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EDITORIAL
NEWSLETTER
STATISTICS
EDITOR’S PERSPECTIVE
GENERAL INTEREST
JOURNALLY SPEAKING
WATCHING GOVERNMENT
DIGITAL WEEKLY E D I T I O N
APR. 28, 2014 | USD 10
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7 NEWSLETTER 12 LETTERS / CALENDAR 14 JOURNALLY SPEAKING 16 EDITORIAL
29 ADVERTISERS’ INDEX 30 STATISTICS 33 MARKET CONNECTION
Apr. 28, 2014 | Volume 112.4cInternational Petroleum News and Technology | www.ogj.com
GENERAL INTEREST
US $10
COVERInspection proceeds on water tanks serving Anadarko
Petroleum Corp.’s operations in the Uinta basin. In
the tight sands of the Greater Natural Buttes area in
eastern Utah, Anadarko operates more than 2,400
wells and uses refrigeration and cryogenic process-
ing to extract NGLs. Photo from Anadarko.
18 DOS gives federal agencies more time for Keystone XL comments
Nick Snow
Eight federal agencies preparing comments on the proposed Keystone XL crude oil pipeline project’s cross-border permit received additional time, the US Department of State announced
19 Latest Keystone delay not political, White House spokesman says
Nick Snow
The decision to give eight federal agencies more time to prepare comments about the proposed Keystone XL crude oil pipeline project’s cross-border permit was not political, White House Press Secretary Jay Carney said.
20 WATCHING GOVERNMENT Reporting offshore near-misses
20 Four years after Macondo, offshore Arctic beckons, speakers warn
Nick Snow
24 BP to sell to Hilcorp certain interests in four ANS assets
26 US gas reserve growth in 2013 was robust, AGA estimates
Nick Snow
26 GAO: Scant information exists about NEPA analyses’ costs, benefits
Nick Snow
28 Texas Petro Index reaches record-high for February
28 EDITOR’S PERSPECTIVE A moralist’s energy transition: from security to climate
140428ogj_3 3 4/24/14 11:34 AM
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NewsletterOGJ®
International News for oil and gas professionals
For up-to-the-minute news, visit www.ogjonline.com
Oil & Gas Journal 7
Apr. 28, 2014
GENERAL INTEREST QUICK TA K ES
Hess to sell Thailand assets for $1 billionHess Corp. has sold its interests in Thailand’s Sinphuhorm and
Pailin fields to PTT Exploration & Production PCL (PTTEP) for
$1 billion, effective July 1, 2013.
The two assets produced a combined average of 17,000
boe/d net to Hess in 2013. The company disclosed its plans
to sell assets in Thailand and Indonesian in April 2013 (OGJ
Online, Apr. 30, 2013).
In December, Hess entered into two separate agreements
with a joint venture of PT Pertamina and PTTEP to sell its in-
terests in the Pangkah and Natuna A assets offshore Indonesia
for $1.3 billion (OGJ Online, Dec. 2, 2013).
Both sales are part of a large-scale divestiture Hess under-
took last year with the purpose of repaying the company’s debt
and strengthen its balance sheet.
Alberta allocates spending for CCS projectsThe government of Alberta has budgeted $144 million (Can.)
this year for two projects it is supporting for carbon capture
and sequestration (CCS) related to oil sands development (OGJ
Online, Feb. 26, 2013).
The province plans to invest nearly $1.3 billion over 15 years
in the projects, the Alberta Carbon Trunk Line and Quest proj-
ect, which are to start up in 2015 and store 2.76 million tonnes/
year of carbon dioxide.
The 240-km Alberta Carbon Trunk Line will collect CO2
from Industrial Heartland upgraders and carry the gas to fields
for use in enhanced oil recovery. The Quest project, led by Shell
Canada, will capture and sequester in the subsurface CO2 from
the Scotford upgrader near Fort Saskatchewan.
Nexen names chief executive officerNexen Energy ULC, a wholly owned subsidiary of CNOOC
Ltd., has selected Fang Zhi as chief executive officer. Fang suc-
ceeds Kevin Reinhart, a 20-year company veteran who oversaw
the acquisition of Nexen by CNOOC in 2012 (OGJ Online, Jan.
12, 2012; Feb. 26, 2013).
Fang, currently executive vice-president, has served 30 years
for CNOOC, which specified that the move will not change
Nexen’s strategy and priorities as a wholly owned subsidiary.
Moore named Gulfport Energy chief executiveMichael G. Moore has been named chief executive officer and a
director of Gulfport Energy Corp., Oklahoma City. He had been
interim chief executive and chief financial officer. He joined
Gulfport Energy in 2000 and became president in August 2013.
J. Ross Kirtley was promoted to chief operating officer. He
joined the company in May 2013 and became chief operating
officer of Gulfport Energy’s Ohio activities in September (OGJ
Online, Dec. 10, 2013).
Also, Michael S. Reddin, chairman, president, and chief ex-
ecutive of privately held Davis Petroleum Corp., was appointed
to the Gulfport Energy board of directors.
EXPLORATION & DEVELOPMENT QUICK TA K ES
Shell makes deepwater gas find offshore MalaysiaRoyal Dutch Shell PLC has made a natural gas discovery with
the Rosmari-1 well, which was drilled 135 km offshore Malay-
sia on Block SK318.
The well, drilled to a total depth of 2,123 m, encountered a
450-m gas column. Shell said the discovery is a positive indica-
tor of the gas potential in the area.
“This adds to Shell’s sequence of recent exploration success-
es in Malaysia, with these discoveries expanding the company’s
heartlands positions,” said Iain Lo, Shell Malaysia chairman.
Last month, Sabah Shell Petroleum Co. Ltd. let a contract
to Flowserve Corp. for supply of custom designed water injec-
tion and liquid transfer pumps for the Malikai oil field project
68 miles offshore Sabah, Malaysia (OGJ Online, Mar. 6, 2014).
Shell operates Block SK318 with 85% interest. Petronas
Carigali Sdn. Bhd. holds the remaining interest.
Total discovers oil deep offshore Ivory CoastTotal Exploration & Production says its Saphir-1XB exploratory
well discovered oil in deep water off Ivory Coast.
The well, drilled in 2,300 m of water, is the first on Block
CI-514. Drilled to 4,655 m, it encountered 40 m of net pay con-
taining 34° API oil.
The company said it will evaluate the discovery and focus on
its extension to the north and east.
Total E&P Cote d’Ivoire operates Block CI-514 with a 54%
interest. CNR International has 36%, and Petroci Holding 10%.
140428ogj_7 7 4/24/14 1:12 PM
Apr. 21 Apr. 221Apr. 181Apr. 17Apr. 16
Apr. 21 Apr. 22Apr. 181Apr. 17Apr. 16
Apr. 21 Apr. 22Apr. 181Apr. 17Apr. 16
Apr. 211 Apr.221Apr. 181Apr. 171Apr. 161
Apr. 21 Apr. 22Apr. 181Apr. 17Apr. 16
Apr. 21 Apr. 22Apr. 181Apr. 17Apr. 16
WTI CUSHING / BRENT SPOT
$/bbl
110.00
109.00
108.00
107.00
105.00
104.00
103.00
102.00
$/bbl
109.00
108.00
107.00
106.00
105.00
104.00
103.00
102.00
NYMEX NATURAL GAS / SPOT GAS - HENRY HUB
ICE GAS OIL / NYMEX HEATING OIL
NYMEX GASOLINE (RBOB)2/ NY SPOT GASOLINE3
ICE BRENT / NYMEX LIGHT SWEET CRUDE
PROPANE - MT. BELVIEU / BUTANE - MT. BELVIEU
¢/gal
302.00
299.00
296.00
293.00
290.00
287.00
284.00
281.00
¢/gal
129.00
128.00
127.00
126.00
113.00
112.00
111.00
110.00
¢/gal
312.00
309.00
306.00
303.00
301.00
299.00
297.00
295.00
4.700
4.675
4.650
4.625
4.600
4.575
4.550
4.525
1Not available 2Reformulated gasoline blendstock for oxygen blending3Nonoxygenated regular unleaded
$/MMbtu
Apr. 13 May. 13 Jun. 13 Dec. 13 Feb. 14Jan. 14 Mar. 14Mar. 13 Sept. 13 Nov. 13Oct. 13Jul. 13 Aug. 13
1,400
2,000
1,800
2,200
1,600
300
500
700
100
BAKER HUGHES INTERNATIONAL RIG COUNT: TOTAL WORLD / TOTAL ONSHORE / TOTAL OFFSHORE
3,900
3,600
3,300
3,000
2,700
2,400
2,100
1,800
600
300
0
3,597
3,210
389
Note: End of week average countNote: End of week average count
BAKER HUGHES RIG COUNT: US / CANADA
Note: Monthly average count
199
1,831
2/21/142/21/143/8/133/8/13 3/22/133/22/13 4/5/134/5/13 4/19/134/19/13
2/15/132/15/13 3/1/133/1/13 4/12/134/12/132/1/132/1/13 2/14/143/15/13 3/29/13 2/28/14 3/14/14 3/28/14 4/11/141/31/14
2/22/132/8/13 3/7/14 3/21/14 4/4/14 4/18/142/7/14
126
1,758
US INDUSTRY SCOREBOARD — 4/28
Motor gasoline 8,832 8,446 4.6 8,510 8,430 0.9 Distillate 3,841 3,895 (1.4) 3,816 3,681 3.7 Jet fuel 1,408 1,311 7.4 1,395 1,342 3.9 Residual 220 357 (38.4) 250 302 (17.2)Other products 3,988 4,596 (13.2) 4,717 4,692 0.5 TOTAL PRODUCT SUPPLIED 18,289 18,605 (1.7) 18,688 18,447 1.3
Supply, 1,000 b/d
Crude production 8,228 7,173 14.7 8,145 7,096 14.8 NGL production2 2,627 2,388 10.0 2,672 2,456 8.8 Crude imports 7,508 7,810 (3.9) 7,405 7,730 (4.2)Product imports 1,846 1,949 (5.3) 1,767 1,947 (9.2)Other supply2 3 2,361 2,217 6.5 2,204 1,983 11.1 TOTAL SUPPLY 22,570 21,537 4.8 22,193 21,212 4.6 Net product imports (1,748) (900) — (1,887) (1,057) —
Refining, 1,000 b/d
Crude runs to stills 15,339 14,766 3.9 15,316 15,028 1.9 Input to crude stills 15,643 15,088 3.7 15,620 15,370 1.6 % utilization 87.5 84.7 — 87.6 88.0 —
4 wk. 4 wk. avg. Change, YTD YTD avg. Change,Latest week 4/11 average year ago1 % average1 year ago1 %
Product supplied, 1,000 b/d
Latest Previous Same week Change,Latest week 4/11 week week1 Change year ago1 Change %Stocks, 1,000 bbl
Crude oil 394,135 384,122 10,013 387,641 6,494 1.7 Motor gasoline 210,282 210,436 (154) 221,730 (11,448) (5.2)Distillate 111,916 113,194 (1,278) 115,181 (3,265) (2.8)Jet fuel–kerosine 38,198 36,641 1,557 40,975 (2,777) (6.8)Residual 37,537 37,037 500 37,788 (251) (0.7)
Stock cover (days)4 Change, % Change, %
Crude 25.7 25.3 1.6 25.8 (0.4)Motor gasoline 23.8 23.9 (0.4) 26.3 (9.5)Distillate 29.1 29.5 (1.4) 29.6 (1.7)Propane 26.5 25.3 4.7 28.1 (5.7)
Futures prices5 34/18 Change Change %
Light sweet crude ($/bbl) 103.97 102.75 1.2 93.40 9.35 11.3 Natural gas, $/MMbtu 4.60 4.57 — 4.11 0.47 11.9
1Based on revised figures. 2OGJ estimates. 3Includes other liquids, refinery processing gain, and unaccounted for crude oil. 4Stocks divided by average daily product supplied for the prior 4 weeks. 5Weekly average of daily closing futures prices.Source: Energy Information Administration, Wall Street Journal
8 Oil & Gas Journal | Apr. 28, 2014
140428ogj_8 8 4/24/14 1:12 PM
Oil & Gas Journal | Apr. 28, 2014 9
Canadian Natural Resources called it “an important discovery.”
Total has interests in three other offshore exploration licens-
es in Ivory Coast: CI-100, CI-515 and CI-516. It plans to drill
exploratory wells in Blocks CI-515 and CI-516 by yearend.
The group is continuing to analyze an oil discovery made on
Block CI-100 in 2013 (OGJ Online, Apr. 25, 2013).
Also offshore Ivory Coast, CNR International expects to be-
gin a 10-well development drilling program in Espoir field in
this year’s second half, and a 6-well phase of development at
Baobab field late this year or early in 2015.
Simba Energy to conduct 2D seismic survey in KenyaSimba Energy Inc., Vancouver, BC, has signed an agreement
with Bell Geospace to conduct a comprehensive airborne full-
tensor gradiometry (FTG) survey on Block 2A in Kenya. The
30-day survey is expected to start in early May.
The program contemplates flying 6,044 line km over two
target areas within Block 2A about 2,150 sq km over the central
portion of the block covering the company’s earlier defined pri-
mary and secondary target areas south-southeast from the city
of Wajir and within the southern extents of the Mandera basin;
and 850 sq km along the block’s southern boundary over the
eastern margins of the Anza basin.
Simba said it expects that data from the FTG survey will
serve to provide for a more focused and cost-effective 2D seis-
mic well location targeting program planned for later this year.
