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Permian oil output tops 6M bpd and may peak at 7.7M by 2035, but plateau—not decline—is expected, per Wood Mac, despite rising costs and challenges.

The Permian is not done yet

Back in 2017, oil production in the Permian stood at 2.2 million barrels daily. Today, the Permian is producing over 6 million barrels daily, accounting for nearly half of the U.S. total. Predictions of a looming peak have lately multiplied, but according to Wood Mackenzie, the Permian is not done yet—not if prices improve.

To be sure, the boom days seem to be over. Production growth in the most prolific shale play in the United States has been slowing already as production costs climb higher while oil prices slide lower. Most forecasts for the region agree that growth in production is about to slow down further, and Wood Mac is no exception. The consultancy expects output there to add 200,000 barrels daily this year, for a total of 6.6 million barrels daily.

Going forward, growth is about to continue slowing, the analysts predicted, until production peaks at 7.7 million barrels daily in 2035. Yet, while many assume that a peak is inevitably followed by a decline, this will not be the case in the Permian. Output of crude oil in the play will plateau at 7.7 million bpd, and this will more than offset production declines in other producing regions in the country—meaning oil demand will be healthy enough to support such a trend.

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Source: Oil & Gas 360

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New policy speeds up leasing, broadens public land access, and supports federal energy and economic goals.

Oil and Gas Leasing Streamline by the Department of Interior

In support of the Trump Administration’s energy dominance agenda, the Oil and Gas Leasing Streamline will push through. The Department of the Interior today announced a Bureau of Land Management policy update. They designed it to expedite the oil and gas leasing process on public lands. Through a newly issued Instruction Memorandum “Oil and Gas Leasing – Land Use Planning and Lease Parcel Reviews,”. The BLM is committing to faster lease parcel reviews by aiming to complete the entire process within six months. This streamlined approach is expected to increase the availability of onshore federal lands for leasing. It will also reduce bureaucratic delays, and enhance public engagement, while reinforcing national efforts to boost job creation, lower energy costs, and strengthen U.S. Energy Dominance.

“Under President Trump’s leadership, we are ending the unnecessary delays and bureaucratic roadblocks that have held back American energy production for too long,” said Acting Assistant Secretary for Land and Minerals Management Adam Suess. “This policy puts us on a fast track to Energy Dominance—opening up more federal land for responsible development, cutting review times nearly in half, and sending a clear message that the United States is serious about job creation, low energy costs, and putting American energy first.”

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Source: doi.gov

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Largest oil and gas producers

Largest Oil and Gas Producers Made Close to $100bn in First Quarter of 2022

The tumult of war and climate breakdown has proved lucrative for the world’s leading oil and gas companies, with financial records showing 28 of the largest producers made close to $100bn in combined profits in just the first three months of 2022.

Buoyed by oil commodity prices that soared following the turmoil caused by Russia’s invasion of Ukraine, major fossil fuel businesses enjoyed a bonanza in the first quarter of the year, making $93.3bn in total profits.

Shell made $9.1bn in profit from January to March, almost three times what it made in the same period last year, while Exxon raked in $8.8bn, also a near threefold increase on 2021.

Chevron upped its profits to $6.5bn and BP revealed in its highest first-quarter profits in a decade, making $6.2bn. Coterra Energy, a Texas-based firm, had the largest relative windfall of the 28 companies, with a 449% increase in profits on last year, to $818m.

The rocketing profits, at a time when inflation has surged in many countries, has prompted several of the companies to return billions of dollars to shareholders via share buybacks and dividends.

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Source: The Guardian

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oil play review

Update On World’s Most Exciting Oil Play: An Interview With Jim Granath

Namibia is currently witnessing what could become one of the most spectacular explorational oil plays in recent memory, and one Canadian driller is at the center of this brand-new, potential blue-sky opportunity. This is what this oil play review and update is all about.

Reconnaissance Energy Africa (TSXV:RECO, OTC:RECAF) is in the process of attempting to de-risk the potentially huge Kavango basin. Following the encouraging results of their first two test wells, the company is now analyzing the data to determine the size and commercial potential of the basin.

