The Weekly USA Oil & Gas Update: 17th November 2015
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The Oil & Gas Weekly is compiled by Todd Erickson. Todd is a veteran executive manager in the North American E&P market.
He has management experience in high-growth oil & gas service organizations performing a leadership role in operations, strategy, and corporate development with a track record of identifying opportunities and best-practices, creating execution plans, then developing effective teams and leaders to execute them.
Learn more about Todd here
Rig Counts - select states with key plays |
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Oil & Gas Prices - Bloomberg/EIA |
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General News |
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IEA says crude oil price to remain below $80 until end of 2020 Despite the continued decline in production investments, oil will stay lower for longer than most expected, largely because of declining rate of demand says the International Energy Agency. Even as prices recover, the IEA expects declines in production to be most pronounced with higher-cost producers in Canada, Brazil, and the US, with declines offset by supply growth in Iraq and Iran. This puts the majority of exports back into the politically-unstable Middle East. "We have to think carefully about the oil security implications of a very few number of countries exporting a big chunk to the global markets along," said Fatih Birol, executive director of the IEA. Article here
Iraq offering discounts to US refiners on its crude US crude oil production has dropped by almost 500,000 bpd since June, and the gap appears to be getting filled by tankers arriving from Iraq, one of the world's lowest-cost producers. This may be more than a one-time event. "In the longer term, we expect the US to have to increase imports next year by some 500,000 barrels to 800,000 barrels a day year on year," said refining consultant Steve Sawyer. "Given our projections for Iraqi output, it could well come from here." The Iraqis are capturing this business by discounting $5.85 off benchmark prices in November. "It's being discounted so US Gulf Coast refiners are more incentivized to take it," said oil analyst Dominic Haywood. Article here |
Unconventional Oil & Gas News |
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Permian Basin edges out Bakken and Eagle Ford as premier US shale oil producer Although output across the US has been declining since the crash in crude oil prices, and the corresponding fall in E&P investment, the Permian is faring better than the other leading shale plays. The US Energy Information Administration believes oil production will be down 12% in the Bakken by December from its peak in the previous year, and the Eagle Ford to decline by 25% from its peak in March, while the Permian is expected to be down just 1% from its level in September. "The Permian is, in my humble opinion, the basin that keeps on giving," said Anadarko's SVP for international exploration Ernest Leyendecker. The rig count in the Permian has fallen less than the other leading plays, primarily because producers believe it still has productivity gains to be wrung out. "The Permian basin is in the second or third inning, where the Eagle Ford and the Bakken are in the sixth or seventh inning said Pioneer's CEO Scott Sheffield. Article here |
Environment and Safety News |
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California's Kern County streamlines permitting process The county hosts a vast majority of the state's drilling and production activity, yet had no previous permitting process, relying on a hodgepodge of uncoordinated state agencies. The new process puts Kern County in charge as the lead agency, streamlining the process while adding a comprehensive environmental review, including 88 mitigation measures. Although the higher level of review makes the permit process more expensive, it also reduces the risk of permit rejection. Suzanne Noble of the Western States Petroleum Association believes the extra cost will be worth it. "The 30-some companies that we represent for this project have accepted a tremendous [amount] of new costs as well as new requirements in order to obtain economic certainty. And you obtain that through a streamlined permitting process, which we achieved here today." Article here |
Mergers and Acquisitions News |
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Major producers have half-trillion dollars available for takeovers |
