon that production from gas fields in Groningen province will be reduced over the next three years.

The move has come after earthquakes recorded in the north of the Netherlands have become more intense and more frequent in recent years. Residents, environmental activists and politicians have blamed onshore drilling in the area.

In a statement sent to Rigzone, the Dutch government said it has decided that production in those areas most at risk will be reduced by 80 percent during the next three years. In addition, limits will be placed on total gas production from the Groningen field so that output will reduce to 42.5 billion cubic meters in 2014 and to 40 billion cubic meters in 2015. In 2013 production from the Groningen field reached nearly 54 billion cubic meters.

The government has also agreed to make $1.6 billion available to reinforce homes and other buildings and strengthen infrastructure in Groningen province.

Is it just me, or is a decrease from 42 billion to 40 billion all that much of a decrease? And that was from 54 billion cubic meters last year. The big decrease will come in 2016, it appears, when they have to get down to 10 billion cubic meters. On another note, the media, including The New York Times, try to associate fracking with these Dutch earthquakes. In fact, they are not fracking in the Netherlands.

Groningen was discovered in 1959; it is the largest natural gas field in Europe; it is the 10th largest in the world. "Closing" this natural gas field is not trivial but it turns out that enough natural gas will continue to be produced to meet the needs of the Dutch.

The Keystone Update ... as if it matters

Now, back to the Keystone story. The decision has been made: the Keystone XL 2.0 North will not be approved by this administration. At least that's what the tea leaves reveal. The AP via Rigzone is reporting:

Brushing aside pressure from Canada, Secretary of State John Kerry said Friday that the United States will not be pushed into making a decision on the long-delayed Keystone XL pipeline.

At a joint appearance with Canada's foreign affairs minister, John Baird, Kerry said he has not received a crucial environmental report on the $7 billion pipeline, which would carry oil from western Canada to refineries in Texas.

At the linked article, Kerry says he hasn't received the "crucial" environmental report -- no doubt it is being edited at 1600 Pennsylvania Avenue NW. If Kerry hasn't gotten the "crucial" environmental report by now, there's no way he can read through it before November 7, 2014.

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I wasn't going to post this story until I remembered the great song that could be posted. USA Today is reporting: 

"All I can report to you is it's not raining today and it's not likely to rain for several weeks," Brown said in a news conference in San Francisco. On Thursday, the National Weather Service's Climate Prediction Center forecast below normal precipitation for two-thirds of California through April.

Mr Brown went to on to say that it never seems to rain in southern California, but, girl, don't they warn you?

Brown's proclamation allows California to request a broad emergency declaration from President Barack Obama, which would expedite some water transfers, provide financial assistance and suspend some state and federal regulations.

The situation in most of California and northern Nevada is extremely dry, according to the most recent report Thursday from the U.S. Drought Monitor, a federal website that tracks drought nationwide. Almost 99% of California is considered abnormally dry or worse; almost two-thirds of the state is in extreme drought.

2013 became the driest year on record in California; San Francisco had the least rain since record keeping there began during the gold rush of 1849.

Just for the record, Mr Brown never said "it never seems to rain in southern California." I made that part up.

It Never Rains in Southern California, Albert Hammond

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A Note to the Granddaughters

I have often remarked that men become more romantic, more sentimental as they age. Women, just the opposite. With age, women become more careful, more circumspect, more cautious in their relationships.

I saw it again tonight during my monthly viewing of Casablanca.

Every time I watch this movie, I see something new, or hear a different line. Tonight, I was captivated by the way Rick and Ilsa looked at each other when they first saw each other at Rick's, and listened carefully to what they said and how they said it. He was incredibly romantic, sentimental; she was cool as a cucumber, as they say.

It's hard to believe they were acting. 

Wow, I love this movie.

CasablancaPlay It, Sam

The Market, Energy, And Political Page, T+30 -- December 6, 2018

The news coming out of OPEC does not sound good for those hoping for a cut in production. US is no doubt putting a lot of pressure on Saudi Arabia. Russia, too, a huge problem. 

It's back ... the Groningen. I can't count the number of posts I had on this Dutch natural gas field over the years ... until it went away. But now this: the story is back even if Groningen is not. From Rigzone:

The EU is facing the perfect storm of dwindling local supply, rising demand and increased dependence on Russian state-owned Gazprom for its supply of natural gas, as analysts and observers mull what, if any governmental action, must be taken.

At issue is mainly how output from the Groningen field in the Netherlands will continue to decline, thus making the EU more dependent on both pipeline and liquid natural gas (LNG) from outside the EU borders.

According to European Commission data, the EU imported 69 percent of its natural gas in by the first semester of 2018. Over 37 percent of the gas the EU member countries imported by the first semester 2018 came from Russia, while 33 percent and 11 percent came from Norway and Algeria, respectively.

Excluding Turkey, the EU imported record high pipeline volumes from Norway and Russia, which increased to 116 billion cubic meters and 169, respectively, in 2017, according to data from Rystad Energy. “We expect Europe to increase its imports over the next years as the Groningen field will continue to decline driven by the announced scale backs,” Sindre Knutsson, senior analyst, gas markets, Rystad Energy. “Post 2020, both Norwegian and UK production is set to decline, strengthening this effect.”

