TOPICS OF INTEREST
PETROLEUM ECONOMICS/PRODUCTION FORECASTING
Shale, Tight Oil Investments to Fall 12% in 2020; Global Deepwater Rising
Lower oil prices and capital discipline are expected bring forth a double-digit drop in shale and tight oil spending, while deepwater momentum is seen continuing. This comes as “massive investments” will be needed in the next decade to meet growing oil demand.
US Sets New Records for Proved Oil and Gas Reserves
Proved oil reserves totaled 43.8 billion bbl at yearend 2018 while proved gas reserves amounted to 504.5 Tcf, both topping records set in 2017, the US Energy Information Administration said.
Permian Basin Decline Rates Have “Increased Dramatically” Amid Ongoing Slowdown
A new report says that production growth in the world’s most prolific unconventional basin is on the verge of stalling out.
Enverus Forecasts “Significant Slowdown” in US Gas Output Growth in 2020
The data analytics firm projects US dry gas output growth will shrink to 2 Bcf/D next year from 8–9 Bcf/D in 2018 and 2019.
Tullow Oil CEO, Exploration Director Resign Amid Lower Production Outlook
The resignations come as the company makes downward revisions to its production guidance after a disappointing performance from its TEN and Jubilee fields offshore Ghana.
OPEC, non-OPEC Allies To Extend, Increase Production Cuts
The group will shed an additional 500,000 B/D of oil production through March 2020, bringing the total curtailment to 1.7 million B/D.
US Was Net Exporter of Crude, Petroleum Products in September
It is the first time the country was a net exporter of crude and petroleum products during a month since the US Energy Information Administration began keeping such records in 1973.
PRMS Classifications: A New Methodology for Resource Inventory Management
This paper presents a methodology that provides the upstream industry with a robust approach to petroleum inventory management.
ConocoPhillips Leaning on Conventionals Near-Term, Unconventionals Long-Term
Most of ConocoPhillips’ oil and gas production by the end of the next decade will come from its unconventional operations. But, for the near-term, the Houston independent will rely on conventional assets as it seeks to keep spending in check, decline rates low, and cash flow on the rise.
ConocoPhillips Unveils 10-Year Operating, Financial Plan
The plan targets some $50 billion in free cash flow over the period while growing production more than 3%/year.
Short-Term Headwinds and Fundamental Long-Term Change Will Challenge Oil and Gas Industry in 2020
Macroeconomic and business risks, investor uncertainty, and the energy transition highlight the challenges outlined in the report.
IEA Outlook Highlights Deep Disparities in Global Energy System
Annual report says that governments have the greatest capacity and responsibility to shape the energy future.
Chesapeake CEO Expresses Confidence in Company’s Financial Stability
The long-struggling shale operator’s share price on 12 November closed at 67¢/share, a 25-year low.
Report Forecasts “Major Slowdown” in US Oil Output Growth
Lower oil prices, increased operator focus on capital discipline, and diminishing access to capital are choking off once-soaring US oil production growth.
OPEC Expects To Shrink Supplies Until US Shale Peaks
The 2019 World Oil Outlook projects tight-oil supplies to rise to at least 75% of total US production before retreating.
Data-Driven Analytics Provide Novel Approach to Performance Diagnosis
This work describes a heuristic approach combining mathematical modeling and associated data-driven work flows for estimating reservoir-pressure surfaces through space and time using measured data.
Dallas Fed Survey: Oilfield Service Woes Fuel 3Q Upstream Industry Contraction
Lower equipment utilization and prices have worsened the pain for oilfield service companies in Texas, New Mexico, and Louisiana, while operators continue to grapple with the industry’s shifting business climate.
Aramco Plan to Restart Damaged Oil Facilities “Optimistic”
Rystad estimates almost 2 million B/D will remain shut in on average during September and October, with full restoration to pre-attack levels not coming until closer to year end.
BP To Sell Alaska Business to Hilcorp
The $5.6-billion deal includes the Prudhoe Bay field and the Trans Alaska Pipeline and vaults Hilcorp to be the second-largest Alaska producer and reserves holder, behind only ConocoPhillips.
Dallas Fed: US Shale Boom Accounted for 10% of US GDP Growth
Researchers from the Federal Reserve Bank of Dallas quantified the economic impact of the US shale revolution for the first half of this decade.
