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MEXICO Oil Reserves and Production

July 4, 2017

MEXICO Oil Reserves and Production

In dollar terms, since mid 2015 Mexico has been a net importer of hydrocarbons (oil, natural gas, petroleum products and petrochemicals combined). To date it has been a relatively small and fairly constant amount, but with their oil production declining, and oil prices apparently continuing to fall while natural gas prices may be on the rise, the net cost could now start to increase.

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2017 reserve numbers were issued in early June. These used to come from PEMEX, but now look like they come from the government through the National Hydrocarbon Commission (probably as a result of the initiative for oil industry deregulation). Overall all categories of reserves have been falling for some years. The chart below shows oil and total (i.e. including condensate, NGL and natural gas) for proved, probable and possible. The production, discoveries and revisions for total petroleum (no figures for crude alone) are also shown – a bit fiddly but the trends can be seen – falling production, small and declining discoveries and some big recent revisions.

Note that the usual confusion holds here in that reserves are for crude only (condensate is included in the total numbers), but total flow rates (discussed further below) have crude and condensate numbers included (but clearly specified). To add to the confusion the datasets below are labeled P1, P2 and P3, but because the charts are stacked they should be read on the axis as 1P, 2P and 3Ps (the bar chart increments don’t really work out very well like this because the revisions can be positive or negative).

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Mexico has four oil producing regions, Northeast Marine, which includes KMZ and Cantarell – the biggest fields, Southwest Marines, Northern Region onshore and Southern Region Onshore. The changes from 2016 to 2017 for these are shown below.

…click on the above link to read the rest of the article…

Venezuela In Dire Straits As Oil Production Falls Further

March 24, 2017

Venezuela In Dire Straits As Oil Production Falls Further

Oil Pipe

Venezuela’s economic crisis continues to deepen. The South American OPEC member is thought to be sitting on nearly 300 billion barrels of oil, far more than any other country in the world, including Saudi Arabia (estimated at 268 billion barrels). But the economy has been in freefall for several years, with conditions continuing to deteriorate.

The economic crisis has morphed into a full-blown humanitarian disaster. Just this week the Wall Street Journal reported on Venezuelan women traveling to neighboring Colombia to give birth because the state of Venezuela’s hospitals are horrific, with shortages of medical supplies and trained staff. Infant mortality is worse than in war-ravaged Syria.

Food and other essential items are also painfully scarce, leading to long lines at shops. Tensions run high because there is not enough to go around.

Now even gasoline is running low in Caracas, Reuters reports, an unusual development for the capital city.

Gas shortages suggests problems for Venezuela’s state-owned oil company PDVSA are deepening. The government depends on oil production for more than 90 percent of its export revenues, and the collapse of oil prices back in 2014, coupled with a long-term slide in output, have ruined the company’s finances.

That, in turn, puts even more pressure on PDVSA. A shortage of cash is straining the company’s ability to import refined products as it falls short on bills to suppliers. PDVSA needs to import refined products to dilute its heavy crude oil, but without enough cash, tankers are sitting at ports unable to unload their cargoes. Reuters also says that “many tankers are idle because PDVSA cannot pay for hull cleaning, inspections, and other port services.”

…click on the above link to read the rest of the article…

Exxon Cuts Reserves By A Record 3.3 Bilion Barrels As Oil Crash Finally Takes Toll

February 22, 2017

Exxon Cuts Reserves By A Record 3.3 Bilion Barrels As Oil Crash Finally Takes Toll

Last September, when the price of oil was well below where it had been trading for the bulk of the past several years,  we reported that NY Attorney General Eric Schneiderman was probing why Exxon Mobil hasn’t written down the value of its assets, two years into a pronounced crash in oil prices. The complaint was simple: out of the 40 biggest publicly traded oil companies in the world, Exxon – then still led by now Secretary of State Rex Tillerson – was the only one that hasn’t booked any impairments in the prior 10 years.

As the WSJ wrote at the time, “since 2014, oil producers world-wide have been forced to recognize that wells they plan to drill in the future are worth $200 billion less than they once thought, according to consultancy Rystad Energy. Because the fall in prices means billions of barrels cannot be economically tapped, such revisions have become a staple of oil-patch earnings, helping to push losses to record levels in recent years.” And yet, Exxon had – until the later half of 2016 – declined to take any write-downs, the only major oil producer not to do so, which has led some analysts to question its accounting practices.

Maybe the NYAG was on to something?

To be sure, the company had played down the criticism, saying it is extremely conservative in booking the value of new potential fields and wells. That reduced its exposure to write-downs if the assets later prove to be worth less than expected. Then again, not even the most “conservative” company could have factored in oil crashing from $100 to $42 without that impacting the balance sheet.

…click on the above link to read the rest of the article…

The Terrible Oil News Nobody Noticed

March 18, 2016

The Terrible Oil News Nobody Noticed

A terrible bit of news went unnoticed in the commotion amid the modest rebound in oil prices over the past two weeks.

