[DantesPeak]

$this->bbcode_second_pass_quote('AirlinePilot', ' ')“The information that we are getting... may well mean that we are going to revise the numbers downwards,” Fatih Birol told Reuters in an interview. Mr. Birol said the IEA had not made a comprehensive update of the G8 report but that the agency was getting signals the drop in investment would be worse than initially feared.

[copious.abundance]

>>> Rigzone <<<
$this->bbcode_second_pass_quote('', '[')b]Is Rig Count About to Rebound? Scenarios for The Future
by G. Allen Brooks
Parks Paton Hoepfl & Brown
Wednesday, June 24, 2009

Last week Baker Hughes reported that their rig count for active rigs in the United States increased by 23 rigs to 899 active rigs. While this count increased from the prior week, compared to a year ago, the rig count is down by over 1,000 rigs marking one of the worst downturns in the industry history. Our favorite chart shows the rig count for 2000-2009 compared to the rig count of 1973-1983. The similarities are stunning, but even more so if one plots the rig counts indexed to 100 at the start of the respective time periods.




The rig count increase was the first since a four-rig gain experienced during the first week of the second quarter of this year. It barely shows up on the rig count charts. All the rig-count gain last week was onshore as the Gulf of Mexico rig count actually fell by one. Interestingly, the number of directional and horizontal rigs working each increased by 10 over the prior week with the number of vertical rigs up by only three. That would suggest gas shale drilling is continuing at a healthy pace, which could produce a greater problem for the natural gas industry later this year. So does this mid June rig count signal a turning point for the oilfield service industry?

[...]

[copious.abundance]

>>> LINK <<<
$this->bbcode_second_pass_quote('', 'T')hursday, June 18, 2009
Oil and gas industry ‘in a good position,’ study finds
Houston Business Journal

The oil and gas industry is headed in the right direction for recovery, according to a study released Thursday by Ernst & Young LLP’s Houston-based oil and gas division.

The study found that hits to the industry included some scaling back of upstream investment in 2009 and the postponement of some proposed developments. But from overall figures, Ernst & Young estimates that, as the recovery in oil and gas markets gathers steam in the second half of 2009, the U.S. oil and gas industry appears poised to resume its growth and be a key contributor to the U.S. and global economic recovery.

[...]

Baker-Highes rig count is now up 2 weeks in a row. Maybe that article above is onto something?

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]US rigs up by 18
By Upstream staff

The number of oil and gas rigs drilling in the US has risen by 18 this week to 917.

The number of rigs drilling in the US Gulf lost two this week to total 43, while the number of rigs drilling for oil gained 23 to total 219 and those drilling for gas lost five to total 687, a report by Houston-based oil services company Baker Hughes said today.

This week, rigs in Alaska gained two bringing the total to six, Arkansas was unchanged at 44 and California lost two to total 22.

Colorado lost one rig this week, bringing the total to 43.

Louisiana lost two to total 135 while New Mexico gained one to total 38.

North Dakota gained one to total 37, while Oklahoma gained two to total 79, Texas gained eight bringing their total to 338, and Wyoming lost one to total 30.

[copious.abundance]

Baker-Hughes rig count is now up 3 weeks in a row.

>>> US Rigs up by 11 <<<

[AirlinePilot]

OPEC Cuts spending estimates

LONDON -- The Organization of Petroleum Exporting Countries cut its five-year forecast for oil-field spending by about a third, as the recession and increased energy efficiency led to a steep reduction in projected demand.

In its annual outlook report, OPEC said it now estimates its members will have to invest about $110 billion to $120 billion in exploration and production in 2009 to 2013, rather than the $165 billion it had forecast. The oil cartel had already said in February that its members had delayed or canceled 35 longer-term projects.

http://online.wsj.com/article/SB124706351955611645.html

[AirlinePilot]

List of cancelled/delayed oil and gas projects


http://www.reuters.com/article/marketsN ... 9620090716

July 16 (Reuters) - Following is a list of some of the oil and gas projects and oil refinery expansion plans that have been delayed or cancelled so far in 2009.

The global financial crisis, falling oil demand, a slide in prices and poor general market conditions have prompted many in the industry to scale back spending and delay projects.

[copious.abundance]

$this->bbcode_second_pass_quote('AirlinePilot', '[')b]List of cancelled/delayed oil and gas projects
http://www.reuters.com/article/marketsN ... 9620090716
July 16 (Reuters) - Following is a list of some of the oil and gas projects and oil refinery expansion plans that have been delayed or cancelled so far in 2009. The global financial crisis, falling oil demand, a slide in prices and poor general market conditions have prompted many in the industry to scale back spending and delay projects.

