the biggest drop in commercial crude supplies in 41 months leaves US oil supplies at a 21½ year low, Strategic Petroleum Reserve at a 38½ year low, oil + oil products supplies at an 18 year low as net oil imports hit a record low
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending November 25th indicated that after a drop in our oil imports, a jump in our oil exports, and another increase in our refinery throughput, we needed to pull oil out of our stored commercial crude supplies for the 10th time in 16 weeks, and by the most since June 21, 2019, despite a big jump in crude supplies that could not be accounted for.... Our imports of crude oil fell by an average of 1,027,000 barrels per day to average 6,037,000 barrels per day, after rising by an average of 1,504,000 barrels per day during the prior week, while our exports of crude oil rose by 706,000 barrels per day to average 4,948,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 1,089,000 barrels of oil per day during the week ending November 25th, 1,733,000 fewer barrels per day than the net of our imports minus our exports during the prior week, and the lowest net import figure on record. Over the same period, production of crude from US wells was reportedly unchanged at 12,100,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 13,189,000 barrels per day during the November 25th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,638,000 barrels of crude per day during the week ending November 25th, an average of 228,000 more barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net average of 1,997,000 barrels of oil per day were being pulled out of the various supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures from the EIA for the week ending November 25th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,452,000 barrels per day less than what our oil refineries reported they used during the week. To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+ 1,452,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed....moreover, since last week’s EIA fudge factor was at (+733,000) barrels per day, that means there was a 719,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, rendering those comparisons complete nonsense....however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….
This week's 1,997,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 808,200,000 barrels at the end of the week, which was our lowest total oil inventory level since March 2nd, 2001, and therefore at a new 21 1/2 year low...Our oil inventories decreased this week as an average of 1,797,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 200,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR, (the smallest draw since February), was an extension of the emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was originally intended to supply 1,000,000 barrels of oil per day to commercial interests over a six month period from its inception to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising over that time....The SPR withdrawals under that program had been fluctuating in recent weeks because the administration has been attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis; furthermore, Biden recently announced another 15,000,000 barrel release from the Strategic Petroleum Reserve to run thru December, while simultaneously announcing he'd buy crude to replenish the SPR if oil prices fall to or below the $67-72 a barrel range, effectively putting a floor under oil at that price.....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 267,031,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 28 months, and as a result the 389,116,000 barrels of oil that still remain in our Strategic Petroleum Reserve is now the lowest since March 16, 1984, or at a new 38 1/2 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's SPR releases. The total 180,000,000 barrel drawdown of the current release program, now scheduled to run through December, will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at the current consumption rate...
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,287,000 barrels per day last week, which was 0.9% less than the 6,335,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 12,100,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 11,700,000 barrels per day, while Alaska’s oil production was 3,000 barrels per day lower at 444,000 barrels per day but had no impact on the rounded national total. US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 7.6% below that of our pre-pandemic production peak, but was 24.7% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021...
US oil refineries were operating at 95.2% of their capacity while using those 16,638,000 barrels of crude per day during the week ending November 25th, up from their 93.9% utilization rate during the prior week, and the highest November utilization rate since 2018....The 16,638,000 barrels per day of oil that were refined this week were 6.4% more than the 15,631,000 barrels of crude that were being processed daily during week ending November 26th of 2021, but 1.0% less than the 16,798,000 barrels that were being refined during the prepandemic week ending November 29th, 2019, when our refinery utilization was at 91.9%, within the normal utilization range for late November...
With the increase in the amount of oil being refined this week, the gasoline output from our refineries was also higher, increasing by 196,000 barrels per day to 9,164,000 barrels per day during the week ending November 25th, after our gasoline output had decreased by 625,000 barrels per day during the prior week.This week’s gasoline production was still 3.0% less than the 9,649,000 barrels of gasoline that were being produced daily over the same week of last year, and 5.8% below the gasoline production of 9,941,000 barrels per day during the prepandemic week ending November 29th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 200,000 barrels per day to 5,311,000 barrels per day, after our distillates output had increased by 14,000 barrels per day during the prior week. And with that big increase, our distillates output was 9.0% more than the 4,872,000 barrels of distillates that were being produced daily during the week ending November 26th of 2021, and 0.9% more than the 5,263,000 barrels of distillates that were being produced daily during the week ending November 29th 2019...
With the increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 6th time in 16 weeks; increasing by 2,770,000 barrels to 213,768,000 barrels during the week ending November 25th, after our gasoline inventories had increased by 3,058,000 barrels during the prior week. Our gasoline supplies rose by less this week even as the amount of gasoline supplied to US users fell by 10,000 barrels per day to 8,317,000 barrels per day, because our imports of gasoline fell by 50,000 barrels per day to 535,000 barrels per day, and because our exports of gasoline rose by 240,000 barrels per day to 1,138,000 barrels per day. But after 31 gasoline inventory drawdowns over the past 43 weeks, our gasoline supplies were still 0.8% lower than last November 26th's gasoline inventories of 215,422,000 barrels, and about 4% below the five year average of our gasoline supplies for this time of the year…
With the big increase in our distillates production, our supplies of distillate fuels increased for the 12th time in 17 weeks and for the 25th time in the past year, rising by 3,547,000 barrels to 112,648,000 barrels during the week ending November 25th, after our distillates supplies had increased by 1,718,000 barrels during the prior week. Our distillates supplies rose by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 190,000 barrels per day to 3,656,000 barrels per day, even as our exports of distillates rose by 148,000 barrels per day to 1,300,000 barrels per day, while our imports of distillates rose by 30,000 barrels per day to 152,000 barrels per day.... But after fifty-two inventory withdrawals over the past eighty-three weeks, our distillate supplies at the end of the week were were still 9.1% below the 123,877,000 barrels of distillates that we had in storage on November 12th of 2021, and about 11% below the five year average of distillates inventories for this time of the year...
Meanwhile, after the big decrease in our oil imports, the big increase in our oil exports, and the increase in oil used by our refineries, our commercial supplies of crude oil in storage fell for the 12th time in 20 weeks and for the 32nd time in the past year, decreasing by 12,581,000 barrels over the week, from 431,665,000 barrels on November 18th to 419,084,000 barrels on November 25th, after our commercial crude supplies had decreased by 3,690,000 barrels over the prior week. After this week's big decrease, our commercial crude oil inventories fell to around 8% below the most recent five-year average of crude oil supplies for this time of year, but were still almost 24% more than the average of our crude oil stocks as of the last weekend of November over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And after our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this November 25th were 3.2% less than the 433,111,000 barrels of oil we had in commercial storage on November 26th of 2021, and 14.1% less than the 488,042,000 barrels of oil that we had in storage on November 27th of 2020, and 6.3% less than the 447,096,000 barrels of oil we had in commercial storage on November 29th of 2019…
Finally, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are also continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR. In spite of the gasoline and distillates inventory increases we've already noted for this week, that big drop in crude supplies meant that the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 10,173,000 barrels this week, from 1,610,605,000 barrels on November 18th to 1,600,432,000 barrels on November 25th, after our total inventories had increased by 1,740,000 barrels during the prior week. This week's decrease left our total petroleum liquids inventories down by 188,001,000 barrels over the first 47 weeks of this year, and at the lowest level since June 11, 2004, or at a new 18 year low...