The data from this FTG survey also will be combined with
some additional 2D seismic data expected shortly from Taipan
Resources Inc., which was recently granted permission to ac-
quire limited 2D seismic on Block 2A. Simba said it begin inter-
pretation of the processed 2D seismic data along with the FTG
data once they are received.
Simba was awarded Block 2A by Kenya’s Ministry of Energy
in 2011 (OGJ Online, Aug. 3, 2011). A year later, the company
acquired 750 sq km of passive seismic (OGJ Online, Apr. 16,
2012).
Repsol drills dry hole offshore Trinidad and TobagoSpain’s Repsol has drilled a dry hole with its Pinter One off-
shore Trinidad and Tobago’s east coast. The dry hole represents
a major failure for the company, which has been trying to boost
its falling crude production from its Teak Samman and Pouis
acreage.
Repsol began drilling Pinter One on Dec. 26, 2013, and
wrapped up the well in February after reaching its total depth
of 13,000 ft.
The failure also has major implications for the announced
discovery of 32 million bbl of recoverable reserves by Bayfield
Energy, which has since been sold to Trinity Exploration &
Production Co.
Bayfield in 2012 announced on the London Stock Exchange
that it made a discovery with its EG8 well on Galeota Block and
that the discovery extends into Repsol’s acreage.
EG8 was deviated from its surface location towards the
southwest in order to target the crestal area of mapped horizons
in the prospective EG2/EG5 Central fault block. The well en-
countered 10 hydrocarbon-bearing sandstone reservoir zones
between 1,364 ft and 6,000 ft below mean sea level. Prelimi-
nary analysis showed the vertical thickness of net hydrocar-
bon-bearing sands. It was drilled to a total depth of 8,133 ft
with well sands totals of 421 ft, of which 352 ft is gas and 69
ft is oil.
Trinity Chief Executive Officer Joel Monty Pemberton told
OGJ that while his company was aware of the failure, it was
not sure to what extent the size of the company’s discovery has
been negatively impacted. He said it was logical to expect it
meant the size of the discovery will have to be downgraded, but
he could not tell without the information from the well.
DRILLING & PRODUCTION QUICK TA K ES
Gazprom Neft loads first oil shipment from Arctic fieldJSC Gazprom Neft has loaded its first shipment of oil produced
from Prirazlomnoye field, 60 km offshore on the Russian Arctic
shelf. The field was discovered in 1989 and is the only Russian
hydrocarbon development project in the Arctic shelf.
The 70,000-ton load of oil will be delivered to consumers in
northwestern Europe by the Mikhail Ulyanov and Kirill Lavrov
oil vessels, which were built on Gazprom’s request for shipping
oil from Prirazlomnoye. Gazprom said 300,000 bbl of oil are
expected to be shipped from the field this year.
The field’s recoverable oil reserves total 71.96 million tons,
with projected oil production expected to reach 6 million tons/
year after 2020.
This is the first time that Arctic oil has entered the global
market. The oil was traded among refining companies in north-
western Europe during the first quarter.
“Today’s event is highly important for strengthening Russia’s
position in the global oil market. We increased the flexibility
The Mikhail Ulyanov oil vessel arrives at Prirazlomnaya field to load
oil from the platform. Photo from Gazprom Neft.
140428ogj_9 9 4/24/14 1:12 PM
10 Oil & Gas Journal | Apr. 28, 2014
and reliability of oil supply to almost any part of the world,”
said Gazprom Management Committee Chair Alexey Miller.
Gazprom said part of the feedstock will be sold under long-
term contracts once Prirazlomnoye production is increased.
Drilling, production, storage, end-product processing, and
loading are conducted on an offshore ice-resistant stationary
platform that Gazprom says “fully excludes any oil spills during
production, storage, and loading processes.” Production from
the platform began in December.
Gazprom Neft is operator of Prirazlomnoye; wholly owned
subsidiary Gazprom Neft Shelf is license holder.
Suncor reports oil sands employee fatalitySuncor Energy Inc. reported that an employee fatality occurred
at its oil sands site on Apr. 20.
The company said emergency service personnel responded
at 11:30 a.m. after an employee was severely injured while
working. The employee was immediately transported to the
Northern Lights Regional Health Centre in Wood Buffalo, Alta.,
where he was pronounced deceased.
Suncor said it’s working with the appropriate authorities and
will complete a full investigation into the cause of the incident.
The name of the individual was not released.
Petrobras hits production record in Santos, CamposPetroleo Brasileiro SA (Petrobras) recently reached an oil pro-
duction record of 428,000 b/d in company-operated fields in
the Santos and Campos basins.
The company said the new mark was a result of the in-
creased output that came with the Mar. 17 launch of opera-
tions from the P-58 platform in the Parque das Baleias area of
northern Campos.
The platform has been producing 50,000 b/d through three
presalt wells. Petrobras holds 100% of the rights in the area.
Twenty-four production wells have been drilled overall, of
which 15 are in the Campos and nine in the Santos. Produc-
tion from Campos and Santos has reached 222,000 b/d and
206,000 b/d, respectively.
Fifteen more production wells are expected to start up by
yearend, of which 11 will be in the Santos and four in the
Campos.
Of the 15 wells, two are connected to the Cidade de Sao
Paulo floating production, storage, and offloading vessel, five
to the Cidade de Paraty FPSO, one to the P-48 platform, and
three to the P-58 platform. The remaining four wells will be
split between the the Cidade de Ilhabela FPSO and the Cidade
de Mangaratiba FPSO, both of which are slated to be installed
and start producing in this year’s second half.
Petrobras last year reported plans to increase net produc-
tion from its offshore presalt formation in the Campos and
Santos to more than 2 million b/d of oil by 2020 (OGJ Online,
May 7, 2013).
PROCESSING QUICK TA K ES
KNPC finalizes contracts for Clean Fuels ProjectKuwait National Petroleum Co. (KNPC) has finalized lump-
sum turnkey contracts previously let to three groups of oil and
gas service providers for work related to its Clean Fuels Project
(CFP) at the Mina Abdullah and Mina Al Ahmadi refineries in
southern Kuwait (OGJ Online, Feb. 19, 2014).
KNPC officially signed the three contracts Kuwait on Apr.
13 with JGC Corp., Petrofac, and Fluor Corp., all of which head
separate consortia of firms tapped for the project, KNPC said.
KNPC awarded a $3.4 billion contract in February to a joint
venture of Fluor Corp., Daewoo Engineering & Construction
Co., and Hyundai Heavy Industries Co. to design, construct,
and commission the Mina Abdullah Package 2 CFP, with an
additional $3.7 billion contract let earlier that month to a con-
sortium led by Petrofac for CFP-related work related at its Mina
Abdullah and Shuaiba refineries.
KNPC in March awarded JGC Corp. and its partners GS En-
gineering & Construction and SK Engineering & Construction
a $4.9 billion contract to provide engineering, procurement,
construction as well as commissioning assistance and testing
services for CFP-related work at Mina Al Ahmadi, JGC said.
With the official signing of contracts concluded, Kuwaiti
government officials on Apr. 16 held a workshop for team lead-
ers at the Mina Al Ahmadi and Mina Abdullah refineries and
project consultant Foster Wheeler that focused on identifying
and developing a plan to address potential risks associated with
implementing the CFP, according to KNPC.
Kuwait’s CFP is designed to reconfigure the country’s three
refineries and, in conjunction with grassroots construction
planned at Al Zour, nearly double total refining capacity to 1.4
million b/d.
Under the CFP, KNPC will integrate and upgrade the
270,000-b/d Mina Abdullah and 466,000-b/d Mina Al Ahmadi
refineries and ultimately close the 200,000-b/d refinery at Sh-
uaiba following the completion of the Al Zour refinery (OGJ
Online, Dec. 3, 2013). The newly integrated refineries will
operate as a merchant complex with total capacity of about
800,000 b/d, the company has said.
LyondellBasell ends talks to sell French refineryLyondellBasell has ceased discussions with Sotragem SA, Mo-
naco, for the sale of its shuttered 105,000-b/d Berre refinery in
France to Sotragem SAM.
After a comprehensive analysis, the company determined
that Sotragem offered neither acceptable commercial terms nor
any guarantee for a viable takeover of the refinery with an ac-
tual restart of its operations, LyondellBasell said.
While it continues to operate the petrochemical plant on the
site, LyondellBasell halted refinery operations at Berre in Janu-
ary 2012 amid challenges facing the European refinery market.
Sotragem, a petroleum products trading firm, came forward
in September 2013 as the sole bidder for the Berre refinery,
140428ogj_10 10 4/24/14 1:12 PM
Oil & Gas Journal | Apr. 28, 2014 11
which was offered for sale beginning in 2011, LyondellBasell
said (OGJ Online, June 7, 2011).
Despite the ending of talks with Sotragem, LyondellBasell
said it remains committed to its core business operations at the
Berre petrochemical cluster, adding that it has implemented
projects to enhance the competitiveness of its Berre cracker and
downstream activities at the site over the past 2 years.
Suncor begins maintenance at Quebec refinerySuncor Energy Inc. has started planned maintenance at its
137,000-b/d refinery in Montreal, Que. The scheduled mainte-
nance will last about 4 weeks, Suncor said.
Impacts to refinery throughput and utilization as a result
of the maintenance were not disclosed, but Suncor said it has
factored these into the company’s annual guidance.
The company also said it has made necessary arrangements
to ensure sufficient finished products are available and expects
all customer supply agreements will be met during the main-
tenance period.
Maintenance under way at Baku refineryState Oil Co. of Azerbaijan Republic (SOCAR) has started ad-
ditional maintenance on units within its 239,000-b/d Heydar
Aliyev (formerly New Baku) refinery at Baku, Azerbaijan.
Both the vacuum distillation and atmospheric towers at the
plant are undergoing installation and repair work.
Installations and repairs for the refinery’s vacuum distil-
lation column, including the replacement of vacuum heat ex-
changers, are slated to last 30 days, while work on the atmo-
spheric column is scheduled for 21 days, according to SOCAR.
The company added that major repair work also remains
under way on the refinery’s catalytic cracking unit (OGJ On-
line, Apr. 11, 2014). SOCAR did not disclose current produc-
tion rates at the plant.
TRANSPORTATION QUICK TA K ES
Alaska passes bill to advance state’s LNG projectAlaska’s state legislature has passed Senate Bill 138, which
would advance a large-diameter, 800-mile natural gas pipe-
line project to transport production from Alaska’s North Slope
(ANS) to a 15-18 million tonne/year LNG plant on the state’s
south-central coast.
The project will now move into the pre-frontend engineer-
ing and design phase to further refine the cost and engineer-
ing aspects. The bill affirms the commercial agreement signed
by the state, Alaska Gasline Development Corp. (AGDC), the
producers, and TransCanada Corp. to advance the Alaska LNG
project (OGJ, Jan. 27, 2014, p. 25).
Passage of SB 138 also expands the role and mission of
AGDC, enabling it to carry the state’s equity interest in the proj-
ect’s infrastructure, particularly the liquefaction and marine fa-
cilities. AGDC said it also will continue to aggressively pursue
the advancement of the Alaska Stand Alone Pipeline (ASAP)
project parallel to the Alaska LNG project.
“SB 138 is a huge validation of the legislature’s decision to
create an Alaskan-owned pipeline development company,” said
AGDC Pres. Dan Fauske. “AGDC will now lead the state’s par-
ticipation in this exciting LNG export project, while continuing
to advance ASAP, the smaller in-state alternative.”
Alaska Gov. Sean Parnell (R) previously described the move
toward a larger-diameter pipe as “a simple answer to a complex
question about how to lower the cost of getting Alaska’s gas to
Alaskans: Get more gas in the pipe (OGJ, Jan. 28, 2013, p. 14).”
The larger diameter will allow enough gas to be shipped to
both meet the state’s needs and still have material for export,
while creating the economies of scale necessary to maximize
project efficiency and reduce costs.
EPP to build Gulf Coast ethane export plantEnterprise Products Partners LP (EPP) plans to build a fully
refrigerated ethane export plant on the Texas Gulf Coast. EPP
has executed long-term contracts to support the development,
designed to have an aggregate loading rate of about 10,000 bbl/
hr, or as much as 240,000 b/d. EPP expects the plant, which
it describes as the largest in the world, to begin operations in
third-quarter 2016.
EPP will integrate the plant with its Mont Belvieu complex,
which includes more than 650,000 b/d of NGL fractionation
capacity and 100 million bbl of NGL storage. The company
brought its eighth Mont Belvieu fractionator online late last
year, bringing its system-wide capacity to more than 1 million
b/d (OGJ Online, Nov. 19, 2013).
The company estimates that US ethane production exceeds
US demand by 300,000 b/d and that this surplus could reach
700,000 b/d by 2020, even after estimated incremental demand
from planned ethylene production. A recent study by Simmons
& Co., however, sees ethane rejection peaking at 545,000 b/d
in 2015 and general oversupply remaining through 2016, after
which the 2017 startup of seven petrochemical plants increases
consumption by 520,000 b/d and absorbs incremental supply
(OGJ Online, Sept. 1, 2013).
Turkey, Gazprom mull Blue Stream capacity increaseTurkey and OAO Gazprom have discussed a possible increase
in natural gas capacity of the Blue Stream gas pipeline to 19
billion cu m/year from 16 bcm/year. Blue Stream, which ex-
tends through the Black Sea, handles more than half of all gas
purchased by Turkey from Russia. Gazprom said an increase in
capacity would not require laying additional strings.
