<a href="http://youngpetro.org/2013/03/06/how-is-it-possible-to-produce-oil-from-sand/"><b>How is it possible to produce oil from sand?</b></a> <a href="http://youngpetro.org/2011/10/09/people-engineers-and-spe-members/"><b>People, Engineers and SPE Members</b></a> <a href="http://youngpetro.org/2012/12/19/if-i-were-a-prime-minister/"><b>If I Were a Prime Minister…</b></a> <a href="http://youngpetro.org/2012/12/26/polish-shales-delayed/"><b>Polish shales delayed?</b></a> <a href="http://youngpetro.org/2013/01/11/russia-continues-the-policy-of-states-companies-monopoly/"><b>Russia continues the policy of state companies’ monopoly</b></a>

Crisis goes on

Crisis goes on

Crisis in oil and gas industry goes on and thus energy firms keep on downsizing production instead of investing in drilling new wells. Interestingly, it is 10th week in a row when U.S. producers cut oil rigs. Drillers from Baker Hughes removed 13 rigs in the week ended Feb. 26, bringing the total rig count down to 400. That compares with 986 oil rigs operating in same week a year ago.

Eagle Ford might be another example of negative low crude price influence on making profit. So far this year, drillers have sidelined 29 rigs. Oil production from U.S. shale fields, including the Eagle Ford, is expected to keep dropping this year, which should take some pressure off of storage.

Sometimes downsizing production is not enough and cutting jobs is essential to survive on the market. Halliburton is about to lay off another 5000 workers which equals about 8 percent of its workforce.

Well, it is just business… Owners of oil companies are forced to make hard decisions in order to avoid a collapse. But surely this will not last forever when production is unprofitable for many.





Oil prices will rally according to IEA report

22 February, 2016 News No comments
Oil prices will rally according to IEA report

Though trying to predict oil prices is said to be a fools game it is very hard to stay away from questioning. Especially because this market is volatile and the political situation is the main determinant. After watching prices crash through floor after floor in the worst slump for a generation, the industry is eager for answers and it gets it- the IEA predicts that global oil supply and demand to rebalance in coming years.

International Energy Agency is at the heart of global dialogue on energy, providing authoritative statistics and analysis. In its annual report, which was released today, says that the market will begin rebalancing in 2017 – and by 2021 the United States and Iran are seen leading production gains among non-OPEC and OPEC countries, respectively. This view is predicated on the expectation that U.S. shale oil production drops 600,000 bpd this year, and by 200,000 bpd in 2017. The IEA projects that global oversupply will be wiped out by 2018. Once the market will start to rebalance, prices will rise also, the availability of easy resources will rally. Thanks to efficiency gains IEA speculates growth of production by 1.2 million bpd in U.S. and global oil supply to rise by 4.1 million bpd from 2015-2021.

According to energy market long-term speculations are the most suitable. So far, shale bankruptcies have been limited to smaller outfits, the one thing the stress on companies hasn’t done is destroy production. Meanwhile, on the international scene, the Saudi-Russian accord announced Tuesday, to which Venezuela and Qatar have also signed up, would cap production at January’s levels.

See more: www.iea.org; www.bloomberg.com, www.oilprice.com

First marine LNG fueling terminal in North America opened

15 February, 2016 News No comments
First marine LNG fueling terminal in North America opened

Some time ago we wrote about LNG Terminal in Swinoujscie, Poland (see). Today we come along with theme related news. First marine liquefied natural gas fueling terminal in North America is now opened. The operator of this undertaking is Harvey Gulf International Marine, New Orleans. They inaugurated the LNG terminal at its operating base in Port Fourchon, Louisiana.

The bunkering included the transfer of 43,000 gallons of LNG in about 2.25 hours, the company said. The terminal is able to deliver LNG at a pumping rate of 550 gmp, total on-site storage is approximately 270 000 gals., contained in three 90 000 gals. USG type “C” vacuum insulated tanks. According to Shane Guidry, Chairman and CEO of Harvey Gulf, it should help with promoting the use of LNG as a clean, abundant, and cost-effective alternative marine fuel. Also it provides a LNG bunkering point at the epicenter of marine operations for the Gulf of Mexico, which is vital to continuing the shift to LNG as a marine fuel. Chad Verret, executive vice president in charge of Harvey Gulf’s Alaska and LNG operations, says easier maintenance, longer intervals between overhauls, and cleaner engines and boats were all part of the company’s decision to commit to building an LNG-fueled fleet – along with the promise of long-term lower fuel costs with gas.