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Why Ohio’s top oil and gas producing counties continue to lag in jobs --A decade after the start of Ohio’s shale gas boom, counties with the most oil and gas production continue to have higher-than-average unemployment rates.A review of state data shows that unemployment rates in Belmont, Carroll, Guernsey, Harrison, Jefferson, Monroe and Noble Counties have exceeded the statewide average every year since 2010, casting doubt on the view that the shale gas industry would be a game changer for jobs in Appalachian Ohio.A report commissioned by the industry-funded Ohio Oil and Gas Energy Education Program predicted in 2011 that the shale gas industry would create or support 204,000 jobs as soon as 2015. Annual reports by the Ohio Department of Job and Family Services, however, show a net increase of less than 21,000 jobs in core and supporting industries since a 2012 lawopened Ohio to widespread development of fracked, horizontal wells.Even with the jobs that were added, the top-producing counties still have higher unemployment rates compared to the state overall. The Energy News Network interviewed more than a dozen experts and local sources and heard four recurring explanations for the disparity.
- 1. Jobs — and workers — came and went. Oil and gas drilling jobs are similar to construction in that the work tends to be temporary and often performed by workers who travel from one job site to the next. “Our crews move from one well pad to the next, so the jobs follow the rigs; same with pipelines,” said Mike Chadsey, spokesperson for the Ohio Oil and Gas Association.Once wells are producing, there’s much less work to be done, and thus fewer jobs. Meanwhile, many temporary jobs were filled with out-of-state workers, especially in the early years.
- 2. Not all jobs are where the drilling is. The Ohio Department of Job and Family Services estimated about 8,600 people worked in core shale-related industries in 2021, with another 184,000 working in "ancillary" industries ranging from trucking to engineering. Many of those jobs, particularly in ancillary fields, are not necessarily based in the same place as the drilling. For example, less than 2% of Ohio's freight trucking jobs in the ancillary categories are based in the seven highest oil- and gas-producing counties, federal data show.
- 3. Infrastructure and workforce support are lacking. From reliable broadband access to wide, well-maintained roads, Ohio’s top oil and gas counties still lack much of the infrastructure that many employers consider a prerequisite before opening facilities. “The infrastructure isn't there,” said Amy Rutledge, a longtime Carroll County resident who led its convention and visitors bureau until 2020. Many businesses expect fast internet, reliable cell phone service, and quick access to interstate freeways. But while I-70 and I-77 cross the seven-county region, Carroll County has no four-lane roads, she said.
- 4. Declines in other industries continued. The rise of Ohio’s shale industry coincided with the ongoing loss of coal jobs and manufacturing work. Coal mining employed fewer than 300 people in Ohio in the first quarter of 2022 — less than one-tenth as many as in 2012. And Monroe County lost about 600 jobs in 2013 when Ormet Corporation shut down its aluminum smelter in Hannibal, Ohio. Monroe County Commissioner Mick Schumacher said oil and gas jobs helped some displaced workers stay in the area. But those other job losses have still taken a toll. Large manufacturing operations that would use the area’s wet gas haven't moved in yet, either. A proposed PTTGC America petrochemical plant for Belmont County was announced in 2015. But “there is no timeline for a final investment decision” by the company, said spokesperson Matt Englehart at JobsOhio, which has spent roughly $50 million on the proposed site.
Gas project, EJ concerns collide in the Florida Panhandle - — Some longtime residents of this city’s predominantly Black north side smell trouble in plans to develop a natural gas export hub on a tract vacated by a massive paper mill. The St. Joe Co. plant was a major employer and a major generator of foul-smelling emissions and health concerns for Beverly Ash and her neighbors in this small Florida Panhandle city. “I can go down this street and name a whole lot of people that passed, on every street here. Most of them had cancer-related illnesses,” said Ash, the owner of Moma Dot’s soul food restaurant in North Port St. Joe. “We don’t need another plant, because we had a lot of people that got sick and died.”Local politicians say those fears are unfounded and have touted the liquefied natural gas proposal’s potential to bring new jobs to the area. The dispute underscores a national tension over the benefits and costs of LNG at a time when U.S. gas exports are surging.Biden administration officials have framed LNG as a geopolitical asset that could help wean Europe off Russian gas and ditch dirtier fuels like coal. At the same time, President Joe Biden is promising to funnel money for environmental cleanups and clean energy into disadvantaged communities like North Port St. Joe.How LNG projects fit into those efforts is at the heart of a fierce debate in this sleepy port city of 3,300 people that’s just a 10-minute drive from the Panhandle’s famous white-sand beaches.“This administration is like Janus, the god of two faces,” said Sacoby Wilson, an associate professor at the University of Maryland and a former member of EPA’s National Environmental Justice Advisory Council. “On the one hand, you say you support environmental justice, but you do policy that’s not for environmental justice.”
Biden Admin Quietly Greenlights Plan To Build Huge Gulf Oil Terminal -The Biden administration has quietly approved plans to build a new crude oil terminal in the Gulf of Mexico off Texas, seemingly in contradiction to the president’s climate agenda.The Department of Transportation’s Maritime Administration approved the application (pdf) for Enterprise’s Sea Port Oil Terminal, one of four proposed offshore oil export terminals, on Monday.According to the application, the port will be located offshore of Freeport, Texas. It will have 4.8 million barrels of storage capacity and add 2 million barrels per day to the U.S. oil export capacity.In its 94-page decision (pdf), the Maritime Administration said that it had approved the application because the construction and operation of the port is “in the national interest and consistent with other policy goals and objectives.”“The construction and operation of the Port is in the national interest because the Project will benefit employment, economic growth, and U.S. energy infrastructure resilience and security,” the administration wrote. “The Port will provide a reliable source of crude oil to U.S. allies in the event of market disruption and have a minimal impact on the availability and cost of crude oil in the U.S. domestic market.” The decision states that the project will expand on an existing Enterprise Crude Houston operated terminal located in Houston and will generate 62 permanent jobs over 30 years. Additionally, 1,400 temporary construction jobs will be created, with the majority of the workforce being hired from existing labor pools in Texas and Louisiana, according to the application.
US shale producers chase productivity gains --Quality not quantity is now the primary objective for most US shale oil producers as they strive to improve capital efficiency. Improving well productivity is becoming the major challenge for the sector as firms face up to growing constraints on output growth. Rising costs, oil service supply-chain bottlenecks and well-performance issues have forced operators to scale back their plans and focus on improving yields. "We have been not satisfied with the 2022 well performance and have made a significant step change to our well-return thresholds going forward," Pioneer Natural Resources chief executive Scott Sheffield says, echoing comments by other publicly owned companies during the recent round of third-quarter earnings calls. Pioneer plans to use its extensive portfolio of contiguous acreage in the Permian Midland basin to focus on drilling longer wells that also exploit multiple stacked rock layers. "Our development strategy has fully transitioned to a full stack approach, which includes drilling up to six highly productive zones," Sheffield says. By drilling 15,000ft (4,572m) laterals, Pioneer says it can generate 20pc higher returns than from 10,000ft wells and aims to bring more than 100 of these wells on line next year compared with 50 or so this year. Other top shale producers are also prioritising longer laterals for the same reasons and are busy buying up adjacent land rights to extend their reach. In the US, the mineral rights for oil extraction belong to the landowner so firms must secure contiguous acreage to drill longer wells. Diamondback Energy recently bought two Midland basin firms — FireBird Energy and Lario Permian — with complementary land assets. "We have a significant amount of long lateral development ahead of us," the firm's chief financial officer Kaes Van't Hof says. Optimising well productivity is also a strategic goal for shale firms. Longer laterals, better well spacing and stacked developments not only improve returns but also slow decline rates. "Importantly, this resource capture allows us to sustain a high-margin production from these assets for many years to come and does not require us to accelerate drilling activity across other parts of the portfolio to maintain our overall productive capacity," Devon Energy chief executive Rick Muncrief says. Devon's underlying decline rates have improved significantly since its 2020 merger with WPX Energy. Well productivity in the shale patch has stalled since the pandemic (see graph). Average oil output from newly completed wells across the seven shale formations covered by the EIA's monthly Drilling Productivity Report (DPR) has remained just under 700 b/d since mid-2021 after nearly tripling in 2014-20. Part of the reason for this may be the high proportion of older drilled-but-uncompleted (DUC) wells used to create new capacity out of the massive DUC backlog accumulated during the pandemic. But the DUC share of new well completions has fallen from about a quarter in mid-2021 to virtually none today. Last month saw a small increase in the DUC count for the first time since mid-2020.
