India’s crude oil production declined in November, led by lower output at Oil & Natural Gas Corp (ONGC), the nation’s largest explorer.
Asia’s third-biggest energy consuming nation pumped 2.79 million tonnes of oil last month, 1.5 per cent less than a year earlier, the Oil Ministry said in a statement yesterday. Production by non-state explorers increased 4.5 per cent to 458,000 tonnes, the government said.
State-owned ONGC produced 2.04 million tonnes of oil in November, a 3.5 per cent decline, the data showed.
Output at ONGC’s Mumbai High fields fell 5.3 per cent to 1.42 million tonnes. The fields, 100 miles (160 kilometres) northwest of Mumbai in the Arabian Sea, accounts for half of India’s annual oil production.
India’s natural gas output increased for the ninth straight month, rising almost 48 per cent to 4.06 billion cubic meters, according to the data.
Reliance Industries, India’s most valuable company, started producing natural gas from the country’s biggest field in April.
http://www.business-standard.com/india/news/crude-oil-production-down-15-in-november/380744/
Friday, December 25, 2009
Friday, November 13, 2009
MARKET WATCH: Increased inventories reduce energy prices
Energy prices fell Nov. 12 as traders ignored an International Energy Agency report predicting gobal oil demand will grow in the fourth quarter and focused instead on a US Energy Information Administration report of a larger than expected increase in crude inventories during the previous week.
“Oil was additionally punished by a resurrection of the dollar, which made its largest advance in over 3 months, leading the Oil Service Index and the S&P Oil & Gas Exploration & Production Select Industry Index both to losses of 3% and underperforming the Dow Jones Industrial Average, which fell 0.9%,” said analysts in the Houston office of Raymond James & Associates Inc. “Natural gas continued its downward slide, with the December contract falling 3%. Henry Hub cash prices…were down 9.5% as warm weather and near-full storage continue to pummel the commodity.”
Olivier Jakob at Petromatrix, Zug, Switzerland, said, “The fundamentals of oil are poor, but they have been poor for a while and the input of the ‘Dowlar’ was again a key driver with West Texas Intermediate staying well in line with its implied value on the euro-dollar correlation.”
Overall US demand for petroleum products remains poor. “On the 4-week average [through Nov. 6] it is down 920,000 b/d from a year ago when it was supposed to benefit from the base effect of last year’s credit crisis in the fourth quarter. Compared to the levels of US oil demand in October or November 2007, the current 4-week average is lower by 1.8 million b/d,” Jakob said.
The latest weekly data from Association of American Railroads also showed “no structural increase in demand for railcars, which are still down 12.2% vs. a year ago (despite the base effect) or down 19.6% vs. the same week in 2007,” Jakob said.
EIA reported commercial US benchmark crude inventories increased by 1.8 million bbl to 337.7 million bbl in the week ended Nov. 6, slightly above average for the time of year. That surpassed Wall Street’s consensus of a 1 million bbl gain but was well below the American Petroleum Institute’s more bearish report of a 3.2 million bbl build. Gasoline stocks for the same week were up 2.5 million bbl to 210.8 million, said EIA, while distillate fuel inventories increased 300,000 bbl to 167.7 million bbl (OGJ Online, Nov. 12, 2009).
Jakob said, “Weather [along] the US East Coast has been warmer than normal; stocks of middle distillates on the East Coast are at a record high for the season; and with the continued strong contango in heating oil futures, we do not see how this will change. In fact, we would not be totally surprised if some floating stocks of middle distillates would start to develop off the eastern shres of the US.”
The latest EIA report on crude and petroleum product inventories “reversed the last three reports that were positive for crude in that the reports showed draws in the three major product categories. Crude traded to the lower end of its recent trading range $76-80/bbl. The critical level for crude is $75/bbl. If crude breaks the $75 level, the commodity could retest $70/bbl,” said analysts at Pritchard Capital Partners LLC in New Orleans.
