Klaus wrote: RIL could also be looking at the Canadian tar sands as an option to feed its thermal crackers.
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Klaus wrote: One doesnt get to hear much about the much vaunted Eagle-Ford and Bakken fields anymore that were doing the rounds less than 2 years ago.
svinayak wrote: The shale gas and fracking industry is a big hype and psy ops
MOSCOW, September 29. /ITAR-TASS/. Russia’s discovered oil reserves stand at 17.8 billion tons, as calculated under the national reserves estimate system, President of the Union of Oil and Gas Producers of Russia Gennady Shmal told a press conference on Monday.
He said that C2 reserves stand at 8 billion tons.
In 2013, the reserves growth exceeded production by 688.34 million tons for oil and by 1 trillion cubic meters for gas.
EconomicTimes @EconomicTimes 31m31 minutes ago
Oil drops under $93 to new 27-month low as supply glut grows - The Economic Times http://ow.ly/CbYeK
Are the Saudi's trying to harm Russia?LONDON: Oil prices hit their lowest level since June 2012 on Thursday, dropping below $93 a barrel, as official oil price cuts from top producer Saudi Arabia added to supply glut worries and weak global economic data.
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Sharp cuts in official selling prices from state producer Saudi Aramco to Asian customers on Wednesday came as the clearest sign yet that the world's largest exporter is trying to compete for crude market share, amplified supply concerns.
"This is a structural change in the oil market, with Saudi Arabia explicitly stating that they are willing to compete on price," said Bjarne Schieldrop, chief commodities analyst at SEB in Oslo.
"I think Brent will fall below $88 before we see the bottom of the market."
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Oil production in Russia increased by almost 0.9 per cent month-on-month in September to 10.61 million barrels per day (bpd), Energy Ministry data showed, adding to a glut from growing US and OPEC production that has held Brent crude prices below $100 a barrel for more than three weeks.
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With oil prices continuing to slide, the pressure is building on the Organization of the Petroleum Exporting Countries (OPEC) to reduce output at its meeting next month.
While analysts expect OPEC to adjust the group's output target of 30 million barrels per day (bpd) for 2015, the actual cut may not be big enough to spur a bounce in oil prices.
New Delhi: On the heels of selling 10% stake in its Vankor oilfield to China for $1 billion, Russia’s biggest oil company Rosneft OAO has offered a similar stake to India’s Oil and Natural Gas Corp. Ltd (ONGC).
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Vankor is the largest field to have been discovered and brought into production in Russia in the last 25 years. As of 1 January 2014 the initial recoverable reserves in the Vankor field are estimated at 500 million tonnes of oil and condensate, and 182 billion cubic meters of gas.
Sources said OVL is doing due diligence on the proposal and will make an offer post that.
Vankor will reach peak output of 500,000 barrels per day or 25 million tonnes a year in 2019. The field, has driven recent Russian output growth, pumped 435,000 bpd in September. Russia is the world’s top oil producer with current output of 10.5 million bpd but its key producing region—West Siberia—is maturing.
Russia and Rosneft are courting China and India after European Union (EU) and US slapped sanctions on them for Moscow’s involvement in Ukraine.
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Prior to offering stake in Vankor, Rosneft had on 5 August sent a formal proposal to OVL for joint development of Yurubcheno-Tokhomskoye oilfield in eastern Siberia. The field is estimated to hold 991 million barrels of oil equivalent reserves and is planned to start production in 2017.
Yurubcheno-Tokhomskoye will reach a production plateau of up to 5 million tonnes a year (100,000 barrels per day) in 2019. Rosneft, Russia’s biggest oil company and the world’s largest listed producer by output, offered to make a management presentation along with Physical Data Room (PDR) access to OVL in Moscow, sources said.
Livemint @livemint 1h1 hour ago
OPEC’s oil price falls below $90 for first time since June 2012 http://mintne.ws/1v0H1GW
There was a time, when shale oil would be economical above 40$/barrel or atmost 60$/barrel. It's only recently that I see 90$ being bandied about.prasannasimha wrote:Two part of the equation - shale gas support proce is 90$/Barrel so if it falls below this then it hits the new production in the US but it seems prices will continue to fall as a lower price means cheaper fuel during winter which can choke Russia.