US rule would limit methane leaks from public lands drilling | AP News - The Interior Department has proposed rules to reduce methane leaks from oil and gas drilling on public lands, in the Biden administration's latest move to aggressively tackle emissions of the climate-warming greenhouse gas.The rules by the Interior's Bureau of Land Management would impose strict monthly time and volume limits on flaring, the process of burning excess natural gas at a well, and require payment for flaring that exceeds those limits.Global methane emissions are the second-biggest contributor to climate change after carbon dioxide and come primarily from oil and gas extraction, landfills and wastewater and livestock farming. Methane is a key component of natural gas and is 84 times more potent than carbon dioxide, but doesn't last as long in the atmosphere before it breaks down. Scientists have argued that limiting methane is necessary to avoid the worst consequences of global warming. The proposal would also require oil and gas producers to develop waste minimization plans demonstrating the capacity of available pipeline infrastructure for anticipated gas production. The BLM could delay action on or ultimately deny a permit to drill to avoid excessive flaring of gas, an activity it said has significantly increased over the last few decades."This proposed rule will bring our regulations in line with technological advances that industry has made in the decades since the BLM's rules were first put in place, while providing a fair return to taxpayers," Interior Secretary Deb Haaland said in a statement on Monday. Officials said the proposal would generate $39.8 million a year in royalties for the U.S. and prevent billions of cubic feet of gas from being wasted through venting, flaring and leaks. The BLM has a statutory mandate and legal authority to prevent the waste of public and tribal resources."This draft rule is a common-sense, environmentally responsible solution as we address the damage that wasted natural gas causes," said BLM Director Tracy Stone-Manning. "It puts the American taxpayer first and ensures producers pay appropriate royalties."The BLM's proposed rule comes after the Environmental Protection Agency said it would expand its 2021 methane rule to require drillers to identify and plug leaks at every well site across the country. The EPA said its updated rule would slash methane emissions from the oil and gas sector by 87% below 2005 levels and move the U.S. closer to its commitment to curb overall methane emissions by 30% by 2030.In addition to the EPA rule, the Inflation Reduction Act passed by Congress earlier this year would impose a tax on energy producers that exceed a certain level of methane emissions. Mallori Miller, vice president of government relations for the Independent Petroleum Association of America, argued that federal methane regulation should be handled by the EPA."The issue is not as cut and dried as this regulation would make it seem as there are many reasons to vent and flare gas, such as safety concerns and connectivity issues," Miller said. "Of course, it will always be in the best interest of a producer to capture and sell a commodity on the marketplace when at all possible." Cole Ramsey, vice president of upstream policy at the American Petroleum Institute, the oil and gas industry's largest trade group, said the association supports waste prevention regulations consistent with the Interior's authority to require the economic capture of greenhouse gasses. "We look forward to reviewing the proposed regulation in its entirety and will work with BLM in support of a final rule that is cost-effective and furthers the progress we continue to make on reducing emissions," Ramsey said.
Biden-Harris Administration Makes $50 Million Available to Clean Up Orphaned Oil and Gas Wells on Tribal Lands | U.S. Department of the Interior — The Department of the Interior today announced final guidance for Tribes on how to apply for the first $50 million in grant funding available under President Biden’s Bipartisan Infrastructure Law to clean up orphaned oil and gas wells. The Bipartisan Infrastructure Law provides a total of $4.7 billion to address orphaned wells across the country, including $150 million for Tribal communities over five years. The final guidance is the result of a 60-day nation-to-nation consultation process.There are several thousand orphaned oil and gas wells on Tribal lands, jeopardizing public health and safety by contaminating groundwater, seeping toxic chemicals, emitting harmful pollutants including methane, and harming wildlife. Some of these wells are underwater, which creates an especially high risk of adverse impacts.“Through President Biden’s Bipartisan Infrastructure Law, we are making historic investments to reclaim orphaned oil and gas wells on Tribal lands and address long-standing environmental injustices left behind by extractive industries,” said Secretary Deb Haaland. “As part of our treaty and trust responsibility we have engaged in nation-to-nation consultations since the inception of this program so we can assist tribal nations in revitalizing their communities and help ensure future generations will have clear air, drinkable water, fertile soil and an overall good quality of life.”The Bipartisan Infrastructure Law makes a historic $13 billion investment in Tribal communities — the largest investment in Tribal infrastructure ever. This includes funding to repair wastewater and sanitation systems, clean up legacy pollution, and invest in climate resilience, such as funding community-driven relocation planning and adaption for Tribes impacted by rising seas, coastal erosion and storm surges.
BOEM to Offer 958K Acres Off Alaska Coast in New Lease Sale The Bureau of Ocean Energy Management (BOEM) has announced that it will offer approximately 958,202 acres off Alaska’s southcentral coast in a lease sale scheduled for December 30, 2022. Dubbed the Cook Inlet Outer Continental Shelf Oil & Gas Lease Sale 258, the sale will offer for lease 193 blocks in the northern part of the Cook Inlet Planning Area in federal waters, BOEM outlined. The sale is in compliance with the Inflation Reduction Act of 2022 (IRA), BOEM pointed out, adding that the IRA directed it to hold the auction by December 31 this year. BOEM highlighted that, last month, it published a final environmental impact statement for the lease sale that identified “robust” mitigation measures to be considered in leasing the area. Mitigation measures identified in the final notice of sale will help protect sea otters, beluga whales, and subsistence, recreational, and commercial fisheries, BOEM noted. “On Friday, December 30, 2022, the Bureau of Ocean Energy Management will open and publicly announce bids received for blocks offered in the Cook Inlet Planning Area Outer Continental Shelf (OCS) Oil and Gas Lease Sale 258 (Cook Inlet Sale 258),” BOEM said in an organization statement. “The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region,” BOEM noted. “BOEM’s proposed economic terms are designed to encourage diligent development while ensuring a fair return to taxpayers,” BOEM added. Back in October, BOEM announced the next steps for oil and gas leasing on the Outer Continental Shelf (OCS) to comply with provisions in the IRA. These included a proposed sale for the Gulf of Mexico region and the completion of the environmental review for Cook Inlet, offshore Alaska.
US to Auction Almost 1 Million Acres Off Alaska for Oil Drilling - The Biden administration plans to offer hundreds of thousands of acres off the coast of Alaska for new oil and gas drilling next month, a sale mandated in Democrats’ Inflation Reduction Act to win the support of holdout West Virginia Senator Joe Manchin. The auction of more than 958,000 acres in Alaska’s Cook Inlet next month, announced by the Interior Department Monday, could produce nearly 200 million barrels of crude and 300 billion cubic feet of natural gas over the lifetime of the lease sales, according to department estimates, though it’s debatable whether any drilling will actually occur. The lease sale, to be held Dec. 30, was one of several previously canceled offerings reinstated in the Democrats’ climate spending bill signed into law in August, and considered a linchpin to win Manchin’s support. The Biden administration announced it had canceled the Cook Inlet sale in May citing a lack of interest, prior to the legislation’s enactment. Still, news of the sale that includes federal waters stretching roughly from Kalgin Island in the north to Augustine Island in the south, drew outrage from environmental groups, such as the Center for Biological Diversity. The nonprofit has said the activity would harm one of the world’s most endangered whale populations -- the Cook Inlet beluga -- as well as other species.
