Category Archives: Oil producers

Iraqi oil, Oil Industry, Oil prices, Oil producers, U.S. oil production

Oil Crash Means Biggest Boomers Halt Supply Growth in 2016

Repost from Bloomberg Business

Oil Crash Means Biggest Boomers Halt Supply Growth in 2016

Grant Smith and Julian Lee, November 19, 2015 — 4:00 PM PST Updated on November 20, 2015 — 6:53 AM PST

HIGHLIGHTS
•  U.S., Iraq to both stop adding barrels amid price drop
•  Faltering growth to spur global oil market rebalancing in 2016

To understand what the oil price crash will mean for global crude supplies next year, look no further than the two nations that added more barrels to world markets in 2015 than anyone else.

The U.S. and Iraq, whose extra crude this year equates to about 80 percent of the global surplus, will fail to boost output in 2016, according to the world’s biggest forecasters. While the U.S. curtailment is mainly because prices are too low to spur fresh supply, the Middle East country’s ability to boost output is also being crimped by a need to fund its battle with Islamic State.

Slowing output in the the two fastest-growing producers signals the global glut, which has depressed oil prices to near $40 a barrel, may begin to dissipate next year, according to Barclays Plc. While that would start to fulfill Saudi Arabia’s plan to re-balance world crude markets, Iraq’s struggles show that producers in OPEC are also suffering as that strategy takes effect.

“The U.S. and Iraq have been two of the biggest contributors to the global oil surplus and when we look at 2016, production in both will be challenged,” Torbjoern Kjus, an analyst at DNB ASA in Oslo, said by e-mail. “Accelerating decline rates and reduced investment will lead to falling U.S. output, while Iraq is unlikely to see much growth from further levels.”

The two nations are now pumping the equivalent of 4.88 billion barrels a year, an increase of 1.77 billion barrels, or almost 60 percent, compared with their output rates at the start of 2012. To put that in context, oil inventories in Organization for Economic Co-operation and Development nations expanded by 314 million barrels, or 12 percent, in the corresponding period.

U.S. shale production, which has driven a six-year boom in the nation’s oil output, will decline by 600,000 barrels a day next year, according to the International Energy Agency. Total U.S. oil supply is set to surge by 830,000 barrels a day this year, powered by shale formations in Texas and North Dakota. Oil traded at $40.39 a barrel in New York at 9:49 a.m. New York time.

Iraqi production “is likely to remain broadly flat” next year as the OPEC member “is struggling with the stress of $50-a-barrel oil and a costly battle” with Islamic State militants, the IEA said in a report on Nov. 13. Baghdad is also straining to reimburse international oil companies for investments in southern fields. BP Plc cut this year’s operations budget by 60 percent to $1 billion. As oil prices halved, Iraq has had to pay twice the amount of crude to foreign firms who receive per-barrel fees in the form of cargoes.

In the north, the semi-autonomous Kurdish region is struggling to pay partners amid a budget dispute with Baghdad. DNO ASA, the Norwegian operator of the Tawke field, and Gulf Keystone, which operates Shaikan, have said their plans are on hold until they receive overdue payments for output from the government. The Kurdistan Regional Government began making regular monthly transfers to companies in September, although DNO says it’s only receiving half of what it is owed for monthly exports and nothing towards reducing accumulated arrears.

With output gains in jeopardy, “there are signs that the supply glut is easing,” said Kevin Norrish, managing director for commodities research at Barclays in London.

“U.S. shale oil growth measured over last year’s levels is now coming to an end at last and given the infrastructure constraints in Iraq, plus an end to the upward trend in Saudi output it seems the phase of steadily rising OPEC production may be pausing for now as well,” he said. “The long, slow process of re-balancing the oil market continues.”

Fossil fuels, Greenhouse gas emissions, Keep it in the ground, Oil and gas auctions, Oil drilling, Oil Industry, Oil producers, Public lands

‘Keep It in the Ground’ Win: Utah Oil and Gas Auction Halted

Repost from the Center For Biological Diversity
[Editor: sign their petition .  – RS]

BLM postpones Utah auction to ‘accommodate’ climate activists

By Phil Taylor, E and E News, November 17, 2015

About the CenterThe Bureau of Land Management late last night announced it is postponing today’s scheduled oil and gas lease sale in Salt Lake City to appease activists who are fighting to keep those minerals in the ground.

BLM had planned to lease up to 37,580 acres scattered around the center of the Beehive State for future oil and gas development, but the agency said it needed more time to “better accommodate the high level of public interest in attending the sale.”

It marks the first time that the “Keep it in the Ground” climate movement — which seeks to end the sale of federally owned oil, gas and coal — has disrupted a BLM lease auction.

BLM said it intends to reschedule the sale in the “near future.”

