Oil & Gas

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Oil & Gas

Postby Heracleum Persicum » Mon Apr 07, 2014 2:44 am

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Re: Oil & Gas

Postby Endovelico » Sat Oct 11, 2014 12:04 pm

Why Oil Is Plunging: The Other Part Of The "Secret Deal" Between The US And Saudi Arabia
Submitted by Tyler Durden on 10/10/2014 18:19 -0400

Two weeks ago, we revealed one part of the "Secret Deal" between the US and Saudi Arabia: namely what the US 'brought to the table' as part of its grand alliance strategy in the middle east, which proudly revealed Saudi Arabia to be "aligned" with the US against ISIS, when in reality John Kerry was merely doing Saudi Arabia's will when the WSJ reported that "the process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority."

What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit.

A glimpse of the answer was provided earlier in the article "The Oil Weapon: A New Way To Wage War", because at the end of the day it is always about oil, and leverage.

The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia...

... which however is merely using "the oil weapon" to target the old slash new Cold War foe #1: Vladimir Putin.

To wit:

Saudi Arabia to pressure Russia, Iran with price of oil

Saudi Arabia will force the price of oil down, in an effort to put political pressure on Iran and Russia, according to the President of Saudi Arabia Oil Policies and Strategic Expectations Center.

Saudi Arabia plans to sell oil cheap for political reasons, one analyst says.

To pressure Iran to limit its nuclear program, and to change Russia's position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America, says Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center. The marked decrease in the price of oil in the last three months, to $92 from $115 per barrel, was caused by Saudi Arabia, according to Abanmy.

With oil demand declining, the ostensible reason for the price drop is to attract new clients, Abanmy said, but the real reason is political. Saudi Arabia wants to get Iran to limit its nuclear energy expansion, and to make Russia change its position of support for the Assad Regime in Syria. Both countries depend heavily on petroleum exports for revenue, and a lower oil price means less money coming in, Abanmy pointed out. The Gulf states will be less affected by the price drop, he added.

The Organization of the Petroleum Exporting Countries, which is the technical arbiter of the price of oil for Saudi Arabia and the 11 other countries that make up the group, won't be able to affect Saudi Arabia's decision, Abanmy maintained.

The organization's decisions are only recommendations and are not binding for the member oil producing countries, he explained.

Today's Brent closing price: $90. Russia's oil price budget for the period 2015-2017? $100. Which means much more "forced Brent liquidation" is in the cards in the coming weeks as America's suddenly once again very strategic ally, Saudi Arabia, does everything in its power to break Putin.

http://www.zerohedge.com/news/2014-10-10/why-oil-plunging-other-part-secret-deal-between-us-and-saudi-arabia



Except that things may not work out exactly like that... Suppose Putin sends troops to Syria to help Assad... Suppose Iran finds an excuse (not too difficult) to bomb Saudi oil export facilities...
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Re: Oil & Gas

Postby Doc » Sat Oct 18, 2014 6:20 am

Endovelico wrote:
Why Oil Is Plunging: The Other Part Of The "Secret Deal" Between The US And Saudi Arabia
Submitted by Tyler Durden on 10/10/2014 18:19 -0400

Two weeks ago, we revealed one part of the "Secret Deal" between the US and Saudi Arabia: namely what the US 'brought to the table' as part of its grand alliance strategy in the middle east, which proudly revealed Saudi Arabia to be "aligned" with the US against ISIS, when in reality John Kerry was merely doing Saudi Arabia's will when the WSJ reported that "the process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority."

What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit.

A glimpse of the answer was provided earlier in the article "The Oil Weapon: A New Way To Wage War", because at the end of the day it is always about oil, and leverage.

The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia...

... which however is merely using "the oil weapon" to target the old slash new Cold War foe #1: Vladimir Putin.

To wit:

Saudi Arabia to pressure Russia, Iran with price of oil

Saudi Arabia will force the price of oil down, in an effort to put political pressure on Iran and Russia, according to the President of Saudi Arabia Oil Policies and Strategic Expectations Center.

Saudi Arabia plans to sell oil cheap for political reasons, one analyst says.

To pressure Iran to limit its nuclear program, and to change Russia's position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America, says Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center. The marked decrease in the price of oil in the last three months, to $92 from $115 per barrel, was caused by Saudi Arabia, according to Abanmy.

