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US To Convert Pacific Oil Rigs Into Military Bases as Part of Anti-China Buildup

US To Convert Pacific Oil Rigs Into Military Bases as Part of Anti-China Buildup

The idea is to create mobile missile defense systems and resupply bases

The US Navy will convert surplus oil rigs in the western Pacific into mobile military bases as part of the US military buildup aimed at China, The Defense Post reported on Tuesday.

The naval engineering firm Gibbs & Cox developed the concept, known as the Mobile Defense/Depot Platform (MODEP), and presented it earlier this month at the Sea Air Space Expo. The idea is to convert oil rigs into mobile missile defense and resupply bases.

“Our target here is to find a solution to help the challenging problem of having capacity issues in the Western Pacific. For not enough cells, not enough missiles, not enough of being able to keep those ships in the forward station,” Dave Zook, an architect at Gibbs & Cox, told Naval News.

Gibbs & Cox claims that the floating bases would be able to hold 512 vertical launch system cells or 100 large missile launchers, which is five times the capacity of a US Navy destroyer. The idea is to counter China’s ballistic missiles that could take out US warships and bases in the region in the event of an open war.

US military officials have been explicit about the fact that they’re preparing for a direct war with China in the region despite the obvious risk of the conflict quickly turning nuclear. The US has been expanding its military footprint in the Philippines and in Pacific island nations to give China more targets that it will have to hit.

Gen. Kenneth Wilsbach, the former head of US Pacific Air Forces who is now the commander of Air Combat Command, made this clear in comments to Nikkei Asia last year.

“Obviously, we would like to disperse in as many places as we can to make the targeting problem for the Chinese as difficult as possible,” Wilsbach said. “A lot of those runways where we would operate from are in the Pacific Island nations.”

Oil Rigs Rise For 12 Straight Weeks; Threaten Oil Price Recovery

Oil Rigs Rise For 12 Straight Weeks; Threaten Oil Price Recovery

For the 12th week in a row, the number of US oil rigs rose (up another 10 to 672 – the highest since September 2015). US Crude production continues to track the lagged rig count, pouring more cold water on OPEC’s production cut party.

The rig count grows, tracking the lagged oil price in a self-defeating cycle.

And crude production appears to have plenty more room to run.

Worldwide Rig Count Dropping Again

Worldwide Rig Count Dropping Again

BH Total World

All rigs were down 85 rigs in October to 2,086 rigs. October 14 to October 15 total world rigs were down 1,571 rigs of 43%.

BH US

US total rigs were down 57 rigs in October to 791. October 14 to October 15 US rigs were down 1,134 rigs or 59%.

BH Canada

Canada was up one rig in October to 194. October 14 to October 15 Canada is down 240 rigs or 56.6%. For several years now Canadian rigs have peaked in February. This year it was different however.

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

Shell Approval May Trigger Resource Race In The Arctic

Shell Approval May Trigger Resource Race In The Arctic

In a few short months Shell will (re)enter the Chukchi Sea. The oil and gas major still awaits approval from a number of state and federal agencies, but in early May the company received the consent of the Obama administration to explore the remote Arctic sea 70 miles off the coast of Alaska.

AlaskanSea

Source: Nicolas Rapp, Fortune

If it sounds familiar, that’s because it is. Shell was in the Chukchi and Beaufort Seas for much of 2012 – a stint that ended with more headaches than drilling. Following some high-profile failures with its Noble Discoverer and Kulluk rigs, Shell put its Arctic operations on pause in early 2013. Amid slumping profits, the group called off its 2014 plans to resume. Today, the economic indicators are not much better – Shell lost $1.1 billion in the Americas in the first quarter of 2015 – but the company is committed to moving forward.

Related: Oil Prices Will Fall: A Lesson In Gravity

One of the richest sedimentary basins in the world, the Arctic Alaska Petroleum Province is estimated to hold approximately 28 billion barrels of technically recoverable oil and 122 trillion cubic feet of non-associated gas spread across Alaska’s continental shelf and rift shoulder.

For Shell in particular, it expects the Arctic to be its biggest source of crude oil globally within the next 20 years. Estimates vary, but the Bureau of Ocean Energy Management calculates the hurdle, or breakeven, price to be roughly $38 in the Chukchi Sea. With a profit margin of around 39 percent – probably generous – Shell could be earning $1 billion or more in annual profits for each 100,000 barrels produced per day at prices not much higher than today’s.

 

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

Where Have All The Rigs Gone?

Where Have All The Rigs Gone?

Baker Hughes publishes a weekly oil and gas rig count by producing basin. I have created charts of all the most productive basins in order that we can see where oil and gas rigs are increasing or decreasing. Their historic rig count, by basin, goes back 4 years.

It needs to be noted that Baker Hughes does not count rigs that are not actively drilling. Rigs that are “Moving In, Rigging Up” are not counted in the Baker Hughes count though they are counted by some others including the North Dakota Industrial Commission.

All rig counts are as of Friday, February 27, 2015.

TotalUSRigCount

But first, total US weekly rig count. The oil rig count stands at 986, down 623 from a high of 1,609 in October. The gas rig count stands at 280, down 656 rigs from the high of 935 in October of 2011. However this data base goes back only 4 years. The all-time high for gas rigs was 1,606 in September of 2008. The 1,609 oil rig count in October 2014 was an all-time high for oil rigs. That record is valid only back to the days when Baker Hughes began separate stats for oil and gas rigs however.

 

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

Global Drilling Slowdown On The Way

Global Drilling Slowdown On The Way.

  • Baker Hughes rig count statistics show how drilling reacted to earlier falls in the oil price. There is always a time lag of months between an oil price event and a change in drilling. There are faint signs of US drilling starting to turn down and quite clear signs that Middle East OPEC drilling has turned down.

  • Drilling in Iraq is down significantly from 94 oil rigs in July to 56 rigs in October, but there are likely other reasons for that.

  • The oil industry in the USA and the Middle East has changed markedly in the last decade and I believe the production response to reduced drilling will be much more pronounced in both areas than before. History doesn’t repeat itself, but it does rhyme (Joseph Anthony Wittreich).

USA Rig Count

Figure 1 Baker Hughes rig count for the USA and oil price described in the text. Note how peaks and troughs in drilling lag the oil price. Also some uncertainty in drilling strategy the last three years as oil price fluctuated within narrow bounds. But the oil price has now broken down and I believe it is inevitable that drilling follows. Never before has US oil production been so heavily linked to drilling activity.

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

 

The Driving Force Behind the US Oil Boom

The Driving Force Behind the US Oil Boom.
The shale revolution’s sweet spot is oilfield services, the lower-risk backbone of the American oil and gas boom that pays off regardless of a play’s economics.

Behind the stardom of the explorers and producers who have put themselves on the revolutionary shale map and absorb most of the risk—are the service providers who make up a highly lucrative market segment.

The US land-based rig count rose 3% over the last quarter, reaching a two-year high of 1,870 active rigs. A major factor in this growth has been an uptick in horizontal drilling in the Permian Basin, Texas’ revived giant, where the rig count was up 21% year-on-year.

And while oil prices slumped in October, drilling activity continues to rise according to Baker Hughes, the third-largest oil services company. Baker Hughes’ rig count is up 3.8% in the fourth quarter of this year, compared to the third quarter.
…click on the above link to read the rest of the article…

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