With the exploration efforts in Namibia advancing quickly, Oilprice.com founder James Stafford sat down with one of RECO’s leading geologists Dr. Jim Granath to find out more about the producibility and commercial potential of the encountered hydrocarbon system in RECO’s Kavango basin.

In This interview with Jim we look at the following:
– Why the stratigraphic wells were a huge success
– How the hydrocarbons are stacked in columns from 15 to over 110 meters in height
– The oil and gas they are seeing are far more than normal shows
– The type of oil they are seeing in the wells
– How the geology is similar to the Zagros belt in the Middle East
– Why this is a conventional play

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Source: Oil Price

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current us oil prices

Current US Oil Prices Soar To 6-Year High In OPEC Standoff

The benchmark of current US oil prices, WTI Crude, hit its highest level since November 2014 early on Tuesday. This is after OPEC+ on Monday called off its third attempt to reach an agreement. Discussed is over oil policy management for the coming months.

In Asian trade earlier in the day, WTI Crude touched $76.50 a barrel, narrowing the WTI/Brent Crude spread significantly.

There has been intense talks late last week and attempts at mediation during the weekend. The standoff between the United Arab Emirates (UAE) and Saudi Arabia over the Emirati baseline production level has no resolution.

Then, OPEC Secretary-General Mohammad Barkindo said in a concise statement on Monday that the OPEC+ meeting was called off. The date of the next meeting has not been decided yet.

The oil market immediately jumped on the news. As participants weighed the notion that no deal about how to proceed with oil supply management. It would mean no additional supply from the OPEC+ alliance for August. This is at a time when global oil demand is bouncing back with summer travel and re-opening of economies.

Insights of Analysts

Most analysts expect oil prices to continue rising until OPEC+ meets again, which, according to reports and analyst estimates, could come at some point over the next one to three weeks. There is already talk about whether this will lead to another break-up in the OPEC+ union, after the collapse in March last year. Currently, a complete collapse of the deal is more of a fringe scenario of extremes, rather than a distinct possibility.

“The fallout within OPEC+ means increased uncertainty in the months ahead if a quick resolution is not found, which suggests increased volatility in prices,” said Warren Patterson, Head of Commodities Strategy at ING.

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Source: Oil Price

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canada oil news

Canada’s Oil Patch Is Preparing For A Production Hike

At a time, U.S. shale, OPEC+, and dozens of oil producers have laid out blueprints to limit production. This is in a bid to return the global oil industry to its former glory. Now, Canada’s Oil Patch appears to be merely paying lip service. It is to the notion of keeping production subdued. Continue reading for more Canada oil news.

Like everybody else, Canada’s oil and gas producers have been preaching capital discipline. They are assuring investors they have no intention of boosting spending. It is preferring to return capital to investors mainly in the form of dividends and buybacks.

But behind the scenes, Canada’s Oil Patch has been giving a nod and a wink to supply chain partners, telling oilfield services companies to get ready for prime-time action—and soon.

A survey by investment bank Raymond James has revealed that the majority of Canada’s mid-and small-cap oil and gas producers plan to increase their capital expenditure (Capex) this year by a significant margin.

About 51% of oil and gas producers intend to ramp-up production over the coming months if oil prices remain above $60 per barrel with a good 28% of E&P companies saying they have increased their budgets by at least 25%.

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Source: Oil Price

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oil_drilling

Permian Production Set To Rise Despite Shale Decline

Oil production from the seven largest U.S. shale regions is set to decline by 46,000 barrels per day (bpd) in April, but output in the biggest and most prolific basin, the Permian, is expected to eke out a production gain next month, EIA data showed.

According to the EIA’s Drilling Productivity Report, shale production is set to drop by 46,000 bpd to 7.458 million bpd next month. All oil-producing regions except for the Permian are expected to see their production drop in April, but the Permian basin should see output rise by 11,000 bpd to 4.292 million bpd, EIA’s latest estimates show.