Adam Sieminski, chief energy economist, Deutsche Bank, Washington, DC, said, “With oil intensity (use per unit of gross domestic product) declining at circa 3% annually in the US, and GDP growth over the medium-term likely below that rate, oil demand in the US appears to be on a clear downtrend from the peak already reached in 2004-07.
EIA reported Nov. 13 the injection of 25 bcf of natural gas into US underground storage in the week ended Nov. 6. That brought the working gas in storage above 3.8 tcf and just short of a generally estimated capacity of 3.9 tcf. Current storage is up 350 bcf above the same period last year at this time and 409 bcf above the 5-year average.
Shannon Nome, an equity research analyst at Deutsche Bank, said the “robust supply outlook” from third quarter results reported by US gas producers prompted the bank to reduce its average gas price estimate to $6/MMbtu for 2011-12 from $8/MMbtu previously. This “reflects lower marginal supply cost assumptions in the prolific shale gas plays,” she said.
Nome reported, “While a few notable producers vocalized bullish 2010 outlooks for natural gas, the majority took no chances and added to their hedge books during the recent quarter. Most producers seem sanguine if not bullish on the prospect for oil prices moving into 2010, while even the staunchest gas bulls seem at least slightly unnerved by the resilience of domestic production levels, per recent government data.”
Nome said, “The E&Ps have their financial houses largely in order for now. Only one of our covered companies suffered a borrowing base reduction during the October round. Several have successfully executed dispositions and financings, substantially reducing debt vs. levels earlier in 2009. Most producers plan to maintain spending within internal cash flow (and unused bank capacity).”
Energy prices
The December contract for benchmark US light, sweet crudes dropped $2.34 to $76.94/bbl on the New York Mercantile Exchange. The January contract lost $2.27 to $77.65/bbl. On the US spot market, WTI at Cushing, Okla., was down $2.34 to $76.94/bbl. Heating oil for December fell 6.48¢ to $1.99/gal on NYMEX. Reformulated blend stock for oxygenate blending (RBOB) for the same month declined 5.22¢ to $1.94/gal.
The December natural gas contract decreased 13.3¢ to $4.37/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 38.5¢ to $3.20/MMbtu. Pritchard Capital Partners said, “Natural gas continues to grind lower on concerns that domestic E&Ps continue to boost production. Most E&Ps have raised fourth quarter production guidance, and the market is beginning to doubt that the rig count reduction will lead to a natural gas supply reduction. Counter to other E&Ps, Encana Corp. announced that it had shut-in 500 MMcfd of production in the third quarter, but it is one of the few.”
In London, the December IPE contract for North Sea Brent crude lost $1.93 to $76.02/bbl. Gas oil for November delivery was unchanged at $624.75/tonne. The gas oil contract expired at the close of trade “with a delivery of about 360,000 tonnes, which is the second-largest delivery for the year and 4.7 times over the delivery of November 2008,” Jakob said.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes fell 83¢ to $76.06/bbl.
http://www.ogj.com/index/article-display/2765094236/articles/oil-gas-journal/general-interest-2/economics-markets/2009/11/market-watch__increased.html
“Oil was additionally punished by a resurrection of the dollar, which made its largest advance in over 3 months, leading the Oil Service Index and the S&P Oil & Gas Exploration & Production Select Industry Index both to losses of 3% and underperforming the Dow Jones Industrial Average, which fell 0.9%,” said analysts in the Houston office of Raymond James & Associates Inc. “Natural gas continued its downward slide, with the December contract falling 3%. Henry Hub cash prices…were down 9.5% as warm weather and near-full storage continue to pummel the commodity.”
Olivier Jakob at Petromatrix, Zug, Switzerland, said, “The fundamentals of oil are poor, but they have been poor for a while and the input of the ‘Dowlar’ was again a key driver with West Texas Intermediate staying well in line with its implied value on the euro-dollar correlation.”