When Will the Market Stop Punishing Public Shale Operators?
Share prices have plunged for seemingly every major US shale producer, with Concho, Pioneer, and Continental among those receiving the worst of the market’s fury. Have investors completely lost faith in the industry? And are shale executives any more optimistic?
New OGA Wells Strategy Focuses on Improving Economics of UKCS Oil and Gas
The strategy supports the Maximise Economic Recovery from UK Oil & Gas Strategy and Vision 2035, whose goal is to achieve £140 billion additional gross revenue from UKCS production by that time.
Whiting Petroleum Slashes Workforce By a Third
The Bakken and Niobrara operator will eliminate 254 jobs in an effort “to better align [its] business with the current operating environment.”
Analytics Firm: Permian Fracturing Work Underreported by 21% in 2018
Findings from Kayrros suggest the average Permian well is both less productive and more expensive than reflected in public data.
Pemex Unveils Plan To Undo “Failure of Energy Reform”
Mexican President Andrés Manuel López Obrador is prioritizing investment in Pemex over foreign participation as a means to boost the country’s shrinking oil output.
US Crude Production Tops 12 Million B/D in April
The new milestone was reached less than a year after the country surpassed 11 million B/D last summer, and is driven by activity in the Permian Basin and new fields in the Gulf of Mexico.
LNG at a Crossroads
In its first 50 years, LNG has become the world’s fastest-growing gas supply source and is now part of an upheaval in the global energy market. Today, the sector stands at a crossroads, and the industry must adopt new thinking to address current and future needs of buyers, sellers, and consumers.
Global Oil Industry Turns its Attention to Volatile Strait of Hormuz
Reports 20 June that Iran shot down a US Navy drone over the Strait of Hormuz—the global oil market’s most critical transit point—exacerbated tensions in the region following a pair of attacks on oil tankers in the Gulf of Oman just a week earlier.
US Leads World in Oil Reserves
Ranking places US ahead of Saudi Arabia and Russia.
IEA, OPEC Cut 2019 Oil Demand Growth Forecast
Trade tensions and economic sentiment take a toll.
North America E&P Capital Efficiency Likely to Stall in 2019-2020
Cost inflation and volatile commodity prices pose threats to sustained financial improvements.
Global Energy Demand in 2018 Grew at the Fastest Pace This Decade
Natural gas accounted for almost 45% of global demand growth last year.
China’s Shale Dream Rests Atop Chaotic Geology
As the country pushes for higher output from its emerging unconventional sector, nature is pushing back. To get better results, operators there are increasing their reliance on technology.
Venezuela Oil Output Sinks to Lowest Level Since Early 2003
The recent production freefall could accelerate even further as US sanctions-related deadlines pass, the US Energy Information Administration said.
New Operators, Well Designs Drive Record Gas Production in Haynesville
After a long cooling off period, this dry-gas shale play is once again red hot.
Ghawar vs. Permian Basin: Is There Even a Comparison?
While some try to put the two enormous oil producers toe-to-toe, the best thing to do might be to understand why they are different.
Three Big Numbers Shaping the Global Crude Picture
Take a quick look at some of the data points shaping upstream headlines and the movement of oil supplies around the world.
History Matching and Forecasting
Machine-learning methods have gained tremendous attention in the last decade. The underlying idea behind machine learning is that computers can identify patterns and learn from data with minimal human intervention. This is not very different from the notion of automatic history matching.
Shale Pioneer: Hard Ceiling on Production Growth Coming
The complicated parent-child relationship in US shale fields is emerging as a turning point in the US shale revolution. One of the first executives to exploit tight oil says the issue will reverse the sector’s cumulative growth rate by 2025.
ExxonMobil, Chevron Target Nearly 2 Million BOE/D in Permian Production
The US majors plan to produce around 1 million BOE/D each from the basin, which has become a primary focus of their upstream operations.
In 2040, Will There Be Jobs for Petroleum Engineers?
BP’s latest annual energy outlook considers many scenarios for the future, and they all require engineers to find a lot more oil to meet high demand.
