biggest-oil-discovery

Oil Majors Are Eyeing Mexico’s Deepwater Sector

Deepwater exploration appears to be the focus of major investments in Mexico in Q3. As state-controlled oil company Pemex focuses on easy-extraction shallow water projects, private players set their sights on deepwater alternatives. International companies are seizing the opportunity to explore Mexico’s reserves, with two exploration projects from Shell and one from China National Offshore Oil Corporation (CNOOC). According to Mexico’s National Hydrocarbons Commission (CNH), exploration of deep and ultra-deep waters accounted for 45% of investments and 80% of reserves in the last quarter.

Companies drilled 33 new wells, 30 of which were by Pemex, in Q3; with CNH approving 14 new wells. The deepwater exploration saw an investment of $117.2 million from Shell Xochicalco and $91.6 million from CNOOC. According to CNH, Ameyalli holds 1,318 million barrels of oil equivalent (BOE) and Xochicalco holds 562 BOE, totalling 80 percent of the authorized prospective resources for exploration for the quarter.

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Source: Oil Price

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oil-demand

World’s Top Oil Trader Weighs U.S. Shale Acquisitions

The world’s largest independent oil trader, Vitol Group, is considering potential acquisitions in the U.S. shale patch, chief executive Russell Hardy said on the Reuters Commodity Trading Summit on Tuesday.

“Nothing has been done, it’s just an area where we feel there might be a fit from an asset point of view, where capital is leaving and some assets are going to want new owners,” Hardy said at the summit.

If Vitol were to decide to proceed with an acquisition, it hopes that it could have deals lined up by this time next year, the executive added.

Earlier this year, Vitol said it had established Vencer Energy, LLC—an upstream venture in the United States, which will be looking to buy mature, producing oil and gas assets, with a specific focus on key basins in the US Lower 48. Houston-based Vencer Energy will be led by industry veteran Don Dotson as president and chief executive officer.

“I am looking forward to leveraging my decades of industry experience operating in multiple basins to build a large-scale oil and gas enterprise,” Dotson said in a statement in July.

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Source: Oil Price

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oil-price-jump

China Looks To Boost Oil Exploration, Expand Oil & Gas Storage

China plans to further increase oil and gas exploration and accelerate the construction of more oil and gas storage infrastructure, state news agency Xinhua reported on Tuesday.

Last week, China’s Communist Party adopted the principles of the five-year development plan 2021-2025.

China will also aim to build more oil and gas pipelines, according to its authorities.

China has been looking to increase its energy security in recent years, including by increasing domestic oil and gas production and expanding its storage facilities.

Over the past decade, China’s oil production has been falling while its oil demand has been soaring, increasing Beijing’s dependence on sourcing oil from abroad.

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Source: Oil Price

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oil

No change without the oil industry

It’s just as well because efforts here in Scotland to build an energy transition movement and creating a viable, large-scale renewables or net-zero manufacturing supply chain have so far – with one or two exceptions – failed and the number of jobs forecast 10 years or so ago have simply not materialised.

It also now seems likely that the chances of achieving any meaningful improvement in that situation are low. A combination of the huge political uncertainty surrounding relations with the EU and the traditional UK issues of short termism, risk averseness and the lack of availability of investment capital don’t help.

There is also little doubt that we continue to suffer from not having a national champion in the same way Norway has Equinor, Denmark has Orsted, France has EDF, Sweden has Vattenfall, and so on. All of these and others are either wholly or majority owned by their respective governments and are used by them to achieve their industrial and economic objectives. In some countries companies also tend to be naturally inclined towards industrial nationalism even though they are not state owned. I have often thought that every US oil and gas operator seemed to act as an ambassador for American industry.

These national champions play a vital role in encouraging and enabling the development of their indigenous supply chains through collaboration, involvement in projects and, sometimes, direct funding. And – to be blunt – our lack of state-owned companies is an ideological issue which has not played at all well for the UK.

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Source: Energy Voice

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crude-oil-shortage

Oil Investments Are Drying Up As Crude Demand Falters

Thirty-five percent: this is the size of the spending cuts oil and gas companies are likely to have made this year in response to the effects that the coronavirus pandemic is having on demand, according to the International Energy Agency. And this is just the spending slump in upstream oil and gas. This is just part of a wider trend of investment cuts in the energy industry, according to the IEA, which earlier this month published an update of its World Energy Investment report, first released in late spring. At the time, some thought we were seeing the worst of the pandemic. They were, apparently, wrong.

Demand for oil has certainly improved in some parts of the world, notably in Asia, where governments have been more successful in containing the spread of the coronavirus than their counterparts in Europe and North and South America. But even in China—the world’s oil demand recovery driver—the rebound is slowing down. After all, even though its domestic demand may be improving, if regional and global demand is stalling, this will have a negative effect on China as well.

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Source: Oil Price

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recovery-oil-demand

Hedge Funds Boost Bullish Oil Bets

Portfolio managers increased their bullish bets on crude oil futures and options in the week to October 20 by the most since April, according to the latest commitment of traders report with data from exchanges.