With oil demand declining, the ostensible reason for the price drop is to attract new clients, Abanmy said, but the real reason is political. Saudi Arabia wants to get Iran to limit its nuclear energy expansion, and to make Russia change its position of support for the Assad Regime in Syria. Both countries depend heavily on petroleum exports for revenue, and a lower oil price means less money coming in, Abanmy pointed out. The Gulf states will be less affected by the price drop, he added.

The Organization of the Petroleum Exporting Countries, which is the technical arbiter of the price of oil for Saudi Arabia and the 11 other countries that make up the group, won't be able to affect Saudi Arabia's decision, Abanmy maintained.

The organization's decisions are only recommendations and are not binding for the member oil producing countries, he explained.

Today's Brent closing price: $90. Russia's oil price budget for the period 2015-2017? $100. Which means much more "forced Brent liquidation" is in the cards in the coming weeks as America's suddenly once again very strategic ally, Saudi Arabia, does everything in its power to break Putin.

http://www.zerohedge.com/news/2014-10-10/why-oil-plunging-other-part-secret-deal-between-us-and-saudi-arabia



Except that things may not work out exactly like that... Suppose Putin sends troops to Syria to help Assad... Suppose Iran finds an excuse (not too difficult) to bomb Saudi oil export facilities...


Suppose Kim Jong Un decides to use that as a excuse to invade Honduras? After all there is still not actual confirmation that he has reappeared. Just some undated photos.

He could be in a submarine off the central American coast as we type here

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Re: Oil & Gas

Postby Doc » Sat Oct 18, 2014 6:41 am

http://www.nytimes.com/2014/10/18/busin ... pe=article
Despite Slumping Prices, No End in Sight for U.S. Oil Production Boom


By CLIFFORD KRAUSSOCT. 17, 2014

Oil wells like these in North Dakota have helped ramp up production to 8.7 million barrels a day, the most in nearly 25 years. Credit Jim Wilson/The New York Times

HOUSTON — Falling oil and gasoline prices have sent oil company stocks tumbling, but oil experts say the boom in American energy production shows no signs of slowing down, keeping the market flush with crude and gasoline prices low.

Even after a drop of as much as 25 percent in oil prices since early summer, several government and private reports say that it would take a drop of $10 to $20 a barrel more — to as low as $60 a barrel — to slow production even modestly.

On the downside, taxes and royalties on oil will decline, potentially cutting into the finances of oil-producing states like Texas, Alaska, Oklahoma and North Dakota. And it will continue to put pressure on the Organization of the Petroleum Exporting Countries to cut output to support prices, as well as cause economic pain to big producers like Russia, Venezuela and Iran.

Ali al-Naimi, the Saudi oil minister, in June. He has said that lower prices are no cause for alarm.

As Oil Prices Plummet, Saudi Arabia Faces a Test of StrategyOCT. 15, 2014

Current production levels can be sustained in the shale fields in 2015 even if the Brent global oil benchmark, which fell to just under $84 a barrel at one point this week, dropped to as low as $60 to $65, according to Rystad Energy, an international oil and gas consultancy based in Norway.

Pressure on Oil Economies

The falling price of oil creates varying degrees of financial difficulties for countries that rely heavily on its export. According to research by Deutsche Bank, the point at which their national budgets break even varies from about $125 a barrel for Iran to less than $75 for Kuwait.

“Oil output will respond very slowly to a drop in oil prices,” Bjornar Tonhaugen, vice president for oil and gas markets at Rystad Energy, wrote in a report released this week. “Markets may even be oversupplied next year more than previously thought.”

Slowing American oil production is like slowing a freight train moving at high speed. The current production of 8.7 million barrels a day, the highest in nearly a quarter-century, is more than a million barrels a day higher than it was only a year ago. Most companies make their investment decisions well in advance and need months to slow exploration because of contracts with service companies. And if they do decide to cut back some drilling, they will pick the least prospective fields first as they continue developing the richest prospects.

The Energy Department this week reported that only 4 percent of shale production in North Dakota, Texas and other states needed an oil price above $80 a barrel for producers to break even on investments. One reason is that improved efficiencies in hydraulic fracturing and other modern production techniques have increased the output of each new well month after month in recent years.

For example, the Energy Department expects that new oil production from new wells in the North Dakota Bakken shale field will increase by seven barrels a day next month over this month, and in the Texas Eagle Ford field by eight barrels a day. Put together, over a couple of months that translates into tens of thousands of new barrels every day across the country, with no increase in investment.

