TOPICS OF INTEREST
PETROLEUM ECONOMICS/PRODUCTION FORECASTING
Rising US Natural Gas Prices During Pandemic Erode LNG Competitiveness
Shale-based associated gas production is behind the phenomenon. When oil prices do not support production, associated natural gas production also stops, with little to no consideration of natural gas prices.
Staged Development Strategy Benefits Smaller Oil Fields
An ATCE presentation outlined how staged field development can help make smaller oil discoveries commercial alongside existing engineering solutions.
Oil-Production Costs Reach New Lows, Making Deepwater One of the Cheapest Sources of Novel Supply
In an updated projection, Rystad said that a breakeven of only $50/bbl is needed to produce 100 million BOPD in 2025, reflecting the reduction in oil-production costs.
New LNG Projects – All Dressed Up and No Place To Go
Wood Mackenzie is bullish on the future of global LNG demand. Chief Analyst Simon Flowers outlines the risks ranging from spot prices, project economics, and environmental concerns.
US Agencies Advance Research To Increase Gulf of Mexico Production
The research will focus on potential policy changes that could help increase oil and gas production from deepwater infrastructure already in place in the Gulf of Mexico to reduce stranded assets.
Economic Downturn Underlines Key Risks for Midstream Operators
An economic downturn and global pandemic are among many issues US midstream operators are dealing with in 2020, including exposure to upstream bankruptcies, limited M&A activity, and regulatory issues.
Another 150 North American E&Ps May Require Chapter 11 Protection Through 2022
Several E&P and OFS companies have already filed for Chapter 11, but unless prices strengthen the total number of filings could be as high as 190 by 2022.
US Geothermal Power Technology Shifts From Steam to Binary Cycle
Nearly 90% of geothermal capacity built since 2000 is binary cycle.
Canada's Shipping Runs Off the Rails
The country’s once-thriving railway system has skidded to a stall, falling victim to low crude-oil prices, reduced demand, and government-imposed oil production cuts.
What Are the Market Drivers for a Recovery?
Crude oil and natural gas prices may recover moving into 2021, albeit at different rates brought on by a variety of market dynamics. Geopolitics and the potential for another wave of COVID-19 cases and resulting lockdowns still pose a threat to the industry.
US Crude Exports to China May Depend on Arbitrage
US crude exports to China have decreased from peak levels in May and June, but Vortexa said there may be unique opportunities looking forward.
Asian Demand Boosts North Sea Crude Exports
Most crude exports coming out of the North Sea since March have been destined for Asia, where floating storage levels remain high.
Supply/Demand Fundamentals Bring US LNG Exports Down More Than Half in Q2
The drop in US LNG exports comes amid a combination of weak demand, ample supply, additional capacity coming on line, and flexibility to cancel US cargoes.
Energy Intelligence Groups Identify Key Challenges to Permian Water Growth and Recovery
A recovery in the energy industry is key to the oilfield water sector in the Permian. But the industry must address issues such as further research, regulatory changes, and technology.
Offshore Drilling Drying Up as Debts Continue To Swell
With contracts canceled and pressures mounting, offshore oil drillers struggle to stay afloat.
Offshore Drilling Drying Up as Debts Continue To Swell
With contracts canceled and pressures mounting, offshore oil drillers struggle to stay afloat.
More Job Cuts Announced in Europe
Sandvik and Van Oord’s announcements come a week after oil major BP said it’s slashing 10,000 jobs.
Experts Discuss the Health of US LNG Industry
Texas LNG’s CEO Vivek Chandra and ALNGE Principal Luc Speeleveld outlined key issues and concerns facing the US LNG industry now and in the future as market dynamics remain affected by COVID-19.
Study Outlines Potential Economic Impacts of GOM Oil and Gas Industry Through 2040
The economic impact report looked at scenarios involving current policies and potential bans on both drilling permits and offshore leases.
India Looking To Store Oil in the US Petroleum Reserve
India may be the second country to lease space in the US SPR. Capacity at the SPR has been building for the past 5 weeks.
