US drillers have taken a record number of oil rigs out of service in the past six weeks as OPEC sustains its production, sending prices below $50 a barrel. The oil rig count has fallen by 209 since December 5, the steepest six-week decline since Baker Hughes Inc. (BHI) began tracking the data in July 1987. The count was down 55 this week to 1,366. Horizontal rigs used in US shale formations that account for virtually all of the nation’s oil production growth fell by 48, the biggest single-week drop.
Petrobas said it has saved around $1billion in cost savings, design optimisation and productivity gains since it launched its Well Cost Reduction Programme in 2013. The company said these savings are expected to increase further as growing numbers of production development wells are constructed in pre-salt areas. Savings made in 2013 were $344 million, rising to US$1 billion by the end of 2014.
The chief executive of ConocoPhillips has called for US exports of surplus crude oil. Ryan Lance told policymakers attending a briefing at the Centre for Strategic and International Studies (CSIS) that the nation’s approaching surplus production of crude oil offers and opportunity for expanded global trade through exports. He said America could sustain the job creation and economic stimulation powered by the US energy renaissance, while putting downward pressure on consumer fuel prices and improving global energy security.
Pacific Energy Development has quadrupled its production rate on the Loomis well in Colorado. The recently completed 2-1H horizontal well in Weld County tested at an initial rate of 576 barrels of oil per day (bopd) and 630,000 cubic feet of gas. Frank Ingriselli, chairman and chief executive, said: "We are very pleased with the initial production rate from our first two of three Loomis wells, as it not only validates our improved completion techniques and value of this acreage, but also more than quadruples our current daily net production.
Venezuelan President Nicolas Maduro is seeking several billion dollars from Qatari lenders to help plug a budget gap after oil lost more than half its value. “We’re finalizing a financial alliance with important banks from Qatar that will give us sufficient oxygen to help cover the fall in oil prices and give us the resources we need for the national foreign currency budget,” he said on state television.
Petroamerica Oil has completed a stabilized test rate of 760 barrels of oil per day at its Langur-1X exploration well in the Llanos Basin of Colombia. The company said the LLA19 block was cased to evaluate 14.5feet of Gacheta Coil pay. Two intervals were perforated and the well was tested for 15 days under flow-assistance by coiled tubing and nitrogen.
Southern Energy Group has confirmed the acquisition of the JT Fields Berry Lease. Located in the Caldwell County, Texas, the JT Fields Berry Lease will receive a multi-well re-stimulation and secondary recovery project for the Austin Chalk reservoir with six wells.
Dome Energy has made an oil discovery on the Orange Field in Texas. The Gulf Lee Hager Fee 37 (GLHF#37) spudded on December 24 and reached a total depth (TD) of 6,550 feet.
Galilee Energy has confirmed plans to drill a well at the Hoffer Prospect in Texas. The Hoffer B well was spud on January 6 and will now be drilled to a total depth of 4,430metres. This is expected to take between 40 to 60 days.
Oil major Chevron has made a significant oil discovery at the Anchor prospect in the Gulf of Mexico. The Green Canyon block 807 well number two encountered oil pay in multiple Lower Tertiary Wilcox Sands. It was spudded in August 2014 and drilled to a depth of 33,749 feet.
Petrobas has moved the hull of P-66, the first of a series of eight sister FPSOs (floating production, storage and offloading units) being constructed to meet oil production demands offshore Brazil. It is also the first FPSO hull completely built in the country.
US oil drillers laid down the most rigs in the fourth quarter since 2009. And things are about to get much worse. The rig count fell by 93 in the three months through December 26, and lost another 17 last week, Baker Hughes Inc. (BHI) data show. About 200 more will be idled over the next quarter as US oil explorers make good on their promises to curb spending, according to Moody’s Corp.
Unconventional oil and gas (UOG) operations in the US that involve fracturing may be harming human health. By inference, research being carried out at the University of Missouri may sound alarm bells in the UK and wider EU where shale gas extraction (and oil) industry has yet to start. Up to now in the US, discussions have largely concentrated on potential air and water pollution from chemicals used in these processes and how it affects the more than 15million Americans living within one mile of UOG operations.
Oil’s biggest bust since the global recession was good for a few cases of whiplash. Just two months ago, Continental Resources Inc. (CLR), the shale driller founded by billionaire Harold Hamm, budgeted for $80-a-barrel oil and planned to spend $4.6billion in 2015. Six weeks later, with crude down 29% in the interim, Continental cut its 2015 budget to $2.7billion.