Sadad Al Husseini, the former head of exploration and production at Saudi Aramco, predicted that the United States would add a million more barrels of oil in daily production over the next year.

“What is softening prices is weaker demand because of the global economy and the growing volume of North American production,” Mr. Al Husseini said in an interview. “So will prices bottom? It depends on what comes from the U.S.”

He added that when investors start seeing $75 to $80 oil, that will cut back some ambitions, and that could mean “a leveling off of new supplies by midyear 2015.”

The United States has banned most oil exports for four decades, but the expanded production has slashed imports from many OPEC countries, forcing them to drop their prices in Asia. The United States is also expanding its exports of refined products like gasoline and diesel, which are allowed, and that is cutting into production from other countries.

The Paris-based International Energy Agency, which accumulates and analyzes data for the industrialized nations, this week identified deep water offshore production, the Canadian oil sands and some of the American oil shale fields as the most susceptible to cuts in investment and production when oil prices fall. But only about 8 percent of these types of production require $80 a barrel oil to break even.

All told, the I.E.A. said only about 2.6 million barrels out of total world production of just over 90 million barrels requires a break-even price of $80, including some fields in China, Indonesia, Malaysia, Nigeria and Russia, which are high-cost fields in part because of how much the governments require producers to pay them in taxes and royalties.

Global and American benchmark oil prices bounced back a bit on Friday, ranging between roughly $83 and $86. The American benchmark, West Texas Intermediate, fell below $80 for the first time in two years briefly Thursday morning, and some oil experts say it could break the symbolic threshold again in coming days.

Lower oil prices mean lower prices at the pump for American consumers. The average national price for a gallon of regular gasoline on Friday was $3.14, 10 cents lower than it was a week ago and 22 cents lower than a year ago, according to the AAA motor club. That is the lowest price in more than three years.

Roughly a third of the nation’s gas stations are selling gasoline for less than $3 a gallon. The average American family saves about $120 a year for every dime drop in the gasoline price, experts say.

Many oil experts say that Saudi Arabia and several other OPEC countries that have shaved their prices in recent days are trying to drive down global production, and particularly American and Canadian production, to protect their market share. But with a growing population and struggling to tamp down potential domestic unrest, Saudi Arabia carries a rising social service budget that is financed almost entirely by oil money.

Over the long term, it may need to stretch its production as much as or more than the United States.

“For the government to balance budgets on an ongoing basis, higher oil prices are inevitably required,” Badr H. Jafar, president of Crescent Petroleum, a United Arab Emirates-based oil and gas company, said in an email exchange. “Otherwise, if oil prices continue to fall, maximizing production may be an imperative to securing required higher revenues, and that in turn might have a catastrophic effect with the creation of a major glut.”
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Re: Oil & Gas

Postby Heracleum Persicum » Sat Oct 18, 2014 7:08 am

.

In final analysis, lower Oil prices is good for everybody

.
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Re: Oil & Gas

Postby Nonc Hilaire » Sat Oct 18, 2014 1:05 pm

Image

That man needs some cheap oil now! I think he's stuck!
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Re: Oil & Gas

Postby Doc » Sat Oct 18, 2014 5:21 pm

Nonc Hilaire wrote:Image

That man needs some cheap oil now! I think he's stuck!


No in this photo Kim Jong Un is pretending he is a Ballistic Missile aimed at North Korea's enemies Ever ready to destroy them for the North Korea people!!!
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Re: Oil & Gas

Postby Nonc Hilaire » Sat Oct 18, 2014 7:02 pm

Doc wrote:No in this photo Kim Jong Un is pretending he is a Ballistic Missile aimed at North Korea's enemies Ever ready to destroy them for the North Korea people!!!


That does explain the haircut.
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Re: Oil & Gas

Postby Typhoon » Sun Oct 26, 2014 9:15 pm

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Re: Oil & Gas

Postby Doc » Mon Oct 27, 2014 4:03 am

Typhoon wrote:Image


What does this tell you about the ME and BRICS?
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Re: Oil & Gas

Postby Endovelico » Tue Nov 11, 2014 10:35 am

China signs currency swap deal with Qatar in the heart of petro-dollar system

The petro-dollar system is the heart and soul of America's domination over the global reserve currency, and their right to make all nations have to purchase U.S. dollars to be able to buy oil in the open market. Bound through an agreement with Saudi Arabia and OPEC in 1973, this de facto standard has lasted for over 41 years and has been the driving force behind America's economic, political, and military power.

