Russia Can Wait for $70 Oil Before Re-Entering Arctic Waters

Russia can wait for a sustained recovery in oil prices before drilling again in Arctic waters, relying for now on less costly regions even as rival producer Norway accelerates development of its northerly fields. “We estimate production costs for the Russian Arctic offshore in the range of $70 to $100 a barrel,” Energy Minister Alexander Novak […]

World Oil Production

The views expressed in this post do not necessarily reflect the views of Dennis Coyne or Ron Patterson. The BP Statistical Review of World Energy has oil production data by country up to the end of 2015. This is what that looks like from 1988: The United States increased production by 5.1 million barrels per […]

Peak Oil: Not Just Wrong but Invalid

By Michael Lynch   “Production in a region rarely follows a bell curve nor do regions necessarily experience a single peak. As a result, this method repeatedly predicted premature peaks for many countries and for the world itself.” “Production patterns are determined by the geology and chemistry of the deposit, plus the engineering decisions on how […]

Here’s how much it costs both Saudi Arabia and the US to produce oil

When crude oil prices crashed into the $20 range early last year, it had most oil-producing nations quaking in their boots. That’s because few countries can make much — if any — money at that price point. I say most because there are a handful of producers that were still able to make a tidy […]

OPEC Warns Members to Comply With Oil-Production Cuts

OPEC officials on Sunday urged member nations to cut their oil production in line with an agreement last year, warning that the petroleum market would remain depressed if they didn’t. Members of the Organization of the Petroleum Exporting Countries, the 13-nation oil cartel that controls a third of global production, need to take compliance with […]

The world’s deepest oil well is over 40,000 feet deep

In the world’s deepest gold mine, workers will venture 2.5 miles (4 km) below the Earth’s surface to extract from a 30-inch (0.8m) wide vein of gold-rich ore. While these depths are impressive, mining is limited by the frailty of the human body. Going much deeper would be incredibly dangerous, as limitations such as heat, […]

There’s almost zero rationale for Arctic oil exploration

Drilling the Arctic region for oil cannot be justified against the background of the major shift in the global oil production paradigm, Goldman Sachs’ lead European commodities equity specialist said on Thursday. “Overall the idea that we have to go into the Arctic to find new resources I think has been dispelled by the enormous […]

King Oil Is Dead; Long Live The King

Summary Oil prices are difficult to predict. Some North American oil producers are leaner and less risky than they used to be, especially those that have wiped out billions of dollars in debt via bankruptcy. I identify one such bankruptcy rebirth, which, despite less risk, trades at significantly lower multiples than its peers. There is […]

How OPEC Lost The War Against Shale, In One Chart

At the start of March we showed a fascinating chart from Rystad Energy, demonstrating how dramatic the impact of technological efficiency on collapsing US shale production costs has been: in just the past 3 years, the wellhead breakeven price for key shale plays has collapsed from an average of $80 to the mid-$30s… … resulting […]

Russia to cut oil output by 300000 bpd by end

Russia will cut its oil output by 300,000 barrels per day by the end of April and will maintain production at that level until the global oil cuts deal expires at the end of June, Energy minister Alexander Novak said on Friday. Russia had cut output by 160,000 bpd by the middle of March, said […]

Has OPEC Underestimated US Shale Once Again?

The U.S. shale cowboys are back on their horses and leading a strong recovery in the oil patch that is not expected to falter even as WTI prices dropped last week below $50 per barrel for the first time in more than two months. With lessons learned from the oil price crash and budgets streamlined […]

Three Reasons Why Keystone XL May Never Get Built

Almost a full decade since first applying for a presidential permit, TransCanada looks set to finally receive go-ahead in the U.S. for its massive $8-billion Keystone XL pipeline. But here’s the thing: U.S. approval, while a great leap forward for TransCanada, doesn’t guarantee the Keystone XL pipeline will ever be built. New U.S. President Donald Trump was elected […]

Saudi Arabia and the war on shale oil that never ended

Last week when Saudi Arabia let it leak that the kingdom has no intention of leading OPEC toward another cut in production to accommodate the growing volumes of oil from American shale deposits, it was another sign that the Saudi war on shale actually never ended. To properly understand this announcement, we need to return […]

Shell to develop transition framework over next two decades

Royal Dutch Shell plans to shift its business model in the next several decades to a mix of renewables and traditional fossil fuels, said Shell CEO Ben van Beurden, during a keynote address given Thursday at the 2017 CERAWeek conference in Houston.  The shift, he said, will enable the company to  focus on creating less […]

Canada Oil Dependence on US Loosens in Age of Donald Trump

The Canadian oil patch’s half-century bond to the U.S. market is loosening one tanker load at a time in Donald Trump’s “America First” era. Last month, a ship loaded oil off Newfoundland and set sail on a 10,000-plus nautical mile journey to China, following on the heels of an oil sands cargo shipped from the U.S. […]

Bakken January Production Data

North Dakota has published January production data for the Bakken and for all North Dakota. Bakken production was up 37,617 bpd to 932,817  bpd while all North Dakota’s production was up 37,972 to 980,294 bpd. Bakken bpd per well was up 3 to 86 while the average bpd per well for all North Dakota wells […]

Oil could flow through the Dakota Access Pipeline as early as next week.