Chevron can resume key role in Venezuela’s oil output, exports - Chevron Corp on Saturday received a U.S. license allowing the second-largest U.S. oil company to expand its production in Venezuela and bring the South American country’s crude oil to the United States. The decision grants broader rights for the last big U.S. oil company still operating in U.S.-sanctioned Venezuela. However, it restricts any cash payments to Venezuela, which could reduce the oil available to export. License terms are designed to prevent state-run oil firm Petróleos de Venezuela, known as PDVSA, from receiving proceeds from Chevron’s petroleum sales, U.S. officials said. The license lasts for six months and will be automatically renewed monthly thereafter, the U.S. Treasury said. The U.S. authorization “brings added transparency to the Venezuelan oil sector” and allows Chevron to benefit from sales of “oil that is currently being produced” by its joint ventures with PDVSA, the California-based company said in a statement. Following oil sanctions on Venezuela in 2019, Chevron received an exemption to trade its Venezuelan crude to recoup pending debts. But those privileges were suspended a year later. Chevron’s four PDVSA joint ventures produced about 200,000 barrels per day of crude oil and exported the crude around the world prior to the sanctions. The United States issued the license on the same day that Venezuela and opposition leaders began a political dialogue in Mexico City by agreeing to ask the United Nations to oversee a fund providing food, healthcare and infrastructure to Venezuelans. Terms bar Chevron from helping the OPEC member develop new oilfields but provides a way for the company to recoup some of the billions of dollars owed by PDVSA through the oil sales. It also allows the U.S. company to import supplies to help process the country’s crude oil into exportable grades.
MTS supports Jamaica’s first ship-to-ship fuel transfer - Maritime & Transport Services Limited (MTS), a member of the Shipping Association of Jamaica, has supported Jamaica’s first ship-to-ship bunkering exercise of a vessel that is fuelled by liquefied natural gas (LNG). The vessel, the Solar Alice, received some 1,200 cubic metres of LNG bunkers from the Avenir Accolade, which is represented by MTS, on November 13, at Portland Bight, St Catherine. The Avenir Accolade operates between Jamaica and Puerto Rico transporting LNG. Maritime & Transport Services provides ship agency, liner service sales, warehousing, oil spill equipment and bunkering. According to Kim Clarke, chairman of MTS, rules established by the International Maritime Organization (IMO) for the reduction of the environmental impact of ocean-going vessels will see an increase in the use of LNG as a fuel for ships. He added that Jamaica’s location in the central Caribbean provides a great opportunity for the island to be a refuelling location for vessels that use this environmentally friendly fuel source. LNG emits less carbon dioxide than coal or oil. Natural gas is cooled to minus 162 degrees Celsius, which turns it into a liquid. Liquefaction reduces the volume to 1/600 of that of gas and enables it to be transported in large quantities by sea.
Europe To Raise LNG Import Capacity Significantly Through 2024 - The EU and the UK are expected to raise their combined LNG import capacity by 34%, or by 6.8 billion cubic feet per day (Bcf/d), by 2024 compared with 2021, the U.S. Energy Information Administration (EIA) said on Monday, citing data from the International Group of Liquefied Natural Gas Importers (GIIGNL) and trade press. Europe’s regasification capacity is set to increase by 5.3 Bcf/d by the end of 2023 and rise by an additional 1.5 Bcf/d by the end of 2024, according to the estimates. After a relatively modest expansion of LNG import capacity before 2022, Europe has rushed to reactivate and relaunch projects since the Russian invasion of Ukraine. Floating storage regasification units (FSRUs) are being set up in Germany, the Netherlands, and Finland. Eemshaven in the Netherlands and Wilhelmshaven and Brunsbüttel in Germany are expected to be operational by the end of this year. So far this year, around 1.7 Bcf/d of the new and expanded LNG regasification capacity has been added in the Netherlands, Poland, Finland, Italy, and Germany, the EIA said. The new EemsEnergy terminal in the Netherlands consists of two FSRU vessels and received its first import cargo in September 2022. The new FSRU terminal at Wilhelmshaven, Germany was completed earlier this month. Regasification terminals currently under construction in seven EU countries could add an additional 3.5 Bcf/d of new capacity by the end of 2023. Germany, Poland, France, Finland, Estonia, Italy, and Greece are currently working to expand LNG import capacities, mostly with FSRUs, according to the EIA. Demand destruction amid high prices could dent part of the LNG consumption in the short term in both Europe and Asia. But even in a weaker demand scenario, Europe will need a lot of LNG to replace all the Russian gas it will have lost after the end of this winter and to build up adequate inventories ahead of the 2023/2024 winter.
Shell Buys Renewable Natural Gas Producer For $2 Billion - Shell Petroleum, a wholly owned subsidiary of Shell, has reached an agreement with Davidson Kempner Capital Management, Pioneer Point Partners, and Sampension to acquire Nature Energy Biogas for nearly $2 billion. The acquisition will be absorbed within Shell’s current capital range, which remains unchanged. Based in Denmark, Nature Energy is a producer of Renewable Natural Gas (RNG) from agricultural, industrial, and household wastes. By purchasing the shares in Nature Energy, Shell will acquire the largest RNG producer in Europe, its portfolio of cash-generative operating plants, associated feedstock supply, and infrastructure, its pipeline of growth projects, and its in-house expertise in the design, construction, and operation of innovative and differentiated RNG plant technology. This acquisition will further increase Shell’s ability to work with its established customer base across multiple sectors to accelerate its transition to net-zero emissions. It will also support Shell’s ambition to profitably grow its low-carbon fuel production and customer offering in our world-leading customer-facing marketing business.
Egypt ready to meet part of Europe demand for natural gas, says minister - - Petroleum Minister Tareq al-Molla says that Egypt is ready to meet some of the demand for natural gas in Europe. Efforts exerted over the past years have made of Egypt one of the solutions to the ongoing energy problem, the minister said during the inauguration of the eighth “Egypt Oil and Gas Convention” earlier Sunday. Talking figures, the minister said that last year Egypt exported some seven million tons of liquefied natural gas – 80 percent of which went to European Union (EU) markets. This year, exports totaled around eight million tons, with 90 percent going to Europe, he added. Molla said that successes of the petroleum sector in Egypt are credited to an integrated program implemented in partnership between the public and private sector and fully supported by President Abdel Fattah al-Sisi and the government. The petroleum sector is also seeking mechanisms of action that would maximize cooperation with international partners to be able to make optimal use of natural resources, potentials and cadres, the minister told the gathering. Molla said he is optimistic about future success stories in light of continued and fruitful cooperation between local and international petroleum companies. All parties should unite to achieve goals of the Petroleum Ministry’s strategy, atop of which increasing and sustaining oil production, as well as reducing emissions, he urged.
