Oil and gas rigs in the United States fell for yet another week, according to Baker Hughes, dipping 4 rigs. as Saudi’s comments regarding the OPEC extension send the Brent Crude benchmark over $60 in mid-day trading for the first time in more than two years.
The total oil and gas rig count in the United States now stands at 909 rigs, up 352 rigs from the year prior, with the number of oil rigs in the United States increasing by 1 this week and the number of natural gas rigs decreasing by 5. Canada saw a decline of 11 in the number of active oil and gas rigs. The US oil rig count now stands at 737.
For the month, the rig count fell by 13, the biggest decline since May 2016. It was also the first time since May 2016 that the number of rigs dropped for a third month in a row.
The rig count, an early indicator of future output, is still much higher than a year ago when only 441 rigs were active after energy companies boosted spending plans in the second half of 2016 as crude recovered from a two-year price crash.
The recovery in drilling lasted 14 months before stalling in August, September and October after some producers started trimming spending plans when prices turned softer over the summer.
The spot price for WTI is also trading up to its highest level in six months, up 2.07% on the day at $53.73 at 12:30pm EST. Brent crude was trading up 1.61% at $59.99 at that time—more than $2 over last week’s close.
At 20 minutes after the hour, WTI was trading at $53.77, with Brent crude trading at $60.02.
US crude oil production was up for the week ending October 20, after falling by almost a million barrels daily for the week prior. Oil production for the week ending October 20 was 9.507 million barrels per day, as things return to normal post-hurricane. U.S. production is expected to rise to 9.2 million barrels per day (bpd) in 2017 and a record 9.9 million bpd in 2018 from 8.9 million bpd in 2016, according to federal energy projections this month.
According to the Platts RigData Locations & Operators Report, the U.S rig count reported 1,016 rigs (-25).
72 rigs are waiting to spud and 386 rigs moved location last week. The U.S. permit count jumped to 1,030 (+143).
Super puma manufacturer Airbus Helicopters has told Rigzone that it welcomes any open and informed discussion on the safety of offshore helicopters, following a debate in Scottish parliament over the security of super puma aircraft operating in the North Sea.
Following a fatal super puma helicopter accident offshore Norway in April 2016, operating restrictions were imposed by UK and Norwegian aviation authorities on H225LP and AS332L2 super puma aircraft. In July, the UK and Norwegian aviation authorities set out plans to lift these restrictions.
“This is clearly a topic of great importance to MSPs [members of Scottish parliament],” an Airbus Helicopters spokesperson said.
“Airbus Helicopters understands the importance of restoring confidence in the aircraft ahead of any return to service. We are now at the beginning of a process of informing the workforce and wider community of the updates to the aircraft,” the spokesperson added.
During the debate, which took place on October 24, Lewis Macdonald MSP remarked that super puma helicopters “do not feel safe to many of those who may be asked to step on board”.
Fellow MSP Alexander Burnett said “there is no doubt that super puma helicopters have brought concerns for both oil companies and workers alike”.
After plans were announced to lift the ban on super puma H225LP and AS332 L2 helicopters, UK union Unite set up a petition to stop all commercial flights from the aircraft.
Unite’s officer for the North Sea, Tommy Campbell, told Rigzone that the union would not stop its campaign “until it’s certain that there will be not be a comeback for the super puma”.
“The Scottish parliament debate has put the issue back on the political agenda…We’re going to see the Scottish transport minister soon to convince him that the North Sea should remain Puma free and that his government has to support the workers on that”.
SDX Energy Inc., the North Africa focused oil and gas company, is pleased to announce the spud of its KSR-15 well on the area in Morocco.
The well is anticipated to take 21-30 days to drill and complete. If successful the well will be completed, flow tested and connected to the existing infrastructure. We expect these activities to be carried out within 30 days of the drilling rig departing the location.
This is the second of a nine-well drilling program on the Company’s Sebou, Gharb Centre and Lalla Mimouna permits in Morocco.
As per the announcement on Oct. 11, 2017, SDX can confirm that its KSR-14 well will be put on test production within the next 10 days.
MarketLine’s latest market report: ‘Global Oil & Gas’ reveals a declining market trend in 2016 as the price of crude oil pushed down profits of the major players.
Overall the global oil & gas market saw its value fall from $1,395.7 billion in 2015, to $1,205.6 billion in 2016.
Commenting on the value decline in the oil & gas market, MarketLine analyst Mohammad Hamza Iqbal said, “There is a clear correlation between the decline in the price of crude oil and the decline in the value of the oil & gas market generally, especially taking into consideration the fact that volume consumption levels globally actually increased rather than decreased in 2016. Whilst demand for oil and gas remains strong, low crude oil prices have hit profitability.’’
The company’s latest forecasts predict a market value of $1,624.7 billion over the period 2016-2021, a healthy Compound Annual Growth Rate (CAGR) of 6.1%. Volume growth during the same period is forecast at 1.6% reaching a total consumption of 52,619.8 MMboe.
Growth is however expected to fall behind the total market in Europe with an expected CAGR of 3.4% to 2021. This is largely due to European market maturity, coupled with low population growth and a shift towards renewable energy. As a result only marginal growth in European volume consumption can be expected.