Will be LNG only or predominant marine fuel someday? Time will tell whether yes or no. But opening first marine liquefied natural gas fueling terminal in North America was definitely worth to mention.

Source: workboat.com

Image source: oilonline.com

Nord Stream 2 – what is it all about?

12 February, 2016 News No comments
Nord Stream 2 – what is it all about?

Nowadays we have tough times in Oil and Gas industry. Prices fly pell-mell, OPEC is showing their strong either USA and Russia have they own business. The game is played for high stakes due to market demand is still high. In recent days we can hear a lot of news about German and Russia project, Nord Stream 2. What is the controversy and why do not we all want to get him to agree?

Gas pipeline from Russia to Germany through the Baltic Sea, called Nord Stream works with the use of both threads with a total capacity of 55 billion m3 per year since 2011. Gas flows from Russia to Germany bypassing transit countries in Eastern Europe. The third and fourth thread planned under the Nord Stream 2 may allow to double the bandwidth and increase the export of gas in this part of Europe. This will lead to an increase in the importance of Gazprom on the market, the weakening of diversification of supply for Germany and thus other recipients such as Poland, Lithuania, Latvia, Estonia. It will also lead to a weakening of the role of transit Ukraine, making it difficult to stabilize the region.

Opponents of the Nord Stream 2 show the direct, negative impact on the energy security of several countries of the European Union, especially for the diversification of supply sources – one of the key objectives of the, still being created, Energy Union. In addition, it is questionable economic interest behind the construction of the new capacity for the supply of gas, the current shape of the market and the significant risks of long-term investments in co-operation with Russia after the aggression against Ukraine.

Nord Stream 2 was also one of the main topics of conversation between Polish Minister of Energy Krzysztof Tchórzewski and the Minister of Industry and Trade of the Czech Republic Jan Mladek, which took place during the meeting of February 5. Visegrad group should have a unified position in that very case. It is obvious that the pipeline project is not the nature of the business, and the only political. Strengthen the dominant position of Gazprom in the EU markets will make the more difficult will be to build a competitive gas market in the EU – said Tchórzewski.

However, many of the countries of western Europe supports Nord Stream 2. A large part of this project would be Germany and Finland, through whose territory the pipeline would run. The project also was supported by France and the Netherlands. We do not know yet if Denmark will give their permission, which is addicted to decision on the environmental impact assessment (EIA).

Today, 12.02.2016 Polish Prime Minister, Beata Szydło, during a visit to Berlin spoke with Angela Merkel, among other things about Nord Stream 2 and expressed concern about the project – We are concerned about support for the project Nord Stream 2, it is not incompatible with sanctions on Russia – said Szydło.

It is certain that Russia will exert pressure and try to soften opposition eastern and central parts of Europe in this topic. Whether it comes to the installation Nord Stream 2 depends on many factors, but primarily policy. The European Commission is currently investigating a case against the law. The next few months will probably be intensive treatments supporters and opponents.

Sources:  Szydło in BerlinBiznesalertBiznesalert

U.S. The hidden value of cheap gas.

U.S. The hidden value of cheap gas.

Technological developments in recent years have changed world energy market and allowed the revitalization of chemical and steel industry, especially in the U.S. The latest decline in global oil prices has accelerated expansion of chemical and manufacturing plants despite enhanced OPEC efforts to undercut it. The hidden value of cheap gas is more suitable for economy growth than for international mining companies. The U.S emergent economic development can be comparable to the Industrial Revolution which took place from the 18th and 19th centuries.

Steel sector.

The American steel industry has been facing up to the impact of the global crisis since 2007. Internal markets have struggled to stay profitable among stagnant domestic demand, low prices and increasing Chinese imports.

Asian countries, principally China and Taiwan have been offering cheaper labor and sufficient amount of the raw materials for many years. The U.S domestic production of steel decreased 11 percent between 2007 and 2013, while Chinese production during that period increased 57 percent.