Overall US demand for petroleum products remains poor. “On the 4-week average [through Nov. 6] it is down 920,000 b/d from a year ago when it was supposed to benefit from the base effect of last year’s credit crisis in the fourth quarter. Compared to the levels of US oil demand in October or November 2007, the current 4-week average is lower by 1.8 million b/d,” Jakob said.
The latest weekly data from Association of American Railroads also showed “no structural increase in demand for railcars, which are still down 12.2% vs. a year ago (despite the base effect) or down 19.6% vs. the same week in 2007,” Jakob said.
EIA reported commercial US benchmark crude inventories increased by 1.8 million bbl to 337.7 million bbl in the week ended Nov. 6, slightly above average for the time of year. That surpassed Wall Street’s consensus of a 1 million bbl gain but was well below the American Petroleum Institute’s more bearish report of a 3.2 million bbl build. Gasoline stocks for the same week were up 2.5 million bbl to 210.8 million, said EIA, while distillate fuel inventories increased 300,000 bbl to 167.7 million bbl (OGJ Online, Nov. 12, 2009).
Jakob said, “Weather [along] the US East Coast has been warmer than normal; stocks of middle distillates on the East Coast are at a record high for the season; and with the continued strong contango in heating oil futures, we do not see how this will change. In fact, we would not be totally surprised if some floating stocks of middle distillates would start to develop off the eastern shres of the US.”
The latest EIA report on crude and petroleum product inventories “reversed the last three reports that were positive for crude in that the reports showed draws in the three major product categories. Crude traded to the lower end of its recent trading range $76-80/bbl. The critical level for crude is $75/bbl. If crude breaks the $75 level, the commodity could retest $70/bbl,” said analysts at Pritchard Capital Partners LLC in New Orleans.
Adam Sieminski, chief energy economist, Deutsche Bank, Washington, DC, said, “With oil intensity (use per unit of gross domestic product) declining at circa 3% annually in the US, and GDP growth over the medium-term likely below that rate, oil demand in the US appears to be on a clear downtrend from the peak already reached in 2004-07.
EIA reported Nov. 13 the injection of 25 bcf of natural gas into US underground storage in the week ended Nov. 6. That brought the working gas in storage above 3.8 tcf and just short of a generally estimated capacity of 3.9 tcf. Current storage is up 350 bcf above the same period last year at this time and 409 bcf above the 5-year average.
Shannon Nome, an equity research analyst at Deutsche Bank, said the “robust supply outlook” from third quarter results reported by US gas producers prompted the bank to reduce its average gas price estimate to $6/MMbtu for 2011-12 from $8/MMbtu previously. This “reflects lower marginal supply cost assumptions in the prolific shale gas plays,” she said.
Nome reported, “While a few notable producers vocalized bullish 2010 outlooks for natural gas, the majority took no chances and added to their hedge books during the recent quarter. Most producers seem sanguine if not bullish on the prospect for oil prices moving into 2010, while even the staunchest gas bulls seem at least slightly unnerved by the resilience of domestic production levels, per recent government data.”
Nome said, “The E&Ps have their financial houses largely in order for now. Only one of our covered companies suffered a borrowing base reduction during the October round. Several have successfully executed dispositions and financings, substantially reducing debt vs. levels earlier in 2009. Most producers plan to maintain spending within internal cash flow (and unused bank capacity).”
Energy prices
The December contract for benchmark US light, sweet crudes dropped $2.34 to $76.94/bbl on the New York Mercantile Exchange. The January contract lost $2.27 to $77.65/bbl. On the US spot market, WTI at Cushing, Okla., was down $2.34 to $76.94/bbl. Heating oil for December fell 6.48¢ to $1.99/gal on NYMEX. Reformulated blend stock for oxygenate blending (RBOB) for the same month declined 5.22¢ to $1.94/gal.
