OEF REVIEW:Total has started up production at the offshore Vega Pleyade gas and condensate field in the Tierra del Fuego region of Argentina. Operated by Total, the project will have a production capacity of 10 million cubic meters of gas per day (70,000 barrels of oil equivalent per day).
OEF REVIEW:The Nikkei spoke with Takashi Tsukioka, CEO at Idemitsu Kosan, a major Japanese oil refiner, about the future direction of crude prices, the outlook for shale oil players and industry realignments in Japan.
OEF REVIEW:With a rainy day “reserve fund” of only 4.5 percent of GDP and scant access to international financial markets, Russia urgently needs a fiscal Plan B. In January, the authorities announced additional cuts amounting to about 1 percent of GDP. More important, the government will try to raise another 1.5 percent of GDP — 1 trillion rubles ($13 billion) — by privatizing state-owned firms, including “crown jewels” such as Rosneft (Russia’s largest oil company), the diamond monopoly Alrosa and the flagship airline Aeroflot.
OEF REVIEW:The jump in imports, if realised, could see China overtaking the United States as the world’s largest crude importer after China’s average crude imports hit a record 6.71 million barrels per day in 2015, up 8.8 percent from a year ago. China is expected to import 860,000 barrels per day more crude this year, Yao Li, chief executive of SIA Energy said at a Platts conference.
OEF REVIEW:“For the first time, we are unbundling the subset of the NNPC (Nigerian National Petroleum Corporation) to 30 independent companies with their own managing directors,” Emmanuel Ibe Kachikwu, also minister of state for petroleum who was appointed head of NNPC last year to overhaul the company, told a conference in Abuja.Nigerian President Muhammadu Buhari has made reforming the nation’s oil sector a priority as a slump in oil prices has hammered the economy, since crude exports account for around 95 percent of foreign earnings.
OEF REVIEW:Although countries saying they’ll freeze oil production account for 25% of global supply, conditions of their Feb. 16 agreement and history offer little reason to expect much change in an oversupplied market. Of four countries agreeing not to raise production beyond January levels, Saudi Arabia, Russia, Qatar, and Venezuela, only one has enough spare capacity to do so meaningfully. Saudi Arabia produced at an average rate of 10.19 million barrels a day in January, according to the International Energy Agency.
OEF REVIEW:Ali al-Naimi, Saudi Arabia’s oil minister, called the agreement by the four producers “simply the beginning of a process to assess in the next few months and decide whether we need other steps to stabilize and improve the market.” Analysts noted, however, that the agreement still needs the cooperation of Iran and Iraq.
OEF REVIEW:“2016 State of American Energy report details the economic, job creation, energy security and global leadership opportunities created by our nation’s 21st century energy revolution and the policy challenges we must overcome to ensure that these benefits extend for generations to come. To give a sense of the reach and scope of the industry, each chapter of this report examines the distinctive policy challenges and opportunities through highlights of these issues in seven regions that include all 50 states. The report makes clear that the economic benefits and opportunities provided by the oil and natural gas industry aren’t confined to energy producing states and that the industry could do more with the right energy policies based on market principles and sound science.” Jack N. Gerard, President and CEO, API
OEF REVIEW:The world’s two most powerful oil producers have reached a tentative agreement to freeze oil production at its current levels, dashing hopes of a supply cut for the world’s glutted market. Meeting in Doha, Russian, Venezuelan, Qatari and Saudi Arabian oil ministers reached a deal to not exceed production from their January levels, but only if it was followed suit by other producers such as Iran and Iraq. Forward prices for Bent crude plunged by as much as 3 percent on the news to $33.68 a barrel, reversing days of gains.
OEF REVIEW:Tight oil production in the United States increased from 2007 through April 2015, based on estimates in Energy Information Agency’s (EIA) Drilling Productivity Report, and accounted for more than half of total U.S. oil production in 2015. Tight oil growth has been driven by increasing initial production rates from tight wells in regions analyzed in the report. As drilling techniques and technology improve, producers are able to extract more oil during the initial months of production from new wells.
OEF REVIEW:While Venezuela’s new legislative majority faces many immediate concerns with the Nicolas Maduro regime following a Dec. 6 election, it also should begin to disband and replace Petroleos de Venezuela SA (PDVSA), a former board member of the national oil company said. “I believe PDVSA is impossible to upgrade,” said Gustavo Coronel, a petroleum geologist and consultant on energy geopolitics and public policy who was a member of the Venezuelan Congress before then-President Hugo Chavez dissolved it. “It should be replaced by another model of oil industry management in Venezuela.”
