Back on November 5, 2015, I selected a few
countries to see where the US was getting its imported oil. Venezuela
stood out; while imports have been decreasing overall, US imports from
Venezuela have been increasing. See data at the link which will also provide links to official government sites. (In retrospect, I might be wrong; snapshots of particular monthly imports can be deceiving; see below.)
I have talked about this before. US
refiners along the Gulf Coast need heavy oil to off-set the glut of
light oil.
US refiners along the Gulf Coast invested $6 billion to
optimize their operations for heavy oil from Canada before the Bakken
shale revolution. Refiners scrambled to figure out what to do. It turns
out a blend of heavy oil and light oil works (though not as good as what
the refiners had expected if using only heavy oil from Canada). Now we
have a Bloomberg story that says the same thing -- regular readers of the blog and RBN Energy were already well aware of this. From the Bloomberg story:
President Barack Obama’s rejection of TransCanada Corp.’s proposed
Keystone XL pipeline could give Venezuela’s ailing economy a lifeline.
With
the world’s largest oil reserves, the South American country produces
heavy crude that’s similar in consistency to the one coming from
Canada’s oil sands, and its economy relies largely on shipping it to the
same U.S. Gulf Coast refineries that Keystone XL was meant to supply.
“The
number one beneficiary of all this will be Venezuela and other
suppliers of heavy oil that ship to the Gulf Coast by tanker,” IHS
Energy Inc. Vice President Jim Burkhard said by e-mail.
Venezuela
is facing an economic crisis as the price of crude, its main source of
revenue, has plummeted by more than half since June last year to trade
below $50 a barrel. The slump has caused a rift within the Organization
of the Petroleum Exporting Countries, of which Venezuela is a member, as
Saudi Arabia continues to pump crude from the ground at an
unprecedented pace.
The Canadians should be paying attention.
The Bloomberg article negates to tell us the the Keystone was dead November 10, 2011. Wow, it's November 10th today -- that was exactly four years to the day that I said the Keystone was dead. Obama simply made it official last week, but it didn't change anything. Venezuela imports have been increasing ever since 2013.
This will be very, very interesting to follow for the next twelve months -- to see if the official announcement made any real difference. I bet not based on past history.
Remember: the Bakken boom in North Dakota began in 2007. Imports from Venezuela started falling after that. The Keystone was dead as of 2011.
In the fiscal year that ended September 30, 2015, the average monthly net HTF tax receipt was about $3 billion, and the average monthly outlay was nearly $4 billion. With outlays exceeding receipts and HTF balances dwindling, Congress in July transferred $8 billion from other sources to ensure the fund's solvency. Before this transfer, the HTF was at $6.1 billion, the lowest monthly value in decades. --- EIA
Another shout-out / thanks to the reader who reminded me to check in on FracFocus if the NDIC file does not include completion data. FracFocus requires the API number so if I check FracFocus I include the API number when reporting the well.
Flashback: it's hard to believe that a single wildcat well started "all this in the Three Forks" and that it was as far back as 2008 (I would have guessed, 2010, and would have been wrong). From The Bismarck Tribune, June 17, 2008:
A single successful oil well tapped below the Bakken shale
formation in western North Dakota has spurred speculation that a
separate - and perhaps rich - oil-producing reservoir may be buried
in the state's oil patch.
Enid, Okla.-based Continental Resources Inc. says its new oil
well in Dunn County produced an average of about 700 barrels of oil
a day during its first week of production last month.
It was Continental's first well in the Three Forks-Sanish
formation, said Harold Hamm, the company's chairman. The formation
is made up of sand and porous rock directly beneath the Middle
Bakken, which lies two miles under the surface in western North
Dakota and holds billions of barrels of oil.
See this presentation which I believe was published about that time. I might come back to this one again, particularly slide 30.