“As a public agency, we understand the importance of transparency,” said BLM spokeswoman Megan Crandall. “Given the large interest, we chose to postpone the sale and will be working to find the best way to accommodate the public and those who wish to attend and participate in the auction when it is held.”

It was the third consecutive BLM lease sale to be confronted by climate protesters who believe the burning of federally owned fossil fuels will undermine the nation’s efforts to reduce greenhouse gas emissions.

Roughly 50 people gathered last week outside BLM’s Colorado headquarters in Lakewood to protest the agency’s sale of 90,000 acres in the Pawnee National Grassland, according to the Western Energy Alliance.

BLM moved forward with that auction, selling 106 parcels covering 83,534 acres for $5 million.

Protesters also demonstrated outside a Nov. 3 lease sale in Wyoming.

Crandall said there was not enough room in BLM’s downtown Salt Lake City auction room to accommodate members of the public who wanted to attend. The room is about 28 feet wide by 60 feet long and also has to accommodate up to 30 bidders and reporters, she said.

BLM planned to live-stream the auction, but many activists insisted on attending in person, she said.

The “Keep it in the Ground” campaign is backed by some major environmental groups including the Natural Resources Defense Council and is buoyed in Congress by legislation from Sen. Jeff Merkley (D-Ore.) that would end new leasing and renewals of nonproducing federal leases for oil, coal and gas.

The movement is riding the momentum of President Obama’s recent rejection of the Keystone XL pipeline and Royal Dutch Shell PLC’s decision to abandon oil exploration in the Arctic Ocean. It now seeks to stop BLM from leasing fossil fuels in the West and the Bureau of Ocean Energy Management from opening the Atlantic Ocean to offshore drilling.

In Salt Lake City this morning, roughly 40 activists displayed theatrical bidding paddles, held up photos of their grandkids and sang folk songs including John Prine’s “Paradise,” according to Tim Ream, an organizer from WildEarth Guardians who is based in San Francisco and attended this morning’s protest. Organizing groups included WildEarth, the Center for Biological Diversity, Women’s Congress for Future Generations, 350.org, the Rainforest Action Network and Elders Rising for Intergenerational Justice.

Ream said BLM informed him last week that some members of the public would be turned back from the auction room regardless of whether there was space. This morning’s protest was led primarily by older activists who had no intention of disrupting the sale, he said.

“They wanted to touch the hearts of those who are selling and buying our public lands,” he said. “They realized two years in prison is too high a price.”

Ream was referring to the two-year prison sentence handed down in 2011 to activist Tim DeChristopher for his decision to pose as a bidder at a BLM lease sale in Utah in late 2008 and snatch up $1.8 million in leases with no intention of paying for them.

Vaughn Lovejoy of the group Elders Rising was among those who attended this morning’s rally.

“We’d like to see if there’s a way to inspire my generation … to spend this piece of our life doing something for the future rather than hanging out on cruise ships or golf courses,” he said.

Ream said activists will also stage protests at BLM’s upcoming oil and gas lease sales in Reno, Nev., on Dec. 8 and in Washington, D.C., on Dec. 10. “We’re going to keep on hitting every one of these lease sales,” he said.

The American Petroleum Institute has criticized the movement and Merkley’s legislation as a “political stunt,” warning that halting federal sales of fossil fuels would hike energy costs and hurt the federal government’s coffers.

The Mineral Leasing Act requires BLM to hold regular oil and gas auctions.

Kathleen Sgamma, vice president of government and public affairs at the Western Energy Alliance, whose members depend heavily on public lands leasing, said this morning that the Salt Lake City protesters are ignoring how increased production of natural gas has helped the nation transition away from coal that is more harmful to the climate when burned.

“Apparently, BLM is seeking a larger venue to accommodate the expected crowd of protesters whose goal is to disrupt the sale,” she said. “These same professional protesters bragged that they were traveling to other lease sales to try to disrupt them, but they’re on a fool’s errand.”

Sgamma noted that Interior Secretary Sally Jewell has rebuffed the “Keep it in the Ground” movement as unrealistic.

“There are millions of jobs around the country that are dependent on these industries, and you can’t just cut it off overnight,” Jewell said in September during a breakfast organized by The Christian Science Monitor (Greenwire, Sept. 15).

Bakken Crude, Oil Industry, Oil prices, Oil producers

Bakken oil companies declare bankruptcy

Repost from the Bismarck Tribune
[Editor:  For an update, see also Bakken.com’s “Magnum Hunter warns of bankruptcy for gas companies” on 11/12/2015.  – RS]

Bakken oil companies declare bankruptcy

By Jessica Holdman, October 26, 2015 5:45 pm

As crude oil prices hang low, about $43 per barrel Monday, some North Dakota operators are trying to divest interests in the Bakken.

Two debt-heavy operators in the state, Tulsa, Okla.-based Samson Resources and Denver-based American Eagle Energy, filed for Chapter 11 bankruptcy, planning to sell off Bakken assets to pay back what they owe.