Yes. That should be a reason enough to have at least 3 more Mountain Strike Corps or at least 5 divisions to be set up in Manipur. Desh needs to work a lot in Manipur.Yagnasri wrote:What is happening in the Manipari Oil exploration efforts. I understand it will reduce the imports by 40% which is a very big thing.
Reuters Business @ReutersBiz 22m22 minutes ago
Exclusive - Privately, Saudis tell oil market: get used to lower prices http://reut.rs/1wrIlzJ
(Reuters) - Saudi Arabia is quietly telling oil market participants that Riyadh is comfortable with markedly lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the U.S. shale patch.
Some OPEC members including Venezuela are clamoring for urgent production cuts to push global oil prices back up above $100 a barrel. But Saudi officials have telegraphed a different message in private meetings with oil market investors and analysts recently: the kingdom, OPEC’s largest producer, is ready to accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two, according to people who have been briefed on the recent conversations.
LONDON/NEW YORK (Reuters) - Saudi Arabia is quietly telling oil market participants that Riyadh is comfortable with markedly lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the U.S. shale patch.
Some OPEC members including Venezuela are clamoring for urgent production cuts to push global oil prices back up above $100 a barrel. But Saudi officials have telegraphed a different message in private meetings with oil market investors and analysts recently: the kingdom, OPEC’s largest producer, is ready to accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two, according to people who have been briefed on the recent conversations.
The discussions, some of which took place in New York over the past week, offer the clearest sign yet that the kingdom is setting aside its longstanding de facto strategy of holding prices at around $100 a barrel for Brent crude in favor of retaining market share in years to come.
The Saudis now appear to be betting that a period of lower prices – which could strain the finances of some members of the Organization of the Petroleum Exporting Countries – will be necessary to pave the way for higher revenue in the medium term, by curbing new investment and further increases in supply from places like the U.S. shale patch or ultra-deepwater, according to the sources, who declined to be identified due to the private nature of the discussions.
The conversations with Saudi officials did not offer any specific guidance on whether - or by how much - the kingdom might agree to cut output, a move many analysts are expecting in order to shore up a global market that is producing substantially more crude than it can consume. Saudi pumps around a third of OPEC’s oil, or some 9.7 million barrels a day.
Asked about coming Saudi output curbs, one Saudi official responded "What cuts?", according to one of the sources.
Also uncertain is whether the Saudi briefings to oil market observers represent a new tack it is committed to, or a talking point meant to cajole other OPEC members to join Riyadh in eventually tightening the taps on supply.
One source not directly involved in the discussions said the kingdom does not necessarily want prices to slide further, but is unwilling to shoulder production cuts unilaterally and is prepared to tolerate lower prices until others in OPEC commit to action.
OPEC ANGST
With most other members of the cartel unable or unwilling to reduce their own output, the group's next meeting on Nov. 27 is set to be its most difficult in years. OPEC has agreed to cut production only a handful of times in the past decade, most recently in the aftermath of the 2008 financial crisis.
On Friday, Venezuela - one of the cartel's most price-sensitive members - became the first to call openly for emergency action even earlier. Foreign Minister Rafael Ramirez said "it doesn't suit anyone to have a price war, for the price to fall below $100 a barrel."
On Sunday, Ali al-Omair, oil minister of Saudi Arabia's core Gulf ally Kuwait, appeared to be the first to articulate the emerging view of OPEC's most influential member, saying output cuts would do little to prop up prices in the face of rising production from Russia and the United States.
"I don't think today there is a chance that (OPEC) countries would reduce their production," state news agency KUNA quoted him as saying.
Omair said that prices should stop falling at around $76 to $77 a barrel, citing production costs in places like the United States, where a shale oil boom has unexpectedly reversed dwindling output and pushed production to its highest level since the 1980s.