The December natural gas contract decreased 13.3¢ to $4.37/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 38.5¢ to $3.20/MMbtu. Pritchard Capital Partners said, “Natural gas continues to grind lower on concerns that domestic E&Ps continue to boost production. Most E&Ps have raised fourth quarter production guidance, and the market is beginning to doubt that the rig count reduction will lead to a natural gas supply reduction. Counter to other E&Ps, Encana Corp. announced that it had shut-in 500 MMcfd of production in the third quarter, but it is one of the few.”
In London, the December IPE contract for North Sea Brent crude lost $1.93 to $76.02/bbl. Gas oil for November delivery was unchanged at $624.75/tonne. The gas oil contract expired at the close of trade “with a delivery of about 360,000 tonnes, which is the second-largest delivery for the year and 4.7 times over the delivery of November 2008,” Jakob said.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes fell 83¢ to $76.06/bbl.
http://www.ogj.com/index/article-display/2765094236/articles/oil-gas-journal/general-interest-2/economics-markets/2009/11/market-watch__increased.html
Friday, November 6, 2009
Oil-gas price link to weaken
While oil has been transformed during the past 30 years into a vibrantly traded global commodity, natural gas trading remains fragmented, with prices in all regions but the US mirroring the oil price.
But that is all about to change, says the International Energy Agency. The looming surplus in gas supply is set to put pressure on the current market structure, helping gas to break from crude oil and trade independently.
In an unauthorised draft version of its flagship World Energy Outlook report, the rich countries’ watchdog says: “The prospect of a large glut in gas supplies persisting to at least the middle of the 2010s could have a profound impact on gas-pricing mechanisms.” The changes “will be inevitably slow”, but over time the formal link between oil and gas prices could weaken in continental Europe and Asia-Pacific, bringing them closer to North America, where gas trades independently.
“Market reforms in some regions could drive a wider move towards spot trading and gas-price indexation, replacing oil-price indexation,” the draft report says.
The IEA declined to comment.
Gas has long been a substitute for oil in power generation. Given that oil is a highly liquid market, crude has historically served as a benchmark for gas prices.
The opportunity to trade and hedge in a new liquid gas market could represent a bonanza for Wall Street banks such as Morgan Stanley, Goldman Sachs and JPMorgan, which are already big traders of natural gas in North America. It could boost revenues for European banks such as Barclays Capital or Deutsche Bank, already big operators in commodities. A move towards spot prices could also trigger a race to create derivatives contracts, helping exchanges in continental Europe and Asia.
Currently, the price of about 70 per cent of gas traded in Europe and 52 per cent of the gas sold in the Asia-Pacific region is linked to oil prices. By contrast, almost 99 per cent of the gas sold in North America is priced as an independent commodity.
“The record high oil prices up to mid-2008 have put pressure on the formal oil-linkage in long-term contracts,” the draft adds. The linkage produces odd price behaviour.
With oil prices rising towards $80 a barrel, importers in Europe and Asia soon are going to be forced to pay more for their gas in spite of a looming glut.
In the US, the cost of oil has broken apart from gas this year due to rising domestic gas supplies and weak industrial demand.
The cost of West Texas Intermediate, the US oil benchmark, has risen 70 per cent since January, while Henry Hub natural gas, the country’s benchmark, has fallen 22 per cent since the beginning of the year, bringing the divergence between oil and gas prices close to record levels.
Gas exporters are, nonetheless, reluctant to break the oil-gas link. Russia’s state-owned Gazprom and Algeria’s national company Sonatrach fear, the draft says, “a move away from oil-price indexation on the grounds that gas-to-gas competition would be more likely to result in lower gas prices”.
Analysts say that gas exporters will fight to maintain the oil link and keep long-term contracts, on the assumption that revenues will be higher.
While the changes in pricing systems are likely to happen over time, the integration of the regional markets seems more distant. “The North American market may remain largely disconnected from the rest of the world,” the draft says, pointing out that rising domestic supplies are displacing imports of liquefied natural gas.