CNOOC’s Strategic Plan Sets “Bullish Tone” for Chinese NOCs
The national oil company’s aim to lift oil and gas production and reserves over the next few years will rely on growth from big international projects, including those in Nigeria, Guyana, and the US.
Survey Points to Bullish Outlook for 2019, With Some Caveats
Industry confidence is on the rise, and so is capital spending, according to DNV’s 2019 annual outlook.
US On Track To Be Net-Exporter Of Crude and Petroleum Products
A new report predicts that US output will rise to a new record high of 12.1 million B/D in 2020.
Oil Prices Take a 2014-Size Hit
Oil prices have fallen since early October in lockstep with the plunge in 2014. But this time oil companies appear better able to deal with a tough situation.
How Does Vaca Muerta Stack Up vs. US Shale? Data Tell the Tale
Vaca Muerta production is on the upswing. Will increasing activity propel the Argentine play to the ranks of US shale? Data suggest it is both already there and has a ways to go.
Big Year for Shale M&A May End with Shell and Endeavor
2018 has seen a wave of shale deals that are consolidating the landscape. While this one could be among the biggest, it is not yet final.
Straight Out of OPEC, Qatar Flexes Global Ambitions
The small Gulf-nation is expanding its upstream portfolio to include some of the hottest exploration areas.
Clustered-Development Approach Leads to Better Evaluation of Multiprospect Plays
In the clustered-development approach, the geologic dependence between prospects is combined with the aggregation of prospects to determine the economic viability of a grassroots development offshore.
New Approach to Capital-Allocation Modeling Improves Performance Assessment
This new conceptual framework for capital-allocation management, known as advanced risk and capital-allocation management (ARCAM), aims to synchronize risk, strategy, and capital decision modeling to provide better visibility of future performance of capital-investment opportunities.
Three Trends Shaping Global Production: US Well Spacing, Argentine Shale, and Middle East Conventionals
For the next several years, supplies of crude will depend on several macro factors. Some are easier to forecast than others.
IEA Warns of Global Oil Supply Deficit, Leaning Too Heavily on US Output
US crude oil production is expanding at an unprecedented rate, but much faster growth will be needed in the next few years to meet the world’s demand if global investment in conventional supply doesn’t pick up, an IEA report indicates.
Schlumberger and Halliburton Warm on Global Market, Cooler on US Shale
The two biggest oilfield services providers are enjoying a rebound in international activity but continue to struggle with a softening US shale completions market. While takeaway constraints will be temporary, steep shale production declines may emerge as a longer-term challenge.
Outlook Optimistic, but Concerns Over Permian Takeaway and Steel Tariffs Linger
The Federal Reserve Bank of Dallas’ quarterly survey of operators and service companies shows an industry still confident in its near-term growth prospects. However, concerns remain about a number of issues, ranging from the steel tariffs to crude oil price differentials in the Permian.
New Method for Predicting Production Boosts Accuracy for Carbonate Reservoirs
This paper proposes a new method of economic prediction on the basis of expert library and oilfield databases. The method takes into account geological factors and the effect of production factors on the economic prediction.
The Price of Permian Gas Pipeline Limits
Pipeline bottlenecks have created a wide gap in the price of gas at a key pipeline hub in the Permian compared to the US benchmark level.
Norwegian Exploration and Development Pick Up, but More Is Needed
Norway hopes for a continued rise in offshore exploration and development activity to ensure steady oil and gas production through the next decade.
Oil Prices Set To Rise This Year, Then Fall Back
Supply growth into next year is projected to outpace global demand, bringing markets once again into a state of relative imbalance.
Is the Permian Barreling Toward a Breaking Point?
Permian oil output is growing fast, pipeline capacity is full with little relief in sight, truck drivers are in short supply, and the value of basin-produced crude is sinking. Is a drop off in activity—including drilling and production—becoming inevitable?
Permian Oil Production Could Soon Reach 5.4 Million B/D
A report from IHS Markit forecasts continued strong production growth in the Permian over the next 5 years despite the well-documented challenges that have recently emerged in the basin.
IOGP Report Explores Changing Global Oil and Gas Supply-Demand Mix
The world’s sources of oil and gas supply and demand are changing, which is captured by a report from the International Association of Oil & Gas Producers. Technological advancements and economic development are serving as catalysts behind a new energy landscape.
