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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.

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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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oil-well facts about oil

10 Things You Never Knew About Oil

From OPEC to U.S. shale, from fracking to negative oil prices, from endless political debates to inventories, the fossil fuel industry is never short on headlines. But the industry has a few lesser-known tidbits that might come as a surprise to even the savviest oil industry connoisseur. That’s why we’ve prepared this article to give you some preview and facts about oil.

In no particular order, here is our top 10 list of things you never knew about oil.

Number 10 on our list was not inspired by DC Comics

Although it’s easy to see why one would think so. Superhero fans might be surprised–and perhaps giddy–to learn that there is a Batman refinery. It gets its name not from the DC comics, but because of its location in Batman, Turkey. Batman in Turkish means “sunken”, and the town was named that because it often floods. If you’re disappointed that the refinery is not really named after the Caped Crusader, you are not alone.

Number 9 If you are an oil industry aficionado.

You probably already knew that Venezuela is home to the biggest oil reserves of any country. But did you know that the Latin American country’s 304 billion barrels of oil are enough to supply the entire world with oil for 8.5 years? That’s over 18 quintillion liters of oil and enough to fill up the Baltic Sea more than two times over!

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Source: Oil Price

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Oil Play

Could This Be The Most Promising Oil Play Of The Decade?

No oil discovery narrative appears to have captured investor attention this year. The Reconnaissance Africa’s (TSXV:RECO, OTC:RECAF) acquisition of the rights to Namibia’s giant, 6.3-million-acre Kavango Basin. Following it with a short order by two confirmations of an active petroleum system.

It keeps on capturing our attention for several reasons. Not the least of which is that onshore discoveries are pretty much a thing of the past. This is except in the final frontier of Africa. Nambia has never produced a barrel in its history. Now, they are anxiously awaiting the possibility of its day in the energy spotlight.

It’s also capturing our attention because this is a junior explorer. It is sitting on what we think is a supermajor-size basin. Lastly it’s fully funded for its current 3-test well drill campaign.

But in recent weeks, our attention has been drawn by reports of surprise early results—twice. And now, there is a lot to potentially look forward to in the coming days and weeks.

On Monday last week, ReconAfrica announced that it had completed its second drill at its 6-1 stratigraphic test well. In a matter of days, we are expecting the results from that drill.

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Source: Oil Price

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Regional Oil Giant

Could Guyana Replace Venezuela As A Regional Oil Giant?

Guyana is continuing to build its reputation as the new oil hub of the Americas. There are more oil firms seeking a stake in the country’s oil fields. With that, it seems new discoveries are being made almost every month as exploration activities continue. Can they become the top Regional Oil Giant?

International oil giants Hess, CNOOC, and ExxonMobil all have a stake in Guyana’s Stabroek Block where the firms have made significant discoveries over the last five years. Exxon alone claims to have made 20 discoveries, expected to contain around nine billion barrels of recoverable oil equivalent resources.

Eco-Atlantic is the latest oil firm to join the major players, acquiring a stake in JHI Associates and taking its share in the Canje block off the coast of Guyana, where Exxon operates.

A 2021 multi-well exploration program will develop upon activities in the Canje Block to see how far the region’s hydrocarbon system extends. The low-risk drilling project could provide greater insight into the extent of Guyana’s oil reserves. This will surely impact them as a regional oil giant.

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Source: Oil Price

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oil-rig-hottest-commodity

Oil Has Become The Hottest Commodity On Wall Street

Crude oil has been having a great 2021 so far—a very different situation to last year’s when the pandemic devastated demand for all commodities fueling a price rout that lasted well into 2020. Now, commodities are back with a vengeance, and nowhere is this vengeance clearer than in oil. Crude has become the hottest commodity for traders in the past few weeks as surging demand has topped all expectations, sparking a run on oil futures. According to a recent Wall Street Journal report, in mid-June, the ratio of bullish to bearish bets on oil in New York stood at a staggering 23 to 1. This compares with a ratio of 6 to 1 at the beginning of the year.

This is the speculative component of the price rally, and it is certainly a big component. But the fundamental component is a big one, too. OPEC+ stunned everyone earlier this month when it failed to reach an agreement on how to proceed with its production control beyond the current month. The UAE, a dissenter who had already criticized some aspects of the production cut deal, this time really dug its heels in and refused to make any concessions until concessions were made to it.

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Source: Oil Price

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shale-gas

The Dawn Of A New Era For U.S. Shale

Higher oil prices and capital expenditure discipline are setting the stage. This is for the highest free cash flow on record for the world’s exploration and production companies this year. And U.S. shale firms—set to generate $60 billion free cash flow—are primed for playing a key role. The record-breaking free cash flow from global upstream operations is the focus. The U.S. shale patch is expected to be the biggest beneficiary of CAPEX discipline and high oil prices. As well as the largest contributor to the highest-ever free cash flows from the upstream business globally. This is what the independent research firm Rystad Energy said in a new report. Let’s talk more about the US shale new era!

$70 oil can certainly help a lot, but it is also capital discipline at every single oil company—from supermajors to U.S. independents—that is contributing to record cash flows this year.

Free Cash Flow Set To Hit Record-Breaking $348 Billion in 2021

The world’s public oil firms are yet to see their combined free cash flow—all cash flows from upstream activity excluding such from financing or hedging effects—surge to a record-breaking $348 billion in 2021. According to estimates from Rystad Energy, this would be $37 billion higher than the previous all-time high of $311 billion. This was in 2008. Back then, just before the financial crisis, oil prices averaged $100 a barrel that year.

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Source: Oil Price

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