While the Permian is expected to increase its oil production, the Niobara and Eagle Ford regions are set for the biggest declines, by 15,000 bpd each, next month. Production in the Anadarko region is seen down 14,000 bpd from March to April, while production in the second most prolific region, the Bakken, is expected down by 12,000 bpd to 1.116 million bpd, the lowest level since July last year. Output in the Appalachia region is forecast slightly down by 1,000 bpd, and production in the Haynesville formation is set to remain flat.

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Source: Oil Price

oil-production

U.S. LNG Exports To China Expected To Grow Substantially

After a year of non-existent liquefied natural gas (LNG) exports from one of the fastest-growing global suppliers, the United States, to the fastest-growing world importer, China, American LNG cargoes started to travel again to China in March this year. Now U.S. exports of LNG are set to grow in the coming years, thanks to the first commercial U.S.-Chinese agreement for term supplies since the trade war that started in 2018 decimated American LNG exports to China, after Beijing slapped tariffs on the super-chilled fuel in retaliation to U.S tariffs on billions of U.S. dollars worth of Chinese goods.

U.S. LNG producer and exporter Cheniere Energy has recently signed a framework agreement with China’s Foran Energy Group to sell 26 LNG cargoes to the Chinese company over the next five years to 2025, Bloomberg reported.

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Source: Oil Price

NMA and NRA

Oil Prices Are Set To Go Higher Next Year

As predicted, a second wave of COVID-19 is wreaking havoc on the world economy with many European nations contemplating new shutdowns. It looks like it will be a tough winter for the oil prices and markets.

In a recent article carried in Reuters, two energy trading firms, Vitol, and Trafigura offered dour forecasts for the next few months. Trafigura’s Executive Chairman, Jeremy Weir offered a demand forecast of a decline of a million BOPD in the U.S. and up to 1.5 mm in Europe as a result, with global demand through the winter at 92 mm BOPD. He made an additional general comment in assessing the bleak near-term outlook.

“As we move now into what we consider the second wave, our anticipation is to see for further demand destruction… So it’s really not looking good for the foreseeable future.”

Demand at 96 mm BOPD for the Winter months affecting Oil Prices

Another energy trader, Vitol was a little less pessimistic, pegging demand at 96 mm BOPD for the winter months.

In this article we will summarize what we see as the key drivers outside the impact of the virus for oil in the next six to nine months, and how we are playing market opportunities to capitalize on this current weakness.

Expectations are for another major draw when they report this week, driving the inventory overhang down toward ~470 mm as of the last week of October, 2020. That’s a decline rate over the year of roughly 7-mm bbls per month.

Keeping that constant (we think the decline will begin to accelerate a bit actually), we should exit 2020 with ~450 mm bbls in storage, and bring the tally comfortably back into the 5-year average for this time of year. 450 mm bbl may sound like a lot, but it’s less than a 1-month supply, to put it in perspective for you.

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Source; Oil Price

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oil-well

Worst is Over for Oil and Gas Markets: OPEC Secretary General

According to Mohammad Sanusi Barkindo, secretary-general of OPEC, the enormous and unprecedented oil market imbalance facing the industry in April following the COVID-19 pandemic required an unparalleled response from producers

Underlining the importance of the two-year agreement signed in the Declaration of Cooperation (DoC) on 12 April by OPEC and non-OPEC oil producing countries and revalidated earlier this month on 6 June, Barkindo said he was confident that more stability would return to the oil markets in the second half of the year, but more work is needed to draw up existing oil inventories to help rebalance markets.

“As we see countries begin to open up, we will see demand start to come back,” Barkindo said. “I remain optimistic but cautious the worst is over and a recovery will be in full swing in the second half of this year, with stocks beginning to be withdrawn. However, what shape the recovery will take, whether a V shape, W or inverted hockey stick, is still uncertain.

“Nevertheless, I am hopeful by the end of this year we will begin to see some further semblance of stability restored to oil markets. Then we will be in a position to move into the next phase of sustaining that stability. Hence the importance of the two-year duration of the historic agreement signed by the OPEC Plus group of countries and non OPEC producers.”

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Source: OilReviewAfrica