Gaza gas deal could make improbable partners out of Israel and Hamas - Europe’s race to secure alternatives to Russian energy supplies is reviving a long-forsaken Palestinian initiative to extract natural gas off the coast of the blockaded Gaza Strip. Palestinian officials said that rapidly advancing negotiations with Egyptian investors could bring a rare glimmer of hope to Palestinians, after plans to develop Gaza’s gas — along with plans for the creation of a Palestinian state — were sidelined by more than two decades of grinding conflict with Israel and equally intractable Palestinian political divisions. The $1.4 billion project, which will be finalized by February 2023 and may launch gas production by March 2024, will be a high-stakes collaboration among the Palestinian Authority, Egypt, Israel and Hamas, the Islamist militant group that rules the Gaza Strip. Hamas and Israel have engaged in four devastating wars in the Gaza Strip. Both will need to be, at least tacitly, on board. The multilateral partnership will also, industry and political analysts say, throw a lifeline to the cash-strapped and deeply unpopular Palestinian Authority, which is based in the West Bank and has for the past 15 years held no authority in the Gaza Strip. The Ramallah-based authority sees Gaza’s gas reserves as a “pillar to improving its fiscal plans,” said Zafer Milhem, chairman of the Palestinian Energy and Natural Resources Authority. “We’ve been waiting for this development and the prosperity that comes with it,” he said. “I hope this will be a step toward the future.” The Egyptian-led project “will contribute to strengthening Palestinian national independence,” said a February 2021 memorandum of understanding between the Palestine Investment Fund (PIF) and Egyptian Natural Gas Holding Co. (EGAS), an Egyptian consortium of investors.
Greece expands oil exploration area into disputed zone with Libya - Greece announced on Navtex website the expansion of the area of seismic surveys for oil and gas deposits off the island of Crete, in response to a request from the American company ExxonMobil, which was granted exploration rights, saying that it also serves a geopolitical purpose, according to the Greek newspaper Ekathimerini. According to a report by the newspaper on Saturday, Greece expects accusations from Turkey and the Libyan government of Athena after granting rights in a disputed area, considering that islands, such as Crete, cannot have a continental shelf, and therefore an exclusive economic zone. Analysts say that drilling in the expanded area defined by Navtex (11,000 square kilometers compared to 6,500 square kilometers reserved on November 7) does not affect Turkish interests in the eastern Mediterranean, adding that if Libya chooses to protest, Turkey will support it by sending research ships to the region which will further escalate the tension with Greece, Ekathimerini said.
The European Union's Misguided Energy Price Cap Proposal - Only 15 years ago, the European Union produced more natural gas than Russia exported, according to the EIA. Repeating past mistakes and maintaining a failed energetic interventionist policy would only worsen what is already a structural disaster.The prohibitive cost of electricity and gas in Europe is not a result of market flaws, but of a completely unsustainable cost structure where consumers are forced to pay escalating taxes, a hidden CO2 tax, subsidies, and other rising regulatory costs. More than 60% of an average euro area country household bill is made up of taxes and regulated costs, according to Eurostat. Brussels cannot turn water into wine, and, similarly, the European Union cannot “cap” the price of natural gas and oil. It is almost ironic, but European leaders are spending days debating whether to impose a cap on Russian oil that would be set above the current Urals price and significantly above the five-year average levels.The only thing that these so-called “caps” would achieve in a global energy market is to provide a massive subsidy that would then have to be repaid with higher tariffs or taxes afterwards. In Spain they already made the horrifying mistake that led to what was called the tariff deficit: Putting a cap on a tariff and passing the difference with the actual price to the following year with added interest charges. What the tariff deficit mechanism did was perpetuate higher tariffs even in periods of low commodity prices as the tariff deficit ballooned. The proposed gas cap would produce a comparable tariff deficit but at an enormous level if implemented throughout Europe.Additionally, in a globalized and international market, the cap would create enormous arbitrage incentives that would only benefit China, which would continue purchasing cheap Russian commodities and exporting to Europe its more competitive goods.We must not forget that the natural gas “cap” in Spain has been a genuine catastrophe. Elevating it to Europe would be worse.According to Enagas data, natural gas demand in Spain soared while it declined in the rest of Europe, due to the disguised subsidy that the “cap” entails. Additionally, the cost of the measure for the country has increased to 13 billion euros, according to the power sector, which all citizens will pay with higher taxes, and this has led to a massive transfer of funds to France, which benefits from purchasing subsidized energy from Spain at a discount price while Spanish consumers pay the cost in higher bills.The total cost of exports to France has exceeded 715 million euros (from 15 June to 4th November, according to sources of the power sector). Additionally, a significant increase in tariffs (+98 €/MWh) is added for clients with fixed contracts, converting their fixed contracts into variable ones due to the subsidy of natural gas prices.The creation of a tariff deficit, which is what the current proposal would do to Europe, implies higher future costs and a larger debt burden. Short-term price “cuts” on gas and oil disguise the reality, incentivize demand while also creating an overcharge whose financing will result in higher prices and taxes in the future.A European gas and oil cap causes no harm to Russia at all. We should have learned by now and that through exports to China, India, and other Asian countries, Russia continues to set trade surplus records.A European “cap” on Russian gas and oil would be a subsidy to China at the expense of European taxpayers.Additionally, by short-term subsidizing the price, the gas cap would create an artificial demand and a perverse incentive. More natural gas consumption and the long-term reliance on fossil fuels is maintained.
Hungary fuel price cap hinges on smooth Russian oil shipments, government says - Hungary can only maintain a fuel price cap beyond Jan. 1 if oil shipments from Russia flow without interruption and oil and gas group MOL's refinery in Szazhalombatta operates continuously, the government said on Monday. Prime Minister Viktor Orban's government introduced the fuel price cap in November 2021 to shield Hungarian consumers from surging inflation but was forced to narrow its scope in July because of supply problems. "We can only maintain this measure ... if oil shipments from Russia arrive without disruptions and the Szazhalombatta refinery operates continuously," a government spokesman said in an emailed reply to Reuters. MOL has temporarily curbed fuel deliveries to some retailers this month after oil supplies from Russia via the Druzhba pipeline fell substantially below normal levels. Oil supply to parts of Central and Eastern Europe via a section of the Druzhba pipeline were suspended temporarily this month after a Russian rocket hit a power station that is close to the Belarus border and provides electricity for a pump station. Hungarian headline inflation rose to an annual 21.1% in October, from 20.1% in September, boosted by surging food and energy prices.
Russian Diesel Halt Still Looking Like Europe's Big Problem - Europe continues to lean heavily on Russia as a source of diesel with fewer than ten weeks to go until sanctions all but block the trade -- a stark reminder of the work that still needs to be done to find new supplies. The European Union and UK received almost half their waterborne imports of diesel-type fuel from Russia in the first 24 days of this month, Vortexa Ltd. data compiled by Bloomberg show. The level of reliance jumped sharply from October, when the region’s overall imports surged to cope with strikes that knocked out French oil refining capacity. Overall, tankers delivered an average 1.34 million barrels a day of diesel-type fuel during Nov. 1-24 into the EU and UK, according to Vortexa data. That’s sharply down from October, but still higher than the average for the first 10 months of the year. From Feb. 5, EU sanctions will all but cut-off seaborne imports of diesel and other refined products from Russia. The country is still by far the bloc’s single biggest external supplier, meaning buyers face a sharp crunch unless they can source more barrels from elsewhere to fill the gap. The EU and UK received about 600,000 barrels a day of diesel-type fuel in shipments from Russia during November 1-24, 45% of total arrivals. In October they took 34% from Russia and the average for the first 10 months of the year was 51%.While Europe is under pressure to find alternative supplies, Russia also needs to identify new homes for its exports: in September, more than half went to the EU. Turkey is also a significant buyer, along with Morocco and Tunisia. Russia also exports large volumes of other petroleum products. Naphtha is a petroleum product that can be used either to make gasoline, or, as a feedstock in the petrochemicals industry. Fuel oil, essentially a leftover from the refining process, has multiple potential uses, including to generate power and as ship fuel. Russia’s total shipments of oil products this month are on course to hit their highest on a barrels a day basis since February, when the invasion of Ukraine began. Not all Russia-made fuel is always exported from the country’s ports -- some can be shipped via other countries and is not included in the statistics used in this article.