The jump in longs in Brent Crude and WTI Crude coincided with increased market speculation earlier this month that OPEC+ would likely postpone the easing of the ongoing production cuts until global oil demand strengthens, Reuters columnist John Kemp commented on Monday.

In the week to October 20, money managers bought the equivalent of 55 million barrels of oil in the six most important petroleum contracts, with the buying focused heavily on WTI Crude and Brent Crude, according to Kemp’s estimates from the commitment of traders (COT) report.

The buying in the crude contracts was not only short covering but also establishing new long positions, the report showed.

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Source: Oil Price

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oil-drilling-operations

Offshore Oil & Gas Poised For A Major Rebound

In a year marked by huge spending cuts across the oil and gas industry amid urgently revised budgets and slashed investments, some analysts are now expecting a light at the end of this tunnel, at least offshore. From next year, Rystad Energy expects offshore oil and gas investments to rebound, but there will be a tectonic shift, with nearly half of that investment going to floating production and storage. Earlier this month, Rystad reported that Chinese shipyards are preparing for an increase in new orders for floating production, storage, and offloading vessels beginning next year. This increase would mean that offshore oil and gas exploration and production were on the rebound. In fact, Rystad’s analysts said that over the next five years, 40 percent of newbuilds for the energy industry would be FPSOs. They stopped short of forecasting what the total of new facilities would be and how it compares with previous years.

Banks, meanwhile, diverge on their oil price forecasts, as they often do. Goldman Sachs, for example, said it expected Brent to rebound to $65 a barrel next year while Morgan Stanley said the benchmark would struggle to break the $50 threshold. Goldman motivated its forecast with the expectation that coronavirus vaccines would become available by spring 2021. Morgan Stanley, on the other hand, pointed to the surge in U.S. oil and gas production from the past few years as one reason for its relatively bearish forecast. The other reason was more important: a shift in investor priorities.

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Source: Oil Price

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Malta

Is This Europe’s Newest Oil & Gas Hotspot?

When Michelangelo Merisi (also known as Caravaggio) left continental Italy for Malta in 1607 to escape the ramifications of a lethal sword fight, little did he know what a profound impact he would leave on the little Mediterranean island. For Michelangelo himself the impact was questionable at best – apart from painting some of his most profound works there (such as the Beheading of Saint John the Baptist), he became a Maltese Knight only to be banished from Malta a year later for being a “foul and rotten member”.

In brief, Caravaggio’s one-year sojourn has only perpetuated all the problems the artist had been suffering from. Yet for the island nation of Malta, Caravaggio has become a showcase to spearhead all its remarkable achievements. No wonder one of the Mediterranean’s most ambitious oil-drilling projects assumed Caravaggio’s name. Caravaggio is a heretofore undrilled prospect offshore Malta, lying in water depths of 350 metres within Area 07. According to preliminary assessments based on seismic surveys the main target for Caravaggio is a Lower Eocene carbonate reef and a secondary reef below that, the aggregate reserves of which might be 1 Bboe.

The operator of Area 07, Heritage Oil, was awarded the rights to it in December 2007 along with Area 02 and was supposed to conduct at least 1000km seismic surveying (the blocks cover 8778km2 and 9190km2 respectively) and drill one exploration well. The latter objective could not be met, however now Heritage has some solid 5000km of seismic surveying data, reportedly attesting to the presence of several prospects to be drilled.

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Source: Oil Price

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LNG

Are LNG Prices About To Head Higher?

Weather forecasters are predicting a harsh winter for Asia, and while this would hardly be good news for anyone in the region, it happens to be great news for LNG exporters.

Producers of liquefied natural gas were hammered no less mercilessly by the coronavirus pandemic than their oil-producing peers. On top of that, the LNG market was already oversupplied—just like the oil market—when the coronavirus began its global march. As a result, prices for the so-called bridge fuel slumped to about $2 per million British thermal units, making a lot of LNG non-competitive and leading to delays in several final investment decisions in the United States.

While the FIDs are unlikely to be revisited anytime soon, spot prices are improving. The Nikkei Asian Review reported last week the price for LNG had hit $5.20 per mmBtu, which was nearly triply the price of the commodity this spring when the glut and the pandemic combined to drive it down. It is still short of the average of $6 per mmBtu, at which LNG traded a year ago, the daily noted.

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Source: Oil Price

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oil-well

The oil and gas industry is ‘not simply going to roll over’

There are investment opportunities within the energy sector that will benefit from the energy transition — and they are not just in the renewables sector.

Tyson Birchall, managing director of Longbow Capital, a Calgary based private equity manager, points out that even if the world is able to achieve the objectives of the Paris agreement, the oil and gas industry will still require investment of approximately $425 billion per year to meet demand as supply declines faster than demand does (he cites IEA reports).

Longbow manages approximately $500 million and is investing in opportunities inside and outside of the oil and gas sector that will benefit from the disruption created by the energy transition — which can include energy infrastructure, services, products and technology — what Birchall called, “Energy with a capital E.”

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Source: PV-Magazine-USA.com

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