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Saudi Arabia Plans to Expand Oil Business as Global Demand Rises

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Saudi Arabia Plans to Expand Oil Business as Global Demand Rises

Saudi Arabian Oil Co., the world’s biggest oil exporter, said it will keep expanding and meet demand from customers as global consumption increases, the head of the state-run producer said. Saudi Arabian Oil Co., also known as Saudi Aramco, will boost capacity at the Shaybah oil field in the Rub Al-Khali desert in southeastern Saudi Arabia by 33 percent to 1 million barrels a day in the next couple of weeks and will double natural gas production over the next decade, Chief Executive Officer Amin Nasser told reporters Tuesday. Aramco is looking for joint ventures in countries from the U.S. to China, he said. “Saudi Aramco will continue to expand,” Nasser said at the company headquarters in Dhahran in eastern Saudi Arabia. “We will soon be publishing our annual book and you will see there is significant growth in our annual oil production compared to previous years.” Saudi Arabia is seeking to reduce its reliance on oil sales amid lower prices for its most lucrative export. As part of that effort, the king’s increasingly influential son, Deputy Crown Prince Mohammed bin Salman, wants to sell stock in Saudi Aramco for the first time, creating what could be the world’s largest listed company. Brent crude rose Tuesday as much as 3.7 percent to $45.24 a barrel. Crude averaged about $100 a barrel from 2011 through 2014. “Even though it is challenging, it’s still an opportunity for us to grow,” Nasser said of the international expansion plans. The company is looking to develop more joint ventures in countries including the U.S., China, Indonesia, India, Vietnam and South Africa, he said. The plans include boosting refining capacity to 10 million barrels a day, Nasser said. Saudi Aramco already has refining and petrochemical partnerships in the U.S., China, South Korea and Japan, as well as in Saudi Arabia, giving it a share in plants capable of processing 5.4 million barrels a day. Of that total amount, it directly controls 3.1 million barrels a day of capacity, he said. Global crude demand will rise by 1.2 million barrels a day this year, Nasser said. Saudi Aramco, which produced 10.2 million barrels a day on average last year, will meet customers’ requests for oil, he said. “We are seeing an increase in India, China, the U.S. and from different parts of the world,” Nasser said. “We are meeting that call on us from our partners across the world.” The company is working to sell shares in an initial public offering on the domestic exchange as well as internationally, Nasser said. A supreme committee with oversight of the company is giving direction in the share sale process, he said.

 

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France Studying Possible Ban on Import of US Shale Gas – Minister

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France Studying Possible Ban on Import of US Shale Gas – Minister

French Energy Minister Segolene Royal said on Tuesday she is investigating legal means to ban the import of shale gas from the United States because France has banned shale gas exploration using hydraulic fracking for environmental reasons. Royal, answering a question in parliament, said contracts signed by French gas utility Engie and power utility EDF with a U.S. producer have led to the import of LNG which contained about 40 percent shale gas. “I have asked the two companies why they weren’t vigilant and I have also asked for an examination of a legal means for us to ban the import of shale gas,” Royal said in parliament.

 

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Freeport to Pay Noble $540 Million to Not Use 2 Oil Rigs

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reeport-McMoRan Inc. will pay Noble Corp. more than half a billion dollars to not use a pair of its drillships.

In the midst of the oil industry’s worst financial crisis, operations at Noble’s Sam Croft and Tom Madden drillships will cease “as soon as practicable,” London-based Noble said in a statement Tuesday. The company said last month it was in talks with Freeport on a potential restructuring of the contracts, which were set to expire next year.

Terminating the contracts is part of an effort by Freeport, the biggest publicly traded copper miner, to cut costs. The Phoenix-based company is also scaling back its energy business, seeking to sell some oil and natural gas assets and is cutting a quarter of the energy unit’s workforce.

Noble rose 4 percent to $9.63 at 12:36 p.m. in New York. Freeport climbed 2.8 percent to $10.81.