While every news outlet shouted about Iran and OPEC, a U.S. energy icon quietly announced news that could potentially shatter the industry.
As I’ve explained recently, many oil companies are teetering on the brink of bankruptcy. But news out of Alaska could lead to disaster.
BP Prudhoe Bay Royalty Trust (BPT) – operated by the Alaskan division of oil giant British Petroleum (BP) – sells oil from the Prudhoe Bay oilfield. It just announced a 65% drop in its economic oil reserves.
We’ll explain exactly what that means in a moment… but you can expect the numbers that the other area shale explorers release in the coming weeks will be even worse…
From 1968 to 2015, Prudhoe Bay was the most prolific oilfield in the country, according to the U.S. Energy Information Administration (EIA). Today, Prudhoe Bay ranks third in the U.S. behind Texas’ Eagle Ford and Spraberry Shales.
Prudhoe was so large, three major oil companies – BP, Arco, and Humble Oil – spent $8 billion in 1977 constructing the Trans-Alaska Pipeline System (TAPS) to bring its oil to market. That’s more than $31 billion in today’s dollars.
For a while, that investment paid off. By 1988, the field produced nearly 2 million barrels per day – almost as much oil as the entire state of Texas. From 1985 to 1995, the field produced as much as 25% of the entire U.S. oil output.
In 2013, the North Slope fields still produced more than 479,000 barrels per day, though that accounts for only about 5% of U.S. production. In 2014, more than 12.5 billion barrels of oil remained in the area, according to the Alaska Oil and Gas Commission. But that’s actual barrels… not “economic reserves.”
…click on the above link to read the rest of the article…

Oil Tankers Are Filling Up As Global Storage Space Runs Low

November 13, 2015

Oil Tankers Are Filling Up As Global Storage Space Runs Low

The rebound in oil prices is still not here, and new data suggests that it will take some more time before the markets start to balance out.

Global supplies are still too large to justify a significant rally in oil prices. The latest indicator that the glut of oil has yet to ease comes from the FT, which concludes that there is 100 million barrels of oil sitting in oil tankers. Oil has piled up in tankers that are floating at sea, as onshore storage space begins to dwindle.

The level of crude oil stashed at sea is nearly double what it was earlier in 2015. “Onshore storage is not quite full but it is at historically high levels globally,” David Wech of JBC Energy told the FT. “As we move closer to capacity that is creating more infrastructure hiccups and delays in the oil market, leading to more oil being backed out on to the water.”

Rising levels of crude stored at sea has more to do with shrinking capacity onshore, rather than traders stockpiling volumes in order to profit from an eventual rebound in prices. Oil tanker rates have surged this year, so it doesn’t exactly make sense to store oil at sea strictly for a trading opportunity. Daily rates for very large crude carriers (VLCCs) are around $60,000 per day, although down from a peak of $111,000 per day hit on October 8. The collapse of crude prices over the past year have contributed to a surge in tanker rates – while volatile, VLCC daily rates consistently ran as low as $20,000 over the last few years.

Related: LNG Glut Set To Worsen Considerably Over Next 3 Years

…click on the above link to read the rest of the article…

Get Ready for Oil Deals: Shale Is Going on Sale

March 11, 2015

Get Ready for Oil Deals: Shale Is Going on Sale

(Bloomberg) — A decision by Whiting Petroleum Corp., the largest producer in North Dakota’s Bakken shale basin, to put itself up for sale looks to be the first tremor in a potential wave of consolidation as $50-a-barrel prices undercut companies with heavy debt and high costs.

For the first time since wildcatters such as Harold Hamm of Continental Resources Inc. began extracting significant amounts of oil from shale formations, acquisition prospects from Texas to the Great Plains are looking less expensive.

Buyers are ultimately after reserves, the amount of oil a company has in the ground based on its drilling acreage. The value of about 75 shale-focused U.S. producers based on their reserves fell by a median of 25 percent by the end of 2014 compared to 2013, according to data compiled by Bloomberg. That’s opening up new opportunities for bigger companies with a better handle on their debt, said William Arnold, a former executive at Royal Dutch Shell Plc.

“In this market, there are whales and there are fishes, and the whales are well armed,” said Arnold, who also worked as an energy-industry banker and now teaches at Rice University in Houston. “There are some very vulnerable little fishes out there trying to survive any way they can.”

Smaller producers with significant debt that depend on higher prices to make money are the most likely early targets for buyers such as Exxon Mobil Corp. or Chevron Corp., companies that have bided their time for years as the value of some shale fields soared to $38,000 an acre from $450 just a few years earlier.

…click on the above link to read the rest of the article…

 

Libya Warns of Oil Shutdown as Attacks Escalate

February 15, 2015

Libya Warns of Oil Shutdown as Attacks Escalate

(Bloomberg) — Libya’s state-run oil company warned that it would shut production at all fields if authorities in the divided nation fail to contain an escalation of attacks on facilities that cut crude output to a year-low.