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Notes to the Granddaughters
After two hours of water polo practice, our oldest granddaughter is ravenous for a snack on the way home. Last night I forgot to bring something from home, so after dropping her off at the natatorium, I drove back to Tom Thumb (major grocery store in this part of the world) to see what I could find. Incredible. Apparently, at the end of the day, they clear out their pastry shelves and mark everything down for "quick sale." Plastic containers with six big fancy donuts, priced at $4.99 during the day, are marked down to 99 cents. [This might explain why Houston and San Antonio lead the nation in obesity data.]
I had one donut this morning; I did not notice much "aging." Actually, it was quite good. Less than 20 cents vs regular price of 75 cents and much less than chocolate croissant at Starbucks. I won't even get into cost of coffee at home vs Starbucks.
Meanwhile, the middle granddaughter, 4th grade, is working on her "healthy eating assignment" this week. Students are recording everything they eat and calculating the calories.
September 13, 2017: Venezuela is asking Russia to restructure its debt. Venezuela faces $3.5 billion in bond payments in October and November, 2017, with less than $1 billion of liquid reserves. Venezuela's debt to Russia stood at $2.84 billion as of September, 2016. Russia's Rosneft lent more than $1 billion to PDVSA in April this year (2017) in prepayments for future oil supplies, bringing loans to the oil company to around $6 billion in the past few years.
July 23, 2017: Venezuela could be the first sovereign producer to fail. At Bloomberg. From my perspective, Venezuelan
heavy oil = Canadian heavy oil. Any loss in Venezuelan exports will be a
win for Canada. Too bad the Keystone XL was never built.
February 2, 2016: Venezuela begins importiing light oil. Production of light crude oil falls short; Venezuela needs light oil to blend with heavy oil for shipping, processing.
Back in the late 1970s, when Venezuela’s oil wealth fueled the supersonic Concorde’s flights from Paris to Caracas,
the idea that a poverty-stricken, landlocked nation known for bowler
hats and coca leaves would someday surpass it was unthinkable. How times
have changed.
Bolivia, South America’s poorest country on a
per-capita GDP basis, leads or is poised to surpass Venezuela in a
number of areas. Already plagued with a plunging currency and the
world’s fastest inflation rate, Venezuela’s decline is stunning for a
country that holds the world’s largest reserves of oil and whose late
president, Hugo Chavez, once served as a mentor for Bolivia’s leader,
Evo Morales.
While Morales took over Bolivia’s natural
gas industry in 2006, his policies were never as radical as Chavez, who
once walked through Caracas’s downtown, pointing at various companies
and saying "nationalize it." Morales and Finance Minster Luis Arce
“understood the importance of having orderly fiscal policy,” said Ben
Ramsey, chief economist and head of sovereign debt strategy for the
Andean region at JPMorgan Chase & Co. in New York, who follows the
two countries. “They have massive reserves vis-à-vis their economy.”
After peaking at more than $40 billion in 2008, Venezuela’s reserves
have tumbled to less than $15 billion, much of that in gold. While
falling energy prices have also affected Bolivia, its reserves have been
on an upward or stable trajectory under Morales, peaking at about $15
billion last year from less than $5 billion when Morales took office in
2006.
But cash is running low. Gold reserves are falling sharply as Venezuela liquidates them to raise funds to meet debt payments. Also, the Wall Street Journal reported that Venezuela withdrew $467 million in cash reserves that it keeps
with the International Monetary Fund, a sign that Venezuela is
scrambling to raise as much money as it can.
And inflation
is running at around 85 percent, at least according to official
estimates, which are likely vastly understating the true inflation rate.
Crime rates are some of the worst in the hemisphere.
.... oil prices need to rise to $88 per barrel in order to guarantee global
oil investments. “If the price of oil stays at $40, there will be a
depreciation of investment, and within a few months we are going to see a
price of $150, $200. Who does this suit? Nobody,” the Venezuelan president said on state
TV.