Turkey is Gazprom’s second-largest sales market in Europe
behind Germany. Gazprom supplied Turkey with 26.7 bcm of
gas in 2013. Russian gas also is supplied to Turkey through the
Trans-Balkan gas line.
The relationship in the gas sector between the two countries
dates back to 1984, when Turkey and the then-Union of Soviet
Socialist Republics signed the gas supply agreement.
140428ogj_11 11 4/24/14 1:12 PM
12 Oil & Gas Journal | Apr. 28, 2014
2014-2015 EVENT CALENDAR
meetings@afpm.
org, website: www.
afpm.org/Conferences
20-23.
International LNG
in B.C. Conference,
Vancouver, website:
http://engage.gov.
bc.ca/lnginbc/lng-
conference/ 21-23.
SPE Latin American
and Caribbean Petro-
leum Engineering Con-
ference, Maracaibo,
website: www.spe.org/
events 21-23.
GPA Permian Basin
Annual Meeting,
Odessa, website: www.
gpaglobal.org. 22.
The Mexican Oil &
Gas Opportunities
Update, Houston,
website: http://www.
petroleumconnec-
tion.com/MexicoUp-
date2014/ 27.
Annual California
Energy Summit, San
Francisco, website:
http://www.infocastinc.
com/events/ca-energy
?gclid=CMHC2K2R2b
0CFU4R7AodfiMA0A
28-30.
New Libya Oil & Gas
Summit, London, web-
site: http://libyaoilgas.
com 29-30.
JUNE 2014
SPE Exploitation of
Tight Carbonates
Forum, San Diego,
website: http://www.
spe.org/events/14fus2/
1-6.
Annual Mining Ameri-
cas Summit, Denver,
website: http://www.
miningamericas.com/
2-3.
events-and-training/cal-
endar-of-events/2014/
springops 20.
TGC Turkmenistan
Gas Congress, Avaza,
Turkmenbashi, website:
http://www.turkmeni-
stangascongress.com/
conference-delegate-
booking-form 20-21.
Advanced Contract
Risk Management for
Oil & Gas Summit,
Houston, website:
http://www.contrac-
triskmanagement.us/
20-21.
DUG Permian Basin
Conference, Fort
Worth, Texas, website:
http://www.dugperm-
ian.com/?gclid=CN30i
PKenL0CFRQV7AodTm
4A4A 20-22.
International Confer-
ence on Petroleum
Data, Integration &
Data Management,
Houston, website:
http://www.pnecconfer-
ences.com/index.html
20-22.
International Confer-
ence on Petroleum
Data, Integration and
Data Management,
Houston, website:
http://www.pnecconfer-
ences.com/index.html
20-22.
AFPM Annual Meeting,
San Antonio, (202)
457-0480, (202)
457-0486 (fax), e-mail:
meetings@afpm.
org, website: www.
afpm.org/Conferences
20-23.
AFPM Reliability &
Maintenance Confer-
ence and Exhibition,
San Antonio, (202)
457-0480, (202)
457-0486 (fax), e-mail:
IOGCC Midyear Issues
Summit, Biloxi, Miss.,
website: www.iogcc.
state.ok.us/events
18-20.
MEPIPES Oil and Gas
Pipelines in the Middle
East Conference, Abu
Dhabi, website: www.
theenergyexchange.
co.uk/event/oil-and-
gas-pipelines-middle-
east-2014. 18-21.
SPE High CO2 and H
2S
Gas Fields Develop-
ment Completions and
Productions Operations
Forum, Bali, website:
http://www.spe.org/
events/14fsap/ 18-23.
SPE Hydrocarbon Eco-
nomics and Evaluation
Conference, Hous-
ton, website: http://
www.spe.org/events/
hees/2014/ 19-20.
World XTL Summit,
London, website: http://
www.cwcxtl.com/
19-21.
SPE Hydrocarbon Eco-
nomics and Evaluation
Symposium, Houston,
website: www.spe.org/
events/calendar/ 19-21.
Flame–Europe’s Lead-
ing Natural Gas & LNG
Conference, Amster-
dam website: http://
www.icbi-flame.com/
FKN2382OGJW 19-22.
API Spring Refin-
ing and Equipment
Standards Meeting,
Orlando, website: www.
api.org/events-and-
training/calendar-of-
events/2014/spring-
refining 19-23.
API Spring Operating
Practices Symposium,
Orlando, website:
http://www.api.org/
International School of
Hydrocarbon Measure-
ments, Oklahoma City,
website: http://www.
ishm.info/ 13-15.
Uzbekistan Inter-
national Oil & Gas
Conference, Tash-
kent, website: http://
www.oguzbekistan.
com/2013/about-con-
ference.html 13-15.
SPE International
Conference and Exhibi-
tion on Oilfield Scale,
Aberdeen, website:
www: www.spe.org/
events 14-15.
AFPM National Oc-
cupational & Process
Safety Conference and
Exhibition, San Anto-
nio, (202) 457-0480,
(202) 457-0486 (fax),
e-mail: meetings@
afpm.org, website:
www.afpm.org/Confer-
ences 14-15.
Annual Asia Pacific
Small and Mid Scale
LNG Forum, Singapore,
website: www.apacing.
com 14-16.
GPA Europe Techni-
cal Meeting, Leiden,
website: https://www.
gpaeurope.com/event-
details.aspx?event=32
14-16.
IADC Drilling Onshore
Conference & Exhibi-
tion, Houston, website:
http://www.iadc.org/
event/drilling_on-
shore_2014/ 15.
IEF International En-
ergy Forum, Moscow,
website: http://www.ief.
org/events/ief14 15-16.
World Fuel Oil Summit
VII, Athens, website:
http://www.worldfueloil-
summit.com/ 15-17.
International Down-
stream Technology &
Strategy Conference,
Lisbon, website: http://
www.europetro.com/
en/idtc_2014 6-7.
PSIG Annual Meeting,
Baltimore, website:
http://www.psig.org/
6-9.
Morocco Oil & Gas
Summit, Marrakesh,
website: http://moroc-
cosummit.com 7-8.
Four Corners Oil & Gas
Conference, Farming-
ton, N.M., website:
http://www.fourcorner-
soilandgas.com/regis-
tration.html 7-8.
GPA MidContinent An-
nual Meeting, Midwest
City, Okla., website:
www.gpaglobal.org 8.
BBTC International
Bottom of the Barrel
Technology Confer-
ence, Lisbon, website:
http://www.europetro.
com/en/bbtc_2014
8-9.
SPE International Con-
ference and Exhibition
on Oilfield Corrosion,
Aberdeen, website:
www: www.spe.org/
events 12-13.
Deloitte Energy Confer-
ence, National Harbor,
Md., website: https://
www.deloitte.com/view/
en_US/us/Events-De
loitte/9de451a76d3
64410VgnVCM3000
003456f70aRCRD.
htm?oper=REG 13-14.
Eastern Oil & Gas Con-
ference & Trade Show,
Pittsburgh, website:
http://www.pioga.org/
event/2014-eastern-oil-
gas-conference-and-
trade-show/ 13-14.
Denotes new listing or
a change in previously
published information.
APRIL 2014
AIPN Spring Confer-
ence, New York City,
website: http://aipn.org/
Events/SC2014.aspx
27-29.
M2M for Oil and Gas
Conference, London,
website: www.smi-
online.co.uk/energy/
uk/conference/m2m-
security 28-29.
Small-Mid Scale LNG
Summit, Amsterdam,
website: http://www.
smallmidlng.com/
29-30.
Smart Grids Summit,
Malaga, website: http://
thesmartgridssummit.
com 29-30.
MAY 2014
Annual Oilfield Housing
Solutions Conference,
Houston, website:
http://www.petroleum-
connection.com/hous-
ing/ 1-2.
API International Oil
Spill Conference, Sa-
vannah, website: www.
api.org/events-and-
training/calendar-of-
events/2014/iosc2014
5-8.
OTC Offshore Technol-
ogy Conference, Hous-
ton, website: www.
otcnet.org 5-8.
Annual East Texas
Energy Symposium,
Kilgore, Texas, website:
www.easttexasoilmu-
seum.com 6.
140428ogj_12 12 4/24/14 11:35 AM
Oil & Gas Journal | Apr. 28, 2014 13
2014-2015 EVENT CALENDAR
Annual International
Operating Confer-
ence & Trade Show,
Houston, website:
http://www.ilta.org/
CalendarofEvents/
AOCTS/2014/2014info.
htm 2-4.
Annual Unconventional
Gas & Oil Conference,
London, website: http://
www.oilandgasuncon-
ventional.com/ 2-5.
International Caspian
Oil & Gas Exhibition
& Conference, Baku,
website: http://www.
caspianoil-gas.com/
3-6.
PIRA Canadian Energy
Conference, Calgary,
Alta, website: www.
pira.com 4.
Annual Ireland Oil &
Gas Summit, Dublin,
website: http://ireland-
summit.com 4-5.
GTL North America
Conference, Hous-
ton, website: www.
gtlnorthamerica.com
4-5.
Tulsa Oilfield Expo,
Tulsa, website: http://
www.tulsaoilfieldexpo.
com 4-5.
SPE London Annual
Conference, London,
website: http://www.
spe.org/events/
lond/2014/ 4-5.
Latin American
Leadership Forum,
Cartagena, website:
http://www.cg-la.com/
forums 4-6.
IPAA OGIS Toronto
Meeting, Toronto,
Ont., website: http://
www.ipaa.org/
meetings-events/event-
details/?mid=308 5.
SPEE Annual Meet-
ing, Stowe, Vermont,
website: https://secure.
spee.org/ 7-10.
PIRA Scenario Plan-
ning Conference,
Houston, website:
www.pira.com 9.
Annual Global Procure-
ment and Supply Chain
Management for the
Oil and Gas Industry
Conference, Houston,
website: http://www.
ifmr-events.com/
marcusevans-confer-
ences-event-details.
asp?EventID=21085
9-11.
SPE Energy Resources
Conference, Port of
Spain, website: www.
spe.org/events/calen-
dar/ 9-11.
Enercom’s London Oil
& Gas Conference,
London, website: http://
www.enercominc.com/
the-london-oil-and-
gas-conference/ 10-11.
PIRA Understanding
Global Oil Markets
Conference, Houston,
website: www.pira.com.
10-11.
SPE African Health,
Safety, Security, and
Environment and Social
Responsibility Confer-
ence and Exhibition,
Nairobi, website: http://
www.spe.org/events/
hsea/2014/ 10-12.
SPE Heavy Oil
Conference-Canada in
Conjunction with GPS,
Calgary Alta., website:
www.spe.org/events/
calendar/ 10-12.
SPE Exploration and
Development in Un-
conventional Reservoir
Symposium, Neuquen,
website: www.spe.org/
events/calendar/ 10-12.
Global Petroleum
Show, Calgary, AB,
website: http://
www.digitalrefining.
com/55,events,Global_
Petroleum_Show.html
10-12.
Tight & Shale Gas
Summit, Edinburgh,
website: http://www.
wplgroup.com/aci/
conferences/eu-eug3.
asp 11-12.
USEA Annual En-
ergy Efficiency Forum,
Washington, DC,
website: http://www.
eeforum.net 12.
World Petroleum
Congress, Moscow,
website: www.21wpc.
com 15-19.
Annual Lebanon Oil &
Gas Summit, Beirut,
website: http://irn-inter-
national.com 16-17.
Pipe Tech World Sum-
mit, Rome, website:
http://www.pipetech-
summit.com/ 16-18.
EAGE Conference &
Exhibition, Amsterdam,
website: http://www.
eage.org/events/index.
php?eventid=1000&Op
endivs=s3 16-19.
API Exploration and
Production Standards
Conference on Oilfield
Equipment and Materi-
als, Chicago, website:
www.api.org/events-
and-training/calendar-
of-events/2014/e-p-
standards 16-20.
EuALF SPE Aberdeen
European Artificial Lift
Forum, Aberdeen, web-
site: http://www.spe-
uk.org/default.aspx.
LocID-0a4008003.
Lang-EN.emID-965.
rss-cal.EventID-13676.
htm 17-18.
PIRA London Energy
Conference, London,
website: www.pira.com
17-18.
IADC World Drilling
Conference & Exhibi-
tion, Vienna, website:
http://www.iadc.org/
event/iadc-world-drill-
ing-2014-conference-
exhibition-2/ 18-19.
Africa Energy Forum,
Istanbul, website:
http://africa-energy-
forum.com/ 18-20.
IPAA Midyear Meeting,
Colorado Springs,
website: www.ipaa.
org/meetings-events/
upcoming-meetings/
18-20.
PIRA Scenario Plan-
ning Conference,
London, website: www.
pira.com 19-20.
PIRA Understanding
Global Oil Markets Con-
ference, London, www.
pira.com 19-20.
Myanmar Oil & Gas
Summit, Yangon,
website: http://www.
myanmaroilexhibition.
com/ 23-24.
Iran Oil & Gas Summit,
Abu Dubai, website:
www.iransummit.com
23-25.
Annual Energy Exposi-
tion & Symposium,
Billings, Mont., website:
http://energyexposition.
com/ 25-26.
API Tanker Conference,
Austin, website: http://
www.api.org/events-
and-training/calendar-
of-events/2014/tanker
25-26.
AAPL American’s
Landman Annual Meet-
ing, Montreal, Que.,
website: http://www.
landman.org/ 25-28.
JULY 2014
South Texas Oilfield Expo,
San Antonio, website:
http://www.southtexasoil-
fieldexpo.com/?gclid=CO
r78Mypi70CFY3m7Aode-
wEAvA 9-10.