Russia aside, the risk of over-dependence on a single supplier is more important than the possible downsides of boosting gas imports overall, said Thierry Bros, senior research fellow, Oxford Institute for Energy Studies, said.

Declining gas production in the region is coupled with rising demand, which obviously means the EU will need more gas from different sources — but that not necessarily mean the EU member states will be “overly dependent” per se, Bros said.

And then a long bit on the Russian factor. Well worth the read. 

Revisiting "bait and switch": the writer places the blame in the wrong place. Also from Rigzone:

The Organization of Petroleum Exporting Countries (OPEC) created a mess.
That’s according to FGE founder and chairman Fereidun Fesharaki, who made the statement in a television interview with Bloomberg on Wednesday.

“Donald Trump said that he is going to take it [Iran oil exports] from three million barrels per day to zero and OPEC countries they prepared for it, producing too much oil in September and October, and now we have a huge amount of inventories,” Fesharaki said in the interview.

“We need to cut 1.4 million barrels per day of oil for three months to be able to bring it in balance. So it is not something which can be fixed quickly, but OPEC created a mess, partly because of … [its] own actions, partly because being misled by Donald Trump, but now OPEC has to clean up the action with a little bit of help from the Russians,” he added.

Fesharaki highlighted three possible OPEC meeting scenarios in the Bloomberg interview.

“You can have a one million barrels per day cut which the markets will be disappointed [in] but would not allow a significant drop in the price, maybe a couple of dollars. You can have a no deal, which could then result in substantial drop in the price, or you can have 1.3, 1.4 million barrels per day deal and the markets will move up slightly,” Fesharaki stated in the interview.

One can blame OPEC if one wants, but it was the "bait and switch" on the waivers that were directly responsible. Saudi Arabia was either a) taking advantage of the situation; or, b) was being responsible by increasing production in anticipation of a global shortage of oil. But it was the waivers that upset the apple cart, or perhaps better said, tipped over the oil bbl.

Mexico To Delay / Cancel Major Deep Water Exploration Projects -- February 18, 2015

Reporting tomorrow:
California Resources Corp (CRC), OXY USA spin-off, forecast 7 cents, before market opens:
Cheniere Energy (LNG), forecast, a 26-cent loss; after market close;
Denbury (DNR), forecast 23 cents, before market opens;
Linn Energy (LINE), forecast 6 cents, before market opens;
Nobel Energy (NBL), forecast 34 cents; before market opens;

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Mexico To Cancel / Delay Deep-Sea Projects

When the slump in oil prices hit, I said the following would be most vulnerable:

• North Sea (off-shore)
• ultra-deepwater ventures in the Atlantic off Brazil and Angola (off-shore)
• Canadian oil sands
• the Arctic

It turns out "stripper wells" needed to be added to that list. Be that as it may, it was pretty obvious that deep-sea projects would be most vulnerable. Today, Reuters via Rigzone is reporting:

Mexico's state-run oil company Pemex has postponed some deep water exploration projects and will cut jobs as part of a raft of planned capital delays due to slumping crude prices.

Pemex said on Monday it would delay execution of capital projects including major refinery reconfigurations and ultra-low sulfur fuel projects because of a sharp fall in oil prices.

"There are ... some exploration projects in deep waters, those that carry higher risks, well if we haven't started them then they will be delayed," Lozoya told local radio.

As noted before,

"With all the big oil projects that are being delayed or canceled, 2017, and possibly 2016, is going to be a huge year for oil investors."

My hunch is that in 2016 / 2017 there will be a relative shortage of oil with these big projects delayed or canceled.

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Update On Talisman / Repsol Deal

Previously posted, this is an update being reported by Rigzone: 

Talisman Energy Inc common shareholders on Wednesday voted to approve an $8.3 billion offer for the Canadian oil and gas producer from Repsol SA, clearing the way for the Spanish company to acquire Talisman's worldwide operations. 

Talisman common and preferred shareholders both voted nearly unanimously in favor of Repsol's December 16, 2014, offer to pay $8 per share for the company, a 56 percent premium to the day-prior closing price for the company on the Toronto Stock Exchange. 

Repsol will also assume Talisman's $4.7 billion long-term debt. Though the deal still requires regulatory approval, expected by mid-year, the vote is a crucial step towards completing Repsol's acquisition of Canada's No.5 independent oil producer.

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Dutch Earthquakes

Posted several times previously, this is simply an update on something that fascinates me for some reason. Being reported by Reuters at Rigzone, also:

Royal Dutch Shell, Exxon Mobil Corp and the Dutch government ignored the danger of earthquakes caused by gas extraction at the massive Groningen gas field for decades, the Dutch Safety Board said on Wednesday.

Its critical report is one of several recommendations to the government of Liberal Party Prime Minister Mark Rutte in coming months about production levels at the Groningen field.