India To Receive First LNG (Gas) Cargo From Indonesian Plant -India will receive its first cargo from Indonesia's Tangguh liquefied natural gas (LNG) plant at the Dahej terminal today, according to a Refinitiv analyst and Refinitiv ship tracking data. The LNG cargo is being transported by the BW Helios tanker, said Olumide Ajayi, senior LNG analyst at Refinitiv. "The vessel which had been acting as a floating storage since it lifted the cargo in mid-September is currently on a term charter to British oil major BP and is due to arrive at state-owned Petronet's Dahej terminal on November 28," he said. The BW Helios picked up the cargo of 132,000 cubic metres at the Tangguh LNG loading facility on Sept. 18, according to Refinitiv data, and has a discharge date of Nov. 28. Olumide Ajayi added that the shipment was unusual as Indonesian LNG cargoes are typically exported to north Asia, and that India receives LNG cargoes from Qatar, Oman and the UAE. Japan, China and Korea are key LNG consumers in north Asia, but high inventories and muted spot demand in the region have weighed on Asia spot LNG prices in recent weeks. Operated by BP, the Tangguh LNG plant is in Indonesia's West Papua province and began production in 2009. Its output capacity is 7.6 million tonnes of LNG per annum (mtpa) from two existing trains.
India purchased 40% of seaborne Russian Urals oil in November: Report - India bought about 40% of all Urals seaborne export volumes loading in November, outperforming other states as buyers, Reuters calculations based on Refinitiv and traders' data showed on Monday. Russian Urals oil shipments to India accounted for about 40% of the total sea exports of Urals in November, not including the transit of oil from Kazakhstan, which is sold as KEBCO, Reuters calculations showed. At the same time, shipments of the grade to Europe, which was previously the largest consumer of seaborne Urals, in November amounted to slightly less than a quarter. Almost the entire volume was delivered to refineries, in which Russian oil companies hold shares. The total volume of shipments of Urals oil from the Russian ports in November amounted to 7.5 million tonnes, excluding the transit volumes of Kazakhstan. On Dec. 5, the European Union imposes an embargo on the supply of seaborne shipments of Russian oil. According to traders, the volume of supplies of Urals oil to Europe may be further reduced in December, since the embargo involves a ban on the supply of Russian oil even by Russian companies to their remaining refining assets in the EU. EU discussions of a price cap for the Russian oil is also complicating trade for December volumes, traders said, raising uncertainty. Turkey remains the main buyer of Urals in the Mediterranean, in November, deliveries to this country accounted for about 15% of all Urals sea exports, according to Reuters calculations. In addition, several shipments of Urals are heading to Egypt's Port Said, where they are expected to be reloaded onto larger tankers for onward delivery to Asia, possibly China. China accounted for less than 5% of Urals sea exports in November, according to the data, but traders expected some of the tankers to change their destinations to China later.
India and China are still snapping up Russian oil — but they are demanding huge bargains which is hitting Kremlin's war chest ---Russian energy revenues may finally be feeling the pinch — the European Union's sweeping sanctions against the country's energy exports are about to kick in on December 5, more than nine months into the Ukraine invasion. As Kremlin is set to lose its single largest customer, it is redirecting seaborne exports to Asia, in particular to India and China. But that's proving to be difficult business. India and China now account for about two-thirds of all Russian seaborne crude-oil exports, and as major customers, they are demanding massive discounts for their purchases, Bloomberg's oil strategist Julian Lee wrote on Sunday. Russia's flagship Urals crude oil was trading at a discount of $33.28, or about 40% to the international Brent crude oil at the end of last week, according to Bloomberg's analysis of data from trade news service Argus and the Intercontinental Exchange in Europe. That's a steep fall from the $2.85 discount that Urals was trading at in 2021. Due to the Urals' widening discount, Russia is losing about $4 billion a month in energy revenues, per Bloomberg's calculations. This is significant, especially since oil prices have fallen sharply in recent months due to fears about a recession, strong Russian output, and falling demand, after prices hit multi-year highs earlier in 2022. That is also why Washington doesn't appear to be too worried about India and China's huge purchase of Russian oil, even if they pay prices above a G7 imposed price cap. Russian oil "is going to be selling at bargain prices and we're happy to have India get that bargain or Africa or China. It's fine," US Treasury Secretary Janet Yellen told Reuters on November 11. Brent crude futures are about 4.3% higher this year so far at around $81.30 a barrel after spiking over 30% in the days after the Ukraine war broke out.
Leaking Oil Pipeline Pollutes Sea Off Coast of Lebanon - A leak in an oil pipeline that stretches from Kirkuk in Iraq to Tripoli in Northern Lebanon has polluted the sea off the Abdeh-Akkar port, endangering the fish population and contaminating the nets of the fishermen who depend on the sea for their livelihoods. The disaster comes as Lebanese continue to struggle with the worst economic crisis the nation has ever faced, with currency devalued by 90 percent and some citizens attempting to storm local banks that have shut down rather than allow depositors to withdraw their savings. The Iraq-Lebanon pipeline suffers from wear and cracks, according to a report by L’Orient Today, and is also regularly sabotaged by individuals who use special pumps to withdraw oil they then sell in the local market. A fisherman in Akkar shared a video of the oil spill from the leaking Iraqi oil pipeline, which passes through Syria and then crosses Akkar, with L’Orient Today, lamenting the country’s latest disaster. “The water’s smell is foul, and the oil has polluted our nets and threatened the remaining fish population,” the fisherman wrote, urging the Tripoli oil facilities to “stop this leakage immediately.”
$15.4bn lost to oil production shortfalls in 2022 --Nigeria’s oil production averaged 1.34 million barrels per day in the first 10 months of 2022 against the 2022 Budget benchmark of 1.88 million barrels per day, costing the nation about 161.58 million barrels in lost production. At an average crude oil price of $95 per barrel it means the country lost about $15.35 billion in estimated earnings. Latest data by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, showed that total oil production for the first ten months was 409.94 million barrels against the budget provision of 571.5 million barrels. The data also showed that oil production fell in the first 10 months of 2022 by 21.37 percent when compared to 497.55 million barrels of oil produced over a similar period in 2021. According to the Budget Office, Gross Oil Revenue amounting to N2,172.35 billion was collected in the first half of 2022 as against N4,684.98 billion prorate budget projection for the period. This denotes a decrease of N2,512.63 billion (53.63 percent) below the 2022 half year budget estimate. The agency stated that it was, however, an increase of N272.56 billion (14.35 percent) above the actual half year gross oil revenue performance reported in 2021. A breakdown of the revenue by sub-head showed that only Crude Oil and Gas Sales of N489.38 billion surpassed its half year projection of N437.03 billion by N52.35 billion (11.98 percent). It stated that other Oil Revenue items fell below their respective half year projections. Petroleum Profit and Gas Taxes of N909.56 billion, Royalties (Oil & Gas) of N750.93 billion, Concessional Rentals of N1.88 billion, Gas Flared Penalty of N39.19 billion, Incidental Oil Revenue (Royalty Recovery & Marginal Field Licenses) of N22.04 billion and Miscellaneous (Pipeline fees etc.) of N7.94 billion fell below their half year projections of N2,786.15 billion, N1,277.0 billion, N3.21 billion, N55.27 billion, N97.54 billion and N28.78 billion by N1,876.59 billion (67.35 percent), N526.07 billion (41.20 percent), N1.32 billion (41.26 percent), N16.08 billion (29.09 percent), N75.51 billion (77.41 percent) and N20.84 billion (72.40 percent) respectively.