E&P Information &
Data Management Asia
Pacific Conference,
Singapore, website:
www.smi-online.
co.uk/energy/asia/
conference/ep-
information-data-and-
knowledge-manage-
ment-asia-pacific 9-10.
SPE Well Construc-
tion Efficiency: NPT,
Reliability and Process
Improvement Forum,
Santa Fe, website:
http://www.spe.org/
events/14fus4/ 13-18.
North American Cus-
tody Transfer Measure-
ment Conference,
Denver, website: http://
www.ceesi.com/Train-
ing/CustodyTransfer-
MeasurementConfer-
ence.aspx 15-17.
SPE Low Carbon
Intensity Process
for Low-Mobility Oil
Recovery Forum, New-
port Beach, website:
http://www.spe.org/
events/14fus3/ July
27-Aug. 1.
AUGUST 2014
SPE Nigeria Annual In-
ternational Conference
& Exhibition, Lagos,
website: www.spe.org/
events/calendar 5-7.
EnerCom’s Oil & Gas
Conference, Denver,
website: http://www.en-
ercominc.com/the-oil-
and-gas-conference/
17-21.
GeoBaikal Exploration
and Field Development
in East Siberia, Irkutsk
website: http://www.
eage.org/events/index.
php?eventid=1131&Op
endivs=s3 18-22.
AFPM Cat Cracker
Seminar, Houston,
website: http://www.
afpm.org/conferences/
19-20.
IADC Asset Integrity &
Reliability Conference,
Houston, website:
http://www.iadc.org/
event/asset-integri-
ty-2014/ 20.
NAPE South Sum-
mer Expo, Houston,
website: http://www.
napeexpo.com/nape-
shows/nape-south
20-22.
Annual Frac Sand
Supply & Logistics
Conference, San An-
tonio, website: /www.
petroleumconnection.
com/sand/ 21-22.
Pipeline & Energy
Expo, Tulsa, website:
http://www.pipe-
lineenergyexpo.com/
home 25-27.
Unconventional Re-
sources Technology
Conference, Denver,
website: http://www.
urtec.org/ 25-27.
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140428ogj_13 13 4/24/14 11:35 AM
JOURNALLY SPEAKING
14 Oil & Gas Journal | Apr. 28, 2014
ROBERT BRELSFORDDownstream Technology Editor
The right wordAs both writers and copyreaders, Oil & Gas Jour-nal editors spend the bulk of their days charged with perfecting the art of word choice.
From using her or his own words to weave a news story from scratch to bringing order to tech-nical article submissions, the editor’s fundamental task becomes choosing language that preserves an accurate, precise history of the oil and gas busi-ness.
But consider for a moment the natural order of any language belonging to any particular group of people.
As a culture and the activities of its daily expe-rience change over time, so too will the language used to describe those things evolve and adapt. New words will emerge, old words will take on new meanings, and some words will vanish alto-gether.
The language of the petroleum industry is no exception, particularly during what many of its members are calling its renaissance.
For this downstream technology editor, it’s pre-cisely this renaissance that has led to the need for a closer examination (and perhaps clarification) of the word “refinery.”
To be preciseThe industry typically gives us its own language to describe and identify its plants and processes or the designs and styles of its installations and infrastruc-ture. Many of these words have become standard-ized, part of our greater international vocabulary, both industry-related and at-large.
But as North American light, tight crude oil (LTO) production continues to expand and prompt many US operators to seek ways to contend with a decades-old export ban to bring surplus crude to market, the term “mini-refinery” increasingly has started to crop up in general media reports as well as in company press releases.
But is this “mini-refinery” creature actually a refinery as the industry has come to understand that word?
As explained by the US Energy Information Administration, a refinery is “an installation that manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids, oth-
er hydrocarbons, and oxygenates.”That’s a mouthful to make just one very simple
point: a refinery makes finished products.The word “manufactures” also is a loaded term
when it comes to refining.A particular refinery can range from simple
to complex, and the types of “manufacturing” that take place span the spectrum from no-frills separation to the more intricate processes of cok-ing, cracking, isomerization, hydrotreating, and blending.
As it has been used to-date, the term “mini-refinery” actually describes the simplest of refin-eries, or rather, the first one or two steps of sepa-ration (distillation) and sometimes reforming that take place in all refineries.
Unless the installation contains additional units to further process crude oil into finished products, however, these “mini-refineries” are more appro-priately termed “topping plants” or “splitters.”
Splitting hairsTo clarify then, at OGJ, a refinery is a plant that, through a series of processes, destroys or breaks crude down into an array of desired, finished pe-troleum products.
This distinction may be technical, yes, with some perhaps tempted to call it finicky or fussy. And it very well may be all of those things.
But with more and more of these topping plants and splitters in the works to process rising North American LTO production into exportable materi-al likely to require further refining once it reaches a final destination, the distinction is, after all, a precise one.
The call of all OGJ editors, regardless of the words given them, is to find the language that best serves their readers.
OGJ is, after all, known as the industry’s pub-lication of record, with some—since its first itera-tion in 1902—having gone so far as to describe it as the industry’s conscience.
This is by design, mind you, a mission instilled and still sustained by a guiding principle in OGJ’s founding—its accurate and independent report-ing style.
140428ogj_14 14 4/24/14 11:35 AM
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EDITORIAL
16 Oil & Gas Journal | Apr. 28, 2014
New Keystone dawdlingNew dawdling over the Keystone XL pipeline bor-der crossing fails the US in so many ways that iden-tifying the worst way should be difficult. But it’s not.
The worst way the decision fails the country is not that it so thoroughly undermines recent en-hancement of energy security. The Keystone XL pipeline should represent the backbone of a lo-gistically optimized North America able to export more oil than it produces. Delaying a permit deci-sion under study nearly 6 years hampers yet again progress toward that goal. Degradation of security interests is bad, to be sure. It’s just not the worst part of the Obama administration’s mishandling of Keystone XL.
Industrial advantageBad, too, is the low regard the latest delay displays for a US industrial advantage. The country pos-sesses world-leading high-conversion refining ca-pacity in its Midwest and Gulf Coast states, capac-ity able to make most profitable and efficient use of low-quality bitumen from Canada. With its latest Keystone XL decision, the administration essen-tially scoffs, “Big deal.” Yet not even this refusal to let the country capitalize fully on its manufactur-ing infrastructure represents the worst offense.
Thoroughly woeful is the delay’s mistreatment of Canada, the closest ally the US has in every sense of the word. Bitumen and synthetic crude from the oil sands of Alberta are finding their ways to markets and will continue to do so. But the Key-stone XL pipeline promises to be the most efficient connection of the oil sands to proximate markets for heavy, low-quality crude. The need to use less-efficient, more-costly alternatives—and, perhaps ultimately, divert to more-distant centers of up-grading capacity—lowers the value of bitumen at the point of production. The delay is therefore costly to the Albertan and Canadian economies and governments. But, no, this financial sandbag-ging of a friend, embarrassing as should be to all Americans, isn’t the worst aspect of yet another delay in the Keystone decision.
Nor are the throw-away reasons the State De-partment gave in its announcement of the deci-
sion. A Nebraska court ruling about a routing de-cision? Please. The 2.5 million comments received by the State Department? Most of those represent cut-and-paste boilerplate from activist groups such as 350.org, the web site of which, after the decision, thanked “everyone who sent a message, shared, and organized to flood the State Depart-ment with comments.”
And downright laughable are claims that the decision isn’t political, such as the Jan. 21 howler by White House Press Sec. Jay Carney. Do Carney and his bosses think Americans don’t understand how important environmental pressure groups and their money are to Obama and congressional Democrats seeking reelection in November? May-be they hope no one noticed in February when hedge fund tycoon and climate-change crusader Tom Steyer of California pledged $100 million, half of it his own, to Democratic candidates shar-ing his environmental views.
None of that speaks well of US judgment. But the worst part of the latest dissembling on Key-stone XL is what it exposes about policy-making. Activists representing nowhere near a majority of Americans have captured the regulatory ap-paratus. They stoke fear with exaggeration and phantom problems, such as Keystone XL’s sup-posed threats to drinking water and the climate. They use organization to outmaneuver members of a more-diffuse majority not sharing their views. Then they block projects when they can, and when they can’t—as with Keystone XL so far—they de-lay. And delay. And delay. The effect in either case is the same.
Activism vs. governanceActivism isn’t all bad. Activism instigates change when change is needed. Where hydrocarbon en-ergy is concerned, though, activism has congealed into a reflex policy response opposed to any new increment of oil and gas supply, heedless of eco-nomic consequences and other national interests. Governance shouldn’t work this way.
Keystone XL is more than a pipeline fight. It’s a battle over executive power. And obstructionists, for whom delay means triumph and cost means little, are winning.
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18 Oil & Gas Journal | Apr. 28, 2014
GENERAL INTEREST
Nick Snow
Washington Editor
DOS gives federal agencies moretime for Keystone XL comments
Eight federal agencies preparing comments on the proposed Keystone XL crude oil pipeline project’s cross-border per-mit received additional time, the US Department of State an-nounced. It did not set a new deadline, but emphasized that the agency consultation process will not start over.
“Agencies need additional time based on the uncertainty created by the ongoing litigation in the Nebraska Supreme Court, which could ultimately affect the pipeline route in that state,” DOS said in its Apr. 18 announcement.
“In addition, during this time we will review and appro-priately consider the unprecedented number of new public comments, approximately 2.5 million, received during the public comment period that closed on Mar. 7,” it continued.
When it released the latest final supplemental environ-mental impact statement on Jan. 31, DOS announced that the US Departments of Defense, Justice, Interior, Commerce, Transportation, Energy, Homeland Security, and the Envi-ronmental Protection Agency would submit comments un-der an executive order on whether the crude oil pipeline from Alberta’s oil sands to Midcontinent and Gulf Coast re-fineries is in the nation’s best interest.
“The permit process will conclude once factors that have a significant impact on determining the national interest of the proposed project have been evaluated and appropriately reflected in the decision documents,” its statement said. “The department will give the agencies sufficient time to submit their views.”
‘Disappointed, frustrated’Russ Girling, chief executive of TransCanada Corp., the project’s sponsor, said the Calgary oil and gas transmission company was “disappointed and frustrated with yet another delay,” which he found inexplicable.
“The first leg of our Keystone pipeline began shipping oil to refineries outside of St. Louis in 2010,” he continued. “It is about the same length of pipe as Keystone XL, carries the same oil, and also crosses the 49th parallel. It took just 21 months to study and approve,” Girling said.
He added, “After more than 2,000 days, five exhaustive environmental reviews, and over 17,000 pages of scientific
data, Keystone XL continues to languish.”Top officials of two major US oil and gas industry associa-
tions also were displeased. “It’s a sad day for America’s workers when politics trumps job-creating policy at the White House,” said American Petroleum Institute Pres. Jack N. Gerard.
“After nearly 6 years of review, repeated research on the pipeline’s benefits to economic security and job growth, nu-merous studies confirming no significant environmental im-pacts, with the backing of organized labor, and poll after poll showing the support of American voters—if the White House lacks the political leadership to make a decision, we call on Congress to represent the will of the people and act,” he said.
‘Bad public policy’“This politically motivated decision comes as no surprise,” American Fuel & Petrochemical Manufacturers Pres. Charles T. Drevna separately said, adding, “Delaying a decision until after the November elections is bad public policy.”
Drevna continued, “President Obama could have decided today to allow the pipeline, which has already been exten-sively studied and found to have little to no impact on the environment, but would greatly enhance our national se-curity, create thousands of immediate jobs and grow local, state and federal tax revenue. Instead he chose to put politics ahead of America’s security, the economy, and consumers.”
Other business groups also criticized the delay. “Manu-facturers and workers are absolutely astounded by the lat-est delay,” National Association of Manufacturers Pres. Jay Timmons said, adding, “Enough is enough. Manufacturers are united in calling on the president to end this nonsense and ap-prove the Keystone XL pipeline immediately.”
The Laborers International Union of North America’s leader blasted the new delay. “It’s not the oil that’s dirty, it’s the politics,” LIUNA Gen. Pres. Terry O’Sullivan said. “Once again, the administration is making a political calculation instead of doing what is right for the country. This certainly is no example of profiles in courage.”
Congressional responsesCongressional energy leaders also weren’t reticent in their reactions. “Today’s decision by the administration amounts to nothing short of an indefinite delay,” US Senate Energy and Natural Resources Committee Chair Mary L. Landrieu
140428ogj_18 18 4/24/14 11:36 AM
Oil & Gas Journal | Apr. 28, 2014 19
(D-La.) said. “By making it clear that [it] will not move the process forward until there is a resolution in a lawsuit in Ne-braska, the administration is sending a signal that the small minority who oppose the pipeline can tie up the process in court forever.”
Separately, Lisa Murkowski (R-Alas.), the committee’s ranking minority member, said, “The administration’s choice to delay indefinitely a decision on extending the Keystone XL pipeline is nothing short of a stunning act of political cowardice. And the timing of this announcement—waiting until a Friday afternoon during the holy Passover holiday in the hope that most Americans would be too busy with their families to notice—only adds further insult.”
US House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said, “Once again, in this so-called ‘Year of Action,’ the Obama administration has hit the pause button on jobs and affordable energy. All Keystone XL re-quires is a simple ‘yes’ or ‘no,’ but after over 2,000 days, the administration is still incapable of making a decision, put-ting politics ahead of jobs—not exactly a profile in courage.”