[AirlinePilot]

You can sigh all you want Oily. And yeah there are some things in there not related to oil or NG specifically, but it is direct evidence that the reason for these project delays/cancellations has everything to do with the fact that globally cheap money has completely dried up and there is a measurable pullback in investment money for projects which otherwise would not be in jeopardy.

You do acknowledge the need for aggressive financing of future projects, or dont you? You do understand that the reason these things are in jeopardy is the lack of that financing, dont you?

This was not the case two years ago. It is hard, factual evidence that global energy industries are in near crisis situations and the required robust investment picture needed going forward for your cornucopian fantasy of production is completely falling apart.

Your blinded by your optimism to see the actual effects the global credit crisis is bringing us. I'm guessing currently this is only the beginning and with any further pullback in prices, or prolonged crude pricing below current levels it gets worse with time. Thats because cash reserves are being used up to continue with lucrative prospects in the hopes that this is just a downturn and soon things will get better. I'd place good money on that NOT being the case. Only the future will tell, we will know soon enough.

Sighing will not change the picture your obviously missing.

[AirlinePilot]

By the way if your so obtuse as to not understand how the delay in water and power projects in Bahrain does not impact infrastructure then I'd submit your the one lacking in the critical thinking skills. You need to understand the impacts outside of immediate tangible resource based projects and how they impact the overall infrastructure. Less power and water means potential worker issues and loss of possible plant capabilities due to electrical generation shortages.

Duh.

At some point its almost pointless continuing debate Oily, you refuse to even acknowledge we are in a period which does not have historic corollary in either the financial or energy industries.

[DantesPeak]

Well in case anyone missed this, the IEA already says the combination of the downsizing of spending and intractable depletion will result in falling output of oil.

Can it get any clearer than this?

$this->bbcode_second_pass_quote('', '[')b]"New capacity additions over the 2008-2014 period are a net 470,000 b/d but the escalating decline rates at older onshore fields more than offset the gains," the IEA said.

[AirlinePilot]

Shell considers staff cuts


HOUSTON (Reuters) - Shell Oil said on Thursday it was considering staff cuts at its refineries and chemical plants on the U.S. Gulf Coast to reduce costs in the current recession. Among the plants where reductions are being considered are the refineries Shell operates jointly with Saudi Aramco through
Motiva Enterprises and a Deer Park, Texas, refinery operated jointly with Mexican state oil company Pemex, said spokeswoman Anne Peebles.

http://uk.reuters.com/article/idUKTRE56 ... 7?rpc=401&

$this->bbcode_second_pass_quote('AirlinePilot', 'Y')ou do acknowledge the need for aggressive financing of future projects, or dont you? You do understand that the reason these things are in jeopardy is the lack of that financing, dont you?

[AirlinePilot]

$this->bbcode_second_pass_quote('OilFinder2', '
')And you are blinded by your pessimism to see that there is nothing new under the sun, and that the recent credit crisis and recession shall pass, as have all others before it.

[copious.abundance]

$this->bbcode_second_pass_quote('AirlinePilot', '[')b]Shell considers staff cuts


HOUSTON (Reuters) - Shell Oil said on Thursday it was considering staff cuts at its refineries and chemical plants on the U.S. Gulf Coast to reduce costs in the current recession. Among the plants where reductions are being considered are the refineries Shell operates jointly with Saudi Aramco through
Motiva Enterprises and a Deer Park, Texas, refinery operated jointly with Mexican state oil company Pemex, said spokeswoman Anne Peebles.

http://uk.reuters.com/article/idUKTRE56 ... 7?rpc=401&

[AirlinePilot]

For those who give a crap and want to understand what I'm driving at....

With a little help from Karl Denninger....


There are two types of recessions: inventory driven recessions, the most common, and credit driven recessions.

The last material credit driven recession was in the 1930s. We called it the "The Great Depression."

Inventory-driven recessions are primarily about excessive industrial capacity for demand. That is, manufacturers and suppliers of services get too bullish about prospects, build too much capacity and inventory, and wind up engaging in a destructive price war in an attempt to "win". This drives down profits and ultimately forces the weaker firms out of business, ergo, recession - GDP and employment decline. Having cleansed itself of the excess, the economy recovers. The trigger for these recessions is often (but not always) an external shock such as the oil embargo in the 1970s or the collapse of the Internet fraud-and-circuses games in 2000.