“A truly global gas market – characterised by strong price linkages between all the main regional markets – is still some way off,” the draft adds.
http://www.ft.com/cms/s/0/5b63b22a-ca3c-11de-a3a3-00144feabdc0.html
But that is all about to change, says the International Energy Agency. The looming surplus in gas supply is set to put pressure on the current market structure, helping gas to break from crude oil and trade independently.
In an unauthorised draft version of its flagship World Energy Outlook report, the rich countries’ watchdog says: “The prospect of a large glut in gas supplies persisting to at least the middle of the 2010s could have a profound impact on gas-pricing mechanisms.” The changes “will be inevitably slow”, but over time the formal link between oil and gas prices could weaken in continental Europe and Asia-Pacific, bringing them closer to North America, where gas trades independently.
“Market reforms in some regions could drive a wider move towards spot trading and gas-price indexation, replacing oil-price indexation,” the draft report says.
The IEA declined to comment.
Gas has long been a substitute for oil in power generation. Given that oil is a highly liquid market, crude has historically served as a benchmark for gas prices.
The opportunity to trade and hedge in a new liquid gas market could represent a bonanza for Wall Street banks such as Morgan Stanley, Goldman Sachs and JPMorgan, which are already big traders of natural gas in North America. It could boost revenues for European banks such as Barclays Capital or Deutsche Bank, already big operators in commodities. A move towards spot prices could also trigger a race to create derivatives contracts, helping exchanges in continental Europe and Asia.
Currently, the price of about 70 per cent of gas traded in Europe and 52 per cent of the gas sold in the Asia-Pacific region is linked to oil prices. By contrast, almost 99 per cent of the gas sold in North America is priced as an independent commodity.
“The record high oil prices up to mid-2008 have put pressure on the formal oil-linkage in long-term contracts,” the draft adds. The linkage produces odd price behaviour.
With oil prices rising towards $80 a barrel, importers in Europe and Asia soon are going to be forced to pay more for their gas in spite of a looming glut.
In the US, the cost of oil has broken apart from gas this year due to rising domestic gas supplies and weak industrial demand.
The cost of West Texas Intermediate, the US oil benchmark, has risen 70 per cent since January, while Henry Hub natural gas, the country’s benchmark, has fallen 22 per cent since the beginning of the year, bringing the divergence between oil and gas prices close to record levels.
Gas exporters are, nonetheless, reluctant to break the oil-gas link. Russia’s state-owned Gazprom and Algeria’s national company Sonatrach fear, the draft says, “a move away from oil-price indexation on the grounds that gas-to-gas competition would be more likely to result in lower gas prices”.
Analysts say that gas exporters will fight to maintain the oil link and keep long-term contracts, on the assumption that revenues will be higher.
While the changes in pricing systems are likely to happen over time, the integration of the regional markets seems more distant. “The North American market may remain largely disconnected from the rest of the world,” the draft says, pointing out that rising domestic supplies are displacing imports of liquefied natural gas.
“A truly global gas market – characterised by strong price linkages between all the main regional markets – is still some way off,” the draft adds.
http://www.ft.com/cms/s/0/5b63b22a-ca3c-11de-a3a3-00144feabdc0.html
Friday, October 23, 2009
Heating oil, natural gas prices rise in October
NEW YORK — Sparked by a cold snap in the northeast, home heating fuels are getting more expensive even though supplies are well above normal for this time of year.
Heating oil futures spiked with crude oil contracts last week. Retail prices followed, surging an average of 10.2 cents per gallon for residential customers by Monday, according to an Energy Information Administration report released Thursday.
Natural gas prices rose everywhere for retail customers, with hikes of between 31 cents and $1.14 per each million British thermal units in the lower 48 states.
Those prices are still well below what they were last year, when worries about peaking world crude demand pushed all energy commodities higher. But energy experts are having a tough time finding fundamental reasons for the recent jump in prices, given the amount of heating oil and natural gas piling up in storage.