Crude Crisis

The oil industry finds itself in an unprecedented financial crisis after crude prices tumbled by about 60 percent from their mid-2014 peak. Explorers slashed more than $100 billion in global spending on land and in the water last year. Offshore spending is estimated to drop another 27 percent this year and 11 percent next year, according to estimates in February from Wells Fargo.

“For offshore drillers, recovery prospects still remain dim and the timing continues to push right,” Andrew Cosgrove, an analyst at Bloomberg Intelligence, wrote Tuesday in a report. “Oil prices probably need to trade more to $60 a barrel to spark a sustainable rebound in offshore demand.”

Rig contractors have suffered through the double blow of declining customer demand due to tumbling oil prices and a glut of vessels that continue to be built to meet orders made before the rout. Many rig owners have worked deals with their customers to keep the vessels working by lowering the daily lease price in exchange for extending contracts.

Deal Terms

Freeport can make the $540 million payment through a combination of cash, stock and as much as $200 million in near-term Noble bonds. Noble can also receive further payments of $25 million and $50 million depending on oil prices over the next 12 months.

Noble also expects more than $100 million in cost savings by cutting the number of workers on the rigs and parking them long term.

The Noble rigs were each earning more than $600,000 a day, including revenue for moving the drillships that can work in water more than two miles (3.2 km) deep, according to their three-year leases.

Beyond offshore contracts that others in the oil sector are also tearing up early, leases on a further 77 rigs are expected to end this year, according to Bloomberg Intelligence.

Freeport invested heavily in the oil and gas sector in 2013 with the acquisition of McMoRan Exploration Co. and Plains Exploration & Production Co., swelling its debt just ahead of the downturn in energy prices. The company has announced more than $4 billion in asset sales so far this year. Those deals, along with free cash flow greater than $4 billion between now and the end of 2018, should give it some breathing room, Christopher LaFemina, an analyst at Jefferies LLC, wrote Monday in a note to investors.

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Oil Jumps; Canada, Nigeria Outages Bolster Prices

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Oil Jumps; Canada, Nigeria Outages Bolster Prices

Brent jumped more than 4 percent on Tuesday while U.S. crude settled up more than 2 percent, after a late burst of buying driven in part by expectations that record U.S. crude inventories would not swell by as much as they have in recent weeks. Crude supply outages in Canada, Nigeria and elsewhere boosted prices. Brent’s gain was its biggest one-day percentage move in a month. The American Petroleum Institute (API) was due to report preliminary stockpiles data at 4:30 p.m. (2130 GMT) ahead of official numbers from the U.S. government on Wednesday. Analysts polled by Reuters expect a 714,000-barrel stockpile build last week to record highs above 543 million. That would be one of the smallest builds in weeks. As recently as mid-April, U.S. crude inventories rose more than 6 million barrels in a week. “The talk is that API will show a big draw in Cushing and not a build,” said a crude futures broker. Market intelligence firm Genscape estimated on Monday that Cushing, the storage hub and delivery point for U.S. crude futures in Oklahoma, saw a stockpile build of 1.4 million barrels during the week to May 6. Oil prices have risen as the wildfire in Canada shut in more than 1 million barrels per day of production from Alberta’s oil sands region. Royal Dutch Shell Plc resumed production in the area on Tuesday and others looked to restart as repair crews assessed damage. In Nigeria, attacks on oil infrastructure have pushed crude output close to a 22-year low in Africa’s largest oil producer, Reuters data showed. Brent spiked just before settlement and settled up $1.89, or 4.3 percent, at $45.52 per barrel. More than 6,000 contracts changed hands in the final minute, Reuters data showed. On Monday, Brent fell 3.8 percent. U.S. crude’s West Texas Intermediate (WTI) futures rose 1.22, or 2.8 percent, to settle at $44.66. Refined oil products joined the rally, with gasoline gaining 3 percent and ultralow sulfur diesel, or heating oil, 4 percent. This year’s rebound in oil has been one of the strongest since the financial crisis. Prices have rallied nearly 80 percent from multiyear lows under $30 in the first quarter, supported by falling U.S. production, supply constraints in Libya and the Americas and a weak dollar. Since the end of April, the rally has stalled at around $45. The U.S. government’s forecast of higher oil demand for this year also supported prices, traders said, although the rally would probably prevent production from falling as sharply as predicted.

 

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Global oilfield process chemicals industry 2016 consumption report: Global QY Research

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Global oilfield process chemicals industry 2016 consumption report: Global QY Research

The recently published report titled Global Oilfield Process Chemicals Industry 2016 Market Research Reportis an in depth study providing complete analysis of the industry for the period 2016 – 2021. It provides complete overview of Global Oilfield Process Chemicals market considering all the major industry trends, market dynamics and competitive scenario.

The Global Oilfield Process Chemicals Industry Report 2016 is an in depth study analyzing the current state of the Global Oilfield Process Chemicals market. It provides brief overview of the market focusing on definitions, market segmentation, end-use applications and industry chain analysis. The study on Global Oilfield Process Chemicals market provides analysis of China market covering the industry trends, recent developments in the market and competitive landscape. Competitive analysis includes competitive information of leading players in China market, their company profiles, product portfolio, capacity, production, and company financials. In addition, report also provides upstream raw material analysis and downstream demand analysis along with the key development trends and sales channel analysis. Research study on Global Oilfield Process Chemicals market also discusses the opportunity areas for investors.

View Report at http://globalqyresearch.com/global-oilfield-process-chemicals-industry-2016

With153 tables and figures, the report provides key statistics on the state of the industry and is a valuable source of guidance and direction for companies and individuals interested in the market.

 

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EIA: Recent U.S. imports of oil tend to be heavier than domestic production

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EIA: Recent U.S. imports of oil tend to be heavier than domestic production

In 2015, more than 70% of the crude oil produced in the Lower 48 states was light oil with an API gravity above 35 degrees. At the same time, 90% of imported crude oil was heavier, with a gravity below 35 degrees API. To accommodate increasing U.S. production of light crude oil, refineries have adjusted their imports by reducing imports of light crudes. The differences between domestic production and imports in this key oil characteristic could bring changes to petroleum refinery operations in the United States, as discussed in the EIA report, Implications of Increasing Light Tight Oil Production for U.S. Refining.

Domestic crude oil production has grown rapidly in recent years, primarily because of light crude oil produced from low permeability (tight) formations. EIA’s report on crude oil production and crude oil quality estimates that about 90% of the nearly 3.0 million barrel per day (b/d) growth in production from 2011 to 2014 consisted of light crude oil, with an API gravity of 40 or above. At the same time, light crude oil imports fell from 1.7 million b/d in 2011 to 0.7 million b/d in 2014, and medium crude oil (27° ≤ API < 35°) imports decreased from 3.3 million b/d to 2.5 million b/d. Imports of heavy crude oil (<27° API) have remained near 4.0 million b/d since 2010.

U.S. refineries reflect a wide range of capacities, quality of crude oil inputs, utilization rates, and sources of crude oil supply. Most U.S. refineries are designed to run medium to heavy crude oil. However, technical options are available for shifts in input streams to process additional light crude oil.

For example, refineries optimized to run very heavy crude oil through cokers and other deep conversion units could reduce the use of those units and instead run light crude oil if that is a more profitable option. Depending on the prices of the different crude oils, the processing units that a refinery has, and the value of the resulting refined petroleum products, refineries will choose to process crude oils that optimize profit margins.

In 2015, the average API gravity for domestic refinery inputs was about 32 degrees, as refiners blended heavy and light crude oils to make a medium-grade feedstock. As discussed in EIA’s report, Technical Options for Processing Additional Light Tight Oil Volumes Within the United States, U.S. refineries have accommodated much of the growth in U.S. crude production from 2010 to 2014 with two limited- or no-investment-cost options: displacing imports of crude oil (primarily light crude oil, but also medium crude oil) from countries other than Canada and increasing refinery utilization rates.

 

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Compressor oil market (Positive displacement & dynamic) 2021 forecasts: 6.1% CAGR Led by APAC

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Positive displacement compressor is set to dominate global compressor oil market growth at projected CAGR of 6.1% to 2021 to reach $83.97 billion between 2016 and 2021 according to the latest research.

Complete report on global compressor oil market spread across 222 pages, profiling 28 companies and supported with 139 tables and 72 figures is now available at http://www.reportsnreports.com/reports/539528-compressor-oil-market-by-compressor-type-positive-displacement-and-dynamic-base-oil-type-synthetic-semi-synthetic-mineral-and-bio-based-end-use-industry-manufacturing-oil-gas-power-and-automotive-by-region-global-forecast-to-2021.html ,

The growth is primarily triggered by its huge demand from the Asia-Pacific region and growing end-use industries, such as manufacturing, power, metal production, oil & gas, food & beverages, and automotive. Moreover, the liberalization of foreign trade and investments and change in industrial policies has triggered rapid industrialization in China, for the past three decades. This, in turn, is contributing to the increasing demand for compressor oil in the Asia-Pacific region.

Positive displacement compressor led the global compressor oil market in 2015. The reduced maintenance cost, high performance, and lower energy consumption contribute to the increasing demand for positive displacement compressors. Since positive displacement compressor is the major application for compressor oil, growing demand for them drives the compressor oil market.

Asia-Pacific is projected to be the largest market for compressor oil, globally. Domestic and foreign investments in the key sectors such as energy, manufacturing, construction, and automotive have been consistently growing for the past decade. The increasing disposable income of people and industrial growth in the Asia-Pacific region led to the increasing demand of automobiles. As a result, there has been a consistent rise in number of vehicles in the region for the past decade, which is ultimately fueling the demand for compressor oil in the region. In addition, the presence of the key market players drives the compressor oil market in Asia-Pacific.

Some of the major companies profiled in this report are Royal Dutch Shell plc (Netherlands), Exxon Mobil Corporation (U.S.), Sinopec Limited (China), Total S.A. (France), Lukoil (Russia), BP plc (U.K.), Chevron Corporation (U.S.), Fuchs Petrolub AG (Germany), the Dow Chemical Company (U.S.), Croda International plc (U.K.), BASF SE (Germany), Sasol Limited (South Africa),and others. Order a copy of Compressor Oil Market by Compressor Type (Positive Displacement and Dynamic), Base Oil Type (Synthetic, Semi-Synthetic, Mineral and Bio-based), End-Use Industry (Manufacturing, Oil & Gas, Power, and Automotive) & by Region – Global Forecast to 2021 research report athttp://www.reportsnreports.com/purchase.aspx?name=539528 .

In the process of determining and verifying, the market size for several segments and sub segments gathered through secondary research, extensive primary interviews were conducted with key people. In Tier 1 (30%), Tier 2 (43%) and Tier 3 (27%) companies were contacted for primary interviews. The interviews were conducted with various key people such as C-level (43%), Director Level (30%) and others (27%) from various key organizations operating in the global compressor oil market. The primary interviews were conducted worldwide covering regions such as North America (37%), Europe (23%), Asia-Pacific (26%) and ROW (14%).

 

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SWOT Analysis of Global Carbon Dioxide Enhanced Oil Recovery (EOR) Industry 2016 consumption report : Global QY Research

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SWOT Analysis of Global Carbon Dioxide Enhanced Oil Recovery (EOR) Industry 2016 consumption report : Global QY Research

The recently published report titled Global Carbon Dioxide Enhanced Oil Recovery (EOR) Industry 2016 Market Research Reportis an in depth study providing complete analysis of the industry for the period 2016 – 2021. It provides complete overview of Global Carbon Dioxide Enhanced Oil Recovery (EOR) market considering all the major industry trends, market dynamics and competitive scenario.