But on Nov. 3 a new chink in the petro-dollar system was forged as China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan, and establishing the foundation for new direct trade with the OPEC nation in the very heart of the petro-dollar system.

While this new agreement between China and Qatar is only for the equivalent of $5.7 billion over the next three years, Qatar becomes the 24th nation to open its Forex market to the Chinese currency, and solidifies acceptance of the Yuan as a viable option for the future in the Middle East.

It is perhaps no coincidence that the term for the new agreement is set for three years, and is within the exact time frame being predicted by the director of the Finance Institute under the Development Research Center of the State Council, Zhang Chenghui for the Renminbi to become fully convertible in the global financial system.

The need for new markets and a more stable trade currency in Qatar could be tied to a new report issued yesterday by French bank BNP Paribas which showed that petro-dollar recycling has fallen to its lowest levels in 18 years, signifying that even oil producing nations in the Middle East are finding it difficult to trust the U.S. dollar, and facilitate its use in trade due to its depreciation since the advent of the Federal Reserve's massive QE programs.

Nearly every week now, China, Russia, or one of the BRICS nations are finalizing agreements that supersede the old system of dollar trade and reliance on the petro-dollar system. And as many countries begin to reject the dollar due to the exported inflation that is growing in nations that are relegated to having to hold them for global oil purchases, alternatives such as the Chinese Yuan will become a more viable option, especially now that the Asian power has taken over the top spot as the world's biggest economy.

http://www.examiner.com/article/china-signs-currency-swap-deal-with-qatar-the-heart-of-petro-dollar-system


Soon the US will be paying the full price for its aggressive posture around the world. And once the dollar's position as the world currency is gone, the US will find out what it means to be a country with a huge trade deficit...
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Re: Oil & Gas

Postby Doc » Wed Nov 12, 2014 3:58 am

And as many countries begin to reject the dollar due to the exported inflation that is growing in nations that are relegated to having to hold them for global oil purchases, alternatives such as the Chinese Yuan will become a more viable option, especially now that the Asian power has taken over the top spot as the world's biggest economy.


Hmm last time I check oil was heading south of 80 per barrel. If the Chinese actually allowed to let the Yuan float to its natural value I would think that would be a good thing for the US though bad for companies like Walmart until they could shift production back to the US.
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That Oil Price Slump is Really Hitting Russia Hard!

Postby Endovelico » Sun Jan 11, 2015 2:22 am

Third of listed UK oil and gas drillers face bankruptcy
Britain's oil and gas industry is running out of cash as low prices and high levels of debt threaten the sector, warns Company Watch
By Andrew Critchlow, Commodities editor - 11:53AM GMT 29 Dec 2014

A third of Britain’s listed oil and gas companies are in danger of running out of working capital and even going bankrupt amid a slump in the value of crude, according to new research.

Financial risk management group Company Watch believes that 70pc of the UK’s publicly listed oil exploration and production companies are now unprofitable, racking up significant losses in the region of £1.8bn.

Such is the extent of the financial pressure now bearing down on highly leveraged drillers in the UK that Company Watch estimates that a third of the 126 quoted oil and gas companies on AIM and the London Stock Exchange are generating no revenues.

The findings are the latest warning to hit the oil and gas industry since a slump in the price of crude accelerated in November when the Organisation of Petroleum Exporting Countries (Opec) decided to keep its output levels unchanged. The decision has caused carnage in oil markets with a barrel of Brent crude falling 45pc since June to around $60 per barrel.

The low cost of crude has added to the financial pressure on many UK listed drillers which are operating in offshore areas such as the North Sea where oil is more expensive to produce and discover.

Ewan Mitchell, head of analytics at Company Watch, said: “Many of the smaller quoted oil and gas companies were set up specifically to take advantage of historically high and rising commodity prices. The recent large falls in the price of oil and gas could leave the weaker companies in difficulties, especially the ones that need to raise funds to keep exploring.”

Losses are expected to much deeper among privately-owned oil and gas explorers, which traditionally have more debt. Company Watch has warned that almost 90pc in the UK are loss making with accounts that show a £12bn accumulated black hole in their finances.

Mr Mitchell said: “Investors in this sector need to focus primarily on the strength and structure of the balance sheet. A critical question is whether the balance sheet is sufficiently robust to keep the company in business until revenues are expected to flow and, crucially are they likely to be able to rely on existing funding lines while they wait?