But US Senate Environment and Public Works Commit-
tee Chair Barbara Boxer (D-Calif.) said DOS made the right choice. “I was pleased to learn today that [US Sec. of State John F. Kerry] has agreed to take into account the public health impacts of the tar sands oil when he considers wheth-er the pipeline is in the national interest,” she said, adding, “But I still do not have a clear-cut answer on whether there will be a separate health impacts study, which is clearly in the public interest.”
Environmental organizations were pleased. “It is already clear that the Keystone XL tar sands pipeline fails the cli-mate test and will damage our climate, our lands, and our waters,” said Susan Casey-Lefkowitz, who directs the Natu-ral Resources Defense Council’s International Program.
“Getting this decision right includes being able to evaluate the yet-to-be determined route through Nebraska and continu-ing to listen to the many voices that have raised concerns about Keystone XL,” she declared
“The newly extended comment period will show what we already know: the more Americans learn about this project, the more they see that the Keystone XL tar sands pipeline is not in the national interest,” she said.
Latest Keystone delay not political, White House spokesman saysNick Snow
Washington Editor
The decision to give eight federal agencies more time to
prepare comments about the proposed Keystone XL crude
oil pipeline project’s cross-border permit was not political,
White House Press Sec. Jay Carney said.
“My response to any questions or statements about this
is that it is a process run by the [US Department of State], as
has been the case in previous administrations of both par-
ties,” he said during the White House’s Apr. 21 daily press
briefing.
Carney’s remarks came 3 days after DOS announced
that the federal departments and agencies that US President
Barack Obama had asked to comment on the project’s lat-
est final environmental impact statement on Jan. 31 would
receive additional time. It did not set a new deadline, but
emphasized that the agency consultation process would not
start over (See story, p. 18).
“There was a decision by the Nebraska Supreme Court—
not here in Washington, but by the Nebraska Supreme
Court—that affects potentially the pipeline route,” Carney
continued. He said DOS, which is running the process to re-
view the final supplemental environmental impact statement
for the proposed crude oil pipeline project from Alberta’s oil
sands to US Midcontinent and Gulf Coast refineries, acted
on what it believes was the Nebraska court decision’s impact
on the process itself.
Lancaster County, Neb., District Judge Stephanie F.
Stacy ruled on Feb. 19 that legislation authorizing Gov.
Dave Heineman (R) to approve a route for Keystone XL was
unconstitutional under state law. Atty. Gen. Jon Bruning (R)
immediately appealed the decision to the state’s supreme
court in Lincoln, where it awaits judicial review (OGJ Online,
Feb. 20, 2014).
The project’s supporters in Congress strongly criticized
DOS’s action. “President Obama’s Keystone XL strategy is
clearly defeat through delay,” US Senate Energy and Natural
Resources Committee Member John Hoeven (R-ND) said on
Apr. 18.
“He claims adherence to process, but whenever he
runs out of process, he finds more process,” Hoeven said,
adding, “If he were clear and transparent with the American
people, he wouldn’t be issuing the announcement of yet
another delay on the afternoon on Good Friday hoping to
minimize the news coverage.”
Carney said Obama has been consistent in his want-
ing the process at DOS to run its course. “We have seen
attempts to inject politics into this—actions by Congress, for
example, that have actually served to delay the normal pro-
cess that [DOS] runs,” the White House press secretary said.
140428ogj_19 19 4/24/14 11:36 AM
20 Oil & Gas Journal | Apr. 28, 2014
WATCHING GOVERNMENT
NICK SNOWWashington Editor | Blog at www.ogj.com
Reporting offshore near-missesCreating a more effective offshore oil
and gas safety culture was on many
people’s minds as the fourth anniver-
sary of the Macondo deepwater well
disaster came and went on Apr. 20.
One growing question involves the
best ways to report near-misses.
“If we really want safety, we have
to do more,” Brian Salerno, who
directs the US Bureau of Safety and
Environmental Enforcement, said in
an Apr. 16 commentary. “We have
to foster a culture of safety among all
personnel involved in offshore opera-
tions so that it becomes part of the
way business is conducted.”
The Safety and Environmental
Management Systems that BSEE
requires are one key. “We recently
completed the first round of SEMS
audits and found that the audit in-
formation was limited,” Salerno said.
“This is because there were few in-
sights into how effectively an individu-
al company used its SEMS process to
identify and correct problems.”
SEMS II built some improvements
into the process, such as a require-
ment for outside auditors, but Salerno
said more needs to be done.
“For one thing, we need to ad-
dress the reluctance to be forthcom-
ing with information due to fears
about liabilities, or perhaps worries
that it might invite increased scru-
tiny by BSEE,” he said. “We will be
searching for options to increase the
amount of information that is shared
with the bureau and the rest of
industry.”
The main purposeEveryone agrees top management
must be committed to the idea.
Charlie Williams, who directs the
industry-funded Center for Offshore
Safety in Houston, suggested that
operating employees may be in the
best position to manage prevention
and mitigation barriers.
“The subset is preventing personal
injuries,” he told reporters Apr. 15 at
the American Petroleum Institute’s
Washington headquarters. “But the
main purpose is to recognize a condi-
tion which can lead to an incident
and relieve it. Near-misses that aren’t
actual incidents also are important.”
Fran Ulmer, who chairs the US
Arctic Research Commission, said at
two separate Washington conferenc-
es that reporting near-misses helps
not just in improving regulation, but
also in learning from mistakes.
“I’ve been told the industry
doesn’t like what the Interior Depart-
ment is proposing, but human beings
are reluctant to change,” she said
during the Bipartisan Policy Center’s
Apr. 21 discussion on offshore Arctic
oil and gas issues.
Williams said the center’s key
focus in 2014 is voluntary auditing of
contractors and service companies
that are not now required to have
SEMS. “It’s a journey with constant
unease that an incident can happen,”
he said, adding, “At least now, we
have a place for the offshore oil and
gas industry to get together and share
experiences and what they have
shown.”
Four years after Macondo, offshore Arctic beckons, speakers warn
Nick Snow
Washington Editor
Lessons learned from the Macondo deepwater well incident and crude oil spill are in danger of being minimized in a push to develop offshore Arctic oil and gas resources, speakers warned during two separate forums around the anniversary of the offshore well’s Apr. 20, 2010, blowout and explosion that took 11 lives and destroyed the Deepwater Horizon semisubmersible rig.
The global oil and gas industry, gov-ernment regulators, and local leaders will need to work closer than ever to avoid the same mistakes, speakers said at an Apr. 17 forum at Resources for the Future (RFF) and an Apr. 21 confer-ence sponsored by the Bipartisan Policy Council (BPC).
“You’re never finished. The goal has continued to move. It’s not static,” ob-served Christopher A. Smith, principal deputy US energy secretary for fossil en-ergy, who spoke at both events.
“But you can go down to Houston and visit the Deepwater Containment Co., which uses a technology that didn’t ex-ist before the Macondo accident,” Smith said on Apr. 21. “The US Department of the Interior also has done a good job of better defining its regulatory responsi-bilities and eliminating conflicts of in-terest. You have to be thoughtful about how you share information, but you also have to keep moving forward.”
Michael R. Bromwich, who oversaw the 2010-11 reorganization of the US Minerals Management Service after the Macondo incident, said during the BPC event: “We’re in a lull right now. Shell’s drilling off Alaska was a series of fias-coes about future activity there. It raised real questions about whether it will con-tinue.”
140428ogj_20 20 4/24/14 11:36 AM
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GENERAL INTEREST
22 Oil & Gas Journal | Apr. 28, 2014
Shell Offshore Co.’s Beaufort and Chukchi Sea leases raise many questions about both the industry’s capacity work safely and the government’s capacity to regulate Alaska offshore oil and gas ac-tivity effectively, said Fran Ulmer, who chairs the US Arctic Commission.
Primary mistakes“We need to prepare a region that’s both exceedingly valuable and exceed-ingly vulnerable for what lies ahead,” Ulmer suggested during panel discus-sions at both events. Ulmer also said that complacency and overconfidence
were the biggest mistakes industry and government made before the Ma-condo incident.
Bromwich agreed. “What struck me after I reported for work in 2010 was how undeveloped prevention, spill response, and containment were,” he said, adding, “The question for regulators is whether we’re ready, given the Arctic’s challenges. If a company apparently can’t deal with a spill there, it’s hard to imaging its being allowed to go forward.”
Bromwich added, “We’re in a much better place now, but we can’t simply rely on changes implemented in 2010-11 without continuing the discussion, re-view, and activity.”
Other speakers emphasized the im-portance of developing practices and regulations that effectively address the worst possible problems that could re-sult from oil and gas activity in the Arc-tic and other frontier regions. “It wasn’t technology, but people, which failed at Macondo,” said Richard A. Sears, a con-sulting professor at Stanford University’s School of Earth Sciences, at the BPC event. “Training needs to be better. Be-yond that, more needs to be invested in determining how to respond.”
Sears said, “The oil companies don’t know how to respond to a major acci-dent in the Arctic. Their managements aren’t asking whether they would be able to survive the consequences financially. Even with a company the size of BP, with the damages it’s going to have to pay af-ter Macondo, I don’t think the Gulf of Mexico will be profitable for it on a life-cycle basis.”
Smith called for greater recognition that there are potential consequences in the Arctic for indigenous peoples who have been there for centuries that go beyond dollars and cents. So did other speakers at RFF’s conference on Apr. 17.
‘Wanted to move on’Robert B. Gagosian, president of the Consortium for Ocean Leadership, said the group that has operated since 2007 is trying to get new ideas for dealing with an offshore oil spill to ad-dress whether new technologies need
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Oil & Gas Journal | Apr. 28, 2014 23
to be developed for use in more severe conditions.“I don’t see strong leadership right now,” Gagosian said.
“People and groups aren’t working together. My concern is that we’ll be in the same situation 10-20 years from now because so many people wanted to move on.”
Steve Cochran, director of the Environmental Defense Fund’s Mississippi River Delta Restoration Project, stated, “It’s important to remember that penalties matter. They serve to re-mind operators that mistakes can cost their companies money.”
Leonard Shabman, an RFF senior scholar who previously was a staff economist at the US Water Resources Council, add-ed, “So far, the whole discussion has been about fixing things that are broken, not preventing them from breaking in the first place. We need more data. Without it, people make [stuff] up, and very quickly start operating in a fact-free zone.”
William Y. Brown, the US Bureau of Ocean Energy Manage-ment’s chief environmental officer, said the US Department of the Interior agency is “quite involved” in studying Arctic re-sources. “We would like to see a standing committee within the National Academies of Science conduct research both domesti-cally and internationally,” he indicated.
Mark Fesmire, Alaska regional director for another DOI agency, the US Bureau of Safety and Environmental Enforce-ment, said it is a co-leader of the US delegation to the Arctic Council studying pollution sources and containment. “I think
BSEE has spent several million dollars this year to research Arc-tic spill response,” he said.
Not yet readyHowever, Beth Kerttula, a fellow at Stanford’s Center for Ocean Solutions who formerly served in Alaska’s House of Representatives, said the state is not ready for Arctic offshore oil and gas development. “Alaska now is in the unenviable position of being the only coastal state without a manage-ment program,” she told participants at RFF’s conference. “We lost it by only 1 vote in the legislature because the oil industry spent so much money lobbying against it. We need to develop spill prevention capabilities and response mecha-nisms. We also need a decent port.”
Alaska’s offshore oil and gas potential looked more attractive in 2008 than it does now since major potential resources have been identified on continental shelves on both sides of the At-lantic Ocean, according to David W. Houseknecht, a research geologist at the US Geological Survey in Reston, Va. “Ice con-ditions and the relatively small understanding of oil and gas development impacts on forms of life there still need to be ad-dressed,” he said at BPC’s event.
“We tend to look at high-consequence risks and probability more now,” said Oliver Moghissi, vice-president of technology at DNV GL North America Oil & Gas, who also participated in
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24 Oil & Gas Journal | Apr. 28, 2014
that conference. “We need to add operator responsibility, regu-latory oversight, and better management. Damages from an in-cident in the offshore Arctic may not be as great as in the [Gulf of Mexico], but the event is much more likely.”
Operators need to have technical competence and experi-ence, the right suppliers and contractors, and good third-party oversight to ensure that risks are controlled and problems are anticipated and managed, Moghissi maintained.
“Our understanding of the subsurface environment and the technology necessary to develop resources is farther advanced than our knowledge of impacts,” Houseknecht said. “It’s becom-ing more apparent that the Arctic environment is increasingly
international forces, including climate change. We’re learning more each year, and increasingly realize how little we actually understand.”
Bromwich said Interior started to promote development of global standards and practices following the Macondo incident, but soon discovered that other countries sometimes resist sug-gestions that they change their regulatory regimes. The chal-lenge is to help them develop acceptable regulatory structures and get the necessary training for their enforcement officers, he explained, adding, “The problem is that their appetites for re-source development often exceed their desires to promote safety and environmental protection.”
BP to sell to Hilcorp certain interests in four ANS assetsBP PLC reported that it will sell certain interests in four of its operated oil fields on Alaska’s North Slope to Houston independent Hilcorp.
The agreement includes all of BP’s interests in the Endi-cott and Northstar oil fields and a 50% interest in each of
the Liberty and the Milne Point fields. The sale also includes BP’s interests in the oil and gas pipelines associated with these fields, the company said.
Together the assets included in the sale represent about 19,700 boe/d of net production for BP, less than 15% of BP’s total net production on the ANS.