The company’s report also highlights that the US oil & gas market is the largest domestic oil & gas market in the world, with a total value of $286 billion in 2016.
This means that the U.S. market, alone, accounts for almost 24% of the global oil & gas market. The second and third largest national oil & gas markets are China and Russia, respectively. Chinese market value stood at $161.9 billion and Russia’s at $63.5 billion in 2016. The crude oil segment was the largest in 2016, accounting for 96.4% followed by natural gas at 3.6%.
India’s consumption of oil products will accelerate in 2018 after unusually slow growth in 2017, according to ESAI Energy’s newly published Asia Watch Products.
The report explains that, due to a faltering economy, demand growth slowed for almost every fuel in 2017, with kerosene, naphtha, and fuel oil use all declining. Petroleum coke demand was stagnant this year after booming in 2016. Consumption of all petroleum products, except kerosene, will return to faster growth in 2018.
After total oil demand growth slowed to just 60,000 bpd in 2017, consumption should accelerate to 200,000 bpd in 2018 as the economy recovers from multiple disruptions this year. Petroleum coke contributed most to the slowdown in oil demand in 2017.
After growing by 140,000 bpd in 2016, petcoke consumption stayed flat this year due to higher prices and a sharp decline in cement manufacturing. Next year, petcoke demand should return to growth of 40,000 bpd. Among oil products, only kerosene use will decline again next year amid a government push to switch households that use kerosene for cooking to LPG.
“Reforms to the Indian economy negatively impacted growth in 2017,” said ESAI Energy Analyst Amrit Naresh. “Demonetization removed 86% of the country’s currency from circulation at the end of last year, and nationwide tax reforms were implemented in the middle of 2017. “Together, these reforms disrupted industries and businesses across the economy, said Mr. Naresh. “Economic conditions should improve in 2018, fostering industrial activity and allowing oil demand growth to strengthen.”
- Agreement to add interest in resource with approximately 2 billion barrels of high-quality oil
- ExxonMobil and partners high bidders in adjacent and other blocks in recent bid rounds
- ExxonMobil adds more than 1.25 million net acres to deepwater portfolio offshore Brazil
ExxonMobil announced that it has completed an agreement to purchase half of Statoil’s interest in the BM-S-8 block offshore Brazil, which contains part of the pre-salt Carcara oil field.
The Carcara field contains an estimated recoverable resource of 2 billion barrels of high-quality oil. The block is located approximately 200 miles offshore Rio de Janeiro.
Statoil currently holds a 66 percent interest in the block, which contains about half the Carcara field. The other part of the field is in the adjacent North Carcara block, where ExxonMobil, Statoil and Petrogal Brasil were high bidders in a bid round held today. Statoil will continue to operate the Carcara development and hold 33 percent interest.
Over the last month, through bid rounds and announced farm-in agreements, ExxonMobil has added 14 blocks comprising more than 1.25 million net acres offshore Brazil to its portfolio, bringing its total acreage in the country to more than 1.4 million net acres.
“These agreements and recent bid round results mark ExxonMobil’s entry into a world-class resource and prospective exploration acreage in Brazil,” said Darren Woods, chairman and chief executive officer of ExxonMobil. “ExxonMobil has a long history in the country and we’re confident our deepwater technology and project expertise can help to further grow the value of Brazil’s energy resources. We look forward to working with Petrobras and all our partners to begin to explore and develop this high quality acreage.”
Separately, ExxonMobil recently added highly prospective acreage to the company’s portfolio after completing a farm-in agreement with Queiroz Galvão Exploração e Produção (QGEP).
ExxonMobil will make an upfront cash payment of approximately $800 million for the interest in BM-S-8 block, and an additional contingent cash payment for a potential total of approximately $1.3 billion. The transaction is subject to government approvals and is expected to close in 2018.
Following the close of the transaction, partner interests in the BM-S-8 block will be 33 percent for Statoil, 33 percent for ExxonMobil, 14 percent for Petrogal Brasil, a subsidiary of Galp, and 10 percent each for QGEP and Barra.
Oil rigs were up by one, but gas rigs dropped by five as natural gas prices hit new lows due to unseasonably warm weather in the Northeast and elsewhere.
U.S. oil and natural gas producers’ drilling activity continues to drop even as oil hovers above $53 per barrel, with Baker Hughes (BHGE) reporting Friday, Oct. 27, the rig count fell by four this past week to 909 overall.
Oil rigs were up one to 737 week over week, while gas rigs dropped by five to 172 as natural gas prices hit new lows due to unseasonably warm weather in recent weeks.
Last week, oilfield services behemoth Schlumberger Ltd. (SLB – Get Report) said North American shale drilling is still strong, but warned that investment in the U.S. region is moderating. Meanwhile, the world’s largest energy companies Exxon Mobil Corp. (XOM – Get Report) and Chevron Corp. (CVX – Get Report) both suffered on the stock market Friday despite reporting earnings that beat expectations.
Compared to this time last year when it stood at 557, the U.S. rig count is up 352 units, as oil rigs are up by 296, gas rigs are up 58 and miscellaneous rigs are down two to zero, Baker Hughes reported.
Meanwhile, the U.S. offshore rig count held steady at 20 last week and is down two rigs year over year.