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.
Petroquest has made a discovery at its Thunder Bayou prospect in Louisiana. The company said it logged 490 gross feet of high quality pay within the primary Cris R2 objective. Petroquest has a 50% working interest and 37% net revenue interest in the well.
West Texas Intermediate and Brent extended declines from the lowest close in more than five years amid speculation that US oil producers will fight OPEC for market share. Futures dropped as much as 1.8% in New York and 1.9% in London. Explorers in the U.S. increased the number of operating rigs last week, defying predictions of a drilling slowdown, according to data from Baker Hughes Inc. Brent’s 14-day relative strength index has been below 30 since November 27, a reading that signals crude is oversold. Oil is trading in a bear market amid signs that US output is expanding even after the Organization of Petroleum Exporting Countries opted not to reduce its production target.
Energy services company Proserv has secured a major contract worth in excess of £13million with US oil major, Hess Corporation. The Westhill-based company will provide a 12-well subsea control system along with associated topside and subsea interface equipment for Hess’s deepwater Stampede development in the Gulf of Mexico.
The last time that U.S. oil drillers got caught up in a price war orchestrated by Saudi Arabia, it ended badly for the Americans. In 1986, the Saudis opened the spigot and sparked a four- month, 67 percent plunge that left oil just above $10 a barrel. The U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market. So while no one expects the Saudis to ramp up output now like they did then and U.S. shale oil companies are pledging to keep drilling regardless, the memory of that bust looms large for American industry executives on the eve of OPEC’s meeting tomorrow. As the Saudis gather with officials from the 11 other OPEC nations in Vienna, analysts are split on whether the group will cut output to lift prices or leave production unchanged to fight for market share with shale drillers. “1986 was the big price collapse and the industry did not see it coming,” said Michael Lynch, president of Strategic Energy and Economic Research in Wakefield, Massachusetts, who has covered the oil sector for 37 years. “It put a lot of them out of business. You just don’t forget it. It’s part of the cultural memory.” The Organization of Petroleum Exporting Countries, responsible for about 40 percent of the world’s output, pumped 31 million barrels a day in October, exceeding its official target of 30 million. West Texas Intermediate, the U.S. benchmark contract, rose 8 cents from the lowest price in more than four years to $74.17 a barrel in electronic trading on the New York Mercantile at 6:28 a.m. New York time. Brent, the marker for more than half of the world’s crude, gained 19 cents to $78.52. “Someone has to blink,” said Sarah Emerson, managing principal of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts. “OPEC is saying ‘Does it really have to be us?’” Saudi Arabia wasn’t the first to blink in 1986. The kingdom had been the world’s swing producer for years, boosting output when prices rose and scaling back when they dropped. As fellow OPEC members pumped more crude, the kingdom’s production fell to 3.175 million barrels a day in 1985 from more than 9 million in 1981, according to data compiled by Bloomberg. That left the country facing a growing budget deficit, according to Daniel Yergin’s Pulitzer Prize-winning book The Prize.
The labor shortage is squeezing a cattle industry already diminished over the past decade by mad cow disease, drought and floods. The herd in Canada, the world’s eighth-largest beef exporter, is the smallest in 21 years. Beef supplies are so tight that Costco Wholesale Corp. is importing more meat from the U.S., where prices are the highest ever. “It’s impossible to find workers,” said Tim Stewart, 57, who has four unfilled jobs and is considering selling the 4,000- head ranch in Rockglen, Saskatchewan, that his family has owned since 1910. “If someone came along with a big fat checkbook, we’d probably walk away.” In Alberta, Canada’s biggest producer of oil and beef, annual wages for specialized livestock workers was C$44,870, ($39,700) or 63 percent less than petroleum workers at C$73,105, according to a provincial government survey of employers last year. The data showed 72 percent of farm employers experienced hiring difficulties, with 25 percent reporting unfilled vacancies for more than four months.
An explosion at a Gulf of Mexico oil and gas platform operated by Fieldwood Energy LLC killed one person and injured three others, according to the Bureau of Safety and Environmental Enforcement. The explosion on Fieldwood’s Echo Platform occurred about 12 miles (19 kilometers) off the coast of New Orleans and was reported just before 3 p.m. local time yesterday, according to a statement on the bureau’s website. The platform wasn’t in production at the time, and no pollution was reported.
With crude at $75 a barrel, the price Goldman Sachs Group Inc. says will be the average in the first three months of next year, 19 U.S. shale regions are no longer profitable, according to data compiled by Bloomberg New Energy Finance.
The Division of Oil and Gas in Alaska has received more than 300 bids in its latest round of lease sales. The application for land include 57 bids in the Beaufort Sea, two bids in the North Slope foothills and 297 bids in the North Slope itself.
Technip has been awarded a subsea contract for the K2 field in the Gulf of Mexico. The deal, with Anadarko Petroleum Corporation for the K2 Riser Base Gas Life project, is located in the Green Canyon 608 at water depth of 1,300 metres. The company will design, manufacture and install pipeline end termination and end manifold and will also provide one of its construction vessels, the Deep Blue.
Caza Oil and Gas has entered into a farmout and exploration agreement with Clayton Williams Energy Inc (CWEI) for land in the Delaware Basin. The Houston-based company will jointly develop CWEI’s 14,738 leased acres in Reeves County, Texas. Both companies anticipate a one rig drilling program in the farmout area in 2015, beginning with the initial horizontal Wolfcamp well.
Cheniere Energy Inc. will sell $2.5 billion in convertible notes to help fund construction of a terminal to export natural gas from Corpus Christi, Texas.
Technology services company Applus RTD has opened a new office in Pennsylvania driven by its operations surrounding the Marcellus Shale formation. The new offices, based in Pennsylvania, are part of the company’s strategic growth plan following demand for its non-destructive (NDT) services in the area.
Petroleo Brasileiro SA is boosting fuel prices as Brazilian President Dilma Rousseff gives the state-run producer some relief from inflation-fighting policies and the lowest oil prices in four years. Shares gained. The Rio de Janeiro-based company known as Petrobras was scheduled to raise its subsidized refinery gate prices for gasoline by 3 percent and diesel by 5 percent at midnight local time, it said yesterday in a regulatory filing. Petrobras booked more than $44 billion in operating losses mainly from selling fuel at below-market prices during Rousseff’s first term and became the world’s most indebted producer. It was granted permission to raise fuel prices even after crude’s 25 percent plunge this year brought them more into line with international benchmarks. The decision comes after Rousseff won re-election by the narrowest margin in Brazil’s history and the central bank raised interest rates sooner than expected last week.