The second sort of recession is a credit-driven recession. Excessive credit creation - that is, loans going too far toward "fog a mirror" qualifications (and in some cases, such as the most recent event, actually reaching "fog a mirror") drives one or more asset bubbles. These pop when effective interest rates in the economy reach an effective level of zero, usually because the amount of leverage available becomes for all intents and purposes infinite (Bear and Lehman at 30:1, Fannie/Freddie at 80:1, AIG at god-knows-what, and duped "home buyers" buying with zero down for a true infinite leverage ratio.) This excessive credit creation drives a speculative asset bidding war which in turn causes prices to go sky-high for one or more types of asset.

The latter sort of recession is triggered because the cost of borrowing money is never actually zero, even if people pretend that it might be. As a consequence the lenders begin to earn a negative spread and lose actual purchasing power. This is an unsustainable situation because cash flow cannot be fudged nor can anyone sustain a negative cash flow for very long; no matter how much you start with if you spend more than you make eventually you go broke.

Recessions cannot end until the conditions that caused the recession are removed from the economy. This is elementary logic and obvious to anyone with an IQ larger than their shoe size.

For an inventory recession growth returns when enough capacity is destroyed through layoffs and inventory selloffs to bring capacity and demand back into balance. Employers then hire new workers and the economy recovers.

For a credit recession, however, there is a much larger problem: The reason real interest rates went negative is that debt has a carrying cost and consumes free cash flow; so long as the debt taken on in the credit binge remains the cash flow impact also remains.

Default and bankruptcy clears excessive credit (debt) from the system - if it is allowed to occur. But if it is not, then the bad debt remains on the balance sheets somewhere and the cash flow impact remains in the economy. Employment remains weak, capital spending restart attempts falter as demand fails to return and credit quality continues to remain insufficient to support new credit demand.

The consumer is 70% of our economy, give or take a few points. The consumer's "savings rate" (which government blithely declares as income minus spending), which was in fact negative (that is, consumers were spending more than they made through taking on more and more debt), but is now solidly positive at 6.9%.

The impact of this (6.9% X 70%) is an immediate 4.83 decrease in real GDP. Fudge the numbers all you want (and government will), but this is the math, and the math is never, ever wrong.

The truly bad news however is that most of the time saving in fact turns into capital formation - that is, it becomes investment. But government doesn't differentiate between actual savings and debt repayment - their formula is simply "income less spending = savings rate."

You had one guest on this evening who "got it", but you wouldn't let him explain it, so I will.

Consumers are not saving, they are paying down debt in a furious attempt to avoid defaulting on nearly $1 trillion in outstanding credit card balances that have gone from 11% interest to 29.6% along with OptionARMs that are experiencing a tripling of payments while the home's value is underwater and precludes refinance, all while consumers are being laid off by the hundreds of thousands monthly.


Bottom line this ain't no ordinary recession and refusing to acknowledge the debt and clear it has dire consequences for all major industries and the greater global economy. Including the energy industry.

NOW BACK ON TOPIC PLEASE

[AirlinePilot]

$this->bbcode_second_pass_quote('OilFinder2', '
')
But with US TPS demand down 6.4% so far this year, it's no wonder they're considering staff cuts at oil refineries! DUH!!

$this->bbcode_second_pass_quote('AirlinePilot', '')$this->bbcode_second_pass_quote('OilFinder2', 'A')nd you are blinded by your pessimism to see that there is nothing new under the sun, and that the recent credit crisis and recession shall pass, as have all others before it.

[AirlinePilot]

Effects of slowdown in Alberta’s oil industry will be felt nationwide


“The CERI 2009 Economic Slowdown Projection indicates that $218 billion will be invested in the oilsands for new production,” it stated.
That figure is $97 billion less than previously projected by the institute last year and $241 billion less than predicted in a different report.
The study assumes that oil stays below US$60 a barrel for most of 2009 and credit markets still lack liquidity. Under this projection, economic
recovery begins in early 2010, and oilsands development stalls until 2013, with no major growth until 2015. "

The assumed recovery in 2010 isn't going to happen. See above post to understand why.

http://www.joconl.com/article/id32919

$this->bbcode_second_pass_quote('AirlinePilot', 'T')hink Globally my boy, GLOBALLY