Where In The World Is Abqaiq? Carrying Coal To Newcastle? No Way, Jose! -- February 9, 2019

Updates

March 20, 2019: off the east coast of South Africa. Destination now: Sikka, India. 

February 21, 2019: update here. Off the coast of Venezuela; has new destination: South Africa.

Original Post

One can track the Abqaiq at this link.

• origin: SA RTA
• destination: VE JOT
• current position: just off the west coast of Morocco

"Carrying coal to Newcastle?" Literally? No, for the benefit of Occasional-Cortex, that's a phrase to describe something pointless or superfluous. Although in this case, it's probably neither.

Story at Platts. Data points:

• a Saudi state-owned tanker: the VLCC Abqaiq
• VLCC: very large crude carrier, capable of carrying two million bbls of crude oil
• half-full
• destination: Venezuela's main crude oil terminal, Jose, Venezuela
• departed the Yanbu port on the Red Sea on January 20, 2019
• to arrive at destination on February 11, 2019
• very unusual for Saudi to ship oil to Venezuela, although it has happened in the past
• Venezuela needs diluent to mix with heavy oil to make it possible to ship it
• Platt's suggests the Saudi tanker could have "entered" the wrong destination code
• half-full; possibly the VLCC is headed to Venezuela to fill the tanker, and then proceed to India; India's Reliance has previously used Bahri tankers to transport Venezuelan crude to its refineries on the west coast of India

Not mentioned: if Venezuela routinely needs light oil to mix with its heavy oil for shipment, one would assume under "better" times, Venezuela would get that light oil from the US, but with US-imposed sanctions, Venezuela may be looking for alternatives.

Railbit, dilbt, shipbit, a dollar,
All for heavy oil, stand up and holler.

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

Global Warming

Northern California, 2019

Chart Of The Day -- US Crude Oil Production -- February 9, 2019

From the EIA, the Hubbert peak oil theory:



The little blip "down" in 2014 - 2016: the two years that Saudi opened their taps in an attempt to destroy the US shale sector.

Twenty New Permits WIth Some Large Mega-Pads Being Proposed -- February 8, 2019

Active rigs:

$52.72	2/8/2019	02/08/2018	02/08/2017	02/08/2016	02/08/2015
Active Rigs	63	57	37	42	136

Twenty new permits:

• Operators: CLR (11), Enerplus (9)
• Fields: Haystack Butte, Moccasin Creek
• Comments: 
• CLR has permits for an 11-well Gordon Federal pad in Haystack Butte in section 8-148-97 (see graphic below); 
• Enerplus has permits for a 9-well "mineral/rock" pad Moccasin Creek in section 16-147-93 (see graphic below):

Eight producing wells (DUCs) reported as completed:

• 32761, 2,023, Rimrock Oil & Gas, Two Shields Butte 13-21-33-13H, Heart Butte, t12/18; cum 37K 12/18 (24 days); neighboring wells with huge jump in production;
• 32693, 3,033, Rimrock Oil & Gas, Two Shields Butte 13-21016-3H3, Heart Butte, t12/18; cum 48K 12/18; (26 days); neighboring wells with huge jump in production;
• 32762, 1,103, Rimrock Oil & Gas, Two Shields Butte 13-21-33-13H3A, Heart Butte, t12/18; cum 18K 12/18; (22 days); neighboring wells with huge jump in production;
• 32692, 1,716, Rimrock Oil & Gas, Two Shields Butte 13-21-16-3H, Heart Butte, t12/18; cum 32K 12/18; (26 days); neighboring wells with huge jump in production;
• 33373, 1,936, EOG, Liberty 44-1311H, Parshall, t818; cum 132K 12/18; (less than 5 months)
• 33374, 2,011, EOG, Liberty 45-1311H, Parshall, t8/18; cum 114K 12/18; (less than 5 months)
• 34271, 1,822, EOG, Liberty 114-1311H, Parshall, t8/18; cum 134K 12/18; (less than 5 months)
• 31882, n/d, Whiting, Hecker 11-18PHU, Bell, t--; cum 21K 12/18; (45 days) (#23419)

The graphics:

Proposed location for CLR's Gordon Federal pad -- 

Meanwhile, the proposed location for Enerplus' "mineral/rock" 9-well pad in NWNW 16-147-93. This will be a mix of middle Bakken and first bench Three Forks wells, half running north, and half running south.

Two producing wells of interest in this area:

• 18627, 746, Enerplus, Henry Bad Gun 9C-4-1H, t4/12; cum 269K 12/18; nice jump in production when it came back on line in 9/18;

• 18790, 1,773, Enerplus, Henry Bad Gun 16B-21-1H, t10/10; cum 464K 12/18; a steady Eddy we;; no jump in production; typical Bakken well with steep decline in the beginning and then plateau at 1,500 bbls/month (12/18)

More On Apache -- February 8, 2019

Over at SeekingAlpha -- see also this link about Apache, earlier.