"Our fear is sustained low oil and gas prices will put an intolerable financial burden on the weaker companies, jeopardising many livelihoods."

The findings of the Company Watch research are the latest downbeat analysis to hit the industry, which is preparing itself for oil prices to fall below current levels of $60 per barrel. Sir Ian Wood, founder of the oil and gas services giant Wood Group, warned earlier this month that the North Sea oil industry could lose 15,000 jobs in Scotland alone and that production could fall by 10pc as drillers cutback.

According to energy consultancy firm Wood Mackenzie, around £55bn of oil and gas projects in the North Sea and Europe could be shelved should prices fall below their current levels.

Ratings agency Standard & Poor’s recently flagged its concern of some of Europe’s biggest oil and gas groups such as Royal Dutch Shell, BP and BG Group. Its primary worry is debt levels which it says have jumped from a combined $162.9bn (£105bn) for the five largest European companies in the sector at the end of 2008 to an estimated $240bn in 2014.

http://www.telegraph.co.uk/finance/newsbysector/energy/11315956/Third-of-listed-UK-oil-and-gas-drillers-face-bankruptcy.html


Who is going to cry uncle first? Russia or the West?...
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Re: Oil & Gas

Postby Typhoon » Sun Jan 11, 2015 3:34 am

Russia.

Unlike Russia, the West has a diverse economy and mechanisms for dealing with bankruptcy.
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Re: Oil & Gas

Postby noddy » Sun Jan 11, 2015 5:00 am

as the article says, its the bottom third of smaller players which will struggle to find the resources to see out this period - for the big players its an oppurtunity to buy these out at bargain prices and make back all the short term losses.

who sells the opec oil in the western market ?
who is involved with this downward pressure on oil prices to crush the upstarts ?

silly article, russia is screwed, the big western suppliers like BP and Shell are laughing.
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Re: Oil & Gas

Postby Endovelico » Sun Jan 11, 2015 2:24 pm

noddy wrote:(...) the big western suppliers like BP and Shell are laughing.


Ratings agency Standard & Poor’s recently flagged its concern of some of Europe’s biggest oil and gas groups such as Royal Dutch Shell, BP and BG Group. Its primary worry is debt levels which it says have jumped from a combined $162.9bn (£105bn) for the five largest European companies in the sector at the end of 2008 to an estimated $240bn in 2014.
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Re: Oil & Gas

Postby noddy » Sun Jan 11, 2015 3:20 pm

Endovelico wrote:
noddy wrote:(...) the big western suppliers like BP and Shell are laughing.


Ratings agency Standard & Poor’s recently flagged its concern of some of Europe’s biggest oil and gas groups such as Royal Dutch Shell, BP and BG Group. Its primary worry is debt levels which it says have jumped from a combined $162.9bn (£105bn) for the five largest European companies in the sector at the end of 2008 to an estimated $240bn in 2014.


thats the short term endo, dont get distracted by the shiny lights.
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Re: Oil & Gas

Postby Endovelico » Sat Jan 17, 2015 2:37 pm

Russia's most recent policy position on energy deals with the EU:

Image

:lol: :lol: :lol:
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Re: Oil & Gas

Postby YMix » Wed Jul 29, 2015 5:17 pm

This WSJ article is from April:

Oil Layoffs Hit 100,000 and Counting
Roughnecks feel brunt of cuts as tumble in price of crude ripples through energy industry

Since crude prices began tumbling last year, energy companies have announced plans to lay off more than 100,000 workers around the world. At least 91,000 layoffs have already materialized, with the majority coming in oil-field-services and drilling companies, according to research by Graves & Co., a Houston consulting firm.

Now the cutbacks are slowly showing up in federal employment data. Direct employment in oil and gas extraction, which had grown by more than 50,000 jobs since 2007, has fallen by about 3,000 jobs since it peaked in October at 201,500, according to the Bureau of Labor Statistics; 12,000 jobs have disappeared from the larger category of energy support since it reached 337,600 jobs in September.

And the layoffs are continuing. Last week alone, the Texas Workforce Commission said it received notices of close to 400 layoffs from energy-related companies. Among them, FTS International, a privately owned oil-field-services business, said it was laying off 194 workers, while Lufkin Industries, a subsidiary of General Electric Co. that makes oil-field equipment, said it was cutting 149 workers, adding to the 426 workers it has cut since the year began.