The government said Thursday that the U.S. has crammed 3.7 trillion cubic feet of gas in underground caverns, the most on record. A day earlier, it said the country has 33 percent more distillate fuel on hand than it did one year ago.
Futures contracts may be rising on the expectation that natural gas producers and heating oil refiners will slow operations ahead of what weather forecasters say could be a frigid winter, said Phil Flynn, an analyst with PFGBest
"They'll stop producing because they're not making any money," Flynn said. "But we still have the bulk of the heating season ahead of us."
Meanwhile, oil prices slipped below $81 a barrel Thursday as a wobblyU.S. dollar gained against other currencies. Crude is bought and sold in dollars, so if the value of the dollar rises, an investor holding euros or Japanese yen can't buy as much crude.
For most of this year, the opposite has occurred and a weak dollar has sent crude prices spiking. Crude hit $82 for the first time in more than a year on Wednesday.
Benchmark crude for December delivery gave up 18 cents to settle at $81.19 a barrel on the New York Mercantile Exchange. InLondon , Brent crude for December delivery fell 18 cents to settle at $79.51 on the ICE Futures exchange.
At the pump, retail gas prices increased for the 10th day in a row, adding 2 cents to a new national average of $2.616 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 7.2 cents more expensive than the same period last month, but it's still 24.2 cents cheaper than last year.
In other Nymex trading, heating oil for November delivery fell 1.07 cents to settle at $2.0946 and gasoline for November delivery fell a penny to settle at $2.0442 a gallon. Natural gas for November delivery gave up 15.3 cents to settle at $4.947 per 1,000 cubic feet.
http://www.google.com/hostednews/ap/article/ALeqM5i4_q7DtiEHvUTVNlJoaJ9ufkd1kgD9BGAU981
Heating oil futures spiked with crude oil contracts last week. Retail prices followed, surging an average of 10.2 cents per gallon for residential customers by Monday, according to an Energy Information Administration report released Thursday.
Natural gas prices rose everywhere for retail customers, with hikes of between 31 cents and $1.14 per each million British thermal units in the lower 48 states.
Those prices are still well below what they were last year, when worries about peaking world crude demand pushed all energy commodities higher. But energy experts are having a tough time finding fundamental reasons for the recent jump in prices, given the amount of heating oil and natural gas piling up in storage.
The government said Thursday that the U.S. has crammed 3.7 trillion cubic feet of gas in underground caverns, the most on record. A day earlier, it said the country has 33 percent more distillate fuel on hand than it did one year ago.
Futures contracts may be rising on the expectation that natural gas producers and heating oil refiners will slow operations ahead of what weather forecasters say could be a frigid winter, said Phil Flynn, an analyst with PFGBest
"They'll stop producing because they're not making any money," Flynn said. "But we still have the bulk of the heating season ahead of us."
Meanwhile, oil prices slipped below $81 a barrel Thursday as a wobbly
For most of this year, the opposite has occurred and a weak dollar has sent crude prices spiking. Crude hit $82 for the first time in more than a year on Wednesday.
Benchmark crude for December delivery gave up 18 cents to settle at $81.19 a barrel on the New York Mercantile Exchange. In
At the pump, retail gas prices increased for the 10th day in a row, adding 2 cents to a new national average of $2.616 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 7.2 cents more expensive than the same period last month, but it's still 24.2 cents cheaper than last year.
In other Nymex trading, heating oil for November delivery fell 1.07 cents to settle at $2.0946 and gasoline for November delivery fell a penny to settle at $2.0442 a gallon. Natural gas for November delivery gave up 15.3 cents to settle at $4.947 per 1,000 cubic feet.
http://www.google.com/hostednews/ap/article/ALeqM5i4_q7DtiEHvUTVNlJoaJ9ufkd1kgD9BGAU981
Wednesday, October 7, 2009
UBS hires oil, gas bankers from Fortis -WSJ
UBS will add eight senior bankers from Fortis in Dallas, giving UBS its first
Darrell Holley, Fortis's former global head of oil and gas banking, will report to
The Fortis group specializes in loans to speculative-grade firms, especially reserve-based lending in which energy reserves are used as collateral on loans.