As a result of the sale and subject to approval, Hilcorp is expected to become the operator of Endicott, Northstar, and Milne Point oil fields and their associated pipelines and infrastructure.
The company said the agreement does not affect BP’s po-sition as operator and co-owner of Prudhoe Bay oil field nor its other interests in Alaska. BP also expects to submit a de-velopment plan for Liberty by yearend.
“This agreement will help build a more competitive and sustainable business for BP in Alaska,” said BP Upstream Chief Executive Officer Lamar McKay. He said the deal also will allow the company to play to two of its “great strengths,” namely managing giant fields and gas value chains.
“We will now concentrate on continuing development and production from the giant Prudhoe Bay field and work-ing to advance the future opportunity of Alaska LNG,” McK-ay added.
BP said it “remains committed” to plans for increased in-vestment at Prudhoe Bay, which have resulted from recent oil tax reform by the State of Alaska. The plans include add-ing two drilling rigs, one in 2015 and a second in 2016, for a total incremental $1 billion investment over 5 years.
These activities are expected to account for 200 Alaska jobs and 30-40 additional wells being drilled each year.
About 250 employees are associated with the assets in-cluded in the agreement and the company is committed to providing clarity about their future as soon as possible. The majority of those BP employees at or supporting Milne Point, Endicott, and Northstar are expected to be offered positions with Hilcorp with no break in employment, the company said.
Endicott was the first continuously producing offshore field in the Arctic and lies about 3 miles offshore on Alaska’s
North Slope. Photo from BP PLC.
140428ogj_24 24 4/24/14 11:36 AM
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Oil & Gas Journal | Apr. 28, 2014 25
GENERAL INTEREST
The sale, which will be subject to state and federal regula-tory approval, is anticipated to be complete by yearend.
Financial details of the transaction were not disclosed.
The assets
Milne Point field, about 25 miles west of Prudhoe Bay, was discovered in 1969 and began production in 1985. BP be-came the field’s operator in 1994. In 2013, average net BP production from the field was about 15,800 boe/d. BP cur-rently holds 100% interest in the field, and will hold 50% interest after the deal.
Northstar, which lies about 6 miles northwest of Prud-hoe Bay in about 39 ft of water, started production in 2001. The unit sits in state and federal waters. Average net BP pro-duction in 2013 from Northstar was about 6,800 boe/d. BP currently holds 98.6% interest in the field; Murphy Oil Co. holds 1.4%. BP will hold no interest in Northstar after the deal.
Liberty field lies on federal leases about 6 miles offshore in the Beaufort Sea and east of Prudhoe Bay oil field. BP drilled the Liberty discovery well in 1997. BP currently holds 100% interest in the field, and will hold 50% interest after the deal.
Endicott, which lies about 3 miles offshore, started pro-duction in 1987 and was the first continuously producing offshore field in the Arctic. Average net BP production from Endicott in 2013 was about 5,000 boe/d. BP currently holds
Northstar, which lies about 6 miles northwest of Prudhoe
Bay in about 39 ft of water, started production in 2001.
Photo from BP PLC.
Milne Point is about 25 miles west
of Prudhoe Bay and averages
production—net to BP PLC—of
15,800 boe/d. Photo from BP.
140428ogj_25 25 4/24/14 11:36 AM
GENERAL INTEREST
26 Oil & Gas Journal | Apr. 28, 2014
68% interest in the field, and will hold no interest in the field after the deal. Other interest holders are ExxonMobil Corp. 21% and Chevron Corp. 11%.
Governor comments
Shortly after the Apr. 22 announcement of the deal, Alaska Gov. Sean Parnell released a statement that said, in part: “To-day’s announcement means another entrepreneurial com-pany will be working to accelerate production and find ad-ditional reserves on the North Slope. Hilcorp has a proven record of improving production in Cook Inlet, and their new North Slope commitment shows the More Alaska Produc-tion Act has created the right environment to attract new companies and competition to the North Slope.”
The announcement was made just days after the Alaskan Legislature passed Senate Bill 138, which authorized Alas-ka’s participation in the $45-65 billion Alaska LNG project, which would commercialize Alaska’s vast, untapped re-serves of ANS gas (OGJ Online, Apr. 21, 2014).
“I applaud the thorough and bipartisan deliberations the Legislature had on Senate Bill 138 and believe the process is already bearing fruit,” Parnell said, adding, “Today’s an-nouncement is important, because it builds on BP’s previous commitments of billions of dollars in new oil investments at Prudhoe and Alaska’s legacy fields, and reflects a focus on advancing the Alaska LNG project, and unlocking gas from Prudhoe and Pt. Thomson.”
US gas reserve growth in 2013 was robust, AGA estimatesNick Snow
Washington Editor
US natural gas producers added more than 35 tcf of reserves in 2013, the American Gas Association said in its latest an-nual preliminary estimate based on reported results by the 30 largest companies representing more than half of the to-tal US production and reserves.
“In addition, negative revisions to existing reserves were modest,” AGA said, adding that with US production of about 24 tcf, the reserves inventory increased compared with that estimated for 2012 by the Energy Information Administra-tion.
AGA said it expects total US reserves at yearend 2013 may have been 330 tcf, or higher, which is slightly below the 334 tcf identified by EIA at yearend 2011—the most recent date on which complete figures are available.
“In essence, the companies added much more gas than they produced in 2013,” said Chris McGill, AGA’s vice-pres-ident for policy analysis. “Most of the reserve additions we see today are associated with unconventional resources, in-cluding the Marcellus and Eagle Ford shales.”
Improved prices over 2012’s $2.75/MMbtu range may be making dry gas plays more attractive, he told reporters during an Apr. 17 teleconference.
“At $100/bbl oil and $4.50/Mcf gas, oil on an MMbtu basis is priced higher,” McGill said. “On the other hand, we’re not talk-ing about wellhead gas prices in the $2.75 range as we were in 2012. When you begin to talk about $4 sustained prices, more of the gas resource base is economically attractive.”
Mature unconventional gas plays continue to produce, he continued. “The Barnett shale produced 1 tcf in 2013 because lifting costs are very low,” McGill said. “The Haynesville shale is a different story because it’s dry gas that’s relatively deep. It’s more sensitive to market pricing. It’s also in a region where there’s growing liquids-associated gas supply from the Eagle Ford shale.”
He said, “That region of the country is looking for markets, and producers are interested in LNG exports, because of the Haynesville shale. It’s not just the price; it’s the demand rela-tionship.”
AGA listed ExxonMobil Corp. as the largest US gas reserves holder, with more than 26 tcf, followed by Chesapeake Energy Corp., BP PLC, ConocoPhillips Co., and Anadarko Petroleum Corp. “In fact, ExxonMobil’s current reserves position is more than twice the second largest reserves holder,” it said.
Seven of the 10 largest US gas reserves holders are indepen-dent producers, while the remaining three are integrated multi-nationals, AGA added.
GAO: Scant information exists about NEPA analyses’ costs, benefitsNick Snow
Washington Editor
Little information exists about the costs and benefits of anal-yses required under the National Environmental Policy Act, the Government Accountability Office said. Federal agen-cies do not routinely track the costs, and there is no govern-ment-wide mechanism to do so, GAO investigators said they learned from officials at the US Environmental Protection Agency, White House Council on Environmental Quality, and other agencies.
“Information on the benefits of completing NEPA analyses is largely qualitative,” the Apr. 15 report continued. “According
140428ogj_26 26 4/24/14 11:36 AM
Oil & Gas Journal | Apr. 28, 2014 27
GENERAL INTEREST
process has been found to be costly, largely hidden from the public, and duplicative of other environmental legislation,” said Daniel T. Naatz, Independent Petroleum Association of America’s vice-president of federal resources and political af-fairs.
“This report echoes the problems America’s independent producers have encountered when dealing with a variety of agencies regarding environmental assessments, environmental impact statements, and categorical exclusions,” Naatz said, add-ing, “Independent producers continue to struggle to operate on federal lands and NEPA continues to be an opaque barrier for entry.”
NEPA analysis was originally designed to enable transpar-ent disclosure of environmental and economic impacts from federal projects so that impacts could be mitigated and better decisions made, according to the Denver-based Western Energy Alliance. The 1970 law was not designed to be a means for un-accountable environmental groups to raise money while stop-ping social progress, it added.
“GAO confirmed what western producers have been strug-gling with for years: long, drawn-out NEPA analysis that pre-vents economic growth and job creation,” said Kathleen Sgam-ma, WEA vice-president of government and public affairs. “NEPA delays to proposed western oil and gas projects on pub-lic lands are holding up nearly 79,000 jobs and $17.8 billion in annual economic activity.”
to studies and agency officials, some of the qualitative benefits of NEPA include its role in encouraging public participation and in discovering and addressing project design problems that could be more costly in the long run.”
The fact that federal agencies’ activities under NEPA are hard to separate from other required environmental analyses under federal laws such as the Endangered Species Act and the Clean Water Act; executive orders; agency guidance; and state and lo-cal laws further complicates analysis of NEPA’s costs and ben-efits, GAO said.
“This report substantiates concerns that the federal gov-ernment has no system to track time or costs associated with NEPA, which is one of the most expansive regulatory laws in the country,” US Rep. Rob Bishop (R-Utah), who chairs the House Natural Resources Committee’s Public Lands and Envi-ronmental Subcommittee.
NEPA is important for many reasons, but delays and prob-lems associated with its processes are significant, he main-tained. “I am also very troubled by the constant use of NEPA as a litigious weapon to halt or delay projects that wealthy special interest groups don’t like,” said Bishop, who requested the in-vestigation.
‘Costly, hidden, duplicative’Officials of two associations representing US oil and gas pro-ducers also responded to the report’s findings. “The NEPA
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28 Oil & Gas Journal | Apr. 28, 2014
A moralist’s energy transition: from security to climateby Bob Tippee, Editor
From a master of high-minded muddle-headedness on energy comes, well, more high-minded muddle-headedness on energy.
Former President Jimmy Carter famously elevated energy policy to “the moral equivalent of war” in a 1977 speech in which he warned, “The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.”
Motivated by concern about security after the Arab oil embargo of 1973-74, his rhetoric shivered with the apocalyptic urgency now typical of climate-change activism.
That, the former president apparently can’t resist. With nine other recipients of the Nobel Peace Prize, Carter signed a let-ter, published in a Politico advertisement Apr. 16, trying to shame President Barack Obama and Sec. of State John Kerry into rejecting the Keystone XL pipeline border crossing.
“Your decision on the Keystone XL tar sands pipeline will define your climate legacy,” declared the letter, sponsored by the Nobel Women’s Initiative, National Resources Defense Council, Environmental Defence, and Sierra Club.
The signatories claimed to have “a moral obligation” to speak out. They cited “hundreds of millions of people whose lives and livelihoods are being threatened and lost as a result of the changing climate and environmental damage caused by our dangerous addiction to oil.”
Their hyperbole is grotesque, their judgments cruelly selective. What about 1.3 billion impoverished people now lack-ing access to electricity, whose prospects would darken further under the energy-cost increases promised by climate activism?
Under Carter, energy policy largely failed. The former president inherited a mess of price and market controls and made things worse.
“We are now running out of gas and oil,” he asserted in his 1977 speech, call-ing for “a transition in the way people use energy.”
So he committed the country to “strict conservation” and costly promotion of energy forms other than oil, including coal.
The transition that survived was between objects of contrived panic: from security to climate.
Otherwise, oil and gas haven’t run out, alternatives remain too expensive, and the moralizing is no less tiresome.
ONLINE APR. 17, 2014 | [email protected]
The number of Texans on oil and gas industry payrolls averaged a record 285,000, according to statistical meth-ods based upon TWC estimates, about 4.9% more than in February 2013. Re-cord-setting estimated oil and gas indus-try employment in February replaced the record estimate of 282,700, set in August 2013.
“In 2012, workforce commissioners revised total upstream payroll employ-ment upward by about 3,200 jobs to more than 270,000 jobs, which reflected a growth rate of 10.2% at yearend com-pared to yearend 2011,” Ingham said, adding, “In 2013, another 10,000 jobs were added to upstream oil and gas com-pany payrolls, and that job growth has escalated during early part of this year.”
He said, “At yearend 2013, the year-over-year rate of industry employment growth was about 3.7%. In February, the year-over-year rate of industry em-ployment growth was nearly 5%, with about 13,400 jobs added over the last 12 months. Since the industry downturn in 2009, about 103,000 jobs have been added to upstream oil and gas company payrolls.”
The most recent low ebb in industry employment, 179,200, occurred in Oc-tober 2009. During the previous growth cycle, industry employment peaked at 223,200 in November 2008.
Texas Petro Index reaches record-high for February
The Texas Petro Index (TPI), a com-posite index based on a comprehen-sive group of upstream economic indi-cators released by the Texas Alliance of Energy Producers (TAEP), reached yet another record high, tallying a score of 300.6 in February as a result of rapidly increasing production, higher well-head prices, and revised statewide em-ployment numbers (OGJ Online, Oct. 2, 2013).
Producers in Texas increased oil out-put by more than 22% in February com-pared with February 2013, noted Karr Ingham, economist and creator of the index. Ingham added that natural gas production was up about 1%.
“Combined with higher wellhead prices for both commodities, the value of oil and gas produced in Texas during February increased by more than $2.85 billion in the past year to about $10.63 billion,” Ingham said.
Texas producers recovered about 2.75 million b/d of crude oil in Febru-ary—the most since 1980. Crude oil production in Texas totaled an estimated 77.2 million bbl, about 14.1 million bbl more than in February 2013. The value of Texas-produced crude oil reached a total of $7.48 billion, a 29.2% jump vs. February 2013.