Saudi oil officials have made no public comments on the deepening swoon in markets. Senior officials did not reply to questions from Reuters about recent briefings.
DON'T BE SURPRISED BELOW $90
Global benchmark Brent crude oil futures have fallen steadily for almost four months, dropping 23 percent from a June high of over $115 a barrel as fears of a Mideast supply disruption ebbed, U.S. shale production boomed and demand from Europe and China showed signs of flagging. [O/R]
Until recently, Gulf OPEC members have been saying that the price dip was a temporary phenomenon, betting on seasonal demand in winter to prop up prices. But a growing number of oil analysts now see the latest slide as something more than a seasonal downswing; some say it is the start of a pivotal shift to a prolonged period of relative abundance.
Rather than fight the decline in prices and cede market share in the face of growing competition, Saudi Arabia appears to be preparing traders for a sea change in prices.
The Saudis want the world to know that “nobody should be surprised” with oil under $90 a barrel, according to one of the people. Another source suggested that $80 a barrel may now be an acceptable floor for the kingdom, although several other analysts said that figure seemed too low. Brent has averaged around $103 since 2010, trading mostly between $100 and $120.
While the latest discussions are the bluntest efforts yet to signal the shift in Saudi strategy, early signs had already begun sending shivers through the oil market. In early October the kingdom cut its official selling prices more sharply than expected in a bid to maintain customers in Asia, widely seen as the opening shots in a price war for Asian customers.
“Riyadh's political floor on oil prices is weakening," Robert McNally, a White House adviser to former President George W. Bush and president of the Rapidan Group energy consultancy, wrote in a note to clients following a trip to Saudi last month.
McNally said he is not aware of any specific Saudi price or timing strategy, but told Reuters that Saudi Arabia "will accept a price decline necessary to sweat whatever supply cuts are needed to balance the market out of the U.S. shale oil sector.”
As that message began to dawn last week, the price rout quickened, with Brent lurching to its lowest level since 2010.
“Until about three days ago the absolute and total consensus in the market was the Saudis would cut," said McNally. That is no longer a foregone conclusion, he said. "The market suddenly realizes it is operating without a net."
Los Angeles Times @latimes 3h3 hours ago
Drop in global oil prices threatens to hit Russia and Iran harder than Western economic sanctions have done: http://lat.ms/1tYDt2g
This is the main reasonpankajs wrote:Los Angeles Times @latimes 3h3 hours ago
Drop in global oil prices threatens to hit Russia and Iran harder than Western economic sanctions have done: http://lat.ms/1tYDt2g
They wont survive even 6 months at under 80 dollar levels. Their reserves will be wiped out in 18 months at below 80. The Saudis are not doing this for any other reason than self preservation from ISIS. The US keeps ISIS in check, the Saudis keep oil cheap and the Russians feel the heat. From a Russian perspective the solution is pretty simple. Get China to increase buying of Russian oil. Or, Take out half of Saudi production using some Oniks from Hormuz.Aditya_V wrote:I feel US, Saudi and et al should keep the prices at USD 75 till July 2019, giving India time to build an economy and alternatives.
Lets keep in mind that oil at $75 means domestic production and exploration becomes un-viable. Not only that a move to alternatives which India has barely started becomes more difficult. The Saudi's have a long history of doing this. Keep price low for a few years, kill off all competitors, jack-up prices. These are the actions of a drug pusher and the Indian economy is the drug addict.Aditya_V wrote:I feel US, Saudi and et al should keep the prices at USD 75 till July 2019, giving India time to build an economy and alternatives.
Erik Schatzker @ErikSchatzker 5h5 hours ago New York, NY
$70 oil = no shale boom http://www.bloomberg.com/news/2014-10-2 ... -boom.html …
At $80 a barrel, output would grow by 5 percent, down from a previous forecast of 12 percent, according to New York-based ITG.
At $75 a barrel, growth would fall 56 percent to about 500,000 barrels a day, Dwivedi said. Closer to $70 a barrel, the growth rate would drop to zero, he said.