“If these incidents continue, National Oil Corp. will regrettably be forced to stop all operations at all fields in order to preserve the lives” of employees, the company said in a statement on its website. “National Oil Corp. urges the Ministry of Defense and the Petroleum Facilities Guard to take the appropriate measures to protect oil sites.”

The North African nation’s oil production was reduced by 180,000 barrels a day after a fire at a pipeline that carries crude to the eastern Hariga port, National Oil spokesman Mohamed Elharari said by phone in Tripoli. Hariga, near Tobruk, has oil left in storage for exports and the last ship to load there was the Greek-flagged Minerva Zoe, he said.

Libya, holder of Africa’s largest oil reserves, was producing 350,000 barrels a day in January, Elharari said at the time. The nation may be producing less than 200,000 barrels a day after the pipeline fire. The previous lowest daily average was in March 2014, at 150,000 barrels. A member of the Organization of Petroleum Exporting Countries, Libya was producing 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.

…click on the above link to read the rest of the article…

 

Study: Foreign Countries Intervene in Civil Wars 100 Times More Often when Afflicted Countries Have Oil

January 28, 2015

Study: Foreign Countries Intervene in Civil Wars 100 Times More Often when Afflicted Countries Have Oil

The Independent reports that a new study conducted in the Universities of Portsmouth, Warwick and Essex, and published in the Journal of Conflict Resolution, finds that “hydrocarbons play an even bigger role in conflicts” than “conspiracy theorists” ever imagined.

…foreign intervention in a civil war is 100 times more likely when the afflicted country has high oil reserves than if it has none.

…a third party is 100 times more likely to intervene when the country at war is a big producer and exporter of oil…

…suggesting hydrocarbons were a major reason for the [US/UK] military intervention in Libya … and the current US campaign against Isis in northern Iraq.

“After a rigorous and systematic analysis, we found that the role of economic incentives emerges as a key factor in intervention,” said co-author Dr Vincenzo Bove, of the University of Warwick. “Before the Isis forces approached the oil-rich Kurdish north of Iraq, Isis was barely mentioned in the news. But once Isis got near oil fields, the siege of Kobani in Syria became a headline and the US sent drones to strike Isis targets,” he added.

[The study] found that the decision to intervene was dominated by the third-party’s need for oil, far more than historical, geographic or ethnic ties.

The US maintains troops in Persian Gulf oil producers and has a history of supporting conservative autocratic states…

David Cameron was instrumental in setting up the coalition that intervened in Muammar Gaddafi’s Libya in 2011, a country with sizeable oil reserves.

It is also important to remember that often control over resources, rather than mere access, is more important to a regime seeking an illegal stranglehold over international affairs:

 

…click on the above link to read the rest of the article…

The Deep State Strategy: Burn Everyone Else’s Oil First, Leave Ours in the Ground

January 13, 2015

The Deep State Strategy: Burn Everyone Else’s Oil First, Leave Ours in the Ground

The U.S. Deep State is in favor of Saudi Arabia’s strategy of forcing production cuts on its rivals and marginal producers for two profound reasons.

It is widely presumed that if the U.S. government isn’t actively concerned about the financial carnage being visited upon the domestic oil/gas sector, it should be actively concerned for self-evident reasons. These self-evident reasons include lay-offs, cratering profits and a mountain of shale-oil based debt that is in danger of default as revenues fall off a cliff.
The political class that must be re-elected to retain power is obligated to publicly express concern about the negative impact on employment, profits and domestic production. Whether the political class can do anything about the lay-offs and decline in oil/gas revenues is another thing.
But we should also keep our eye on the political system which retains power regardless of which party or politico is in office: the Deep State.The Deep State exists to maintain the essential infrastructure of global power and domestic stability. Its class of officials are paid to take the long view and consider the chessboard not from the point of view of winning re-election in two or four years but on what might unfold in the decades ahead that would challenge U.S. supremacy and the stability of the current world system and domestic economy.

…click on the above link to read the rest of the article…

 

World Proved Oil Reserves Data A Work Of Fiction

December 10, 2014

World Proved Oil Reserves Data A Work Of Fiction.

The EIA publishes Annually a list of World Proved Reserves of Crude Oil. Though all charts in this post use the EIA data, BP, the IEA and virtually every other reporting agency in the world uses basically the same data. It is my contention that this data is misleading and totally meaningless. This is especially true of OPEC Middle East Reserves. However because this data is taken as gospel by the media and perhaps 90% of energy analysts in the world, this misinformation becomes a serious problem.

But first let’s look at the data. It dates to 2014 in most cases but some data only goes to 2013. All data is billion barrels of reserves.

EIA World Proved Reserves

The EIA said we had 1,646 billion barrels of proved reserves in 2013. Other agencies put that figure a bit higher but we will go with this. And just where are these reserves located?

…click on the above link to read the rest of the article…

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