This one from a couple of days ago:

More Layoffs Expected at U.S. Energy Firms

U.S. energy companies had been counting on a rebound in crude oil prices in the second half of this year after last year’s plunge, but that hasn’t happened so far. So they’re planning more layoffs and financial maneuvers to deal with a recent, sudden drop in prices to the lowest level in four months, Lynn Cook reports.

A speedy rehiring of drilling rigs coupled with the possibility of new Iranian oil on the market have pushed down prices more than 20% over the past six weeks. So, for example, oil-field service providers have announced job cuts deeper than initially declared and warned of more layoffs to come. Halliburton Co. and Baker Hughes Inc., two big companies that plan to merge, disclosed last week that they cut 27,000 jobs between them, double the 13,500 announced in February. ConocoPhillips has already cut nearly 1,500 jobs so far this year but is planning more layoffs this fall that could number into the thousands.

“Everybody was hopeful, but it feels like the hangover is dragging on,” said Dennis Cassidy, managing director of oil and gas at global consulting firm Alix Partners.

The impact of low oil prices isn’t limited to U.S. energy companies. Firms world-wide have shelved $200 billion of new-project spending, the Financial Times reports.


Seems like the fracking miracle is taking a break.
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Re: Oil & Gas

Postby Heracleum Persicum » Wed Jul 29, 2015 5:58 pm

.

wait till Iran kicks in

Iran the 2nd biggest Gas reserve and 3rd biggest Oil reserve

and

that not counting all those Shia territory oil (Al Saud) :lol:

Pretty much, soon, swimin in oil and gas :lol:


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Re: Oil & Gas

Postby YMix » Wed Jul 29, 2015 6:15 pm

Heracleum Persicum wrote:wait till Iran kicks in


Yep.
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Re: Oil & Gas

Postby YMix » Thu Oct 29, 2015 5:59 pm

Eastern European shale gas hopes on ice as boom turns to bust
FT

Whatever happened to the much-heralded eastern European shale-gas boom? The answer is that, for now at least, it has quietly become a bust. Even more than in the rest of Europe, unconventional gas seemed a few years ago to hold out great promise in the centre and east of the continent. With Moscow flexing its geopolitical muscles, shale gas offered the prospect of reducing energy costs and reliance on Russian imports, which in some former Soviet bloc countries is 100 per cent.

Western oil majors, especially from the US, flocked late in the past decade into countries such as Poland, Hungary, Romania and later Ukraine, hoping to replicate the North American shale boom. But alarm bells sounded in 2012 when ExxonMobil pulled out of Poland, seen as one of the continent's best prospects, after disappointing test-well results. The Polish Geological Institute also estimated recoverable reserves of shale gas that year at 346bn-768bn cubic metres, only about one-tenth of previous estimates by a US agency.

Since then, other majors have made for the exits. In the eight months from summer 2014 to early this year Chevron, which had led the charge into eastern European shale exploration, pulled out of Lithuania, Ukraine, Romania and Poland. This summer, ConocoPhillips, the last US major in Poland, withdrew, following on the heels not just of Chevron and ExxonMobil, but Marathon Oil of the US, Canada's Talisman, France's Total and Eni of Italy.

Tim Wallace, Conoco's manager in Poland, after drilling seven wells in three exploration blocks, and investing some $220m since 2009, said "unfortunately, commercial volumes of natural gas were not encountered".

Just a few years ago, Poland's government had hoped commercial shale-gas production would be under way by now. Instead, after more than 70 test wells were drilled on 45 blocks, with investment totalling $2bn, no industrial-scale production has begun.

The reasons for the bust across the region are varied: sometimes unfavourable regulatory and tax regimes, as well as bans or temporary moratoria on hydraulic fracturing in countries such as Bulgaria, Romania and the Czech Republic, often following environmental protests. Some western officials, including Anders Fogh Rasmussen last year when he was Nato secretary-general, have accused Russia of secretly stirring up such protests, which Moscow denies.

Lower oil prices have also changed the financial equation, in a region where drilling costs are high and that lacks the infrastructure whose development has driven costs down in the US. On top of all that, in the words of one executive from a US oil major, "the rocks aren't there". Geological formations that appeared promising in countries such as Poland have turned out to be more difficult to fracture than reserves in North America. Some industry insiders say the geology has been the biggest factor holding back development of central European shale. But while Poland no longer looks like becoming a new North Dakota, its domestic energy companies PGNiG and PKN Orlen have been charged with continuing to try to develop its shale reserves. Polish officials remain optimistic that some commercial shale production will begin - reducing the country's reliance on Russia for about 60 per cent of its gas needs.