Premier Recasts First Oil for Tolmount, Seeks Acquisition Deal with BP
North Sea system now on track for completion in Q2 2021.
Natural Gas Markets Remain Regionalized
Historically, natural gas contract prices were tied to the price of crude; now, volatility and growth in spot-market liquidity signal a shift from long-term linking toward a more integrated market.
Global Oversupply of Crude Leads to Scramble for Storage Solutions and Alternatives
No vacancy? The hunt for global alternatives to store crude oil includes offshore, global strategic reserves, pipelines, rail cars, and trucks.
Global Supply/Demand Imbalance Cut in Half for May as Storage Space Remains Tight
Rystad Energy estimates show demand will be at its lowest in April before moving back up again in May.
Commercial Crude Stockpiles Nearing Record Levels
The US crude inventory grew by 74 million bbl since 13 March when the US declared a national emergency in response to COVID-19.
Lack of Storage Space Drives Nymex WTI to Record Low in Negative Territory
Shut-ins and planned production cuts have not affected crude prices, say industry experts.“It’s like trying to explain something that is unprecedented and seemingly unreal."
UPDATE: Limited Storage Capacity and Global Supply Glut Lead to Record Low Oil Futures
Nymex WTI crude opened Monday on track for its worst day on record, falling nearly 40% to $11.05/bbl on the back of excess supply vs. low demand and dwindling storage capacity.
Current Challenges for the UK and Norway in the Face of COVID-19
Westwood Global Energy’s analysis looks at production, cost, and revenue estimates in the UK and Norway, should oil prices remain low. The research group also provided an outlook on drilling activity.
Global Gas Prices Expected To Drop Further Than Expected in 2020
The drop in gas prices, although greater than forecast, will not be to the same extent as oil prices.
Oil and Gas in the Perfect Storm
The market in 2020 will be oversupplied by 3–5 million B/D and global inventory will surpass 400 million bbls over the next few months, according to ADI Analytics.
Aker Solutions To Provide Umbilicals for Chevron’s Gulf of Mexico Project
The umbilicals will be designed and manufactured at Aker Solutions’ facility in Alabama.
Indonesia’s 2020 Oil and Gas Output Likely To Fall, Despite Official Forecasts for Growth
Indonesia’s production of both oil and gas will most likely fall in 2020, a Rystad Energy analysis shows, despite the country’s official projections of a combined 8% growth year-on-year.
Qatargas, Shell Sign LNG Delivery Agreement to Kuwait
The LNG will come from the offshore Qatargas 4 project in the North Field, a joint venture between Qatar Petroleum and Shell.
Coronavirus Set To Slash Chinese LNG Demand but US LNG Tariff Lift Could Save the Day
The unseasonably warm weather in the northern hemisphere and the rise of the global supply levels has resulted in record-low LNG prices. Adding to that, the coronavirus epidemic in China has reduced business and industrial activity, with January’s LNG imports dropping by about 10% year on year.
Take 10: Oil & Gas, Energy, and Chemicals in 2020
What will 2020 look like for the oil and gas, energy, and petrochemical markets? Here are 10 observations from ADI Analytics that demonstrate just how global and complex the energy mix has become.
Better Abandonment Cost Estimates Yield Improved Project Valuations
Developing an asset requires key investment decisions to be made early in the process, and as a result, some critical cost evaluations—such as abandonment—are often ballpark estimates. Adjusting the parameters for evaluating these costs can lead to more-accurate project valuations.
Natural Gas Prices Raise Questions About the Future Energy Mix
Natural gas has emerged as a potentially major player in the energy mix, but what role will price pressures play in sanctioning gas supply projects and in LNG markets?
UK Leads Global Drop in Operational Production Costs
Global OPEX is falling, and the UK has emerged as a cost-cutting powerhouse among global offshore regions feeling the squeeze of uncertain oil prices. In pursuit of lower unit prices, Rystad Energy says that operators and contractors have begun nurturing operational improvements.