The issue has become a political flashpoint ahead of local elections. The correlation between gas extraction and earthquakes was clear in 1993, but "the risks to residents were not recognised" until 2013, the report said.

The board's year-long inquiry concluded that the Economy Ministry, State Supervision of Mines and NAM, the Shell-Exxon Mobil joint venture which operates the gas field, worked collectively to maximise production.

"The parties concerned considered the safety risk to the population to be negligible and thus disregarded the uncertainties surrounding this risk assessment," it said. They "failed to act with due care for citizen safety in Groningen."

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MRO Cuts CAPEX A Second Time

Reuters via Rigzone is reporting: 

Marathon Oil Corp on Wednesday cut its 2015 budget by another 20 percent to $3.5 billion and said its fourth-quarter profit rose, boosted by a gain related to the sale of oil and gas properties in Angola and Norway.

Profit in the quarter was $926 million, or $1.37 per share, compared with $375 million, or 54 cents in the year-ago period.

Marathon, which previously said it was slashing 2015 spending about 20 percent in December, said it would make a second budget cut of another 20 percent.

UK, Europe -- Energy Crisis -- 2021 - 2022

Big things are happening in Europe, UK in response to the crisis. 

Two issues, and they appear completely separate.

Natural gas.

Gasoline.

They are related but we can dispense with the UK gasoline crisis for the moment. This was how it played out:

• natural gas prices were surging
• talk of natural gas prices pulling gasoline prices forward
• among the well-read, folks started keeping their automobiles full of gasoline; their trucks full of diesel
• that exacerbated the situation and rumors worsened
• even the less-well-read were now hearing rumors of fuel shortages
• shortage fed on itself
• then, accurate or not accurate, there were reports of a shortage of truck drivers ...
• but what's the possibility that as service stations (or garages as the Brits called them) anticipated growing demand, started ordering more and in some cases were simply being told, there's plenty of fuel, but there is now a "relative" shortage of drivers (same number of drivers, just more demand); the Brits famously do not like to work overtime;
  
• and, the rest is history as petrol stations started to run out of fuel
• mostly due to panic buying
• but this is what is not being said: the Brits, regardless of what the politicians have said, had moved on; they had enough with Covid; they were getting back to normal; demand for fuel exceeded prognostications when the Delta virus hit
• could this happen in the US? Nope.

Okay, now natural gas. This is a bigger problem for the Brits and even with a warm winter, the UK could be in big, big trouble. One would hope BoJo is coordinating with JoBid to get LNG shipments prioritized to the UK, not Asia. [There are reports saying that will not happen.]

This is not a story about Russia. Wow, that gets tiresome. 

This started with the "Angela Merkels" years ago when faux environmentalists started shutting down coal plants (2000) and nuclear reactors (Fukishima, 2011). It's ironic how it happened. Shutting down coal plants would not have been a disaster had there been no problem with nuclear plants, but that all changed, for Germany, with Fukishima. For Germany, coal was their Plan A. Nuclear plants, their Plan B.

The UK had no Plan B. One could say the same thing for the UK, except instead of shutting down nuclear reactors in response to Fukishima they simply increased reliance on wind.

And it was the "wind issue" that brought the UK to its knees most recently.

Well, to some extent. I don't believe it was simply the wind. 

A gedankenexperiment:

Imagine what would happen in the US if for whatever reason, Resident Biden shut down the Permian. Just shut it down. Things were reversed in the US. Plan A was oil from Canada via the Keystone XL. There was no Plan B because no Plan B was needed. Oil was more than plentiful in Canada and no one in their right mind ever thought any US president would shut down a simple pipeline.

Fortunately for America, Mark Papa (EOG) and Harold Hamm (CLR) came up with a Plan B before it was even needed; pure serendipity. In fact, Plan B, light oil was not what the refiners along the Gulf coast needed. They were optimized for heavy oil. 

So, with the loss of the Keystone X, Plan A: not a big deal but unpleasant for the oil industry, especially the refiners, and ultimately those who buy gasoline for their automobiles, like you and me.

So, now with the loss of the Keystone XL, imagine Resident Biden shutting down the Permian.

That's exactly what happened in Europe with regard to natural gas. And no one is talking about it. Until today, interestingly enough, and I will provide the link later. Actually there are two links but I can't find one of them now. Not to worry. By the end of the week, there will be many links, many stories.

The US did not shut down the Permian. But the Dutch shut down "the" Groningen, the largest natural gas field in Europe. Made the decision based on risk of earthquakes. Europe's Plan B: like Keystone XL from Canade, Europe's Plan B was Nord Stream 2 from Russia. 

The problem: Americans like Trump did not like Nord Stream 2. I have no idea what drove that: knee-jerk politics, or well-founded national security issues.  

So, whereas Americans did not have a Plan B if the Keystone XL did not materialize, Mark Papa and Harold Hamm pre-empted any serious problems for the US. 

But not the Europeans. It was just the reverse. They closed the Groningen (Plan A) knowing Nord Stream 2 (Plan B) was coming down the pike.

