TOPICS OF INTEREST
PETROLEUM ECONOMICS/PRODUCTION FORECASTING
Further Cuts Announced Due to Low Oil Price, Supply/Demand Imbalance
ExxonMobil and Halliburton made additional cuts in spending and personnel.
Rapid Forecast Calibration Using Nonlinear Simulation Regression With Localization
The industry increasingly relies on forecasts from reservoir models for reservoir management and decision making. However, because forecasts from reservoir models carry large uncertainties, calibrating them as soon as data come in is crucial.
What Role Will LNG Play in Balancing Gas Demand in the MENA Region?
The complete paper analyzes the role of liquefied natural gas (LNG) in balancing the natural gas demand in the Middle East/North Africa (MENA) region.
Upstream Digitalization Is Proving Itself in the Real World
For the upstream industry, where improvement in efficiency or production can drive significant financial results, there is no question that the size of the digital prize is huge. So are the challenges.
Model Error Estimation Improves Forecasting
The results of the authors’ research showed a promising benefits from use of a systematic procedure of model diagnostics, model improvement, and model-error quantification during data assimilations.
Multilevel Strategies Improve History Matching of Complex Reservoir Models
The complete paper explores the use of multilevel derivative-free optimization for history matching, with model properties described using principal component analysis (PCA) -based parameterization techniques.
Whiting Files for Bankruptcy
The Denver-based shale producer is the first to cite the ongoing price war and COVID-19 pandemic as the triggers for its insolvency.
US to Consider Leasing Space in Strategic Petroleum Reserve
The potential leasing of space in the SPR comes after the DOE’s plans to buy crude oil were suspended. US oil inventory stockpiles stand at a 10-month high.
History Matching and Forecasting
Most history-matching studies have fixed resources—that is, the team of engineers and geoscientists is predetermined. Moreover, the deadlines are always very strict. This constrained scenario often leads to an unfortunate result: The quality of the study suffers.
UPDATE: Oil Industry Budget Cuts Adding Up Across the Globe
The list of companies that are slashing millions and sometimes billions from their annual spending programs is growing longer as the ripple effects of a price war and pandemic spread across the globe.
Chevron Hits the Brakes on Permian, Cuts $8 Billion Across Company
The international major has lowered its output forecast in the world’s most prolific unconventional basin by 20%.
Industry Faces Long Road to Recovery
Leaders of Rystad Energy went online recently to talk about the effects of the coronavirus pandemic on the oil and gas industry, and the prognosis isn’t good.
Is Depression-Era Production Regulation What OPEC Really Wants To See?
The notion that the state of Texas could help oil producers by limiting production at a time when the market is glutted has a real history in Texas, but an iffy future.
Historic Oil Glut May Linger for Years
Oil prices got bad fast, so when will they get better? Don’t bet on a quick recovery.
Facts and Figures: US To Fill Strategic Petroleum Reserves Amid Historic Price War
In its first response to the Russia-Saudi Arabia price war, the US government will purchase up to 78 million bbl of crude to protect domestic producers.
E&P Spending Cuts Spur Requests for Reduced OFS Fees
The shale industry could shoulder 65% of $100-billion 2020 global E&P spending cut. Can oilfield services providers afford to cut their fees further to prop up hard-hit operators?
Oil Price Crash Triggers Decisions To Slow Drilling
The prescribed treatment for market- and virus-induced oil price collapse is to quickly slow production growth. Two US shale companies moved swiftly to cut the pace of drilling and completions, but it is too soon to know if that will have any impact.
Record US Production Topped 12 Million B/D in 2019, Will Climb Slower This Year
Led by Texas and New Mexico, year-over-year crude output jumped by 11% according to the US Energy Information Administration. Going forward, new records will be set but at a slower pace.
Maintaining Seismic-Focused Exploration During Downturn Yields Benefits
This paper demonstrates how maintaining investment in high-quality 3D seismic during the last downturn, together with selective exploration, quality geoscience, application of new technologies, and efficiently maturing discoveries to early cash flow, was successful in sustaining future production.
Life After 5: How Tight-Oil Wells Grow Old
Production data from the oldest horizontal wells in the three largest oil plays in the US show that annual decline rates remain relatively high for a long period of time. This challenges assumptions held about production after 5 years and directly affects reserve and ultimate recovery estimates.
EIA: US Crude and Renewables Will Coexist For Decades To Come
While renewable energy sources are poised to see major growth, possibly displacing natural gas as the top source of electricity in the US, hydrocarbon production will remain above or near current historical highs until at least 2050.
ExxonMobil: Another Guyana Discovery, Ups Recoverable Reserves, Adding a Drillship
Guyana continues to strengthen its reputation as the world’s fastest growing offshore exploration hotspot.
2020 Will Be Year of New Directions and Complex Choices for Oil and Gas Industry
Amid weakening confidence and volatile market conditions, greater efficiencies and decarbonization are at the center of the industry’s agenda.
Eni, ADNOC Sign Carbon Capture Agreement
The companies will focus on research and development to reduce CO2 emissions and promote the circular economy.
Israel Starts Exporting Natural Gas to Egypt
Landmark deal called most significant since 1979 peace treaty.
US Shale: All Signs Point to Further Consolidation
As capital markets dry up and shale producers look for pathways to growth, oil and gas data analytics firm Enverus predicts the US sector will see a “surge” in mergers and acquisitions in 2020.
Study Assesses Incentives, Development Strategies for Peruvian Mature Heavy Oil
The complete paper explores technical and economic development options to produce heavy-oil resources at commercial rates and showcases three optimization scenarios of higher recovery efficiency aimed at increasing net present value at the basin level.
Shale, Tight Oil Investments to Fall 12% in 2020; Global Deepwater Rising
Lower oil prices and capital discipline are expected to result in 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: Updated 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.
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.
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.
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.
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27 March 2020