Illegal pipelines, oil theft: SERAP drags Buhari to ECOWAS Court - THE Socio-Economic Rights and Accountability Project, SERAP, yesterday, sued the President Muhammadu Buhari-led administration over its failure to probe the operations of illegal oil pipelines between 2001 and 2022, as well as mention the name and prosecute those suspected to be involved. The suit was filed by Eric Dooh, (who is suing for himself as a leader of the Goi Community in Gokana Local Government Area of Rivers State, and on behalf of the Goi Community), and 15 other concerned Nigerians. The suit, filed on their behalf by SERAP lawyer, Kolawole Oluwadare, followed recent reports of the discovery of at least 58 illegal oil pipelines used to steal the country’s oil wealth. In the Suit filed last Friday before the ECOWAS Court of Justice in Abuja, the Plaintiffs are seeking “an order directing and compelling the Buhari government to immediately probe the reports of operations of illegal pipelines and oil theft, name and prosecute suspected perpetrators.” The Plaintiffs also sought: “An order directing and compelling the Buhari government to fully recover any proceeds of crime, and to respect, protect, and fulfil the human rights of the people of Niger Delta that have continued to suffer the effects of oil theft by non-state actors.” In the suit, the Plaintiffs argued that “The Buhari government is failing to uphold its international legal obligations to ensure that the country’s oil wealth is used solely for the benefit of Nigerians and that the wealth does not end up in private pockets. “Poor and socio-economically vulnerable Nigerians have continued to pay the price for the stealing of the country’s oil wealth apparently by both state and non-state actors. “Despite the country’s substantial oil wealth, successive governments have largely squandered the opportunity to use the wealth to improve the lives and well-being of ordinary Nigerians. “The illegal pipelines have been operated for many years without notice, implying a flagrant violation of international human rights obligations to ensure the proper, effective and efficient management of the country’s wealth and natural resources.” Meanwhile, no date has been fixed for the hearing of the suit.
CNPC’s Tarim Oilfield constantly increases oil, natural gas output - The Tarim Oilfield, operated by the China National Petroleum Corporation (CNPC), China's leading oil and gas producer, has produced 6.6 million tons of crude oil so far this year, a record high, China Media Group (CMG) reported on Sunday. The “Hade-Fuman” bloc of the oilfield has recently accelerated its production, with crude oil production capacity rising by an additional 500,000 tons per year, the report said, citing CNPC. The bloc has produced 2.66 million tons so far this year, increasing 340,000 tons year-on-year, laying a foundation for the overall new record of crude oil output by the oilfield, Li Xuguang, the head of the “Hade-Fuman” oil and gas production bloc said. Located in Tarim Basin, the Tarim oilfield is a major petroliferous basin in Northwest China's Xinjiang Uygur Autonomous Region. The oilfield’s extra-deep gas field, the Kela-Keshen gas field, has produced more than 200 billion cubic meters of natural gas as of November 11, 2022, providing stable gas supplies to the country’s West-to-East Gas Transmission Pipeline, significantly contributing to China's green and low-carbon development. In 2022, the Tarim Oilfield stepped up efforts to expand its production capacity, with 115 new oil wells being dug and all have entered operation. A total of 30 8,000-meter extra-deep wells have completed drilling, also a record high, CNPC said. The drilling period for the 8,000-meter extra-deep wells has been shortened to 360 days from 600 days, the report said, citing a senior oilfield engineer. The Tarim Oilfield is the largest ultra-deep oil and gas field in China, and a significant natural gas source of the country's West-to-East Gas Transmission Pipeline. At present, the oilfield’s daily production of crude oil reaches 20,000 tons and natural gas is 92 million cubic meters. It is expected that the annual oil and gas production of the oilfield will exceed 33 million tons.
UAE moves up oil production capacity expansion to 2027 - The board of Abu Dhabi's ADNOC endorsed plans on Monday to bring forward the company's five million barrel per day oil production capacity expansion to 2027 from a previous target of 2030, the state oil firm said in a statement. The new date will provide ADNOC with the flexibility to meet rising global energy demand, it said. The United Arab Emirates' hydrocarbon reserves increased by 2 billion stock tank barrels (STB) of oil and 1 trillion standard cubic feet (TSCF)of natural gas in 2022. The additional reserves increase the UAE's reserve base to 113 billion STB of oil and 290 TSCF of natural gas, ADNOC said.
Iraq plans to start expanding oil export capacity from next year, official says --Iraq, OPEC’s second largest producer, plans to start increasing oil export capacity from its southern ports from next year to add a total of 1 million to 1.5 million barrels a day by 2025, according to its OPEC delegate. The project involves rehabilitating the southern Khor Al-Amaya port and marine pipelines, Mohammed Saadoon, Iraq’s national representative at OPEC and a deputy director general of the state-run oil marketing company known as SOMO, said in an interview on state-run Iraqiya TV. Export capacity from southern ports is due to increase between 150,000 to 250,000 barrels a day from next year, he said. Iraq exported 3.293 million barrels a day from its southern ports in October, according to the oil ministry. Iraq is trying to boost revenue from oil and entice global companies to work in the country after decades of turmoil marked by wars, sanctions and militant attacks. The output cuts decided by the Organization of Petroleum Exporting Countries and their allies last month won’t affect Iraq’s oil exports, Saadoon said. Iraq’s oil sales price has averaged $97 a barrel so far this year, he said. The oil ministry is also pursuing plans to boost oil production to 5 million-5.5 million barrels a day by 2028, Saadoon said. The country produces 4.652 million barrels a day, Prime Minister Mohammed Shia Al-Sudani said on November 12.
Global Crude Oil Inventories Rising -Global crude oil inventories have been rising prior to a European embargo on Russian crude imports due to take effect on December 5, energy and environmental geo-analytics company Kayrros noted in a new report sent to Rigzone. “Global onshore crude oil inventories built by nearly 70 million barrels in the last four weeks, or close to 2.5 million barrels per day, reaching the highest weekly average since September 2021,” Kayrros stated in the report. “On its face, the gain does not appear to support calls for increased OPEC output ahead of the producer group’s December 4 meeting and the coming into effect of the EU embargo on Russian crude imports on December 5,” Kayrros added. According to Kayrros, China alone accounted for more than half of the estimated build in global onshore crude oil stockpiles. “Its crude inventories gained roughly 36 million barrels from end-October to end-November, or ~1.3 million barrels per day, led by East China, Shandong Province and Southern China,” Kayrros said. European onshore crude oil inventories also edged up in the last four weeks to reach their highest level since July 2021, Kayrros outlined. “By end-November, the region’s crude stocks were roughly on par with their pre-Covid levels at this time of year,” the company stated. Middle East and North Africa crude oil inventories also “extended the rising trend begun in early August”, Kayrros noted, adding that the region grew by an estimated nine million barrels in the last four weeks. “The UAE, recently described in media reports as angling for an increase in OPEC production targets, led the latest build,” Kayrros highlighted. In a separate report sent to Rigzone earlier this month, Kayrros noted that crude oil inventories held in onshore crude tanks had been edging lower. “Most recently, a drop in Japanese stocks, partially reversing earlier builds, has been leading the global decline,” Kayrros stated in that report. In a statement sent to Rigzone last month, Kayrros said global onshore crude stocks had been flat for several weeks and crude supply and demand in balanc
Oil Rebounds From China Crash On OPEC+ Production Cut Headlines - Last week we saw oil prices dump and pump on rapidly denied rumors (reported by WSJ) of an OPEC production hike. At the time we tweeted our expectations...If anything MBS will cut more https://t.co/Rn5NbYQo3T Fast forward a few days and we see a headline, via Eurasia Group, claiming that discussions of OPEC production cuts are under discussion...“Given overall market conditions, OPEC+ will seriously consider a new production cut at its upcoming meeting, particularly if crude prices fall much below their current level in the next week,” analysts at Eurasia Group say in report.“Ultimately, the decision will depend on the trajectory of the oil price when OPEC+ meets and how much disruption is evident in markets because of the EU sanctions”To be frank, this is just pure speculation and not even a qualified 'fake leak' strawman from OPEC (like the WSJ article last week), but it has prompted a response in oil markets.WTI is trading back at $77, up almost 1% on the day now, after the overnight puke on the heels of the chaos seen in China raising anxiety about demand...