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The Apple Page
I find this interesting. This is a good example of government regulations holding back innovation. The link is at Macrumors:
Cook also said Apple doesn't have plans to introduce sensors or other
health features that would cause the FDA to get involved with the
device. He didn't rule out the possibility of other products that
require FDA approval, like apps.
We don't want to put the
watch through the Food and Drug Administration (FDA) process. I wouldn't
mind putting something adjacent to the watch through it, but not the
watch, because it would hold us back from innovating too much, the
cycles are too long. But you can begin to envision other things that
might be adjacent to it -- maybe an app, maybe something else."
I would trust the sensors Apple would use and they would eventually be "rubber-stamped" by the FDA, but not for at least a decade.
Cook knows what he is doing.
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Shadows in a Mirror, Chris Isaak
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Notes to the Granddaughters
I get a lot of free stuff by writing reviews for Amazon.com.
My wife says I am being dishonest: I rate almost everything 5 stars and am not "honest" in the reviews. (In fact, I am honest. The fact is, I only order stuff that is worth "5 stars." Why would I order something that would be less than 5 stars? It's not like I have time to waste.)
Today, I reviewed an advance copy of a book that will be released in a few weeks, Sex in the Sea, a very serious scientific marine biology book. I received it for free, but I specifically ordered it because I thought it might be something our oldest granddaughter would be interested in. She wants to become a marine biologist.
I gave the most honest review I have ever written, and I used words and phrases directly from the book.
I have written hundreds, maybe thousands of reviews for Amazon, and have never had a review rejected.
I posted the review and then sent a copy to my wife who is out in California. I received a phone call almost immediately despite the time difference. She was probably still in bed this morning when she called. She told me that I couldn't possibly post that review and I had to take it down immediately. I reiterated what she had told me about my reviews, and that this time I was going to write one of my best "honest" reviews. She was not in a mood to be trifled would.
I told her the review had been rejected by Amazon because it violated Amazon's policies.
She was relieved.
I re-submitted the review, replacing the "offensive" words with hyphens. Again, not one word was a swear word or an inappropriate word except when used as used in the book. This time, the review was accepted. The recommendation was the same: 3 stars. The only thing that was changed, the words Amazon did not want used were replaced with hyphens. [I have subsequently edited the review again, eliminating the hyphens so that there is nothing "objectionable" in the review. It is still rated 3 stars, although now that I have spent more time with the book, maybe 4 stars is warranted.]
It was interesting to learn that Amazon.com rejected an honest review because I mentioned that some sea creatures engage in group sex.
Disclaimer: the usual disclaimer holds. There will be typographical and factual errors. Opinions and facts will be interspersed; it is often hard to tell opinion from fact; the shorthand and notes are for my use only; feel free to read them but don't quote me on any of this stuff. This is not an investment site. Do not make investment or financial decisions based on anything you read here or think you may have read here. If this information is important to you, go to the source.
Updating some old wells. Note the date these wells were drilled (the "t" date is the test date -- so "t5/07" means the well was tested May, 2007. Wells are tested about the time they are completed/fracked, and at the time these wells were drilled, they were fracked soon after.
Also note the total production to date (cum XXXK 9/15).
These wells were drilled when:
average EUR in the Bakken was estimated to be about 350,000 bbls
not a lot was yet known about the Bakken (where the sweet spots were; how best to complete the wells)
when infrastructure was greatly lacking
These wells will be producing for another 20 years, if not longer.