Once oil prices rise again, drilling will become more affordable. The experience and data amassed by energy companies so far can then be put to use in attempting to adapt technology to local geological needs.

Ukraine, too, which has seen Royal Dutch Shell and Chevron withdraw from unconventional gas exploration, is hopeful that if it can resolve its eastern conflict and stabilise the economy, shale production will be developed.

It may ultimately be domestic companies and smaller independents, not the international majors, that will harness the unconventional resources of eastern Europe.

With development of unconventional gas stalling, moreover, a pointer to the future may be this month's EU-backed deal to build a 534km gas pipeline from Poland to the Baltic states. All three Baltic republics were until recently entirely dependent on supplies from Russia.

Also this month, outgoing Polish prime minister Ewa Kopacz opened a delayed liquefied natural gas terminal on Poland's Baltic coast at Swinoujscie. The first LNG tanker is expected to dock in late November. For the time being, diversifying eastern Europe's sources of supply is likely to rely on these kind of efforts to develop LNG capacity and establish more "interconnector" pipelines to enable gas to flow more freely. The promise of shale gas will have to wait.


Translation: After lying through their teeth in order to create hype and after creating unnecessary tensions, oil companies (mainly from the USA) found reality to be a harsh mistress, packed their sh*t and left.
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
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Re: Oil & Gas

Postby YMix » Mon Nov 02, 2015 2:42 pm

‘We Need an Energy Miracle’
Bill Gates has committed his fortune to moving the world beyond fossil fuels and mitigating climate change.

[...]

On the surprising wisdom of government R&D:

When I first got into this I thought, How well does the Department of Energy spend its R&D budget? And I was worried: Gosh, if I’m going to be saying it should double its budget, if it turns out it’s not very well spent, how am I going to feel about that? But as I’ve really dug into it, the DARPA money is very well spent, and the basic-science money is very well spent. The government has these “Centers of Excellence.” They should have twice as many of those things, and those things should get about four times as much money as they do.

Yes, the government will be some-what inept—but the private sector is in general inept. How many companies do venture capitalists invest in that go poorly? By far most of them. And it’s just that every once in a while a Google or a Microsoft comes out, and some medium-scale successes too, and so the overall return is there, and so people keep giving them money.

On why he thinks Congress may not be hopeless:

The U.S. Congress does support solar and wind subsidies, which have been quite generous. So Congress isn’t completely absent on this. The House actually passed a climate-change bill [in 2009], when it was a Democratic Congress. There’s a class of voters who care about this, that I think both parties should want to compete for. So I don’t think it’s hopeless, because it’s about American innovation, American jobs, American leadership, and there are examples where this has gone very, very well.

On the centrality of government to progress on energy, historically:

Everyone likes to argue about how much the shale-gas boom was driven by the private sector versus government; there was some of both. Nuclear: huge amount of government. Hydropower: mind-blowingly government—because permitting those things, those big reservoirs and everything, you can’t be a private-sector guy betting that you’re going to get permitted. People think energy is more of a private-sector thing than it is. If you go back to Edison’s time, there wasn’t much government funding. There were rich people funding him. Since World War II, U.S.-government R&D has defined the state of the art in almost every area.
I’m optimistic about climate change because of innovation.

But energy moves really slowly. There’s this thing Vaclav Smil says: If Edison were reborn today, he would find our batteries completely understandable, because it’s just chemistry. He would say, “Oh, cool, you found lithium, that was nice.” Nuclear-power plants, he would go, “What the hell is that?” That, he would be impressed with. And chips, which we can use for managing data and stuff, he’d be impressed with. But he could visit a coal plant and say, “Okay, you scaled it up.” He would visit a natural-gas plant and that would look pretty normal to him; he would look at an internal-combustion engine and he wouldn’t be that surprised.

[...]
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
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Re: Oil & Gas

Postby Typhoon » Tue Nov 24, 2015 4:08 am

All the world's a stage.
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Re: Oil & Gas

Postby noddy » Tue Nov 24, 2015 10:34 am



thats a cute perspective.

its such a pleasant thought that the oil arabs might go back to being irrelevant camel riders in the desert again, so much so that my self defence mechanisms kick in and stop the wishful thinking.
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