Oil Markets May Be Misjudging News of China Lockdown - Oil markets may be misjudging news of China’s lockdown, according to a new market note sent to Rigzone by Rystad Energy late Monday. In the note, Rystad said its analysis of the impact of the latest lockdowns, as reflected in real-time traffic activity, shows their likely effect on China’s short-term oil demand, particularly in transportation, is likely to be minor. “China’s nationwide road traffic has so far been resilient despite the latest round of lockdowns,” Rystad Energy Senior Vice President Claudio Galimberti stated in the note. “Reported Covid-19 cases have reached new highs in mainland China, with daily infection numbers surpassing their previous April peak and surging above 40,000 on November 28,” he added. “The latest surge of infections has led to new lockdowns and movement restrictions of varying magnitude being imposed across several of China’s largest cities, including Guangzhou, Chongqing and Beijing,” Galimberti continued. The Rystad VP highlighted that real-time data on mainland Chinese road activity indicates a small downturn in country level road traffic during the fourth week of November, “sliding from 97 percent to 95 percent of 2019 levels”. “By comparison, the country level road traffic index dropped to around 90 percent in April 2022 amid the large-scale Shanghai lockdown,” Galimberti said in the note. “Over the last few days, we have already seen a rebound in road activity as certain short-lived lockdown measures have been eased and the traffic index has thereafter climbed back to 98 percent,” he added. Galimberti pointed out, however, that Chinese road traffic remains well below comparable 2020 and 2021 levels “as persistent lockdowns and China’s growth slowdown weigh on road traffic”. “In essence, so far, the latest round of lockdowns appears to be mimicking previous ones, with nationwide road traffic only marginally affected while selected provinces undergoing comparatively severe lockdowns to try and suppress Covid outbreaks,” Galimberti said. “However, the street protests against lockdowns emerging in various parts of the country are a novelty and could become a source of further disruption in the coming days,” he added. According to the latest figures from the World Health Organization (WHO), China’s daily confirmed Covid-19 case peak was seen on May 28, 2022, at 94,753. The country has seen more than 9.5 million confirmed cases of Covid-19, with over 30,000 deaths, WHO figures show. As of November 21, China has administered a total of 3.4 billion vaccine doses, according to WHO data.
Defying forecasts, crude oil prices wiped out most of this year's gains and could head lower - Oil prices are defying expectations and are barely higher on the year, as the outlook for oil demand continues to deteriorate for now. West Texas Intermediate crude futures for January settled higher Monday at $77.24 per barrel, following a drop to $73.60 per barrel, the lowest price since last December. WTI was up 2.2% for the year, after briefly turning negative earlier Monday. Gasoline prices at the pump have also been falling dramatically and could be cheaper than last year for many Americans by Christmas, according to an outlook from the Oil Price Information Service. On Monday, the national average was $3.546 per gallon of regular unleaded fuel, down from $3.662 a week ago but still higher than the $3.394 a year ago, according to AAA. China's Covid latest lockdowns have significantly changed the outlook for oil, which some experts had predicted could spike to $150 per barrel or more after Russia's invasion of Ukraine. While crude futures briefly wiped out their gains for 2022 Monday morning, they had been as much as 70% higher on the year after Russia's invasion of Ukraine sent WTI to about $130 a barrel last March. China's lockdowns and the rare protests against Beijing this weekend have raised more doubt about the outlook for the country's already weakened economy. "We think the recessionary [forces] around the world, particularly in the three largest economies, are dominating the macro environment for the year as a whole, and we think that the issues we've been identifying as relatively bumpy in the period ahead are going to remain," said Ed Morse, global head of commodities research at Citigroup. "Right now, we are looking at macro headwinds rather than tailwinds." Morse was one of the more bearish strategists on Wall Street in 2022, but he said the latest market developments and the hit to major economies made even his forecast too bullish. He had revised his outlook higher at the end of the third quarter, based on the shift by OPEC+ to focus on prices and the pending ban of Russian crude by Europe. The oil market has been focused on those two potential catalysts for higher prices, but the impact on demand from the slowdown in China and new lockdowns has outweighed concerns about supply for now. The European Union's ban on purchases of seaborne Russian oil takes place Dec. 5. The EU is also expected to announce price caps for Russian crude. OPEC+ is also a factor. The group includes OPEC, plus other producers, including Russia. The group surprised the market in October when it approved a production cut of 2 million barrels a day. "We're waiting to see if they signal even deeper cuts. There were rumors in the market about that happening," Brent futures , the international benchmark, was lower Monday afternoon at $83.19 per barrel, recovering from $80.61 per barrel, the lowest price since January.
US Urgently Mediating Between Turkey & Syrian Kurds To Prevent Ground Offensive - Turkey has reportedly laid out its conditions for refraining from a ground offensive against the US-backed Syrian Democratic Forces (SDF) in Syria, Kurdish media reported.According to local sources, the Turkish bombardment – although ongoing – has decreased significantly as of the last few days. The sources added that this is due to the current US mediation between Turkey and the Kurdish militant group. "Turkish Defense Minister Hulusi Akar received the US ambassador, Jeffry L. Flake, at the ministry’s headquarters in Ankara," the Turkish Defense Ministry said in a statement on 24 November, without further clarification. During the meeting, the US ambassador reportedly offered a 30-kilometer pullback of Kurdish forces to prevent Turkey from launching its promised ground offensive. According to a Kurdish media report, however, Ankara has not only demanded a 30-kilometer withdrawal of the SDF from Turkey’s borders, but also that all members of the Kurdistan Workers Party (PKK) in Syria be handed over to Turkish custody.The report also states that Turkey has demanded "the allocation of partial oil revenues in SDF-controlled areas for the benefit of factions loyal to Ankara [and the areas under their control]," referring to the Syrian National Army (SNA) and the Free Syrian Army (FSA).Ankara has also requested the establishment of "observation points," either independent ones or joined by the US coalition, to allow Turkey to "monitor weapons transfers [following the SDF withdrawal]."The Kurdish report also states that Ankara is willing to "substitute" all of its conditions with a handover "of the entire area" to the Syrian Arab Army (SAA). The report also accused Turkey of having a secret agreement with Russia that would allow it to occupy more Syrian territory. This could be due to Russian pressure on the Kurdish militants to withdraw.While the US mediates between Turkey and the Kurds, President Recep Tayyip Erdogan announced Friday that a Turkish ground offensive in Syria is still imminent and will begin "when the time comes."Moreover, Erdogan identified the northern Syrian towns of Ras al-Ain, Manbij, and Ain al-Arab (Kobane), as the site of the upcoming ground offensive. According to Turkish Interior Minister Suleiman Soylu, the order for the Istanbul bombing was taken in Manbij.
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