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Oil and Gas Roundup — Nov. 30

November 30, 2017
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

OPEC agrees to extend oil cuts through 2018

OPEC and its allies outside the group agreed to maintain oil production cuts until the end of 2018, extending their campaign to wrest back control of the global market from America’s shale industry.

After a day of talks in Vienna, the decision showed the strength of the unprecedented alliance between the world’s top two oil producers, Saudi Arabia and Russia, and confounded Wall Street analysts who’d predicted Moscow would be reluctant to keep going. The deal was even beefed up through the inclusion of Nigeria and Libya, two members of the Organization of Petroleum Exporting Countries originally exempted from the curbs.

“We are united, shoulder to shoulder,” Saudi Arabian Energy Minister Khalid Al-Falih said sitting next to his Russian counterpart Alexander Novak at a press conference after the meeting. “We are completely aligned.”

Since the pact started a year ago, global inventories have fallen and prices risen by more than $20 a barrel, but in a rare display of unanimity at an OPEC meeting ministers agreed the job wasn’t yet complete. By keeping the 1.8 million barrels a day of cuts in place for a further nine months, the oil producers aim to return stockpiles to their five-year average without overheating the market and eliciting a new flood of shale oil.

Read more at Bloomberg News.


Colorado town enacts 6-month oil and gas moratorium

The Dacono City Council implemented a six-month moratorium on permitting new oil and gas development on an emergency basis.

City Manager AJ Euckert said that city staff felt that Dacono needed to examine its oil and gas development regulations — which have not been updated since 1996 — but the city is not trying to ban oil and gas development.

"It's totally within our purview as a city to guard the health, safety and welfare of our residents and just hit the pause button while we review our regulations," he said Tuesday.

Euckert said that Dacono's new moratorium, which went into effect the moment it passed Monday night, is unique because there is an exception for oil and gas developers who work with city staff. Specifically, if an operator negotiated an agreement with the city and the council approved it, that company could bypass the moratorium.

"That's our exception to the moratorium that we included," he said. "Other moratoria that have been passed around the state and made the news lately — those seem to be focused on just stopping operations, and that is not our intent. We want to update our 20-plus-year-old rules."

Read more.


Texas ranks highest in oil and gas allure; Okla. 2nd

Texas tops a list of 97 jurisdictions ranked by oil and gas executives for investment allure in an annual survey by the conservative Fraser Institute of Canada.

Venezuela ranked last in the survey, which had 333 respondents.

The survey ranks jurisdictions—states, provinces, geographical regions such as offshore areas, and countries—according to the extent of their oil and gas investment barriers.

It evaluates jurisdictions by assigning scores on each of 16 questions about factors known to affect investment decisions. The scores yield a “policy perception index,” which the institute applies to jurisdictions grouped by proved oil and gas reserves.

Of the 15 jurisdictions with the largest petroleum reserves, the five ranking highest in investment attractiveness, in descending order, are Texas, the United Arab Emirates, Alberta, Kuwait, and Egypt.

The five least attractive jurisdictions in the large-reserves category, starting at bottom, are Venezuela, Libya, Iraq, Indonesia, and Nigeria. They account for 41% of the oil and gas reserves of all jurisdictions covered by the survey.

The 97 jurisdictions evaluated account for 52% of global oil and gas reserves and 66% of production.

In the group of 39 jurisdictions with medium-range reserves, the 10 most attractive for investment are Oklahoma, North Dakota, Newfoundland & Labrador, West Virginia, Norway-Other, Wyoming, Norway-North Sea, the UK North Sea Offshore, Arkansas, and the Netherlands.

Among 39 jurisdictions with relative small reserves, the top 10 are Kansas, Saskatchewan, South Australia, Manitoba, New Zealand, Mississippi, Montana, Namibia, the UK-Other, and Alabama.

Read more at Oil & Gas Journal.


Report: U.S. oil production on track to hit record high in December

Add another bullish forecast for U.S. oil to the pile of confusion confronting OPEC.

Researcher Rystad Energy AS predicted Wednesday that American output may pass 9.9 million barrels a day by December, based on an analysis of company correspondence and state data. That would be 200,000 barrels above the latest U.S. government forecast.

“Largely due to Hurricane Harvey and seasonal maintenance in Alaska, production data for August gave the misleading impression that the United States’ shale production was incapable of sustainable growth" Rystad’s head of well research, Artem Abramov, said in a statement on the researcher’s website. “In reality, the gap between full production capacity and actual output exceeded 300 thousand barrels per day, which is unprecedented in recent years."

OPEC, Russia and other major crude suppliers have been dogged by uncertainty over the future of U.S. production as they head toward a meeting in Vienna Thursday on whether to extend output cuts.

Read more at Bloomberg News.
 
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