Total Plans US$ 1 Billion Annual investments In Brazil lweb.es/f2523 12.28.2016
The decision by Total E&P do Brasil to expand operations in Brazil with annual investments of US$1 billion comes on the heels of Total agreeing to acquire assets from Petrobras as part of the latter company’s asset sales program. Technical cooperation will be strongly reinforced between the two companies including joint assessment of the exploration potential in key prospective areas in Brazil, and the development of new technologies. Total will also enter the integrated gas and power market in Brazil. Petrobras and Total jointly participate in 19 E&P consortiums worldwide.
The collapse in world oil prices since mid-2014 has reinforced two imperatives for the countries in the Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE: First, the need to raise revenue in order to balance state budgets; and second, the strengthened focus on the understanding that diversification away from dependence on oil is both essential and long overdue. Thus, many of the GCC governments have been discussing and attempting to promote economic reform, with a particular emphasis on the need for wide-ranging privatization.
OPEC is not the name it was compared to the early 1970s when it controlled more than 50% of global market share. Its recent deal to cut production has kept the oil price above $50 a barrel, but gains will be effectively capped once low-cost shale producers ramp up production again. And this is happening when oil is waning in importance in the global energy mix; when U.S. domestic production has almost doubled because of the shale revolution; and when Canada has become the major supplier of oil to the U.S.
The oil industry must brace for five energy “tsunamis” that threaten to drag prices as low as $10 a barrel in less than a decade, according to Thierry Lepercq, head of research, technology and innovation at Engie SA. The falling cost of solar power and battery storage, rising sales of electric vehicles, increasingly “smart” buildings and cheap hydrogen will all weigh on crude: “Even if oil demand continues to climb until 2025, its price could drop to $10 if markets anticipate a significant fall in demand.” 
Wood Mackenzie’s global corporate outlook for 2017 forecasts that the oil and gas industry will turn cash flow positive for the first time since the downturn, if OPEC production cuts drive oil prices above $55 a barrel. Focus is on five themes: strengthening finances as a top priority; U.S. Independents to lead the sector into a new investment cycle; portfolios will adapt, down the cost curve and into new energy; modest growth in production despite past capex cuts; and an improved value proposition for exploration and mergers and acquisitions.
According to the International Energy Agency oil stockpiles will decline by about 600,000 barrels a day in the next six months as curbs by OPEC and its partners take effect. Oil has gained about 17 percent since OPEC agreed on November 30th to trim output. The accord was expanded on December 10th with the participation of 11 non-members including Russia and Kazakhstan. The stockpile declines will only occur if OPEC reduces supply enough to maintain a target of about 32.7 million barrels a day, said the Agency. 
U.S. field production of crude oil increased in 2015 for the seventh consecutive year, reaching 9.42 million barrels per day. This was the highest crude oil production level since 1972. In 2015, production gains were highest in Texas, the Gulf of Mexico, and North Dakota, as these three regions accounted for 77% of the country’s total increase. Although annual production for 2015 grew, monthly U.S. crude oil production has declined since April 2015. Lower oil prices led to slower development activity, and production fell to 8.74 million b/d in August 2016.
This 2016 Energy Outlook from the company JLL looks at global macroeconomic trends and considers the recovery timeline to expect once oil prices stabilize. The net effect on property markets of the structural changes that are currently redefining the energy industry is then discussed, focusing on the performance of office and industrial inventories in energy-centric cities. The influence of renewable energy on the health of real estate markets today and into the future is also covered. Lastly, U.S. and Canadian trends, deals and fundamentals are presented.
The International Civil Aviation Organization (ICAO) announced the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), designed to serve as a global market-based measure to control increases in CO2 emissions from international aviation operations. CORSIA will increasingly require international airspace users and others to measure, verify and report their greenhouse gas emissions to ICAO. CORSIA’s main goal is to allow operators to offset unavoidable aircraft emission growth with a reduction in activities elsewhere by allowing operators to buy carbon credits and outsource the process of reducing emissions.
Mexico and Brazil want a slice from a shrinking pie as international drillers limit their investments during a time of depressed oil prices. Mexico will hold its first-ever deepwater auction December 5th, offering up 10 areas in the Perdido area, near its maritime border with the U.S.; in the southern gulf’s Cuenca Salina; and a separate bid for the joint-venture with Pemex in Trion field. Brazil’s tender, set for 2017, will include “unitized” blocks that extend from already discovered pre-salt areas previously awarded to concession holders. 
Crude oil inventories are near record high levels and are rising on a year-on-year basis. Gasoline and ultra-low-sulfur diesel inventories are increasing to a lesser extent. Inventories of all three remain near seasonally-adjusted record highs. However, the pace of this increase – even though still growing – is slowing rapidly, and this is, on balance, welcome news for energy producers and those who have financial exposure to them. It’s a sign that energy supply and demand are moving more closely into alignment.
Donald Trump’s Energy Plan: Make America energy independent, Conserve our natural habitats, reserves and resources,Declare American energy dominance a strategic economic and foreign policy goal, Unleash American untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves, Become totally independent of any need to import energy from OPEC or any nations hostile to our interests, Open onshore and offshore leasing on federal lands, eliminate moratorium on coal leasing, and open shale energy deposits, Encourage the use of natural gas and other energy resources that will reduce emissions, reduce the price of energy, and increase our economic output, Rescind all job-destroying Obama executive actions, Reduce and eliminate all barriers to responsible energy production. 
The oil market has experienced structural changes since prices peaked in June 2014. Prices have been driven down by supply-side factors that are principally increased production from U.S. shale and Saudi Arabia’s market share defence. At the same time operational efficiency has been increased, as for example with the companies in the U.S. shale areas, thus begging the question of whether OPEC still matters. Within this context of change it looks to be that the conventional wisdom with regard to the global oil market no longer applies. 
OEF REVIEW:The Brookings report “Lower Oil Prices and the U.S. Economy: Is This Time Different?” explores the effect on U.S. real GDP growth of the sharp decline in the global price of crude oil and hence in the U.S. price of gasoline after June 2014. This decline produced a stimulus of about 0.7 percentage points of real GDP growth by raising private real consumption and an additional stimulus of 0.04 percentage points reflecting a shrinking petroleum trade deficit. However, the net stimulus since June 2014 has been effectively zero. No evidence of an additional role for frictions in reallocating labor or the price of gasoline in explaining the sluggish response. Neither was there evidence of lower oil costs stimulating other business investment, nor an increase in household savings, nor of households deleveraging.
OEF REVIEW:China’s crude oil output is at a 6-year low as the country’s state-run energy companies continued to pump less from aging, high-cost fields. Production during August dropped 9.9 percent and during the first eight months of the year output dropped 5.7 percent. The country is forecast to lead production declines across Asia, helping tighten the global market as the world’s largest consuming region relies more on overseas supplies. China’s imports rebounded last month to the highest since April. Nomura Holdings Inc. in Hong Kong pointed out that ”China’s crude output won’t see an apparent rebound unless Brent recovers to $60 a barrel level, as most of China’s aging oilfields can’t make a profit below this price,” adding that ”Massive capital expenditure cuts have translated to more oil supply destruction.”