Unconventional sources of energy has enabled the American steel industry to get  back on track. The largest companies have made diversifications and established appropriate investments. A titan of industry Nucor Corp spent $750 million in an iron-ore devices in St. James Parish, Louisiana. Simultaneously, influential Austrial steel maker Voestalpine invested about $634 million in a new factory.

Currently, market analysts predict that new investments can provide about 1 million new jobs by 2035. “Low natural gas prices are spurring new manufacturing investment and creating jobs” said Katherine Miller, a Nucor spokeswoman.

Chemical sector.

The chemical sector was another branch of an American industry which was modernized. The hydraulic fracturing of shale formation has led to a rapid growth of chemical plants mainly in Louisiana and Texas. Modern factories have used natural gas to produce a wide variety of products including plastics and liquid fuels. “Plants use natural gas like a bakery shop uses flour”, said Dan Borne, president of the Louisiana Chemical Association.

The most influential chemical companies such as: Du Pont, Dow Chemical, Eastman Chemical or Westlake Chemical have boosted their production and prepared ground for foreign funds.

According to The American Chemistry Council 238 U.S chemical companies have declared money for new projects. Investment spending in the industry increased 64% from 2010 to 2014, to $34 billion. The ACC assumes spending to rise another 37% by 2018.

This jump in industrialization will stimulate stock market and provide higher employment . However, too high environmental degradation and revolution in energy policy can cut optimistic expectations.

In conclusion.

To sum up new technologies, low gas prices and considered diversifications can  make a great influence on an American society. New plants will generate not only profit but also workplaces. In spite of all the advantages, government and companies can’t forget about environmental challenges and their future impact on safety standards and health.




Shale Revolution Accelerates Chemicals Industry




Norway wants to become a major natural gas deliverer in Europe

Norway wants to become a major natural gas deliverer in Europe

Norway has got a chance to become a major natural gas deliverer in Central Europe. Now the most important thing is positive reaction of European Commission. Tord Lien, norwegian Minister of Petroleum and Energy is cofident that his country is ready to become essential natural gas supplier to Europe for many decades.
In European Union many people see this move as a plan to reduce dependence on russian natural gas. Many countries in Europe are tired of games with Russia. They are looking for a strong, safe and certain ally to leave their main gas supplier. In that case Norway is a very attractive and trustworthy associate. Nevertheless nothing is official and Norway waits to see specific decisions from Europe.
These days European countries are looking for a way out from russian authority in gas sector. New polish government is interested in diversification of gas suppliers to Poland and analyzes project about collaboration with Norway, which was rejected years ago. Many things changed in last few years and now norge gas is much more eye-catching than earlier. What’s interesting is that for the first time in lithuanian history Russia will not be primary gas supplier for this country. Rokas Masiulis, Energy minister in Lithania during an interview with Reuters says that in 2016 Gazprom lost their gas monopoly to Statoil.
Without clear decisions from european and norwegian side we can only debate about these ideas. We see that Norway has got a lot of friends in European Union and this move might be attractive for both groups. Now we have to wait for more informations in that important case.




Drones in Oil&Gas industry

Drones in Oil&Gas industry

Recently drone business has gotten to Oil&Gas industry in order to conduct inspections of oil rigs. One knows that those inspections are dangerous and expensive work involving workers hanging from the bottom of an oil platform to visually log damages. Drones usage naturally has its positive aspects and could easily reduce costs of expensive traditional inspections.

Nowadays, when crude price stays below 30$/bbl it is obvious that not economics but common sense forces big companies to cut costs and it is a good impetus to implement effective solutions without compromising safety. There is a significant demand for such services and this trend is likely to thrieve in the near future.

London-based Sky Futures, which opened an office in Houston in 2015, said that last week the company flew its drones on inspections of an oil platform, a helicopter deck and four cranes on a drillship. Sky Futures did not name which oil company contracted them to perform the inspection.

Sky Futures grew its business in the North Sea for years before getting approval by the Federal Aviation Administration in March 2015 to operate in the United States. According to the date of the FAA’s exemption, Sky Futures was among the first companies to get approval to start flying drones for commercial activities in the U.S.