On Tuesday, a U.S. district judge denied a motion to stop construction of the final piece of the pipeline, which had been filed by the Standing Rock Sioux and Cheyenne River Sioux Tribes. While disappointing to the tribes, the ruling is narrow. It only concerned the tribes’ claim that oil spilled by the pipeline in Lake Oahe […]

‘Decade of Disorder’ Looms Without Global Energy Investments, Says Former EIA Chief

Global oil markets are facing down a “decade of disorder” if long-term supply projects aren’t put into the pipeline, a former chief of the Energy Information Administration (EIA) said Tuesday. Adam Sieminski, who headed EIA from June 2012 until January, discussed global supply trends during a panel discussion in Houston on the second day of […]

Libya’s Biggest Oil Port Shut, Crude Output Cut on Clashes

Libya halted exports from its two of biggest oil ports and reduced production from some fields after clashes threatened to reverse the North African country’s progress in reviving crude output and sales. Shipments from Es Sider, the country’s largest oil port, and Ras Lanuf, its third-biggest, have been suspended until the security situation improves and workers […]

The Beginning Of The End For The Bakken Shale Play

It’s the beginning of the end for the Bakken Shale play. The decline in Bakken oil production that started in January 2015 is probably not reversible. New well performance has deteriorated, gas-oil ratios have increased and water cuts are rising. Much of the reservoir energy from gas expansion is depleted and decline rates should accelerate. More drilling may increase […]

A cornerstone of global oil supply — Canada at a cross roads

Canadian heavy crude is a cornerstone of global oil supply now and into the next decade. But growth is likely to be increasingly affected by investor sentiment soured by environmental concerns and competition for capital from tight oil. Both factors have already begun to reshape the domestic corporate landscape. How many oil producing countries can […]

Saudi Arabia and Iraq Crude Exports to US Hit Five-Year High

Crude oil imported to the United States from Saudi Arabia and Iraq combined has reached a peak not seen since 2012, but the U.S. Energy Information Administration says the volume will likely decline soon. Toward the end of 2016, high production in Saudi Arabia and Iraq, coupled with low domestic demand in Saudi, contributed to […]

Saudi Arabian Production Was Supposed to Peak in 2006

The world was running out of oil and the global economy was about to collapse as a consequence ten years ago. Imminent peak oil doom was everywhere and one of its leading proponents was banker Matthew Simmons. Among other things, Simmons based his prognostications on the claim that oil production in Saudi Arabia was about […]

Norway Doubles Down On Arctic Oil

While Canada and the U.S. ban Arctic drilling for oil and gas motivated by environmental concerns, and majors such as Shell pull out of their Arctic projects due to financial pressures, Norwegian energy companies are planning to increase drilling in the country’s Arctic shelf in the Barents Sea. It seems that the limited oil price […]

Mexico turns to the Jurassic era for shale oil

Mexico’s plans to develop its shale oil resources have finally taken a step forward following years of largely fruitless efforts by the state owned company Pemex. Canada’s Renaissance Oil and Russia’s Lukoil are joining forces to develop the Amatitlan block of the Chicontepec region. They aren’t interested in the shallower tight oil, but in the […]

How Saudis Cut Oil Output Without Really Cutting

Saudi Arabia has led the way among major energy exporters in cutting oil production. At the same time, the kingdom is adding to global supply in a surprising way. The deal to cut oil output has been a success, at least for its first month, largely because there was little cheating and because Saudi Arabia […]

Can Other Oil Basins Ever Catch Up To The Permian’s Prosperity?

While many exploration and production (E&P) companies hustle to buy diminishing available acreage in the Permian Basin, other basins are lining up to the be next play that cashes in on $50-plus oil. Increasingly, the rig count bears out the possibilities. Although the Permian remains the leader in rig addition, others are showing signs of […]

Is The Bakken a Bust?

North Dakota has released December production data for the Bakken and for all North Dakota. They were a little shocking. Bakken production down 86,150 barrels per day 895,330 bpd. North Dakota production down 92,029 bpd to 942,455 bpd. It was noted that this the largest decline ever in North Dakota production. But it should not […]

Learning to Frack

Technological advances and learning-by-doing have made U.S. shale oil profitable even at $55/barrel. Just ten years ago shale oil was expensive. Global oil prices spiked to $135/barrel in 2008 but shale oil didn’t and couldn’t respond. Now, at only $55/barrel, U.S. oil producers are going all in, announcing billions of dollars of increased investment, particularly […]

Fireballs and booby traps: On the front lines with the oil workers …

The flames exploded into the sky like a volcanic eruption, blanketing a swath of the Iraqi countryside in a noxious haze of black smoke. The inferno reached more than 300 feet high on a recent afternoon when the wind shifted direction, bending the billowing wall of fire toward the men from Iraq’s North Oil Co. […]

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