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Hurricane Ida Oil Effect

Hurricane Ida Shuts In 95% Of U.S. Gulf Coast Oil Output

As much as 95 percent of oil production in the U.S. section of the Gulf of Mexico has been shut-in. That is the Hurricane Ida Oil Effect. As hurricane Ida passed through it before making landfall in Louisiana earlier today.

What is the latest data from the Bureau of Safety and Environmental Enforcement? Some 288 production platforms in the Gulf of Mexico have been evacuated. This is more than half of the manned platforms in the Gulf.

This meant that about 1.74 million barrels in daily production is 95.65 percent. The total produced in the Gulf was shut-in. Along with 2.09 billion cu ft of natural gas production daily. Meaning 93.75 percent of the total, the BSEE reported.

Refiners along the Gulf Coast also shut down their facilities. According to a CNN report from earlier today that quoted Lipow Oil Associates President Andy Lipow, as of Ida’s landfall, six refineries in the New Orleans area were shut down, including facilities managed by PBF, Phillips 66, Shell, Marathon, and Valero.

“It’s now a waiting game to assess whatever wind and flooding damage will be caused as the hurricane passes through the area,” Lipow said.

According to an earlier Bloomberg report, the shut-in refining capacity totaled 2.11 million BPD, or about 12 percent of the national total. The figure also includes refineries operating at reduced rates because of the hurricane.

Ida is the ninth named storm in the hurricane season in the Atlantic this year. Gulf of Mexico producers had evacuated staff ahead of a storm in June, too. Occidental Petroleum and Chevron Corp were among companies evacuating staff from platforms.

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Source: Oil Price

oil price rise - rig

Oil’s Comeback Is Lifting Commodity Prices

After taking a beating over the past few weeks, oil price rise surging on rising demand optimism. This is a major production outage in Mexico. Also the first full U.S. regulatory approval of a COVID-19 vaccine.

October crude and Brent were up 3% to $67.47/bbl and $70.83/bbl, respectively. A day after a 5% surge by both benchmarks snapped a seven-day losing streak. This is after China claimed to have brought its coronavirus cases down to zero and opened up the Ningbo port. This is one of the busiest in the world, after a two-week shutdown.

About two weeks ago, China—once the epicenter of the virus—took an uncompromising approach by imposing widespread travel restrictions. This inclueds new lockdowns. Authorities in Beijing curtailed public transport and taxi services in 144 of the worst-hit areas nationwide, including train service and subway usage in Beijing.

That seemed like overkill, with less than 1,000 cases of the delta virus reported nationwide and a good 61% of the population already fully vaccinated. However, Beijing opted to employ its tried-and-tested method of targeted lockdown that has been successful in stopping no less than 30 Covid-19 flare-ups in the past. The capital city of Beijing implemented a two-week quarantine for visitors from high-risk areas, halted the use of community spaces for entertainment, and also limited the number of visitors allowed at parks and scenic areas.

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Source: Oil Price

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Hottest Oil Play

5 Things You Need To Know About The World’s Hottest Oil Play

The game is afoot with 2D seismic and a 6-well exploration drilling campaign. This is with evidence of an active petroleum system now confirmed after two test wells in Namibia’s 6.3-million-acre Kavango Basin. That hopes to put this final frontier nation definitively on the commercial oil map.

Recon Africa (TSXV:RECO, OTC:RECAF), the junior explorer behind the new play, and its JV partner NAMCOR, Namibia’s state oil company, think they might have drilled into a reservoir in their first test well, and they are very excited about what comes next.

So, let’s drill down here to better understand exactly where we stand with exploration in the Kavango Basin. Learn why many of us are so excited about it.

Here are 5 key details that are very important to understand:

#1 Exactly what did Recon Africa find in its first two test wells?

Key Takeaway: They’ve found light oil showings and evidence of an active petroleum system, helping to de-risk the 8.5-million-acre position in the Kavango Basin. The company’s expectations are that much more is to come, and now full-blown exploration begins.

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Source: Oil Price

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wall street oil prices fell

Wall Street Bullish On Oil Despite Losing Streak

Oil prices fell on Friday but still managed to eke out a slight weekly gain at $68.44/bbl. This is as investors continued to weigh a bullishly tight global market. Mainly against the worrying spread of the coronavirus delta variant.