Samson, with production acres in the Three Forks and Middle Bakken plays, has not yet succeeded in selling off acreage, spokesman Brian Maddox said.

“We have not currently entered into agreements to divest other larger packages, including our Bakken, Wamsutter, San Juan and non-core Mid-Con assets, because we perceived the value offered was less than the value of retaining those properties when economic factors and the impact to our credit position were considered,” the company said in first-quarter 2015 filings with the U.S. Securities and Exchange Commission.

“Even if we are successful at reducing our costs and increasing our liquidity through asset sales, we do not expect to have sufficient liquidity to satisfy our debt service obligations, meet other financial obligations and comply with restrictive covenants contained in our various credit facilities.”

The company is the most recent operator in the state to declare bankruptcy, filing in mid-September in hopes of clearing more than $3.25 billion in debt.

As part of the company’s restructuring agreement, second lien lenders own all of the equity of the reorganized company in exchange for providing at least $450 million of new capital to increase liquidity.

“The steps we are taking will allow our company to maximize future opportunities and compete more effectively with significantly less debt on our balance sheet,” Randy Limbacher, CEO of Samson Resources, said in a statement. “We fully expect to operate our business as usual throughout this process and to emerge as a financially stronger company.”

According to 2012 reports, Samson had 400,000 acres in the Bakken. Later that year, it would sell 116,000 acres, primarily in Divide and Williams counties, to Continental Resources for $650 million. No other sale of assets has been reported by the company since then.

And no substantial plans have been announced as to the fate of what does remain, Maddox said.

“We are planning on a Dec. 3 emergence date,” he said of bankruptcy proceedings.

Between June and late September, 10 oil and gas companies have filed for bankruptcy — 19 have filed in the past year since mid-October.

American Eagle Energy, which buys and develops oil wells in the Bakken, was the fourth, filing in mid-May.

American Eagle missed an interest payment on its debt. It listed assets of $222 million and liabilities of $215 million at the time of filing.

American Eagle held 54,262 acres in the Bakken in late 2014. In early 2015, it sold 1,185 leasehold acres in Divide County for $9.5 million.

American Eagle could not be reached for comment.

Outside of those companies filing for bankruptcy, Occidental Petroleum Corp. agreed to sell all of its North Dakota shale oil acreage and assets to private equity fund Lime Rock Resources for $500 million, according to the Reuters news agency. The sale includes 300,000 acres and a recently built, 21,000-square-foot regional office building in Dickinson.

Locally based MDU Resources Corp. is also trying to sell off its oil and gas exploration subsidiary, Fidelity Exploration and Production Co., but has not announced a deal to date.

MDU is scheduled to report its most recent quarterly results next week.

 

Climate Change, Climate change denial, Federal Regulation (U.S.), Fossil fuels, Gasoline prices, Global warming, Oil producers

U.S. Senators introduce “Keep It In the Ground Act”

Repost from the Independent Journal

Bernie Sanders Announces Plan to Strangle the Booming Fossil Fuel Industry in America

By Michael Hausam, November 5, 2015
Democratic presidential candidate Sen. Bernie Sanders, center, and Sen. Jeff Merkley (l) announce new climate legislation, Nov. 4, 2015, during a news conference on Capitol Hill in Washington. (Photo: AP)

The just-introduced “Keep It In the Ground Act,” co-sponsored by Bernie Sanders, would halt new oil and gas exploration on federal lands and offshore waters. It also would terminate any existing leases that aren’t currently producing.

The bill is also sponsored by Senators Barbara Boxer (D-CA), Ben Cardin (D-MD), Kirstin Gillibrand (D-NY), Patrick Leahy (D-VT), and Elizabeth Warren (D-MA).

In an announcement at the Capitol in D.C., Sanders said that the end result of the legislation would be to make sure that:

“over 90 percent of the potential carbon emissions from oil, gas and coal on our federal lands and federal waters (would stay) underground forever.”

The motivation for the bill is to combat climate change. In Sanders’ statement at the rally, he took a shot at his Republican opponents, whom he characterized as deniers:

“But somehow — somehow! — when it comes to climate change there are massive attacks on scientists who tell us the truth about climate change. Worry less about your campaign contributions, worry more about your children and grandchildren. The debate is over.”

Of course, this bill only addresses the supply side of fossil fuels and does nothing about addressing the demand for oil and gas – other than via necessarily driving up the costs of gasoline, electricity, and others that depend on their availability.

Stopping the availability of using federal lands for fossil fuels is a key priority for the anti-fossil fuels movement.

With roughly half of the remaining unexploited fossil fuels in the U.S. being on those lands, according to Grist, the jobs and fuels from this battle will make a huge difference for groups warning about global warming, as well as people who care about cheap fuel for economic growth and prosperity.