OEF REVIEW:The February 2016 OPEC Monthly Oil Market Report indicates the following, on page 17, with regard to “Recent Interactions Between the Oil Market and the Global Economy”: It seems that the overall negative effect from the sharp decline in oil prices since mid-2014 has outweighed benefits in the short-term and there seems to be a ‘contagious’ effect taking place across many aspects of the global economy…more
OEF REVIEW:The head of Russian state-run oil company Rosneft on Wednesday floated the idea of a coordinated output cut by major oil-producing countries to prop up sagging prices but fell short of saying whether Moscow would contribute to such a plan. Rosneft Chief Executive Igor Sechin, in a speech at the International Petroleum Week conference in London, attributed oversupply in the market to overproduction by members of the Organization of the Petroleum Exporting Countries. He suggested major oil producers each cut production by 1 million barrels per day.
OEF REVIEW:According to latest figures from the International Hydropower Association (IHA), the 1,036 GW of hydropower capacity generated over 16 percent of global electricity production in 2014. Looking to the year ahead, IHA identified several trends driving hydropower build-out. Prominent on the list is hydropower’s ability to function as a grid management asset: delivering base- and peak-load energy, frequency response and black-start capabilities. These solutions are recognized as critical to facilitate a successful transition to renewable energy. A second trend fostering steady investment is modernization, uprating, and conversion of existing plants in efforts to secure more efficient and sustainable operations. A third driver motivating fresh momentum for hydropower stems from ancillary hydropower functions that can assist nations in adapting to climate change: providing freshwater for irrigation, drought management and flood protection solutions.
OEF REVIEW:A handful of shale patches in the state, which would be the world’s sixth-largest oil producer if it were a country, are profitable with crude below $30 a barrel, according to an analysis by Bloomberg Intelligence. In the Eagle Ford’s DeWitt County, which produced more than 100,000 barrels of oil per day in November, the average well can be profitable with U.S. benchmark crude at $22.52 a barrel, $4 below the lowest level this year. Drive 200 miles southwest to Dimmit County, and drillers need $58 oil. The wide range of break-evens illustrates one reason why shale production from exploration and production companies has been more resilient than expected, filling storage tanks in the U.S. to levels not seen in 85 years.
OEF REVIEW:The impact of sharply lower oil prices is being felt around the globe. Oil-dependent countries are trying to mend busted budgets. Oil companies are cutting production and workers. While consumers in some countries enjoy lower gas prices, elsewhere consumers are paying higher food prices due to declines in the local currency. This article gives some facts and figures from the USA, Canada, Saudi Arabia, Iraq, Iran, Europe/Russia, Asia, Africa, and Latin America.
OEF REVIEW:The shale gas boom has proved to be a game changer for the United States economy, bringing about an era of cheap natural gas that has helped to make the country’s industry more competitive. Europe has also been seen as a future shale gas region in recent years, but a Wood Mackenzie survey of global shale gas drilling activity highlights only three European countries – Poland, Ukraine and the UK – as having any shale gas wells scheduled for 2016.
Morocco has switched on what will be the world’s largest concentrated solar power plant. The new site near the city of Ouarzazate – famous as a filming location for Hollywood blockbusters like “Lawrence of Arabia” and “Gladiator” – could produce enough energy to power over one million homes by 2018 and reduce carbon emissions by an estimated 760,000 tons per year, according to the Climate Investment Funds (CIF) finance group.
OEF REVIEW:“It’s hard to see a dramatic price increase,” Vitol Group BV Chief Executive Officer Ian Taylor told Bloomberg in an interview, saying prices were likely to bounce around a band with a midpoint of $50 a barrel for the next decade. “We really do imagine a band,” probably between $40 and $60 a barrel, he said. “I can see that band lasting for five to ten years. I think it’s fundamentally different.”
OEF REVIEW:China’s oil demand will grow 4.3% this year to surpass 11 million barrels per day, compared to 4.8% growth last year, the country’s top energy group forecast on Tuesday. State-owned China National Petroleum Corporation (CNPC) sees the country’s oil demand rising to 566 million tonnes, or 11.32 million barrels per day in 2016, some 460,000 barrels per day higher than last year.