Oil prices have been highly volatile over the past few weeks. With the International Energy Agency (IEA) warning that the spread of the delta variant would slow.

Now, the global oil demand recovery in its latest report “Growth for the second half of 2021 has been downgraded more sharply, as new COVID-19 restrictions imposed in several major oil-consuming countries, particularly in Asia, look set to reduce mobility and oil use,” the IEA wrote in its monthly oil report.

According to the IEA, last month’s demand slump clocked in at 120K bbl/day, and has forecast that growth would drop by ~500K bbl/day during the second half of the year compared to the group’s previous estimate.

The good news: The IEA has raised its oil price outlook for 2022.

Global oil demand is now seen rising 5.3 mb/d on average, to 96.2 mb/d in 2021, and by a further 3.2 mb/d in 2022. The IEA is also predicting that we could start to see a comeback of U.S. shale in the coming year, with supply from non-OPEC producers expected to rise by 1.7 mb/d in 2022, with the US accounting for 60% of the growth. Baker Hughes’ latest weekly survey found that the number of active, oil-targeted rigs in the U.S. jumped by 10 to a 16-month high 397 rigs.

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Source: Oil Price

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cheap natural gas

Cheap Natural Gas Is A Thing Of The Past

The era of cheap natural gas might be gone for good. U.S. natural gas futures climbed to a 31-month high of 4.16/MMBtu on Thursday thanks to forecasts for hotter weather over the next two weeks and soaring global gas prices ensuring that U.S. liquefied natural gas (LNG) exports will remain at record highs.

Refinitiv has projected that average gas demand, including exports, will climb from 90.9 bcfd in the current week to 94.5 bcfd next week as cooling demand keeps rising. Next week’s forecast is actually lower than anticipated because some power generators will be forced to burn coal instead due to increasingly high natural gas prices.

But that won’t be on a big enough scale to stop the natural gas march. Cheap natural gas is fading!

And that’s great news for U.S. LNG. Between January and June 2021, U.S. LNG exports made a jump by 42% Y/Y to an average of 9.6 billion cubic feet per day (Bcf/d). This is comparable with the first half of 2020. Asia is still the top buyer of U.S. LNG, accounting for 46 percent of exports through the end of May.

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Source: Oil Price

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Offshore Oil and Gas

2021 Has Been A Blockbuster Year For Offshore Oil and Gas

For an industry in trouble, the offshore oil and gas industry is doing pretty well. This is especially in terms of discoveries and final investment decisions.

So far this year, 21 new offshore projects have received a final investment decision. This is according to Westwood Global Energy Group. At the same time, there are a number of discoveries, tapping billions in new oil reserves. The Middle East and Latin America are the leaders in final investment decisions. The tune of a $20 billion, Offshore magazine reports, citing Westwood analyst Joe Killen.

In the Middle East, one of the highlights is the Farzad B natural gas field offshore Iran. Initially discovered by Indian state major ONGC Videsh, the field will now be developed by Iranian Petropars as U.S. sanctions made international participation in Iran’s oil and gas industry problematic.

Farzad B is estimated to hold some 22 trillion cubic feet of natural gas, with 16 trillion cubic feet of recoverable gas. It should produce about 1 billion cubic feet daily five years from now, according to the developer. The contract Iran’s government has signed with Petropars for Farzad B is worth $1.78 billion.

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Source: Oil Price

Image Credit: Wikipedia Commons

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new mexico oil production

New Mexico Breaks Oil Production Record

New Mexico broke an oil production record in May, pumping an average of 1.22 million barrels daily as the Permian Basin returned to output growth again.

Bloomberg reports, citing government data, that New Mexico produced more oil than North Dakota, and it did so for three months in a row to May.

New Mexico also recently reported record oil and revenues for the fiscal year 2021. According to the New Mexico State Land Office, it had received some $1.26 billion in total revenues in the latest fiscal year, of which $1.25 billion or 96 percent came from oil and gas royalties.

Since the start of this year, revenues have strengthened further, averaging some $100 million per month and rising to a record $135 million for June, according to preliminary data.

State Land Commissioner Stephanie Garcia Richard said, as quoted by the Carlsbad Current-Argus, that oil and gas production in New Mexico rebounded quickly thanks to relief granted by the state. The relief consisted of drillers keeping their leases despite well closure during the worst of the demand crisis last year.

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Source: Oil Price

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Hottest Oil Play

Is The World’s Hottest Oil Play About To Surprise Markets Again?