There are now more than 3,000 businesses or individuals in the U.S. with approval to fly drones for commercial reasons, according to the FAA’s database on exemptions. At least 994 of those exemptions went to applicants performing various types of inspections: electric transmission lines, solar power installations, chemical plants, commercial and residential real estate and farms, as well as oil and gas equipment and a host of other facilities.

A few major energy companies also received exemptions, among them Chevron, Marathon Petroleum, NextEra Energy and Duke Energy. Most have listed safety inspections of oil and gas facilities and power infrastructure as reasons for new drone launches.

Watch video below taken by a Sky Futures drone of the underside of an oil platform in the North Sea.



Lifted sanctions against Iran

17 January, 2016 News No comments
Lifted sanctions against Iran

Iran has fulfilled all obligations under the nuclear agreement, which in July last year concluded with world powers – said today the head of the International Atomic Energy Agency (IAEA) Yukiya Amano. As a result, the US and the EU decided to lift the economic sanctions imposed on Iran.

Read more

Could the price of oil rise in 2016?

Could the price of oil rise in 2016?

This week, Morgan Stanley (Global Financial Services Firm) has published a report which shows that the price of a barrel of oil could fall to $ 20. Analysts estimate that the price will fall by around 10-25 percent. Conversely the political tension between Saudi Arabia and Iran, which are important exporters of oil, is still present.

According to the data for 2014 Saudi Arabia is one of the biggest, just behind the United States, oil producer in the world. Daily extraction of raw materials reaches 11.6 million barrels there. In comparison to Iran on account of production is the seventh in the world. Every day 3.4 milion barrels are extracted.

In January 2016, Saudi Arabia and Iran suspended diplomatic realations. The conflict between this two countries can provide to reduce extraction of oil. Increasing political conflict can destabilize the world’s prices of oil.

It’s worth mentioning that, in addition to high supply of raw materials, even in case of any politacal conflict between Saudi Arabia and Iran the supply of raw materials will be provided safely. The situation stabilizes cheap oil from the United States. Additionaly experts evaluate that the particular problem we are likely to reach in 2016 is the lack of place to such big amounts of oil. Some of analysist consider that, prices can be expected to drop to a very low prices only $10 per oil barrel.

Marked increase of prices is not likely to occure but present situation in the Middle East is very unstable and it can completely change today’s oil market.

Sources: www.ourfiniteworld.com, www.forbes.pl, www.tvn24bis.pl

IMG: www.biznes.interia.pl

Half of US shale drillers may go bankrupt

Half of US shale drillers may go bankrupt

Before the crude market reaches equilibrium Half of U.S. shale oil producers could go bankrupt. The senior oil and gas analyst at Oppenheimer & Co., Fadel Gheit, said this Monday that it could be more than two years before crude prices ultimately will stabilize, and its price will oscillate near $60.

Many secondary U.S. drillers must drill into and break up shale rock to get the oil and gas released through a process called hydraulic fracturing. It is a well-stimulation technique in which rock is fractured by a pressurized liquid. The process involves the high-pressure injection of ‘fracking fluid’  into a wellbore to create cracks in the deep-rock formations through which natural gas, petroleum, and brine will flow more freely. It causes that fracking is significantly more expensive than extracting oil from conventional wells. This drillers cannot wait for prices to stabilize so long, also they need at least $70 oil to survive. At current oil prices, companies both large and small – including ExxonMobil and Chevron — will have to think twice about their dividend.

On Tuesday, U.S. crude fell to $29.93, which was last seen in December 2003. Such a drop would be brief because supply and demand are beginning to come into balance. But a number of producers would enter bankruptcy even with crude near $30 per barrel. U.S. drillers are now spending more than they are making from operations, a situation that Gheit said is unsustainable and will eventually force prices higher.

Summing up, the oil industry needs a minimum amount of investment to keep oil supply in line with demand. The current investment right now would not be sufficient enough to bring additional production to meet global demand. It’s not a good information that crude price fell, but we have to remember that this industry is very unstable, so let’s hope it get better within upcoming days.

sources: www.cnbc.comen.wikipedia.org