Archive for the ‘exploration’ Category

Falling oil prices, new regulations spell trouble for Bakken

Amid falling oil prices, another factor has come into play that could start to curtail North Dakota’s crude production. On December 9th, the state’s three-person Industrial Commission approved an order requiring Bakken crude to be conditioned before it is transported.

The order, to go into effect April 1, will limit Bakken to a vapor pressure of no more than 13.7 per square inch, 1 psi below the national standard of 14.7. It also requires that operators separate light hydrocarbons from the crude and prohibits blending light hydrocarbons back into the oil.

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Challenges facing Africa — and some of its oil producing countries — in 2015

Plummeting oil prices coupled with a significant increase in terrorism, and regime instability pose a direct threat to several sub-Saharan African countries the next year.

2015 will ask searching questions for Nigeria’s political climate as the country heads into a crucial election in February. Campaigning comes against a backdrop of sliding crude prices which have crushed an economy which relies on oil for 70% of its income. Opposition in the north to president Goodluck Jonathan’s re-election has deepened because of a deadly insurgency by Boko Haram Islamists in the region.

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At the Wellhead: A model oil contract in India might not be too popular

India is setting up a new model for outside investment in its oil and gas sector. But as Mriganka Jaipuriyar notes in this week’s Oilgram News column, At the Wellhead, it isn’t getting rave reviews just yet.

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It’s now Ant and Grasshopper days in the oil industry

During most times, the oil industry may operate in a dog-eat-dog world.  Now it’s also in an ant-and-grasshopper world.

You know the story of those two insects — they’re paired together in Aesop’s Fable of the same name.

The ant toils hard to save and scrimp for a rainy day, while the grasshopper flits around, enjoying the moment with no thought for tomorrow. Then winter comes and the ant has stores of food to last him for months; the grasshopper dies.

It’s hard to think, especially given the lavish times of several months back when Niagaras of oil revenues were pouring into corporate coffers, that any operator would ever be out shivering in the cold, harsh winter of sub-$60/barrel oil prices, but that reality is now here. And those who prepared for it in better times, are holding their heads up.

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Guest post: in the oil market, you can’t have it both ways

The media is replete with stories of low oil prices killing the shale revolution.  This is not going to happen, and here’s why: the world remains dependent on US shale oil production growth.

We at Princeton Energy estimate that oil demand should grow at around 1.6 million b/d  per year at $80/b, on a Brent basis, with that demand improvement becoming evident from the second half of 2015.

Now, where would supply growth come from to meet that demand?

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Dear Santa: Please, give us more clarity on 2015 upstream oil spending

Given the gradual but precipitous drop in oil prices in recent months, especially in the last week or so, industry has poor visibility on next year’s activity until the majority of upstream companies release their 2015 capital budgets.

And even those operators that have guided on next year’s capex, did so at a time when oil prices were a good $10-$15/b higher than they are currently.

But some preliminary clues are emerging at post-OPEC industry conferences in recent days, constituting the first public remarks after a controversial meeting last week when the cartel took a decision to maintain its oil output at a current 30 million b/d.

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Abu Dhabi’s upstream oil sector shifts gears subtly

The 2014 edition of the Abu Dhabi International Petroleum Exhibition and Conference, held in the UAE capital last month, was the largest yet for the upstream oil and gas gathering, drawing more than 70,000 visitors in a testament to the continued importance of the Persian Gulf region to global oil supply.

Yet, with crude prices falling, change was in the wind, suffusing the gathering with a palpable air of uncertainty.

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Russia’s anti-fracking push taking to the streets?

We don’t post too many things on The Barrel that are merely links to other groups’ works. But this one was too good not to pass along, if you haven’t seen or heard about it already.

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New Frontiers: Tapping Mexico’s Gulf of Mexico oil reserves

The opening of Mexico’s oil industry will give a company, or several companies, an opportunity to develop reserves in the Gulf of Mexico that aren’t on the US side of the border. It’s been a frustrating task so far but the possibilities are significant, as Robert Perkins reviews in this week’s Oilgram News column, New Frontiers.

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Japan’s crude oil storage leases with producers: scope to do more with strategic stocks

Japan’s recent deal with Abu Dhabi to lease out more crude storage capacity to the emirate under a renewal agreement is deemed mutually beneficial. Not only will it enhance Tokyo’s supply security, but it also wiill give the Middle Eastern producer greater access to the Asia-Pacific market.

Under the agreement, similar to one Japan has with Saudi Arabia, the Japanese government will pay for storage to be used by Abu Dhabi for commercial purposes, in exchange for assigning priority to supplying the crude to Japan in an emergency.

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