Oil Price Spike Could Send Service Company Margins Higher
The recent jump in oil price could create additional momentum for margins in the service sector. With shale euphoria wearing off, service company margins are still showing some resiliance. If the price hike persists into 4Q 2019, increased activity could improve pricing further.
Subsea Markets Face High Stakes if Oil Prices Slide
In a $60 to $70 oil environment, the subsea market is poised to grow around 7% annually up to 2025. But a significant portion of this activity is at risk if the price of Brent crude falls to $50 per barrel.
Capital Discipline Drives E&P Sector as Investors Look for Better Returns
The E&P sector has maintained a strong focus on capital discipline during its recovery from the 2014 oil price downturn, as investors look for companies to generate free cash flow to help pay down debt. How will this focus affect sector growth in the near term?
Australia Set To Become King of LNG Exports
Exports capacity has been rising for a decade and is on track to become the world leader within a year.
Plains Adds Fee for New Pipeline, Cites Tariffs
In a filing with the US FERC, Plains All American Pipeline said it would begin charging shippers an additional fee on its Cactus II pipeline to offset higher construction costs incurred in the wake of US steel tariffs.
Shell Sanctions Deepwater PowerNap Project
The subsea tieback is expected to start up in 2021. This is Shell’s second major development on a tieback in the US Gulf of Mexico, following Kaikias’ startup in May.
Vaca Muerta Growth Drives Argentina LNG Exports
Production from the Vaca Muerta now accounts for 23% of Argentina’s natural gas output. With only 4% of the shale play’s acreage in development, the US EIA says the country is in position to boost LNG exports in the coming years.
Aker Energy Moves Closer to IPO
With a $100-million investment and submittal of its offshore Pecan field development plan to Ghana authorities, Aker Energy continues its positioning for an IPO later this year.
ADNOC and CNOOC To Collaborate in Upstream, Downstream, and LNG
ADNOC and CNOOC will explore multiple new opportunities for collaboration across the upstream and downstream sectors in the UAE and China.
Africa Takes the Lead in Record Year for LNG
Driven by Mozambique’s Area 1 and Area 4 projects, Africa is poised to become the dominant LNG investment destination by the end of this year, with the continent seeing nearly one-third of total greenfield investment.
New Pipelines Needed to Meet Surge in Permian Crude Demand
Growing supply of Permian crude oil means the basin will need extra takeaway capacity of up to 500,000 B/D by the end of the 2020s, according to new research from Wood Mackenzie.
US LNG Export Capacity Growth Will Keep Floor Under Natural Gas Prices
With almost 10 Bcf/D of liquefaction capacity scheduled to go into service by 2025, a new report from Moody’s says that US LNG exports should help solidify a floor under natural gas prices as LNG markets see a shortfall in supply.
Kuwait Oil Pursues Offshore E&P, Signs With Halliburton for Services
Kuwait Oil Co. signed a $597-million offshore drilling services contract with Halliburton for six high-pressure/high-temperature exploration wells on two jackup rigs in the Arabian Gulf.
Service Companies Show Pricing Power Growth
New analysis from Rystad Energy shows service companies are beginning to raise prices after seeing a significant drop following the oil price downturn. Pricing power is projected to keep rising in 2020 as the service industry sees more demand across the supply chain.
Shell Ships First LNG Cargo From Prelude
First cargo from the world’s largest floating LNG project comes in the midst of low LNG prices sparked by a global supply boost. Prelude is expected to produce 3.6 mtpa for Shell.
Tariffs Pack a Bigger Punch Than Tax Incentives
Louisiana state granted a tax incentive to LNG Ltd. for its Magnolia project in Lake Charles. Although a beneficial development, it’s a drop in the bucket in the company’s progress toward FID.
US Exceeds One-Year Mark as Natural Gas Exporter
An EIA report shows natural gas exports reaching 4.6 Bcf/D in February, the 13th consecutive month in which the country's natural gas exports exceeded its imports. Exports are projected to reach 7.5 Bcf/D by 2020.