A UBS spokesman was not immediately available for comment. A Fortis official could not be reached. (Reporting by Robert MacMillan; Editing by Gary Hill)
http://www.reuters.com/article/managementIssues/idUSN0539602820091005
Wednesday, September 2, 2009
'Support vulnerable oil and gas industry in same way as banks'
OIL and gas industry experts are calling for tax breaks and production incentives from the UK government to maintain jobs in the sector and ensure the country has a stable supply of fuel.
The demands come as research reveals almost half of oil and gas companies in the UK, United States and Canada have been left in a "vulnerable" position by recession.PSN and McGrigors law firm, was published yesterday by Robert Gordon University.
Of those businesses badly hit, 89 per cent blamed the bank crisis. Oil price change caused problems for 78 per cent of firms.
Chief financial officer of PSN Duncan Skinner said: "The government was pretty bold bailing out the banks. I'd love it to be bolder supporting oil and gas."
Mr Skinner said he wanted a mixture of tax breaks and incentives to encourage large players in the industry to stay in the North Sea and to support smaller firms.
He said such initiatives could secure the production of billions of additional barrels of oil.
Bob Ruddiman, head of energy at McGrigors, said he wanted the government to act to secure a stable domestic supply of oil and gas and to decrease current reliance on volatile overseas markets.
http://business.scotsman.com/energyutilities/39Support-vulnerable-oil-and-gas.5607642.jp
Tuesday, August 18, 2009
Oil steady above $67; eyes inventory data, hurricane
SINGAPORE (Reuters) - Oil was steady above $67 a barrel on Tuesday, after falling the previous day to its lowest level in two weeks, amid persistent worries over the pace of the global economic rebound and revival in energy demand.
The market got some support from a bounce in equities but could see more downside after the release of weekly inventory data later from the American Petroleum Institute (API), and on Wednesday from the Energy Information Administration (EIA).
Key July housing data and producer prices due later will also shed light on the health of the U.S. economy.
Further price support could come from the rapid growth of Hurricane Bill, the first of this year's season, which might disrupt Gulf of Mexico oil and gas production.
By 2:45 a.m. EDT, U.S. crude for September delivery was up 44 cents at $67.19 a barrel. It had settled 76 cents lower at $66.75 on Monday, off a two-week low of $65.23 earlier. London Brent crude for October was up 12 cents at $70.66.
"The tone is nervous, absolutely. The market is realizing that a lot of the recent gains have been based on very loose fundamentals, being driven out of equity markets, and that is vulnerable to a correction," said Mark Pervan, senior commodity strategist at ANZ in Melbourne.
Oil suffered its sharpest decline in two weeks last Friday after the Reuters/University of Michigan Survey of Consumers showed consumer confidence in early August dropped to the lowest level since March, casting doubts over the pace of recovery in the world's top energy consumer.
http://in.reuters.com/article/hotStocksNews/idINTRE56T3EA20090818
Friday, July 31, 2009
Active Power keeps oil flowing in Northern Mexico
Pemex Refinacion protects pumping operations with CleanSource UPS System.
Pemex Refinacion, a subsidiary of PEMEX, Mexico's national oil company and the world's largest oil producing entity outside of the Middle East, has deployed the Active Power 900 kVA CleanSource uninterruptible power supply (UPS) system to protect its operations at a northern Mexico re-pumping station.
Active Power, the inventor and manufacturer of the most reliable and energy-efficient critical power systems in the world, developed its CleanSource UPS system to protect today's sensitive equipment from voltage sags, surges and complete power interruptions.
"The lack of consistent and reliable power to support our operations was an ever-present management headache before we installed CleanSource UPS," said Mauro Caceres, Superintendente General de Operaciones Ductos Zona Norte for Pemex Refinacion.