Subdued Permian oil growth indicates that a large portion of its domestic upstream growth is likely to be represented by natural gas and natural gas liquids, which is consistent with past trends. In Q3 2018, Apache’s Permian production rose by 38% year over year to 222,000 BOE/d while its oil output rose by just 16% during that period. During that quarter, Apache's Permian production mix was 41% oil, 21% NGLs, and 38% natural gas.

Keep in mind that international output declines may be represented more so by crude oil than natural gas, particularly as its North Sea and Egyptian operations are primarily oil producers (crude represented 63% of its Egyptian output and 84% of its North Sea output in Q3 2018).

It will be interesting to see how Apache’s Alpine High strategy turns out over the long haul. By November 2018, the firm was pumping 55,000 BOE/d out of the area with eight rigs actively developing the play, up from a minimal amount of output in late-2016. Apache had drilled 180 wells and placed 125 wells online in the Alpine High area as of November 2018, giving it a large enough slate of well data to gauge how economical developing the region will actually be (in theory, expected well returns are strong enough to justify stepping up the pace of its development activity). Major midstream investments are being made to support this growth trajectory.

Generally speaking, the most lucrative parts of unconventional liquids-oriented plays (such as the Eagle Ford, Bakken, Permian, SCOOP, STACK, Powder River Basin, DJ Basin and others) are the most liquids-rich regions within those plays, regions that can bring wells online with high oil, condensate, and natural gas liquids cuts. Domestic natural gas prices in America have been and continue to be very low, a paradigm that is unlikely to change anytime soon. So unless these gassier wells can achieve the kind of performance seen at the Marcellus or Haynesville gas plays in terms of estimated ultimate recovery rates, it will be up to Apache to make sure it can maximize its natural gas liquids and condensate output as best it can from its Alpine High drilling inventory.

Disclaimer: again, 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.

Ban on Venezuela Oil -- Minimal Effect On US -- February 8, 2019

I was just going to link the article at another post (which I did) and leave it at that, but it's too important to get lost in all the clutter.

Data points:

• 14 US refineries imported Venezuelan crude oil in 2018
• Venezuelan imports declined by 129,000 bopd from same period one year ago (2017)
• imports from Canada and Mexico rose by 113,000 bopd and 48,000 bopd, respectfully, from 2017
• 113,000 + 48,000 = 161,000 -- well above the 129,000 lost from Venezuela the year before
• if I recall correctly, total amount of Venezuelan oil being imported by US in most recent data, about 500,000 bopd -- a drop in the bucket compared to Canadian, Mexican, Mideast capacity to replace 
• Canada has a self-imposed cap on heavy oil production; that cap could be rescinded overnight
• Mexico's opportunity to shine
• Saudi looking at options

Over at oilprice:

The U.S. sanctions on Venezuela’s oil industry and state oil firm PDVSA are unlikely to have a significant impact on the refinery runs of the U.S. refiners, the Energy Information Administration (EIA) said in an analysis this week.

U.S. imports of crude oil from Venezuela have been falling in recent years, and U.S. refiners have been replacing heavy crude from Venezuela from heavy crude grades from other sources, the EIA said.

Last week, the U.S. imposed sanctions on PDVSA to “help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela,” Secretary of the Treasury Steven T. Mnuchin said.

Those sanctions will essentially eliminate U.S. imports of Venezuelan crude oil as the full effects of the sanctions emerge, the EIA said, but noted that it doesn’t expect “any significant decrease in U.S. refinery runs as a result of these sanctions.”

Imports of crude oil from Venezuela are still a significant portion of the U.S. Gulf Coast imports, but they have been falling in recent years due to the collapsing Venezuelan oil production. Gulf Coast imports of Venezuelan crude oil fell to an average of 498,000 bpd between January and November 2018 from an average of 618,000 bpd in the first 11 months of 2017, the EIA said.

Out of the 14 U.S. refineries that imported crude from Venezuela last year—12 of which in the Gulf Coast—imports in January-November declined by 129,000 bpd compared with the same period in 2017. While imports from Venezuela declined, imports from Canada and Mexico to these refineries rose by 113,000 bpd and 48,000 bpd, respectively, from 2017 levels, the EIA has estimated.

“Moving forward, refineries may also choose to run lighter crude oils because transportation constraints may limit the availability of heavy crude oils,” according to the EIA.

Much more at the link, and oh, by the way, sort of explains to millennials why the need for oil will never, ever go away, no matter what they "think." In quotes, 'cause I use the word "think" loosely whenever I put "think" and "millennials" in the same sentence.