The estimated Texas natural gas output was more than 625.2 bcf. With gas prices in February averaging 5.04/Mcf—an increase of about 55.6% com-pared with the average wellhead price of $3.24/Mcf in February 2013—the value of Texas-produced gas increased 57.3% to about $3.15 billion.
Ever-expanding workforceIngham said revised statewide employ-ment estimates by the Texas Workforce Commission indicated the oil and gas industry continues to hire new workers at an impressive pace, faster than even the robust growth in prior years.
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STATISTICS
30 Oil & Gas Journal | Apr. 28, 2014
Additional analysis of market trends is available through OGJ Online, Oil & Gas Journal’s electronic information source, at http://www.ogj.com.
OGJ CRACK SPREAD 4–18–14* 4–19–13* Change Change, ———–—$/bbl ——–—— %
SPOT PRICES Product value 124.02 111.76 12.26 11.0 Brent crude 109.09 98.23 10.86 11.1 Crack spread 14.93 13.53 1.40 10.4
FUTURES MARKET PRICESOne month Product value 127.04 116.36 10.68 9.2 Light sweet crude 103.97 87.97 16.00 18.2 Crack spread 23.08 28.39 (5.31) (18.7)Six month Product value 118.50 110.55 7.95 7.2 Light sweet crude 99.16 88.26 10.90 12.3 Crack spread 19.34 22.28 (2.94) (13.2)
*Average for week ending. Source: Oil & Gas JournalData available at PennEnergy Research Center.
IHS PURVIN & GERTZ LNG NETBACK MATRIX—APR. 18, 2014 –––––––––––––––––––––––––––– Liquefaction plant ––––––––––––––––––––––––––––––––Receiving Algeria Malaysia Nigeria Austr. NW Shelf Qatar Trinidadterminal –––––––––––––––––––––––––––––––– $/MMbtu ––––––––––––––––––––––––––––––––––––
Barcelona 11.80 9.18 10.69 9.16 9.96 10.59 Everett 2.90 1.76 2.45 1.93 1.18 3.24 Isle of Grain 7.28 4.69 6.46 4.58 5.41 6.50 Lake Charles 2.01 (0.20) 1.72 0.03 0.32 2.75 Sodegaura 10.98 13.81 11.09 13.41 12.40 9.97 Zeebrugge 10.03 7.41 9.17 7.28 8.17 9.25
Defnitions, see OGJ Apr. 9, 2007, p. 57.Source: IHS Purvin & GertzData available at PennEnergy Research Center.
CRUDE AND PRODUCT STOCKS —–– Motor gasoline —–– Blending Jet fuel, ————— Fuel oils ————— Propane- Crude oil Total comp. kerosine Distillate Residual propyleneDistrict ———————————————————————————— 1,000 bbl —————————————————————————
PADD 1 ..................................... 11,804 54,158 47,505 9,540 32,204 8,787 2,141PADD 2 ..................................... 97,355 48,317 38,683 6,490 27,180 1,852 8,852PADD 3 ..................................... 207,173 73,781 62,573 12,390 35,445 22,068 16,287PADD 4 ..................................... 22,025 6,373 3,954 656 3,780 175 11,077PADD 5 ..................................... 55,778 27,653 25,223 9,121 13,307 4,655 —
Apr. 11, 2014 ........................... 394,135 210,282 177,938 38,197 111,916 37,537 28,357Apr. 4, 2014 .............................. 384,122 210,437 177,077 36,642 113,194 37,036 27,585Apr. 12, 20132 ........................... 387,641 221,730 171,161 40,976 115,181 37,788 39,026
1Includes PADD 5. 2Revised. Source: US Energy Information AdministrationData available at PennEnergy Research Center.
REFINERY REPORT—APR. 11, 2014
REFINERY –––––––––––––––––––––––––––– REFINERY OUTPUT ––––––––––––––––––––––––––– –––––– OPERATIONS –––––– Total Gross Crude oil motor Jet fuel, ––––––– Fuel oils –––––––– Propane- inputs inputs gasoline kerosine Distillate Residual propyleneDistrict ––––––– 1,000 b/d –––––––– –––––––––––––––––––––––––––––––– 1,000 b/d –––––––––––––––––––––––––––––––
PADD 1 .............................................. 1,027 1,018 2,859 82 262 66 157PADD 2 .............................................. 3,482 3,474 2,621 225 983 59 267PADD 3 .............................................. 8,227 8,138 2,133 766 2,832 195 796PADD 4 .............................................. 525 524 381 24 175 16 1158PADD 5 .............................................. 2,669 2,459 1,643 381 628 120 —
Apr. 11, 2014 ...................................... 15,930 15,613 9,637 1,478 4,880 456 1,378Apr. 4, 2014 ........................................ 15,694 15,338 9,840 1,523 4,798 511 1,406Apr. 12, 20132 ..................................... 15,372 15,074 8,890 1,484 4,476 426 1,334
17,933 Operable capacity 88.8 utilization rate
1Includes PADD 5. 2Revised.Source: US Energy Information AdministrationData available at PennEnergy Research Center.
IMPORTS OF CRUDE AND PRODUCTS
— Districts 1-4 — — District 5 — ———— Total US ———— 4-11 4-4 4-11 4-4 4-11 4-4 4-12* 2014 2014 2014 2014 2014 2014 2013 ––––––––––––––––––––––––— 1,000 b/d ––––––––––––––––––––––––—
Total motor gasoline ............. 523 478 9 23 532 501 606 Mo. gas. blending comp. ..... 462 442 9 20 471 462 526 Distillate ............................... 258 314 0 4 258 318 337 Residual .............................. 129 110 25 8 154 118 298 Jet fuel-kerosine .................. 218 129 0 0 218 129 83 Propane-propylene .............. 54 65 18 (7) 72 58 99 Other ................................... 282 178 33 43 315 221 319
Total products ...................... 1,926 1,716 94 91 2,020 1,807 2,268
Total crude ........................... 6,709 6,300 1,562 1,012 8,271 7,312 7,430
Total imports ........................ 8,635 8,016 1,656 1,103 10,291 9,119 9,698
*Revised. Source: US Energy Information AdministrationData available at PennEnergy Research Center.
140428ogj_30 30 4/24/14 11:36 AM
STATISTICS
Oil & Gas Journal | Apr. 28, 2014 31
Motor gasoline (Conventional-regular) New York Harbor ......... 293.40 Gulf Coast .................. 282.40
Motor gasoline (RBOB-regular) New York Harbor ......... 330.40
No. 2 heating oil New York Harbor ......... 286.80
No. 2 DistillateLow sulfur diesel fuel New York Harbor ......... 293.50 Gulf Coast .................. 290.20 Los Angeles ................ 295.50
Kerosine jet fuel Gulf Coast .................. 286.00
Propane Mont Belvieu .............. 111.50
OGJ GASOLINE PRICES Price Pump Pump ex tax price* price 4-16-14 4-16-14 4-17-13 ————— ¢/gal —————
(Approx. prices for self-service unleaded gasoline)Atlanta .......................... 303.3 350.1 359.8Baltimore ...................... 309.6 355.0 349.8Boston ........................... 310.9 355.8 340.0Buffalo .......................... 289.2 357.1 369.4Miami ............................ 317.6 372.1 360.0Newark .......................... 313.1 346.0 320.0New York........................ 295.2 363.1 379.6Norfolk........................... 319.6 355.3 335.0Philadelphia .................. 303.9 364.1 374.6Pittsburgh ..................... 300.8 361.0 354.0Wash., DC ...................... 320.9 362.8 356.0 PAD I avg .................. 307.6 358.4 354.4
Chicago ......................... 350.0 407.5 408.9Cleveland ...................... 315.1 361.5 338.0Des Moines .................... 317.1 357.5 348.0Detroit ........................... 308.0 365.5 362.8Indianapolis .................. 315.4 372.5 357.6Kansas City ................... 321.8 357.5 323.5Louisville ....................... 323.4 372.6 354.9Memphis ....................... 337.5 377.3 341.8Milwaukee ..................... 320.4 371.7 357.8Minn.-St. Paul ............... 320.6 367.6 358.9Oklahoma City ............... 305.3 340.7 323.8Omaha .......................... 307.0 352.7 325.5St. Louis ........................ 312.0 347.7 325.8Tulsa ............................. 303.6 339.0 324.6Wichita .......................... 319.3 362.7 345.1 PAD II avg ................. 318.4 363.6 346.5
Albuquerque .................. 315.3 352.6 331.4Birmingham .................. 303.9 343.3 340.6Dallas-Fort Worth .......... 303.4 341.8 344.3Houston ......................... 304.6 343.0 335.5Little Rock ..................... 300.8 341.0 342.5New Orleans .................. 307.1 345.5 340.5San Antonio ................... 308.3 346.7 338.7 PAD III avg ................ 306.2 344.8 339.1
Cheyenne....................... 293.5 335.9 340.7Denver ........................... 318.4 358.8 360.7Salt Lake City ................ 300.0 342.9 350.6 PAD IV avg ................ 303.9 345.8 350.7
Los Angeles ................... 345.9 416.8 416.9Phoenix.......................... 346.7 384.1 356.8Portland ........................ 338.7 388.2 358.8San Diego ...................... 324.2 395.1 416.8San Francisco................ 347.4 418.3 418.3Seattle........................... 329.1 385.0 373.3 PAD V avg ................. 338.7 397.9 390.2
Week’s avg. .................. 315.4 362.7 353.8Mar. avg. ....................... 302.1 349.4 370.7Feb. avg. ....................... 286.1 333.4 361.52014 to date ................. 293.5 340.7 —2013 to date ................. 306.6 352.7 —
*Includes state and federal motor fuel taxes and state sales tax. Local governments may impose additional taxes.Source: Oil & Gas Journal.Data available at PennEnergy Research Center.
BAKER HUGHES RIG COUNT 4-18-14 4-19-13
Alabama............................................ 5 4Alaska ............................................... 9 8Arkansas ........................................... 12 15California .......................................... 40 41 Land................................................ 39 39 Offshore .......................................... 1 2Colorado ............................................ 62 61Florida ............................................... 1 1Illinois ............................................... 3 2Indiana.............................................. 0 3Kansas .............................................. 28 24Kentucky............................................ 3 2Louisiana .......................................... 110 108 N. Land ........................................... 25 22 S. Inland waters .............................. 14 25 S. Land............................................ 23 16 Offshore .......................................... 48 45Maryland ........................................... 0 0Michigan ........................................... 0 1Mississippi ........................................ 14 13Montana ............................................ 7 10Nebraska ........................................... 2 2New Mexico........................................ 89 78New York............................................ 0 1North Dakota ..................................... 178 176Ohio................................................... 36 30Oklahoma .......................................... 187 180Pennsylvania ..................................... 59 60South Dakota..................................... 0 1Texas ................................................. 884 837 Offshore .......................................... 2 2 Inland waters .................................. 0 0 Dist. 1 ............................................. 124 134 Dist. 2 ............................................. 81 86 Dist. 3 ............................................. 54 38 Dist. 4 ............................................. 36 36 Dist. 5 ............................................. 8 14 Dist. 6 ............................................. 34 26 Dist. 7B ........................................... 9 18 Dist. 7C ........................................... 93 82 Dist. 8 ............................................. 320 275 Dist. 8A ........................................... 38 36 Dist. 9 ............................................. 16 26 Dist. 10 ........................................... 69 64Utah .................................................. 27 31West Virginia ..................................... 23 24Wyoming............................................ 49 40Others—ID-1; NV-2 .......................... 3 5
Total US ........................................ 1,831 1,758 Total Canada ................................ 199 126
Grand total ................................... 2,030 1,884US oil rigs.......................................... 1,510 1,371US gas rigs........................................ 316 379Total US offshore ............................... 52 49Total US cum. avg. YTD ..................... 1,788 1,757
Rotary rigs from spudding in to total depth.Defnitions, see OGJ Sept. 18, 2006, p. 46.
Source: Baker Hughes Inc. Data available at PennEnergy Research Center.
US NATURAL GAS STORAGE1 4-11-14 4-4-13 4-11-13 Change, –——––—— bcf —––——– %
Producing region ................ 371 361 701 (47.1)Consuming region east ...... 311 305 662 (53.0)Consuming region west ...... 168 160 336 (50.0)
Total US ............................. 850 826 1,699 (50.0) Change, Jan. -14 Jan. -13 %
Total US2 ............................ 1,926 2,702 (28.7)
1Working gas. 2At end of period.Source: Energy Information Administration Data available at PennEnergy Research Center.
REFINED PRODUCT PRICES 4-11-14 4-11-14 ¢/gal ¢/gal Spot market product prices
Source: EIA Weekly Petroleum Status Report.Data available at PennEnergy Research Center.
US CRUDE PRICES4-18-14
$/bbl*
Alaska-North Slope 27° ......................................... 97.76 Light Louisiana Sweet ........................................... 99.67 California-Midway Sunset 13° .............................. 102.05 California Buena Vista Hills 26° ........................... 108.96 Wyoming Sweet ..................................................... 95.80 East Texas Sweet ................................................... 99.00 West Texas Sour 34° .............................................. 95.75 West Texas Intermediate ........................................ 100.75 Oklahoma Sweet.................................................... 100.75 Texas Upper Gulf Coast ......................................... 94.50 Michigan Sour ....................................................... 92.75 Kansas Common ................................................... 99.75 North Dakota Sweet ............................................... 90.94
*Current major refner’s posted prices except N. Slope lags 2 months. 40° gravity crude unless differing gravity is shown. Source: Oil & Gas Journal. Data available at PennEnergy Research Center.