While editing this, a reader wrote to remind that there even more to the story. The reader reminded me that at the time the Groningen decision was being made there is/was another copious energy supply that was stillborn ... the project to frac the Bowland Basin shale.

A company named Cuadrilla not only drilled a horizontal well 3 years ago, they were able to frac about 5 stages.

 

The preposterous restrictions placed upon the company included not exceeding a .5 (point 5) reading on the Richter scale during the fracturing process. (For context, rambunctious football fans regulary produce Richter readings of 2 when stomping their feet. As the Richter scale is algorithmic, that 2 is something like 30/40 times more prominent than the acceptable .5).

Combining both the known Bowland and Weald Basin shale gas resources, the UK possesses about a 80 to 100 year supply of natgas beneath their feet. 

For Cuadrilla, this was just what the DAPL operators experienced: experiencing harassment at the very time recognizing how acute the need for natural gas.

So, in fact, there was a Plan C -- all that natural gas in Great Britain until faux environmentalists shut that project down, also.

But, as usual, there's even more. 

Folks are blaming the Russians. 

Nope, nothing could be farther from the truth.

First, the timing and the geopolitics. Why would Russia risk being exposed to "cheating" at the very time they are trying to get this thing approved by Europe and by the US?

Second, there are many, many indications that Russia itself is reaching the limits of its production. That has been addressed at the blog on number occasions over the past ten years. Russia is facing a very, very cold winter (again, nothing new). 

Link here, but this article appeared after I drafted the above. Cyril Widdershoven is one of my favorite contributors over at Oilprice.com.

Two Best Energy Editorials To Read Before You Start Your Day -- September 21, 2021

The two best editorials to read this morning. 

Having scanned 3,456,218 sites overnight and using sophisticated AI tools these are the best of the best:

David Messler: the dangerous rally in natural gas prices. September 20, 2021, 7:00 p.m. CDT.
This is just a very, very small piece, Groningen: 

“The drastic drop in output from Groningen will redefine the European energy landscape. The field, which had a rebound in production at the start of this century, reaching 57 billion m3 in 2013, was for decades the central cog in northwest Europe’s gas system.”

“The phase-out of this giant field will force Europe to expand its gas imports at an even quicker pace. We can already see this drastic shift taking place in the Netherlands, which is in the midst of the transition from being a net gas exporter to a net importer,” says Carlos Torres-Diaz, head of gas markets research at Rystad Energy.”

Charles Kennedy: oil demand set to grown even after 2050. September 20, 2021, 1;00 p.m. CDT.  

 “The impact of climate change policies on oil demand are highly exaggerated – The impact is mostly on demand growth, not on demand itself,” Alhajji said during a keynote speech at the event focused on the impact of the energy transition on oil-dependent economies. 

First geopolitical "region" mentioned: Africa. Oh, give me a break.

“African countries can reduce their carbon footprint by focusing on energy efficiency and the low hanging fruits, save oil & gas for exports or value added industries and place solar and wind projects strategically.”

The Value Of An Energy Asset Is Deteriorating Underneath Europe -- Bloomberg -- July 14, 2016

From Bloomberg:

For decades, one of the most profitable parts of Europe’s energy industry was giant, underground reservoirs used to store billions of dollars worth of natural gas. Traders stockpile fuel there during the summer to sell in winter, when the continent’s consumers need to heat their homes.

The trade isn’t working anymore.

As the world finds itself with an increasing oversupply of natural gas, the gap between summer and winter prices has narrowed, making the storage business much less lucrative.

That’s caused RWE AG and SSE Plc to write down the value of gas storage sites by about $200 million each in the first quarter. Other operators from Statoil ASA to Wingas GmbH say they may exit the industry if the slump continues. That could be a problem because storage isn’t just about profits from trading - it also provides security against sudden spikes in demand or unexpected supply constraints.

Data points:

• European storage operators are shutting down storage; storage prices no longer cover operating costs
• 1Q16: three of the 10 largest storage operators in Europe recorded losses due to storage operating costs
• more than 3% of Europe's gas storage has been mothballed since 2010, including two more facilities in 2016
• there was also a permanent reduction in output from Europe's largest natural gas field Groningen, in Netherlands, when production was linked to tremors

Risks:

• Europe has experienced natural gas shortages twice in the last decade during freezing temperatures because of disputes between Ukraine and Russia
• Russia is the EU's largest outside supplier
• this is a security issue for the EU

With regard to Groningen, this is a most opportune time to take us back to this post in early 2014.

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

Notes To The Granddaughters

The book to read this week (me, not the granddaughters): Why Beauty Is Truth: A History of Symmetry, Ian Stewart, c. 2007, the author of Nature's Numbers and Does God Play Dice?

Mesopotamia: between two rivers. Potamia, rivers, potable?

Invention of agriculture, led to city-states. Some of the world's great city-states in Mesopotamia: Ninevah, Nimrud, Nippur, Uruk, Lagash, Eridu, Ur, and above all, Babylon.