Forty-one years ago this month, the Arab oil embargo began. The countries that were part of it belonged, of course, to the Organization of Petroleum Exporting Countries — OPEC — which had banded together 13 years earlier to strengthen their ability to negotiate with international oil companies. The embargo led to widespread shortages in the United States, higher prices at the gas pump and long lines at gas stations. By the time it ended, the price of oil had risen to $12 a barrel from $3.
Perhaps more important than the price increases themselves was the new world order the embargo signaled. The embargo “set in motion geopolitical circumstances that eventually allowed [OPEC] to wrest control over global oil production and pricing from the giant international oil companies — ushering in an era of significantly higher oil prices,” as Amy Myers Jaffe and Ed Morse noted in an article in Foreign Policy magazine that was published last year at the 40th anniversary. Twice a year, OPEC’s oil ministers would meet in Vienna, where they would set oil policy — deciding to either hold back or increase oil production. There was always cheating among members, but there was usually enough discipline in the ranks to keep prices more or less where OPEC wanted them.
As it happens, the title of that Foreign Policy article was “The End of OPEC.” Jaffe and Morse are both global energy experts — she is the executive director of Energy and Sustainability at the University of California, Davis, and he is the global head of commodities research at Citigroup — who say that if America plays its cards right, OPEC’s dominance over the oil market could be over. I think that day may have already arrived.
“OPEC is not going to survive another 50 years,” Morse told me. “It probably won’t even survive another 10. It has become extremely difficult for them to forge an agreement.”
When Morse and Jaffe wrote their article last year, the price of oil was more than $100 a barrel. Today, the per-barrel price is in the low- to mid-$80s. It has dropped more than 25 percent since June. There was a time when $80 a barrel would have been more than satisfactory for OPEC members, but those days are long gone. Venezuela’s budgetary needs requires that it sell its oil at well above $100 a barrel. The Arab Spring prompted a number of important OPEC members — including Saudi Arabia and the United Arab Emirates — to increase budgetary spending to keep their own populations quiescent. According to the International Monetary Fund, the United Arab Emirates needs a price of more than $80 to meet its budgetary obligations. That’s up from less than $25 a barrel in 2008.
Not long ago, Venezuela asked for an emergency OPEC meeting to discuss decreasing production. Iran has said that such a meeting is unnecessary. Meanwhile, Saudi Arabia has made it clear that it is primarily concerned with not losing market share, so it will continue to pump out oil regardless of the needs of other OPEC members. This is not exactly cartel-like behavior. The next OPEC meeting is scheduled for late November, but there is little likelihood of an agreement.
And why does OPEC suddenly find itself in such disarray? Simply put, the supply of oil is greater than the demand, and OPEC has lost its ability to control the supply. Part of the reason is a slowdown in global demand. China’s economy has slowed, and so has its voracious appetite for oil. Japan, meanwhile, is increasingly turning to natural gas and nuclear power.
But an even bigger part of the reason is that the shale revolution in North America is utterly changing the supply-demand dynamic. Since 2008, says Bernard Weinstein, an energy expert at Southern Methodist University, oil production in the United States is up 60 percent. That’s an additional three million barrels a day. Within a few years, predicts Morse, America will overtake Russia and Saudi Arabia and become the world’s largest oil producer.
What’s more, according to another article Morse wrote, this one for Foreign Affairs magazine, “the costs of finding and producing oil and gas in shale and tight rock formations are steadily going down and will drop even more in the years to come.” In other words, the American energy industry might well be able to withstand further price drops easier than OPEC members.
When I got Jaffe on the phone, I asked her if she thought OPEC was a spent force. “You can never say never,” she replied, and then laid out a few dire scenarios — mostly revolving around oil fields being bombed or attacked — that might make supply scarce again. But barring that, this is a moment we’ve long been waiting for. Thanks to the shale revolution, OPEC has become a paper tiger.