DeepStar Accomplishments in Continued-Service Realm
Offshore operators must grapple with ways to keep aging floating facilities on station beyond their original design life.
Abu Dhabi Plans International Tender for Oil and Gas Exploration Blocks
Abu Dhabi will conduct its first-ever competitive tender for international partners to explore and develop oil and gas blocks onshore and offshore.
With US Growth Toward Global Energy Dominance, Infrastructure, Technology Advances Remain Critical
The United States is producing a growing share of the world’s oil and gas, with a potential impact that remains uncertain. But continuing infrastructure development and technology advances will be critical in the long term.
US Gulf of Mexico Production Projected To Hit Record High
Falling costs and breakeven prices, increased operational efficiencies, and favorable government policy are at the heart of a potential short-term boon in Gulf of Mexico production.
IEA Sees No End to US Shale Output Surge
The scheme by OPEC and non-OPEC producers to collectively curb oil production has brought stability to the global market—which, as a result, could soon be awash in “a second wave” of US shale output growth.
History Matching and Forecasting
One unfortunate consequence of a base-case model, however, is the risk of an anchoring effect, in which case we may underestimate uncertainty. Essentially, the anchoring effect refers to our tendency to rely too heavily on the information offered, introducing a bias in the model-construction process
Alternatives No Threat to Oil, Aramco CEO Says
Fears of peak oil demand are exaggerated, Saudi Aramco’s CEO says, despite recent headlines that advances in electric vehicles and worries about climate change will lead to a drop in global oil and gas use.
Oil and Gas Acquisitions Ready To Grow
Oil industry acquisitions appear ready to increase in 2018 and shift from survival strategies toward growth objectives, according to key business observers at global professional services firm EY.
US Projected to Become Net Energy Exporter by 2022
Continued growth in production driven by natural gas, along with a modest increase in US energy consumption, will lead the US to become a net energy exporter within 4 years according to a new report from the EIA.
E&Ps Hedging Production To Support Cash Flow and Returns Goals
Facing increased pressure to deliver neutral cash flows and stronger corporate returns, North American E&P companies hedged more oil and gas production than usual heading into 2018.
Banker: All ‘Going Right’ With Delaware Play
The industry has figured out how much opportunity lies in the Permian Basin’s Delaware subbasin, and the Delaware play is now dominating US unconventional oil activity, Citigroup’s Jeff Sieler told the SPE Gulf Coast Section reservoir group recently.
Oil Discoveries Fall to Lowest Level in 70 Years
Low oil prices that forced operators to slash upstream spending budgets has led to the lowest level of discoveries in decades.
Increased Spending, Project Sanctions to Fuel Global Upstream Resurgence in 2018
With their newly refined portfolios, operators are looking toward growth in the coming years but will remain cautious given ever-changing industry economics.
Hebron Field Begins Producing 37 Years After Discovery
The Hebron field off the east coast of Canada has begun production 37 years after it was discovered. Production is expected to peak at 150,000 B/D and ultimately yield about 700 million bbl of oil over the field's life.
OPEC, Non-OPEC Partnership Extends Production Cuts Through 2018
OPEC and a Russian-led group of non-OPEC producers agreed to extend their deal to collectively curb oil production until the end of 2018, following through on their efforts to rebalance the oil market and support higher crude prices.
Don’t Kill the Chickens, Build Community Consensus
We hear the term “social license” a lot. We have created a new term that people can hide behind and debate endlessly. I believe that we need to take it to the broader level and rethink how we do our work and achieve "community consensus."
Angola: Does Recent Change Mean Economic Development?
Angola’s powerful oil and gas industry has enabled the country’s rapid growth, but an overreliance on those revenues has posed major challenges. Does a recent change of leadership mean a shift in the nation’s economic direction?
Energy Panel: Efficiency Focus Still Necessary in an Era of Transition
Despite optimism in a shift from “lower for longer” oil prices, industry executives stressed the value of maintaining efficient operating practices.
Outlook Points to Peak Transport Demand for Oil
Oil demand growth from the transportation sector, the linchpin of oil consumption, will slow to a trickle by 2035 and level off, while demand from the petrochemicals sector will become oil’s chief growth driver, the BP 2017 Energy Outlook says.
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