Euclid's Elements Of Geometry (generally, just Elements). When printing was invented, this book was among the first to appear in printed form. It  has been published in over a thousand different editions, a number exceeded only by the Bible. Taught, wrote in Alexandria, 325 BCE; died, 265 BCE; exact birthplace unknown. Must have been, at some point, a student at Plato's Academy in Athens.

Euclid's only tools: an unmarked straightedge and a compass.

Regular polygons. The Greeks could construct regular polygons when the number of sides is: 3, 4, 5, 6, 8, 10, 12, 15, 16, or 20. The Greeks could not construct regular polygons when the number of sides is: 7, 9, 11, 13, 14, 18, 19. From wiki:

As 7 is a Pierpont prime but not a Fermat prime, the regular heptagon is not constructible with compass and straightedge but is constructible with a marked ruler and compass.

This type of construction is called a neusis construction.

It is also constructible with compass, straightedge and angle trisector.

The impossibility of straightedge and compass construction follows from the observation that ${\displaystyle \scriptstyle {2\cos {\tfrac {2\pi }{7}}\approx 1.247}}$ is a zero of the irreducible cubic x3 + x2 − 2x − 1. Consequently this polynomial is the minimal polynomial of 2cos(2π⁄7), whereas the degree of the minimal polynomial for a constructible number must be a power of 2. 

Within the range of 3 - 20, note that the number "17" is missing. The author will get back to "17" later. 

Omar Khayyam was prominent among Persian and Arab mathematicians who took up the torch that the Greeks had dropped. He went farther than using straightedge and compass, but not much farther. He used "conic sections" because they can be constructed by slicing a cone with a plane.

To be continued, maybe. Probably not.

Amsterdam's Groningen Natural Gas Field Update -- September 18, 2020

 Groan-again: Netherland's Groningen natural gas field update.

Natural Gas Proved Reserves -- Global -- August 22, 2022

Off Cyprus:

• link here.
• this was considered "breaking news" and breathlessly reported -- oh, give me a break.
• but, yes, it's huge -- see Groningen below 
• but so is the Permian 140 trillion cubic feet
  
• TTE, Eni: Cronos-1 well
• preliminary estimates indicate there are about 2.5 trillion cubic feet (TCF) of gas in place, “with significant additional upside”
• that 2.5 trillion: put into perspective by numbers below
• Groningen, which the Dutch closed down? 2.8 trillion cubic feet
  

US proved reserves of natural gas by top eight states, 2016 - 2022:

Staggering global riches of natural gas (the numbers keep increasing). From an earlier post:

Top five countries:

• Russia: 6,000 trillion cubic feet
• Iran: 1,000 trillion cubic feet
• Qatar: 900 trillion cubic feet
• Turkmenistan: 600 trillion cubic feet
• US: 350 trillion cubic feet
• #11: Australia: 152 trillion cubic feet (as of January, 2014). (See this post.)
  

Now, let's go back and re-run the numbers that were posted earlier:

• that recent huge Mediterranean natural gas find: 30 trillion cubic feet; this was said to be biggest natural gas find ever in the Mediterranean
• Barnett, revised USGS figures: 53 trillion cubic feet
• Utica, newly revised figures: 782 trillion cubic feet
• Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves
• Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
• Qatar: 800 trillion cubic feet, wiki, conversion

Other recent stories on natural gas reserves

• Marcellus: 480 trillion cubic feet of technically recoverable gas, Penn State geoscientist 

Comments regarding natural gas reserves

• for me, it's hard enough getting my hands around billions of bbls of oil; it's almost impossible for me to get a feel for trillions of cubic feet of natural gas
• proved reserves are based on price of recovery, confusing matters from year to year
• estimates are just that, estimates (and often inflated for "certain" reasons)
• watch for this gotcha: sometimes reported in trillion cubic feet; sometimes in trillion cubic meters (35 cubic feet = 1 cubic meter; not trivial)
• for me it comes down to two things:
• any discovery over 30 trillion cubic feet natural gas is staggering, worth reporting
• "we" aren't going to run out of natural gas any time soon

Notes From All Over -- The "Market" Edition -- July 7, 2020

Some of the following has been previously posted. 

"Breaking 911" back in the twitter feed. 

Going, going, gone, Groningen, link here:

• output hits record low of 470 mil cu m in June 
• production at Eemskanaal continues to fade, down to 6,500 cu m 
• Dutch regulator advises GY-20 Groningen quota as 9.3 Bcm  

Walmart is surging. Link here.

With the Nasdaq trading at record highs on its sixth straight day in the green, largely thanks to Amazon surpassing $3,000 a share, Wal-Mart is gearing up to launch what it hopes will be its "Amazon Prime Killer" - a new e-commerce subscription service called "Walmart+".

According to Recode, Wal-Mart is planning to launch the new service later this month.

The service will cost $98 a year, and include perks like same-day delivery of groceries and general merchandise, discounts on fuel at Walmart gas stations, and early access to product deals ...

Wal-Mart had initially planned to launch the new service in March or April, but it delayed the rollout due to COVID-19.