This time it may not work. The development in battery tech is very fast, thanks to the demand of battery in mobile devices. Dont think that battery cars are slow or boring to drive. A tesla can go from 0-100 km in only 3 seconds. That is faster then a Ferrari. Less maintnace, less local air pollution, less local noise pollution and less dependance on oil.Theo_Fidel wrote:Lets keep in mind that oil at $75 means domestic production and exploration becomes un-viable. Not only that a move to alternatives which India has barely started becomes more difficult. The Saudi's have a long history of doing this. Keep price low for a few years, kill off all competitors, jack-up prices. These are the actions of a drug pusher and the Indian economy is the drug addict.Aditya_V wrote:I feel US, Saudi and et al should keep the prices at USD 75 till July 2019, giving India time to build an economy and alternatives.
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Suraj, Thanx. History explains a lot.
According to many I spoke here, there are very strong environmental lobbies in current US govt. and Democrats in general which are stifling exploration of oil and development of efficient technologies to better extract oil shale and oil sands. A prime example of this approach is the slow pace of Keystone project.svinayak wrote:The shale gas and fracking industry is a big hype and psy ops
I agree with the highlighted part and they have prevented new areas from being opened up for drilling. I however think that environmentalist and democrats support "development of efficient technologies" rather than choke them.saurabh.mhapsekar wrote:According to many I spoke here, there are very strong environmental lobbies in current US govt. and Democrats in general which are stifling exploration of oil and development of efficient technologies to better extract oil shale and oil sands. A prime example of this approach is the slow pace of Keystone project.
With the U.S. on track to become the world’s largest oil producer by next year, it’s become popular in Washington and on Wall Street to call America the new Saudi Arabia. Yet the real Saudi Arabia hasn’t relinquished its role as the producer with the most influence over oil prices. Its reserves of 266 billion barrels, ability to pump as many as 12.5 million barrels a day, and, most important, its low cost of extracting crude still make it a formidable rival to the U.S., whose shale wells are hard to exploit. “Saudi Arabia is the only one in the position of putting more oil on the market when they want to and cutting production when they want to,” says Edward Chow, a senior fellow at the Center for Strategic and International Studies in Washington. The Saudis are also the most powerful member of OPEC, the 12-member group that’s increasingly facing off against Russian, U.S., and Canadian production.
In September, despite a global oil glut developing largely because of China’s slowdown and the rapid increase in U.S. production, the Saudis boosted production half a percent, to 9.6 million barrels a day, lifting OPEC’s combined production to an 11-month high of almost 31 million barrels a day. Then, on Oct. 1, Saudi Arabia lowered prices by increasing the discount it offered its major Asian customers. The kingdom might just as easily have cut production to defend higher prices. Instead, the Saudis sent a strong signal that they were determined to protect their market share, especially in India and China, against Russian, Latin American, and African rivals. Iraq and Iran followed Saudi Arabia’s example.
The news set off a bear market in oil: Brent crude, the international benchmark, fell from $115.71 a barrel on June 19 to $82.60 a barrel on Oct. 16, the lowest price in almost four years, as investors realized that the big oil states were not going to cut production. “OPEC appears to be gearing up for a price war,” Eugen Weinberg, head of commodities research at Commerzbank (CBK:GR), wrote on Oct. 2. The Saudi government wouldn’t comment for this story.
Oil exports account for 85 percent of the Saudi government’s revenue, and the International Monetary Fund estimates the kingdom needs an annual average price of at least $83.60 a barrel to balance the national budget: The average for Brent crude this year is $106, still above the Saudi break-even price.
A foreign diplomat based in Riyadh suggests that while the Saudis are most comfortable with $100-a-barrel oil, current prices are no cause for alarm because of their strong fiscal position. The diplomat adds that one reason Saudi Arabia cut prices was its awareness that global economic growth is fragile and that cheaper crude could help its customers grow faster. Every 10 percent drop in oil prices spurs 0.15 percent more consumption in the global economy. That consumption sets up additional demand of almost 500,000 barrels of oil a day, Goldman Sachs (GS) estimates. Oil that’s 20 percent cheaper than the average price of the past three years amounts to a $1.1 trillion annual stimulus to the world economy, Citigroup (C) says. The diplomat asked not to be identified because his embassy doesn’t want to comment publicly on Saudi oil policy.