The world’s hottest oil play, Kavango Basin oil exploration, is lighting up again. This is with a series of big announcements on Friday by the junior explorer. This is behind what we consider is the most exciting onshore play in a decade.

They made two consecutive confirmations of an active petroleum system in Namibia’s giant Kavango Basin.

Reconnaissance Energy Africa (TSX.V: RECO, OTCMKTS:RECAF) has now initiated an ambitious 450-kilometer 2D seismic acquisition.  This expects to release more comprehensive results from their first well. With that, it also launched an impressive community water well drilling program for Namibia.

The July 30th Press Release

Recon Africa and its Namibian state-run partner NAMCOR, launched the first-ever 2D seismic program. This is in the 6.3-million-acre Kavango Basin. It follows the successes of the drilling of two stratigraphic wells. Both of which have confirmation of an active conventional petroleum system.

The Company reports that a 450-kilometer seismic program is to delineate potential traps and hydrocarbon reservoirs. Importantly, 95% of the seismic program will be on existing roads over 10 seismic lines. For the past week, Recon Africa is working with Canada’s most established seismic provider. It is the Polaris Geophysical. Finally, they have been testing the first line before moving into full acquisition mode.

The entire 450-km seismic acquisition is ready by the end of October.  That, along with Vertical Seismic Profiles (VSPs), is ready right now. It is to connect the first two stratigraphic test wells (6-1 and 6-2). These are to guide the next round of drilling before the end of this year.

multiple logging by RECO is complete and it runs and taken 86 sidewall cores in the 6-1 well. Next, it will run and cement casing to isolate the prospective hydrocarbon-bearing zones. In addition, it will run the VSP to total depth to tie both wells into the wider 2D seismic program.

Shareholders have also been anticipating additional results from the first test well, and we expect they won’t be disappointed: according to their latest press release, RECO plans to release these results this week, right after they submit them to NAMCOR and the Namibian Ministry of Mines and Energy.

Click here to read the full article about this hottest oil play news.

Source: Oil Price

Image Credit: Flickr/cc

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LNG

U.S. LNG Exports Jump To Record In H1 2021

Rising spot demand in both the winter and summer months from Asia and Europe and lower the US. These benchmark gas prices than international prices resulted in record-high American liquefied natural gas (LNG) exports. This is in the first half of this year as the U.S. Energy Information Administration (EIA) said on Tuesday.

U.S. LNG exports jumped to an average of 9.6 billion cubic feet per day (Bcf/d) between January and June 2021. This is up by 42 percent compared with the first half of 2020. In the summer of last year, U.S. exports of LNG had dropped to record lows. This is due to the low demand and low prices during the lockdowns in the pandemic. The key natural gas importing regions are Asia and Europe.

At the end of 2020, global LNG demand started to rebound with the easing of the COVID-related restrictions and the start of the winter heating season in the northern hemisphere. As a result, U.S. exports jumped in November and December 2020.

American exports continued to soar at the start of 2021, with high winter demand due to colder weather in Asia and Europe and outages at LNG export facilities outside the United States, including in Australia, Malaysia, Nigeria, Algeria, Norway, and Trinidad and Tobago.

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Source: Oil Price

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turkemenistan gas

Can Turkmenistan Become A Serious Gas Player In Europe?

The Caspian Sea is one of the world’s largest and oldest oil and gas producing regions. During the Cold War, the hydrocarbon-rich area was Soviet-controlled as the vast majority of the reserves were located in the Soviet Union. With that, can Turkemenistan Gas top as Player In Europe?

Since the breakup of the communist state, international companies have flocked to the newly independent countries such as Azerbaijan and Kazakhstan. Of the littoral states, Turkmenistan has by far the largest reserves when it comes to natural gas. Geographic isolation and animosity with Azerbaijan long prevented the export of gas to customers in Europe.

Recently, however, relations between Ashgabat (Turkmenistan) and Baku (Azerbaijan) have improved as the countries signed an agreement to jointly develop a shared natural gas field. While the size of the field isn’t a game-changer, the renewed cooperation between the countries could be. Turkmenistan has the world’s fourth-largest gas reserves at 19.5 trillion cubic meters and 10 percent of the global total. It includes Galkynysh with 2.8 trillion cubic meters which is one of the world’s largest gas fields.

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Source: Oil Price

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