As Amazon struggles to roll out grocery delivery across the US (so far, it has concentrated mostly on the big cities), Wal-Mart is leaning on this natural advantage as a central component of this new service. [Comment: Walmart+ will quietly fade away by 2025.]

Oh-oh:

"Breaking 911": I can't find details, but it looks like "Breaking 911" has been suspended from Twitter again. No "Breaking 911" tweets on my twitter feed since last night. One could expect at least a dozen tweets overnight. 

Market, mid-morning:

• AAPL: hits an all-time new high; up over 1%; adds another $4.28 to be trading at $378.04; market cap ever so slightly above MSFT which is also having a great day
• TSLA: unreal -- up another 3.5%; up $47 to be trading at $1,420. Again, a nice milestone, easy to remember, $1400.
• Dow: has cut its "losses" from 300 points down at the beginning of the session to being down 150 ponts today
• hunch: the Dow will close today, somewhere between being up 200 points and down 1,000 points; but in early morning trading, it is clear traders want to move this market higher; 
• sell in May, go away? LOL. It's Christmas in July for some.

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

EU Gas Markets Descend Into Chaos (Remember: The Netherlands Officially Closing Groningen -- Traders Having A Field Day) -- Meanwhile The Texas Grid Holds -- In The Bakken, Seven DUCs Completed; Three New Permits -- June 27, 2023

Locator: 45811B.

Texas to NE ISO: thank you for all your thoughts and prayers; your prayers got "us" through another typical Texas day. The global warming gods were appeased.

ERCOT:

• our apartment complex has two pools; I generally use the larger pool; today, the smaller pool; more shade;
• it's so hot, no one apparently even wants to swim; not me; I've been out here "all afternoon";
• 100°F right now, 6:07 p.m. CT; I don't know what the high was;
• unaware of any grid failures, but I don't listen to / watch local news
• wow, ERCOT supply / demand not even close to having problems; just checked;
• 8,000 MW reserves yet in play
• I won't look at the price; but "everybody" only cares whether the grid "holds."
  
• 86°F is the highest it gets in the apartment; I won't turn on the a/c if I can swim to keep me cool;

Headline: European gas markets descend into chaos. I didn't click on the clickbait. It's over at oilprice. Let me guess: Groningen and Norway. [Later: Norway back in the game despite promises last year to go green. My hunch: behind closed doors, the EU begged Norway to bail them out.]

**********************
Back to the Bakken

Active rigs: 36.

WTI: ouch -- $67.93.

Three new permits, #40003 - #40005, inclusive:

• Operator: Neptune Operating (I wonder who they are "working for"?)
• Field: Elk (McKenzie)
• Comments:
• Neptune has permits for three Wahlstrom wells, lot 1 section 3-151-102; 
• to be sited 303 FNL and between 634 FEL and 700 FEL

Seven producing wells (DUCs) reported as completed:

• 39143, 307, Enerplus, LK Bice 147-96-6-31-6H-LL, Dunn County;
• 39145, 113, Enerplus, LK Bice 147-96-6-31-2H, Dunn County;
• 39147, 278, Enerplus, LK Bice 147-96-6-41-6H, Dunn County,
• 38501, 2,885, MRO, Audreey 34-10H, Dunn County;
• 39129, 204, Crescent Point Energy, CPEUSC Claire Rose 5-31-30-159N-99W-MBH, Williams;
• 38168, 960, CLR, LCU Foster FIU 5-28H1, Williams,
• 38169, 1,134, CLR, LCU Foster FIU 6-28H1, Williams,

Groningen Back In The News -- January 8, 2024

Locator: 46491LNG.

How cold is it in Europe? Reports were that the continent was fully supplied with LNG / NG -- but now ....

Link here.

Groningen is tracked at the sidebar at the right.

The irony of the last update. LOL. 

 July 30, 2021: natural gas prices surging in Europe; severe shortage, and it could get worse. 

Notes From All Over -- The Late Night Edition -- The Asian - US LNG Paradox -- January 15, 2021

Updates

Later, 2:54 a.m. CT, January 15, 2021: bitter cold brings chaos as global energy systems show strain; power and gas prices spike to records across global markets; more cold weather from the Arctic possible from end of January -- Bloomberg. Wow, perfect storm in a good sense; all bullish for oil companies:

• weakening dollar;
• OPEC+ agrees to maintain/cut; Saudi surprises by cutting more than expected;
• global freeze;
• global economy recovering from Covid (maybe)

Later, 2:22 a.m. CT, January 15, 2021: see if anyone mentions the Groningen? Nope. Groningen on the blog.

Later, 01:50 a.m. CT: literally one minute after posting the note below the following popped up on twitter. Link to Financial Times here. LNG rally heralds more volatile gas prices to come: spike in demand in Asia triggers scramble for supplies.

When restaurants in Japan open their windows to help combat the spread of Covid-19, you might not think it would have much effect 6,000 miles away in lockdown Britain.