The kingdom has sterling credit and about $735 billion in financial reserves, so it’s better positioned to withstand a prolonged downturn than its rivals, says Bruce Jones, a senior fellow at the Brookings Institution in Washington. A price war could do serious damage to nations already on the ropes. Iran, whose exports are still constrained by Western sanctions, needs $153.40 a barrel to break even, according to the IMF. “Knowing that Iran is going to struggle, that’s something Saudi Arabia would certainly enjoy,” says Reva Bhalla, vice president for global analysis at Stratfor, which advises companies on political risk. Russia counts on $100 a barrel: Its budget loses about $2 billion for every dollar drop below that price, says Maxim Oreshkin, head of strategic planning at Russia’s Finance Ministry.
An unanswered question is whether sustained lower prices will hurt the U.S. shale boom. Busting oil out of miles-deep shale using hydraulic fracturing and sideways drilling costs $50 to $100 a barrel, says the International Energy Agency, vs. pumping costs of $10 to $25 a barrel in the Mideast and North Africa. The point at which shale drilling turns broadly unprofitable is debated by analysts. The IEA says only 4 percent of U.S. shale oil production needs prices above $80 a barrel; Sanford C. Bernstein analysts put it around one-third. Shale oil accounts for 55 percent of U.S. production.
Shale wells deplete faster than conventional ones, so U.S. drillers have to find enough new shale oil deposits to replace the 1.8 million barrels a day that exhausted wells no longer produce. And that’s just to keep annual production flat, says Vikas Dwivedi, oil and gas economist for Macquarie Group (MQG:AU). The diplomat in Riyadh doubts the Saudis have a deliberate policy of blunting unconventional oil production such as fracking. It wouldn’t make sense to injure the U.S., an ally in the war against Islamic State.
The Saudi policy of waging a price war has already hurt weaker members of OPEC. Venezuela has called for an emergency OPEC meeting to organize price hikes. The Venezuelans’ request was ignored by Saudi Arabia and Gulf ally Kuwait: They say they don’t intend to change course before the next OPEC meeting on Nov. 27.
Hindustan Times @htTweets 13m13 minutes ago
Big oil discovery made near #Ahmedabad in Cambay basin http://read.ht/kZ8
A significant oil discovery has been made near Ahmedabad in the Cambay basin that by some estimates may be the biggest onland find this year.
Jay Polychem (India) Ltd, a unit of city-based Jay Madhok Group, made the oil discovery in the very first well it drilled on the block CB-ONN-2009/8 in Gujarat's Cambay basin.
The firm has since July last year drilled two wells and discovered huge oil pay zones in both the wells, sources said.
The discovery in the well Kharenti-A has been notified to the upstream regulator DGH and the government.
Sources said the discovery by Jay Polychem is huge and similar to oil being produced by ONGC in the neighbouring Padra field as also by GSPC in Ingoli field.
Financial Times @FinancialTimes 46m46 minutes ago
India’s ONGC plans $180bn spending spree http://on.ft.com/1oKpzVz
MADRID (MarkeWatch) — Oil futures fell sharply on Monday, after Goldman Sachs slashed its forecast for prices, predicting West Texas Intermediate crude will prices will spend the better part of 2015 at $75 a barrel.
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Goldman analysts brought forward their medium-term bearish oil outlook, as they predicted WTI crude will average $75 a barrel for the first quarter of 2015 and the second half of 2015. That’s down nearly 17% from $90 a barrel, previously. They cut their Brent forecast by 15%, to $85 a barrel, from $100 a barrel, previously. The 2016 and long-term forecasts for those oil prices are $80 a barrel WTI and $90 a barrel for Brent.
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NRao wrote:With oil around $85 a barr, wonder where is Russia going to get any funds to buy anything. They need it to be around $115 to make ends meet (balance their famous budget).
India should not make the same mistake again.