Rose Petroleum has spudded the State 1-34 Mancos well in Utah. The company said it had used a smaller rig for better cost efficiency and will bring in a larger rig in early January to drill the balance of the well to total depth. Surface casing will be set to 300 feet and once the surface casing is cemented in place, drilling operations will recommence.
US oil drillers, facing the lowest crude prices in five years and rising competition from suppliers abroad, idled the most rigs since 2012. Rigs targeting oil declined by 37 to 1,499 in the week ended December 26, the lowest since April, Baker Hughes Inc said, extending the three-week decline to 76. Those drilling for natural gas increased by two to 340, the Houston-based field services company said. The total rig count, which includes one miscellaneous rig, dropped 35 to 1,840, also an eight-month low.
EMGS (Electromagnetic Geoservices) has struck a licensing agreement worth $1.8million in Foz do Amazona in Brazil. The company will assist an international oil company in the provision of 3D EM data. It will be delivered in December 2014 and EMGS will book the sales in the fourth quarter of 2014.
A price war is brewing between Canada and Latin America over who will satisfy US Gulf Coast refiners’ hunger for heavy oil. The new Seaway Twin pipeline will almost double the amount of heavy Canadian crude coming to Gulf terminals and plants to about 400,000 barrels a day starting in January, according to Calgary-based based ARC Financial Corp. The shipments are growing even without the Keystone XL pipeline, which has been delayed for six years because of environmental opposition. The Canadian supply will square off against crudes from Mexico and Venezuela that have traditionally fed refineries along the Texas and Louisiana coasts.
Mexico’s Finance Ministry took out 50 billion pesos ($3.4 billion) from the state oil company Petroleos Mexicanos, according to a statement sent to the Mexican Stock Exchange. The payment this month was meant to “make management of public-sector finances more efficient,” according to the filing from the oil company, known as Pemex. The withdrawal marks a departure from the government’s usual methods of obtaining revenue from Pemex, which include taxes and royalties. Pemex typically provides about a third of the federal budget, and its contributions dropped this year as the oil company faced production declines and falling crude prices. During the first 11 months of 2014, taxes paid by Mexico City- based Pemex declined by about 260 billion pesos, or 22 percent, from the same period of 2013, according to records. The withdrawal shows “a near addiction to Pemex’s revenue by the ministry,” Fluvio Ruiz, a board member of the oil company’s petrochemical unit, said in a phone interview. He said he had no prior knowledge of the disclosure through his role at the company. Pemex and Finance Ministry press officials declined to comment.
Oil traded near the highest price in almost two weeks as the US economy expanded at the fastest pace in more than a decade, signalling fuel demand may increase in the world’s biggest consumer. West Texas Intermediate futures were down 0.6% in New York, paring a 3.4% gain yesterday. Gross domestic product rose at a 5% annual rate from July through September, the most since 2003, according to revised Commerce Department data.
Subsea 7 has been awarded a contract by the Hess Corporation for installation work on the Stampede Project in the Gulf Of Mexico. The deal includes work on flowlines, steel catenary risers, umbilicals, jumpers and associated subsea architecture which will tie-back two drill centres to a tension leg platform. The company said production would be via two 10-inch flowlines from each drill centre.
BP has challenged a federal judge’s ruling that the company’s exploration unit acted with gross negligence in causing the 2010 Gulf of Mexico oil spill, a decision that exposed the UK-based energy company to as much as $18 billion in fines under US law. This is BP’s first appeal of US District Judge Carl Barbier’s September decision that the company was 67% responsible for causing the worst offshore spill in US history. The judge determined rig-owner Transocean Ltd. (RIG) was 30 percent liable and cement-services provider Halliburton 3% responsible for the disaster, which killed 11 workers.
Oil extended losses below $60 a barrel amid speculation that OPEC’s biggest members will defend market share against US shale producers. Brent also slid after closing at the lowest price since July 2009. West Texas Intermediate futures fell as much as 1.9% in New York and are down 10% this week.
The US is producing the most oil in 31 years, economic growth is picking up and crude prices are plunging. So why is Americans’ use of petroleum waning? As the US moves closer and closer to energy independence, greater fuel efficiency, changing demographics and an increase in renewables are altering the dynamic that in the past would have seen demand for gasoline climbing. Gross domestic product, the value of all goods and services produced in the US, grew at a 2.4 % pace in the third quarter from the year-earlier period. Oil consumption fell 0.3%, government data show.
Mexico authorized preliminary bidding rules for new offshore blocks as the country prepares for an investment deluge in its recently opened oil industry. Oil regulator CNH approved rules today for 14 shallow-water exploratory blocks that will be auctioned to private companies by the end of July, according to a live feed of the meeting. In a separate vote, the agency also approved production-sharing contracts for the winners.