But the shivering diners of Tokyo and Kyoto, where restaurants are still allowed to admit customers for limited hours, are not just an illustration of the differing emphases put by governments on the dangers of the aerosol spread of the virus. They also tell a story of interconnected energy markets and increasingly how what happens in Asia can have a large knock-on effect for the UK and Europe — from what consumers pay to heat their homes to the ability of national grid systems to comfortably keep the lights on.

As a brutal cold snap has hit Japan and much of north-east Asia in recent weeks, Japanese utilities have had to scramble to source fuel supplies. Power prices in Japan have soared to record highs and the government has asked citizens to limit energy consumption by turning off lights and appliances, even while urging them to keep the heating on and the windows open.

But the biggest pinch point for Japan has been the country’s reliance on liquefied natural gas, a once relatively niche commodity that has grown in global importance over the past decade. Japan has long been one of the biggest importers of LNG, which is natural gas that has been super-chilled and compressed so it can be delivered by ship. The country lacks pipeline access to gas or its own reserves of a fuel that it needs for heating, electricity generation and manufacturing.

But as the LNG market has grown, Japan has had to increasingly compete with other countries looking to substitute highly polluting coal. Energy consultancy Wood Mackenzie estimates LNG has risen from 11 per cent of global gas supplies in 2010 to 15 per cent today (and it forecasts it will reach more than 20 per cent by 2040).

Prices for LNG cargoes in the Asian spot market have soared to record levels this week as the cold snap hit, up almost 20 fold from just a few months ago when the market was seen as oversupplied. Energy traders have diverted every LNG cargo they can towards the Asian market, with China and South Korea also scrambling to buy.

But they have been hamstrung by a number of problems, from a lack of available tankers and delays at the Panama Canal, to outages at various projects. Goldman Sachs described the situation this week as a gas market that had “shifted from a bearish perfect storm last year to a bullish perfect storm now”.

Much more at the link. Will be archived.  

Original Post

LNG pricing: Asia vs US. A few days ago a reader asked why Asian LNG could be priced more than 10x higher than US LNG. A reader who knows the subject very, very well replies:

Addressing one of your reader's curiosity as to why US gas prices are not rising despite torrid Asian (and now European) demand:

US LNG plants are operating near 100% capacity: about 11 Bcfd. They are simply maxed out and the feedgas supplies are tied into Henry Hub. 

Somewhat counter-intuitively, US prices may drop mid-February as a shortage of available ships may cause a drop in US LNG exports. Slightly longer term (balance of 2021 out to October or so), HH pricing should stay firm (around $2.80?) as the demand to replenish depleted storage supplies should be very strong.

Taking a slightly broader view, the jarring discrepancies between contractual arrangements versus spot market is/has been HUGE!

That is to say, customers with firm, long term contracts are doing okay. Those needing both LNG and ships on a spot basis ... not so much.

This should greatly incentivize customers such as Japanese, Turkish, and Indian utilities to enter into firm purchasing agreements.

The ripple effect should make for a much more favorable climate for pending US LNG projects to obtain financing which has been the main stumbling block this past year.

Fast and furious:

• Switzerland: public transportation shut down in Zurich; heavy snowfall;
• China blinks: may allow imports of Australian coal;
• Venezuela: one step closer -- to losing Citgo;
• Norway: to increase production to more than 2 million bpd from 1.7 million bpd now; mostly from the giant Johan Sverdrup field (global warming? EVs?)
  

Electronic land posting: link here.

For The Archives -- Shell, XOM, NAM -- Natural Gas -- Europe -- September 7, 2022

This interests me not, but it seems important for the archives.

Link here.

LONDON (Reuters) - Shell and Exxon Mobil have put up for sale one of Europe's largest and oldest natural gas production ventures, betting on soaring energy prices amid tensions with Russia to attract buyers. 

The top two Western energy giants could raise over $1 billion from the sale of the 50-50 NAM joint venture in the Netherlands, two industry sources said.

It would be part of both companies' efforts to shed ageing assets that are no longer central to their operations.

Shell and Exxon recently launched the sale process for NAM’s offshore gas operations, which include dozens of fields and around 20 offshore platforms, as well as a network of pipelines and three processing plants.

NAM started producing natural gas in 1963 following the discovery of the giant Groningen field and has been a major source of gas for the Netherlands and Europe for decades.

Its output has nevertheless been in a steady decline since 2014 and is set to fall further in the coming years after the Dutch government decided to shut Groningen in order to limit seismic risk in the region. The field is expected to shut down in 2023 or 2024 but its life could be extended.

**************************
The Book Page

Stephen King.

All 75 books. 

Ranked.

Link here.

********************
Never Too Old

Sterling Lord.

Literary agent.

Among other triumphs worked for years to find a publisher for Jack Kerouac’s On the Road, has died. He had just turned 102.

From the linked article at The Guardian:

Sterling Lord, who started his own agency in 1952 and later merged with a rival to form Sterling Lord Literistic, was a failed magazine publisher who became, almost surely, the longest-serving agent in the book business. He stayed with the company he founded until he was nearly 100 – then decided to launch a new one.