These wells are back on active status:
16457, 922, EOG, C & B 1-31H, Parshall, went inactive 1/15; back on status of 9/15; t5/07; cum 434K 12/14;
16997, 1,520, EOG, Van Hook 1-13H, t6/08; cum 579K 9/15;
placed on inactive status in 4/13; appears to be pumping again in 7/13;
producing as of 7/13; again, off-line, 10/14; again, off-line as of
11/14; back on status as of 9/15;
17092, 3,027, Behr 11-34H, Sanish; s4/08; produced 500,725 bbls in 591 days; inactive Jan/Feb 2015; now back on status 3/15; 1.03 million 9/15;
According to the NDIC, these wells are still flowing freely (no pump):
17158, 4,184, Whiting, LL, Richardson
Federal 11-9H, Sanish, t10/08; F; cum 895K 9/15;
According to the NDIC, this well is still on active status but it was on-line for only five (5) days in August, 2015, and only one (1) day in September, 2015, and produced no oil last month:
17287, 1,137, EOG, Austin 22-31H, Parshall, t10/08, cum 861K 9/15;
We now know why this well was taken off-line:
18193, IA/1,666, OXY USA, Martin 34-31H, t10/09; cum 320K 3/15; not much production since May, 2014; is off-line; inactive; a sundry form dated 3/31/14 says that 12.28 tons of contaminated soil was removed; another well is being added to the pad; the existing tank batter and berm will be removed to ensure adequate cleanup and a new lined dike will be installed to accomodate the dual well pad;
This well is waiting to be re-drilled according to a sundry form from 2014; this well has never been on a pump:
18408, IA/1,945, Amber Renee 25-36H, Sanish; one mile to the west of the Chandler James; t2/10; F ; 822K 8/14 -- 661K in about two years; no pump; still 9K/month 1/13; IA 1/14; still inactive 7/15; the most recent sundry form shows this well is scheduled to be "re-drilled";
I continue to marvel at the Bakken. The boom began in Montana in 2000, and in North Dakota in 2007. Going back to the daily activity report dated November 1, 2007, the year the ND Bakken boom began, the new permit numbers were 16888 - 16891. Today, the new permits are numbered 32230 - 32231, and the producing wells are file numbers as high as 31011. Who wudda guessed eight years ago? I know I'm speaking heresy here, but I am thrilled that everything has slowed down in the Bakken. There are a lot of good things one could say about the slowdown but regular readers can probably figure out what I'm talking about. Those who arrive at the blog/site by accident wouldn't care any way, so might as well move on.
Active rigs:
11/9/2015
11/09/2014
11/09/2013
11/09/2012
11/09/2011
Active Rigs
65
193
182
192
198
First of three:
In My Secret Life, Leonard Cohen Perhaps one of the best songs ever.
Wells coming off the confidential list Tuesday:
31001, A, Hess, EN-Cvancara A- 155-93-3231H-8, Robinson Lake, API: 33-061-03649; no test date, cum 16K first 27 days; according to FracFocus this well was fracked 8/4 - 6/2015; with 1,644,636 gallons water, and 14.93% sand (from RockPile Energy); for those interested, search the blog for RockPile Energy;
31010, SI/NC, EOG, Shell 46-3229H, Parshall, no production data, API: 33-061-03652;
Two (2) new permits:
Operators: Denbury, WPX Fields: Cedar Hills (Bowman), Mandaree (Dunn) Comments:
Producing wells completed:
30702, 750, SM Energy, Hagen 3-28HS, Burg, t10/15; cum 6K 9/15;
30777, 1,960, BR, CCU Red River 7-2-15TFH, Corral Creek, t10/15; cum --
31013, 1,348, Newfield, Wahus Federal 152-97-13-24-4H, Westberg, t9/15; cum 9K 9/15;
31012, 833, Newfield, Wahus State 152-97-12-1-12H, Westberg, t9/15; cum 7K 9/15;
31011, 1,348, Newfield, Wahud Federal 152-97-13-24-1H, Westberg, t9/15; cum 9K 9/15;
Denbury canceled one permit today; #30026, CHSU 42-31SH in Bowman County.
Second of three:
I'm The One Who Got Away, Devil Doll
Oh, why not? One more:
My Sweet Lord, George Harrison Perhaps one of the best songs ever. Also.
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31001, see above, Hess, EN-Cvancara A- 155-93-3231H-8, Robinson Lake:
