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Oil and Gas Roundup — Nov. 14

November 14, 2017
TOPICS: In the news, OIPA
A roundup of oil and natural gas industry news from around the state, nation and world:

Bloomberg’s one-hour piece looks at shale’s past, present and future

The U.S. will be a dominant force in global oil and gas markets for many years to come as the shale boom becomes the biggest supply surge in history, the International Energy Agency predicted.

By 2025, the growth in American oil production will equal that achieved by Saudi Arabia at the height of its expansion, and increases in natural gas will surpass those of the former Soviet Union, the agency said in its annual World Energy Outlook. The boom will turn the U.S., still among the biggest oil importers, into a net exporter of fossil fuels.

“The United States will be the undisputed leader of global oil and gas markets for decades to come,” IEA Executive Director Fatih Birol said Tuesday in an interview with Bloomberg television. “There’s big growth coming from shale oil, and as such there’ll be a big difference between the U.S. and other producers.”

The agency raised estimates for the amount of shale oil that can be technically recovered by about 30 percent to 105 billion barrels. Forecasts for shale-oil output in 2025 were bolstered by 34 percent to 9 million barrels a day.

The piece also includes interviews with Continental Resources CEO Harold Hamm and Pioneer Natural Resources Chairman Scott Sheffield.

See it at Bloomberg.


U.S. Justice pledges to prosecute activists who damage pipelines

The U.S. Department of Justice on Friday pledged to prosecute protesters who damage oil pipelines and other energy infrastructure, a move that could escalate tensions between climate activists and the administration of President Donald Trump.

The DOJ said it was committed to vigorously prosecuting those who damage “critical energy infrastructure in violation of federal law.”

Attempts to “damage or shut down” pipelines deprive communities of services and can put lives at risk, cost taxpayers millions of dollars, and threaten the environment, a department official said in a statement sent to Reuters.

The statement was in response to a letter sent last month to Attorney General Jeff Sessions by 84 U.S. representatives asking whether domestic terrorism law covers activists who shut oil pipelines in October 2016. The DOJ said it was reviewing the letter.

The DOJ did not say whether it would investigate or prosecute the protesters who broke fences in four states last year and twisted shut valves on several pipelines importing crude oil from Canada that carry the equivalent of as much as 15 percent of U.S. daily oil consumption.

Read more at Reuters.


Exxon drills 3-mile lateral in Bakken

Exxon Mobil Corp. is drilling shale wells that stretch farther than the length of New York’s Central Park.

The world’s biggest oil explorer by market value recently finished four wells in North Dakota’s Bakken region that extend sideways for 3 miles (4.8 kilometers), Barclays Plc analyst Paul Cheng said in a research note after meeting Exxon executives, and it’s closing in on the 4-mile mark.

That would be “a game changer that could potentially allow the company to leap frog the competition in unit cost and return metrics,” Cheng wrote.

In the Permian Basin that stretches beneath Texas and New Mexico, the company’s horizontal wells are approaching the 2 1/2-mile threshold, Cheng wrote, about the length of Central Park in Manhattan from north to south.

Although famously late to the shale revolution that’s disrupted the global oil industry, Exxon now appears to be transferring breakthroughs it made in the icy Russian Far East a decade ago to its North American fields. In 2007, from a perch on remote Sakhalin Island, the company drilled a total of 7 miles down and then sideways to reach a cluster of oil fields beneath the Sea of Okhotsk.

— Bloomberg.


As oil prices rise, global majors eyeing Mexico's deep waters

As the price of oil rises, an international rush is on for Mexico’s untapped deep-water riches.

The who’s who of the oil world -- led by Exxon Mobil Corp and Royal Dutch Shell Plc, the world’s two biggest drillers by market value -- are lining up to bid in the country’s Jan. 31 deep-water auction. And the interest is international in scope, drawing Chevron Corp. from the U.S., the U.K.’s BP Plc, Norway’s Statoil ASA, France’s Total SA, Australia’s BHP Billiton Ltd, Russia’s Lukoil PJSC and China’s Cnooc Ltd, among others.

The total: 25 registered to bid for 29 deep-water plots across the southern Gulf of Mexico, the nation’s regulator said Thursday. It shouldn’t be a surprise. The areas up for grabs are estimated to hold as much as 4.2 billion barrels of crude oil in untapped deep waters where 76 percent of Mexico’s prospective resources may lie, the energy ministry has said.

In the country’s first-ever deep water oil auction last year, eight of the 10 blocks auctioned were won by international crude majors. The stakes are higher for the Jan. 31 bid round, which aims to auction almost 3 times the amount of fields as last year.

At the same time, it arrives on the heels of two recent 1 billion barrel-plus discoveries in Mexico shallow waters this summer, and as the price of oil has risen. Brent crude, the global benchmark, has jumped from $44.43 a barrel in November 2016, to close at $63.93 on Thursday, a 44 percent rise.

Friday is the last day for companies to qualify to participate in the auction. Then the countdown will begin.

— Bloomberg.
 
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