The Global Carbon Dioxide Enhanced Oil Recovery (EOR) Industry Report 2016 is an in depth study analyzing the current state of the Global Carbon Dioxide Enhanced Oil Recovery (EOR) market. It provides brief overview of the market focusing on definitions, market segmentation, end-use applications and industry chain analysis. The study on Global Carbon Dioxide Enhanced Oil Recovery (EOR) market provides analysis of market covering the industry trends, recent developments in the market and competitive landscape. Competitive analysis includes competitive information of leading players in market, their company profiles, product portfolio, capacity, production, and company financials. In addition, report also provides upstream raw material analysis and downstream demand analysis along with the key development trends and sales channel analysis. Research study on Global Carbon Dioxide Enhanced Oil Recovery (EOR) market also discusses the opportunity areas for investors.

View Full Report at http://globalqyresearch.com/global-carbon-dioxide-enhanced-oil-recovery-eor-industry-2016

With 153 tables and figures, the report provides key statistics on the state of the industry and is a valuable source of guidance and direction for companies and individuals interested in the market.

Reasons to Buy this Report

The research report will enrich your decision-making capability by helping you to –
Design and improve your product development and sales strategies and enhancing your marketing activities
Develop business strategies by understanding the market dynamics and developments driving the Global Carbon Dioxide Enhanced Oil Recovery (EOR) market
Develop market-entry strategies and effective ways to sustain competition
Create merger and acquisition opportunities by identifying the market players with the most innovative pipelines
Identify the regional market potential which would further help in designing regional market strategies
Understand the competitive scenario in the Global Carbon Dioxide Enhanced Oil Recovery (EOR) market
Take more informed business decisions by relying on the insightful opinions from industry experts

 

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Platts China Oil Analytics: China oil demand contracted 1.6% year over year in March

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Platts China Oil Analytics: China oil demand contracted 1.6% year over year in March

China’s apparent oil demand* contracted by 1.6% in March 2016 from a year earlier to 11.11 million barrels per day (b/d), according to a just-released analysis of Chinese government data by S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets.

Refinery throughput in March averaged 10.62 million b/d, data from China’s National Bureau of Statistics (NBS) showed April 14. This was a 0.6% decrease year over year, as well as a 0.2% contraction from the prior month.

However, net imports of key oil products fell 20% from a year earlier to an average 493,000 b/d in March, driven by significant exports of transport fuels, according to data from the country’s General Administration of Customs.

In the first quarter (1Q) of 2016, apparent oil demand in China averaged 11.08 million b/d, registering zero growth from the first three months of 2015. This compared with a 7.5% expansion in apparent oil demand during the same period last year.

China’s oil demand growth is expected to moderate significantly in 2016 as gross domestic product (GDP) growth slows on the back of economic rebalancing. The Chinese economy expanded by 6.7% in the first quarter of this year, down from 6.8% in the fourth quarter of 2015, according to the government.

China’s apparent oil demand this year is forecasted to grow by less than 2%, according to Song Yen Ling, senior analyst with Platts China Oil Analytics, an on-line platform for supply/demand and trade data, of S&P Global Platts.

Gasoil

“Gasoil apparent demand fell by 7% in the first quarter to 3.35 million b/d and is a further reflection of lower consumption by industry in China,” said Song.

Gasoil is the most widely consumed oil product in China and is used in the transport sector and by industry. Demand for gasoil has been hit in the last three years because of declining economic growth. With demand stagnant, refiners have experienced growing inventories during the last few months. The culmination was record high exports in March at 1.2 million metric tons (mt) or 300,000 b/d. In March alone, apparent demand for the fuel slumped 11.7% year over year, marking the seventh straight month of contraction.

Gasoline

Apparent demand for gasoline averaged 2.82 million b/d in March, which was an 8.2% increase from the same period a year ago. Growth was attributed to higher car sales, with 1Q sales of sports utility vehicles rising 51.5%. However, gasoline sales by state-owned refiners continued sluggish on competition from independent refiners and fuel blenders for end users. As a result, gasoline exports from China in March, handled predominantly by state-owned refiners, rose 9.1% year over year and 4.5% month over month to 184,000 b/d.