OGJ PRODUCTION REPORT 14-18-14 24-19-13
–—— 1,000 b/d —–—
(Crude oil and lease condensate)Alabama ................................. 28 28 Alaska .................................... 557 526 California ............................... 600 594 Colorado ................................. 188 164 Florida .................................... 6 5 Illinois .................................... 25 27 Kansas ................................... 132 133 Louisiana ............................... 1,215 1,245 Michigan ................................ 22 21 Mississippi ............................. 66 67 Montana ................................. 78 81 New Mexico ............................. 292 262 North Dakota .......................... 995 791 Oklahoma ............................... 345 309 Texas ...................................... 3,370 2,707 Utah ....................................... 106 91 Wyoming ................................. 182 171 All others ................................ 79 81
Total .................................. 8,286 7,3031OGJ estimate. 2Revised. Source: Oil & Gas Journal.Data available at PennEnergy Research Center.
WORLD CRUDE PRICES $/bbl OPEC reference basket Wkly. avg. 4-18-14 105.40 –– Mo. avg., $/bbl –– Feb.-14 Mar.-14
OPEC reference basket....................... 105.38 104.15Arab light-Saudi Arabia ....................... 106.30 104.80Basrah light-Iraq ................................. 103.38 102.10Bonny light 37o-Nigeria ........................ 110.77 109.50Es Sider-Libya ...................................... 108.47 107.15Girassol-Angola.................................... 109.54 108.67Iran heavy-Iran..................................... 104.96 104.01Kuwait export-Kuwait ........................... 104.17 103.05Marine-Qatar........................................ 104.91 104.07Merey-Venezuela .................................. 94.00 93.23Murban-UAE ......................................... 108.69 107.60Oriente-Ecuador ................................... 97.44 94.96Saharan blend 44o-Algeria ................... 110.52 108.95Other crudesMinas 34o-Indonesia ............................ 108.46 113.60Fateh 32o-Dubai ................................... 105.04 104.32Isthmus 33o-Mexico ............................. 100.47 98.87Tia Juana light 31o-Venezuela .............. 108.87 107.55Brent 38o-UK ........................................ 107.43 106.66Urals-Russia ........................................ 102.52 102.74DifferentialsWTI/Brent ............................................. (8.09) (7.02)Brent/Dubai.......................................... 3.83 3.23
Source: OPEC Monthly Oil Market Report.Data available at PennEnergy Research Center.
IHS PETRODATA RIG COUNT APR. 18, 2014
Total supply of rigs
Marketed supply of rigs
Marketed contracted
Marketed utilization rate (%)
US Gulf of Mexico. . . . . . 112 86 80 93.0South America 83 81 80 98.8Northwest
Europe. . . . . 93 92 92 100.0West Africa. . . . . . 80 76 69 90.8Middle East. . . . . . . 146 142 131 92.3Southeast Asia. . . . . . . 101 93 81 87.1Worldwide. . . . 838 784 741 94.5
Source: IHS PetrodataData available in PennEnergy Research Center
140428ogj_31 31 4/24/14 11:36 AM
STATISTICS
32 Oil & Gas Journal | Apr. 28, 2014
WORLD OIL BALANCE ––––––— 2013 ——–––– –––—––— 2012––——–– 3rd 2nd 1st 4th 3rd 2nd qtr. qtr. qtr. qtr. qtr. qtr. ————————– Million b/d ————————–
DEMAND OECD US & Territories ...................... 19.25 18.79 18.76 18.66 18.81 18.76 Canada .................................. 2.30 2.31 2.28 2.37 2.34 2.23 Mexico.................................... 2.09 2.14 2.11 2.24 2.11 2.13 Japan .................................... 4.32 4.11 5.08 4.86 4.48 4.29 South Korea ........................... 2.26 2.28 2.31 2.37 2.26 2.23 France.................................... 1.76 1.75 1.75 1.71 1.73 1.71 Italy ...................................... 1.34 1.28 1.28 1.33 1.38 1.36 United Kingdom ..................... 1.52 1.54 1.50 1.47 1.49 1.53 Germany ................................ 2.44 2.51 2.30 2.44 2.41 2.39 Other OECD Europe ............................... 6.90 6.69 6.34 6.69 6.78 6.77 Australia & New Zealand ............................. 1.28 1.28 1.28 1.31 1.27 1.27 Total OECD ........................ 46.07 45.33 45.63 46.10 45.74 45.33
NON-OECD China .................................... 10.56 10.61 10.55 10.80 10.28 10.07 FSU ........................................ 4.76 4.49 4.56 4.58 4.59 4.39 Non-OECD Europe .................. 0.73 0.71 0.70 0.71 0.73 0.73 Other Asia .............................. 10.83 11.25 11.03 11.19 10.78 11.06 Other non-OECD..................... 17.93 17.33 16.63 16.76 17.39 16.87 Total non-OECD ................ 44.80 44.39 43.46 44.04 43.78 43.11
TOTAL DEMAND ........................... 90.88 89.72 89.09 90.14 89.52 88.44
SUPPLY OECD US .......................................... 12.61 12.06 11.69 11.67 10.98 10.92 Canada .................................. 4.21 3.86 4.11 4.04 3.74 3.74 Mexico.................................... 2.90 2.89 2.93 2.92 2.94 2.95 North Sea ............................... 2.73 2.88 2.93 2.90 2.76 3.20 Other OECD ............................ 1.55 1.53 1.49 1.55 1.61 1.60 Total OECD ........................ 24.00 23.22 23.15 23.08 22.03 22.41
NON-OECD FSU ........................................ 13.52 13.47 13.53 13.50 13.37 13.37 China .................................... 4.37 4.49 4.46 4.51 4.41 4.36 Other non-OECD..................... 12.71 12.39 11.90 12.49 12.59 12.21 Total non-OECD, non-OPEC ..................... 30.60 30.35 29.89 30.50 30.37 29.94
OPEC* ........................................ 35.99 36.29 35.75 36.03 36.83 36.94
TOTAL SUPPLY ............................ 90.59 89.87 88.79 89.60 89.20 89.22
Stock change ............................ (0.28) 0.15 (0.30) (0.54) (0.32) 0.78
*Includes Angola. Source: US Energy Information Administration Data available at PennEnergy Research Center. NOTE: No new data at press time.
US PETROLEUM IMPORTS FROM SOURCE COUNTRY Chg. vs. Average previous Dec. Nov. —––—YTD——– ——– year —— 2013 2013 2013 2012 Volume % –———––––––—— 1,000 b/d ––—––––––———–
Algeria.............................. 110 144 115 242 (127) (52.5)Angola .............................. 136 125 217 233 (16) (6.9)Kuwait .............................. 332 397 328 305 23 7.5 Nigeria ............................. 99 93 281 441 (160) (36.3)Saudi Arabia .................... 1,520 1,557 1,328 1,365 (37) (2.7)Venezuela ......................... 847 796 797 960 (163) (17.0)Other OPEC....................... 526 417 641 725 (84) (11.6) Total OPEC .................. 3,570 3,529 3,707 4,271 (564) (13.2)
Canada ............................ 3,324 3,104 3,125 2,946 179 6.1 Mexico .............................. 1,030 1,014 919 1,035 (116) (11.2)Norway ............................. 52 52 54 75 (21) (28.0)United Kingdom................ 146 124 147 149 (2) (1.3)Virgin Islands ................... 0 0 0 12 (12) (100.0)Other non-OPEC ............... 1,380 1,485 1,842 2,110 (268) (12.7)
Total non-OPEC ........... 5,932 5,779 6,087 6,327 (240) (3.8)
TOTAL IMPORTS ........... 9,502 9,308 9,794 10,598 (804) (7.6)
Source: US Energy Information Administration Data available at PennEnergy Research Center.
OIL STOCKS IN OECD COUNTRIES* Chg. vs. previous Nov. Oct. Sept. Nov. ——– year —— 2013 2013 2013 2012 Volume % –———————— Million bbl ––——————–
France ................................. 167 167 166 160 7 4.4 Germany .............................. 287 288 287 287 — —Italy ..................................... 125 123 126 138 (13) (9.4)United Kingdom................... 82 81 82 85 (3) (3.5)Other OECD Europe.............. 676 688 691 675 1 0.1 Total OECD Europe ......... 1,337 1,347 1,352 1,345 (8) (0.6)
Canada ............................... 175 176 183 174 1 0.6 US ....................................... 1,792 1,812 1,832 1,810 (18) (1.0)
Japan .................................. 584 587 591 604 (20) (3.3)South Korea ......................... 181 190 191 177 4 2.3
Other OECD ......................... 114 114 112 107 7 6.5
Total OECD ..................... 4,183 4,226 4,261 4,217 (34) (0.8)
*End of period. Source: US Energy Information AdministrationData available at PennEnergy Research Center.
OECD TOTAL NET OIL IMPORTS Chg. vs. previous Nov. Oct. Sept. Nov. ——– year —— 2013 2013 2013 2012 Volume % –———————— Million b/d ––——————–
Canada ............................ (2,366) (2,063) (2,179) (2,066) 3 (0.1)US .................................... 5,334 5,594 6,349 6,777 (1,183) (17.5)Mexico .............................. (872) (969) (956) (679) (290) 42.7 France .............................. 1,551 1,693 1,493 1,587 106 6.7 Germany ........................... 2,148 2,317 2,086 2,519 (202) (8.0)Italy .................................. 1,142 1,127 1,009 1,064 63 5.9 Netherlands...................... 691 951 1,047 949 2 0.2 Spain................................ 1,014 1,238 1,009 1,162 76 6.5 Other importers ............... 3,627 3,732 4,045 3,839 (107) (2.8)Norway ............................. (1,382) (1,248) (1,141) (1,419) 171 (12.1)United Kingdom................ 605 693 644 895 (202) (22.6) Total OECD Europe ...... 9,396 10,503 10,192 10,596 (93) (0.9)Japan ............................... 4,681 3,567 4,359 4,195 (628) (15.0)South Korea ...................... 2,042 2,241 2,242 2,191 50 2.3 Other OECD ...................... 1,809 2,158 1,712 1,772 386 21.8 Total OECD .................. 20,024 21,031 21,719 22,786 (1,755) (7.7)
Source: US Energy Information Administration Data available at PennEnergy Research Center.
OECD* TOTAL GROSS IMPORTS FROM OPEC Chg. vs. previous Nov. Oct. Sept. Nov. ——– year —–— 2013 2013 2013 2012 Volume % –———————— Million b/d ––——————–
Canada ............................. 187 284 344 338 (151) (44.7)US ..................................... 3,529 3,411 3,921 4,228 (699) (16.5)Mexico ............................... — — 10 21 — —
France ............................... 587 467 577 649 (62) (9.6)Germany ............................ 382 459 456 573 (191) (33.3)Italy ................................... 514 571 585 719 (205) (28.5)Netherlands....................... 828 509 526 586 242 41.3 Spain................................. 625 578 617 660 (35) (5.3)Other importers ................ 1,134 1,041 1,179 1,372 (238) (17.3)
United Kingdom................. 395 400 460 456 (61) (13.4) Total OECD Europe ....... 4,465 4,025 4,400 5,015 (550) (11.0)
Japan ................................ 3,625 3,043 3,460 3,325 300 9.0 South Korea ....................... 2,732 2,773 2,755 2,665 67 2.5
Other OECD ....................... 283 292 287 291 (8) (2.7) Total OECD ................... 14,821 13,828 15,177 15,883 (1,062) (6.7)
*Organization for Economic Cooperation and Development. Source: US Energy Information AdministrationData available at PennEnergy Research Center.
140428ogj_32 32 4/24/14 11:36 AM
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T h e N e W S R e S e R V e F O R N O R T h A M e R I C A N S h A L e P L A Y S VOLUME 1 NUMBER 1
Beyond US border, Mexico primes shale pot
Oil production from 14 of the most active counties in the South Texas eagle Ford shale reached 28 MMbbl in the last year. Gas production doubled from the previous year to 271 bcf, and for the
same period, condensate tripled to 21 MMbbl, according to a March report from the eagle Ford Task Force, which was established by the Texas Railroad Commission. By 2015, the eagle Ford shale will become the largest stand-alone energy project in the world as
measured by capital expenditures, the report indicates.
Meanwhile, across the border from South Texas, Mexico is gearing up to initiate its own shale boom.
“The eagle Ford doesn’t stop at the border,” said edgar Rangel-German, commissioner with Mexico’s National hydrocarbons Commission (CNh). The US energy Information Admin-istration (eIA) reported in 2011 that Mexico has the second-largest shale gas potential in Latin America and the fourth-largest in the world. The country contains 61 tcf of natural gas reserves but the eIA report places Mexico’s shale gas potential at 680 tcf.
Mexico state oil cbeen analyzing tthe eIA along witof resources, beithe world was a nbelieve the eIA’s nmated,” Rangel-G
Mexico’s CNhnew laws in the cThe commission isanctioning resertioning e&P projmation concerniand overseeing oThe country is in iunconventional
Tayvis Dunnahoe, Editor
EAGLE FORD
SHALE GAS BASINS OF EASTERN MEXICO
TexasEl BurroUplift
Sabinas Basin
Coahuila
Platform
Burgos
Percutor
Nomada
MontañezHabano
Emergente
Arbolero-1
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il Pl
ay
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achos A
rches
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