Archive for the ‘exploration’ Category

Observers wait for Mexico to allay concerns over subsequent bidding rounds

Mexico’s debut bidding event in Round One of its energy reform is now history, and resulted in what was widely agreed was a poor showing.

Now, the post-mortems have begun, both within industry and the Mexican government, which openly acknowledged it needs to do a better job of listening to industry’s concerns about contract terms that might have attracted more winners had the sticking points been addressed to begin with.

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Shell capitalizes on low oil to drive advancement for gas, LNG

Shell has become the first major to take proper advantage of the low oil price, taking out a company that it has long been interested in buying: BG. And the reason is a good one: not growth for its own sake but using BG’s assets to help it achieve its own goals faster. The transaction is underpinned by BG’s asset value, it said.

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New Frontiers: Colombia looks to reverse the drop in its oil production

After a much-celebrated turnaround in increasing oil production, Colombia reversed course last year. In this week’s Oilgram News column, Regulation & Environment, Chris Kraul talks with a key Colombian official on reversing that slide.

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Despite lower 2015 capex, could continued oil output gains delay price recovery?

Upstream operators that released 2015 preliminary capital budgets a few months before the year-end holidays have returned to the surgical table for more fiscal liposuction on already slender frames.  Despite this, they and other producers insist they can continue to grow oil production this year, and for some, growth will be in the double-digits.

Last week alone, small producers Halcon Resources, Sanchez Energy and Concho Resources all slashed projected 2015 capital spending by 48%, 29% and 33%, respectively.  In some cases this was the second revision from preliminary figures announced before oil prices began their steep descent to current levels below $50/b.

They are not alone.  Even the bigger players such as Continental Resources, a big Bakken Shale producer, said in late December its capex would be 41% lower than contemplated in early November when prices were still in the high $70s/b range, while ConocoPhillips will shave 20% off its budget compared to last year.

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At the Wellhead: Harvest’s partnership with PDVSA increasingly strained

Harvest Natural Resources is one of the last remaining US independent operators in the Venezuelan oil patch. But as Starr Spencer notes in this week’s Oilgram News column, At the Wellhead, Harvest has had a difficult time divorcing itself from an increasingly strained partnership with the country’s state oil company, PDVSA.

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The “factory floor” aspect of shale oil production means it’s different this time

The search for a means to halt the continuous fall in crude oil prices is not going to be easy. One reason for that is the very short lag between shutting a shale well and then restarting it as market prices rise.

Saudi Arabia is absolutely correct in allowing the market to take its course by allowing prices to fall to a level that will enforce market discipline among independent and high cost producers to cut back or halt production.

The conventional wisdom by allowing market forces to reduce production is logical. However, this wisdom applies to only conventional means of crude oil production and far less when it comes to unconventional means of producing crude oil.

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Some advice to those developing the Marcellus, from somebody who knows

Rodney White is wrapping up a lengthy career with Platts today, and he has watched up close the battles over developing the Marcellus and Utica shales, among other areas. Not only that, he lives in West Virginia, home to part of the Marcellus. Here are some of his departing thoughts for The Barrel.

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How the oil price slide will spill into steel markets

Years ago, US Steel got into the energy business with the acquisition of Marathon Oil and Texas Oil & Gas. The thinking at the time was that steel and energy markets were countercyclical: when the steel market was soft, energy markets likely would be strong and vice versa.

We’re not sure what was behind that thinking and the resulting steel/energy conglomerate, USX Corp., was ultimately broken up by famed vulture capitalist cum shareholder activist Carl Icahn. This was part of another 1980s trend of investors seeking “pure plays,” companies focused on a single market or product.

Today the steel and energy markets don’t seem very countercyclical. American hot-rolled coil (HRC) producers and customers that make oil country tubular goods (OCTG) from the basic sheet steel product agree that their energy sector businesses will be seriously impacted early next year by the precipitous fall in oil prices, which are down more than 40% from earlier this year.

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Regulation & Environment: Colombia tries to turn its oil business around

Just a few years ago, Colombia was being touted as one of the most successful countries in attracting foreign capital and then in turn boosting its output with that new funding. But things have turned, as Chris Kraul discusses in this week’s Oilgram News column, Regulation & Environment.

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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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