Fuel Oil

China’s fuel oil apparent demand in March declined some 18.7% from a year earlier to 753,000 b/d. China’s fuel oil consumption has fallen since late 2015, when the government started allowing more independent refiners to import crude oil. Prior to this, these refiners which had limited access to crude oil had to rely on fuel oil as an alternative processing feedstock. Since the second half of 2015 however, Beijing has approved more than 1 million b/d of crude oil import quotas for independent refiners.

China’s crude oil imports over the first three months of this year have increased 12.1% to an average 7.71 million b/d. Platts China Oil Analytics estimates that around three-quarters of this increase has been driven by new demand from independent refiners. As a result, total fuel oil imports by China over the period fell 30% to about 300,000 b/d.

Month-to-month demand in China is generally viewed to be subjected to short-term anomalies which are of interest and important to note, but often fail to reveal the country’s underlying demand trends. Year-to-year comparisons are viewed by the marketplace to be more indicative of the country’s energy profile.

*S&P Global Platts calculates China’s apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the NBS and Chinese customs. Platts also takes into account undeclared revisions in NBS historical data.

The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country’s actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.

In view of some significant shifts in Chinese consumption and trade patterns in recent years, Platts has revised its methodology starting July 2015 to include production and net imports of LPG, as well as imports of petroleum bitumen blend, a popular imported feedstock for China’s teapot refineries.

S&P Global Platts has also refined its calculation of exports of jet fuel and fuel oil to exclude international marine bunker sales and aviation fuel delivered to international flights. This also impacts net imports, and hence apparent demand calculations.

All historical figures used for comparison have also been calculated using the new methodology to ensure consistency.

Platts aims to release its monthly calculation of China’s apparent demand between the 18th and 26th of every month via press release and via its website, although the timing of release may vary. Any use of this information must be appropriately attributed to S&P Global Platts. Platts uses a conversion rate of 7.33 barrels of crude per metric ton, the widely-accepted benchmark for markets East of Suez.

About S&P Global Platts

At S&P Global Platts, we provide the insights; you make better informed trading and business decisions with confidence. We’re the leading independent provider of information and benchmark prices for the commodities and energy markets. Customers in over 150 countries look to our expertise in news, pricing and analytics to deliver greater transparency and efficiency to markets. S&P Global Platts coverage includes oil and gas, power, petrochemicals, metals, agriculture and shipping.

S&P Global Platts is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence.

 

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Northern Petroleum provides production and development update

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Northern Petroleum provides production and development update

Northern Petroleum (AIM: NOP), the AIM quoted oil company focusing on production led growth, provides the following update regarding production and development in north west Alberta, Canada:

  • net average oil production from 1 April up to and including 18 April was 449 barrels of oil per day (‘bopd’)
  • regional trucking restrictions were imposed between 19 and 29 April due to the expected annual spring thaw, which can cause wet and difficult road surface conditions:
    • production from wells tied in via pipeline continued at a rate of approximately 212 bopd for the remainder of April
    • overall average production for the whole of April was therefore 354 bopd
  • trucking restrictions were lifted on 29 April due to unusually dry weather allowing the local roads to dry out quicker than in previous years
    • trucked wells now back in production
  • 9-25 battery ready for start up once final approvals are obtained from regulator, which will initially add another three producing wells
  • costs incurred to date at the Rainbow redevelopment project indicate that operating costs per barrel are between US$20 and US$25, when measured at an average production rate of 400 bopd
  • the variable operating costs per barrel of incremental production over and above 400 bopd are forecast to be between US$4 and US$10 per barrel, depending on whether the oil is transferred to the processing facility by pipeline or truck
  • following the completion of the current programme, a summer work programme will be developed for Q3, to achieve further production enhancements and operating cost synergies.

Keith Bush, Chief Executive Officer, commented:

‘The operations team in Canada and London have done well to more than double production in the last three months, with production from the 9-25 battery yet to be added. This has provided a production base which gives valuable net cashflow for the group.

‘Additional production above the current level comes at very low incremental cost and is a key focus once the current work programme is completed. The Company has substantial owned infrastructure which can process much higher volumes of production with a limited increase in fixed operating costs. Building production from here will create an asset with very attractive net cashflow and value, even at current oil prices.’

 

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