Will LNG Drive Asia’s Sustainable Future?
Coal remains the biggest challenge to LNG in Asia.
US on Pace To Top Saudi’s Liquid Exports This Year
The shale revolution is leading the US into a unique position: a bigger exporter of crude and petroleum liquids than the Kingdom of Saudi Arabia.
How Many Export Terminals Does the US Need?
The new bottleneck for Texas’ crude production is not onshore—it is offshore. Shallow ports have kept big tankers from taking away the state’s expanding supply which has attracted a slew of proposed export projects.
Keep Your Eye on the Oil Price Ticker To Gauge 2019 Oilfield Services
The oilfield services sector showed steady revenue growth in 2018 thanks, in part, to increased project sanctioning. With the oil price falling $20 in the past 2 months, however, the future may be murkier than expected.
Sustained Subsea Hardware Investment Projected for Near Term
Westwood forecasts a recovery in the subsea market backed by a new wave of offshore investment. Subsea vessel operations and hardware expenditure are expected to total $152 billion from 2019 to 2023.
US To Become Third-Largest LNG Exporter in 2019
The US EIA projects LNG export capacity will rise to 8.9 Bcf/D by the end of next year, making the US the third-largest exporting country in the world behind Australia and Qatar.
FPSO Market Set To Rebound Over Next Three Years
A report from Rystad Energy shows a near-term boost in the global floating production market, with more than 30 new FPSO projects possibly reaching sanction from 2019 to 2021.
Equinor Submits Phase 2 Plan for Johan Sverdrup to Norway Regulator
Equinor submitted the development plan for Phase 2 of the Johan Sverdrup project on 27 August with an increased resource estimate and a cut of NOK 6 billion in investment costs.
UK E&P Activity Looks Promising for 2018, But Questions Remain
A new report from Oil & Gas UK explains how the UK North Sea is showing signs of life, but warns that new exploration investment will be necessary to avoid another production downturn.
Government, Industry, Consumers, and Arithmetic: How Will the Rise of Electric Vehicles Impact Oil Demand?
Even if EVs reach cost and performance parity with conventional combustion engines, a lot of questions remain about how long it will take for consumers to get comfortable that parity is real, and for manufacturers to turn over enough volume to make a big enough impact on the oil industry.
Oilfield Services Q3 Review: Promising Outlook After Tough Times
A rise in oil prices close to 3-year highs should further stimulate a recovering oilfield services and equipment sector, despite lower than expected late-2017 activity in US shale.
2018 Global Natural Gas Outlook
Natural gas is the only fossil fuel that will maintain its share in the energy mix of the coming decades, mainly supported by policies to reduce air pollution and greenhouse gas emissions.
2017 Energy Outlook
As the debate continues about oil prices and supply and demand, the SPE Production and Facilities technical director examines data published by various organizations on the short- and long-term industry outlook.
Book Summary and Commentary: The Price of Oil
In the Price of Oil, Roberto Aguilera and Marian Radetzki predict a dramatic increase in shale oil and other tight oil production from about 4 million BOPD today to as much as 40 million in 2035. This will have a limiting effect on oil price.
Iranian Oil and Gas Production Shows Significant Upside Potential, but Limitations Remain
Iran’s oil and gas sector has been significantly affected by the introduction and tightening of international sanctions in recent years. represents a significant step forward in terms of normalizing the country’s relations with the global community.
Hedgehogs vs. Foxes: Improving the Accuracy of Predictions
Can aggregative contingent estimation (ACE) improve the quality of oil price forecasts and even project performance? I have come to believe that oil price can be determined with reasonable confidence, and the key to such forecasting is ACE.
Oil at USD 20 per Barrel: Can It Be?
The oil price cannot be USD 20 for any long period because we cannot produce enough oil to feed the world at that price. But if the price of oil is based on supply and demand, how could it fall to USD 20 at any point in time?
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