He was an early ambassador for a revolutionary cultural movement: the Beats. He endured the initial unwillingness of publishers to take on Kerouac’s unorthodox work and was later the agent for the poet and playwright Amiri Baraka, novelist Ken Kesey and poet and City Lights bookstore owner Lawrence Ferlinghetti.

Thanks to his friendship with Theodore Geisel, better known as Dr Seuss, Lord helped launch Stan and Jan Berenstain’s multimillion-selling Berenstain Bears books. He found a publisher for Nicholas Pileggi’s mob story Wiseguy and helped arrange the deal for its celebrated film adaptation, Goodfellas.

In the early 1960s, Viking asked Lord to get a blurb from Kerouac for One Flew Over the Cuckoo’s Nest, Kesey’s first and most famous novel. Kerouac declined but Lord ended up representing Kesey.

He represented the former US defense secretary Robert McNamara and John Sirica, the judge of Watergate fame, and worked with Jackie Kennedy during her time as an editor with Doubleday and Viking. Some of the great US sports books of the 20th century, from North Dallas Forty to Secretariat, were written by Lord clients.

Energy Notes From All Over -- September 24, 2021

WTI: some say WTI closed at $74. Let's check.

Bakken economy: North Dakota aircraft boarding numbers declined in August, m/m, but numbers in Williston continued to rise. Most important word: "continued."

UK: 50-fold jump in power rates. Link to Tsvetana Paraskova. Putin lovin' it. The good news? It's transitory. Likely to last only through 2027.

UK petrol: panic buying overwhelms UK filling stations. Again, simple procedures put in place would prevent it. Odd/even license plates; max: half tank. 

UK / EU: French and Germany electricity wholesale prices (one-year forward) have hit all-time highs, showing that the European energy crunch isn't going away anytime soon. 

Coal: highest levels in thirteen years. Reasons?

• high natural gas prices (why?);
• high power demand (why?);
• nuclear plant closures (why?);
• low wind generation

Arctic: oil is booming despite strong opposition. Link here. And look at this -- look which American company is among three international E&P companies? Gazprom, Total, and COP. For the record, I'm accumulating shares in two of the three. LOL. American banks providing huge amounts of financing, along with private equity giants like BlackRock. Report provided by a faux environmentalist.

US natural gas: it might not average $10 in 2022, but some pundits see $20+ in some regions.

Groningen: from Alexander Stahel @BurggrabenH -- Groningen was a key EU gas producer (yes, ageing but still solid) and is to be turned off next year due to seismic risk in the region. JSMH. Link here. 

• a reminder: commodities are priced at the margin, and it exactly those marginal bcfs/barrels/pounds that will be missed most in the coming years and that ARE setting prices. 
• with Nord Stream 2, the Russians conquer Europe without firing a shot.

***************************
Never Too Old

Go for it.

• Chuck Grassley: will run for sixth term. Next year he will be 89 years old. But he's still young. 
• Dianne Feinstein: has already filed papers to run in 2024 when she will be 91 years old.
  

And they survived Covid-19, the plague year.

No one should complain. US judgeships are generally lifelong appointments.

• RBG died "in office" at the age of 87.

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Personal Matters

Your resume. What to include; what to leave out. Link here to The WSJ. There's some valuable tidbits for college students. 

Academic coursework: Listing courses taken while earning a degree or certification tells employers nothing about your abilities; it only speaks to your attendance. Neither does a GPA, which only demonstrates that you were a good student. Even if you are a recent college graduate, a better strategy is to write about a group project, a case study you wrote or a hypothetical model you built while in school. These types of details demonstrate to employers what you are capable of far better than a course list or GPA.

Rystad Energy Identifies Record Number Of High-Impact Wells For 2024 -- January 31, 2024

Locator: 46695DRILLING.

Link here.

In a release sent to Rigzone recently, Rystad Energy revealed that it has identified 36 potential “high impact” wells to be drilled or spud this year, which the company said is the highest annual total since it started tracking the market in 2015.

“This would be a sizeable jump from the 27 high impact wells drilled last year, and operators will hope for a better success rate,” Rystad noted in the release, which pointed out that eight of the 27 high impact wells drilled last year resulted in “commercially movable volumes”.

The high impact wells in 2023 discovered volumes of one billion barrels of oil equivalent, Rystad highlighted in the release, noting that this was a “sharp decline from the 3.5 billion barrels of oil equivalent found in 2022”.

“To make matters worse, 2023 was an expensive year, with drilling costs rising due to a significantly tighter rig market than in prior years, worsening the blow of a low success rate,” Rystad said in the release.

Of the 36 identified wells for 2024, 13 are in Africa, 10 are in Latin America, six are in Asia, and the Middle East, Europe, and North America each contain two, while Oceania contains one, Rystad outlined in the release. Fourteen of these wells will be drilled in frontier and emerging basins, with three opening up new plays entirely, Rystad noted.

Ya think SLB might be involved? SLB is the NVDA in the oil patch.

Reminder: Saudi Arabia to cut back on drilling. 

*****************************
People Who Know, Know

Link here.

This is simply incredible.

 And then this, link here.

Does anyone even remember Groningen any more? Wiki.