"Since installing the Active Power system our operation has not experienced any power-related interruptions and we are very pleased with the improvement in our day-to-day operations".
CleanSource UPS conditions the power as it comes into Pemex Refinacion's facilities delivering a steady stream of high-quality power to run the equipment as well as providing backup power in the event of a commercial power failure.
In addition, the system records commercial power glitches - 164 which occurred in the first 24 hours the UPS system was running.
These can wreak havoc on sensitive equipment if the power is not conditioned properly.
"The motors and turbines in our pumping stations have very sensitive controls and quality power is crucial for efficient operations," said Caceres.
"The main commercial power supply coming in is inconsistent and unreliable, causing costly service disruptions and making accurate supply planning nearly impossible".
"PEMEX is an important part of the national economy in Mexico, and we are pleased to partner with them to keep their oil and gas operations online," said Jim Clishem, President and CEO of Active Power.
"There is no better solution for power quality issues than our flywheel-based UPS system because it is more cost-effective and is inherently more reliable than conventional UPS solutions".
Active Power's representative in Northern Mexico, IAMSA, was awarded the public bid for the PEMEX Zaragoza Station project and worked closely with PEMEX to deliver the solution they needed.
"Active Power's CleanSource UPS is the ideal solution for demands of our Mexican market," said Arturo Martinez, President of IAMSA.
"It is a simple solution for complex power quality problems".
Pemex Refinacion's operation in Victoria Zaragoza, in the Mexican state of Tamaulipas, is one of eighteen re-pumping stations used in pumping crude oil, gasoline, and diesel from Tamaulipas to Chihuahua.
The eighteen stations operate in series and are dependent on one another - if one is down, the others must cease pumping as well.
Downtime means the oil and gas stops flowing, leading to lost revenues and potential equipment damage.
Active Power's CleanSource UPS provides power conditioning and backup power for short interruptions (less than 60 seconds), while longer power outages are handled by a generator.
http://www.buildingtalk.com/news/aep/aep103.html
Friday, July 10, 2009
Baker Hughes: US Oil, Gas Rig Count Down 12 To 916 This Week
The number of rigs drilling for oil and natural gas in the U.S. fell this week as producers continued to rein in drilling activity in response to sliding energy prices.
The number of oil and gas rigs fell to 916, down 12 from the previous week, according to rig data from oil-field services company Baker Hughes Inc (BHI). The number of gas rigs was 672, a drop of 16 rigs from last week, while the oil rig count rose to 234, an increase of five rigs. The number of miscellaneous rigs fell by one, to 10 rigs.
The number of gas rigs in use peaked at 1,606 in September.
Natural gas prices have plunged about 75% from summer highs amid robust production from U.S. onshore natural gas fields and slumping demand. Large industrial consumers have scaled back gas use to cut costs during the recession. In response to falling gas prices, producers such as Chesapeake Energy Corp. (CHK) and Devon Energy Corp. (DVN) have slashed their spending plans and rig counts to curb the flow of new gas supplies into the market.
Analysts anticipate that the sharp decline in natural gas drilling activity will eventually bring supply back in line with demand and help bolster gas prices.
Gas for August delivery on the New York Mercantile Exchange was recently down 3.3 cents, or 0.97%, at $3.375 a million British thermal units.
http://online.wsj.com/article/BT-CO-20090710-710633.html
Sunday, June 21, 2009
Energy prices tumble, gasoline leads the way
Gasoline markets exhibited the first signs that an extended rally in pump prices is nearing an end after 52 straight days on the rise.
Gasoline futures started falling midweek after a government report showed a huge surplus. Already, wholesale gasoline prices in key markets like the Gulf Coast and Chicago had begun to fade. Should prices continue to fall on the New York Mercantile Exchange, cheaper gas may be on the way for motorists.
"Supply won't be an issue," said Andrew Lebow, senior vice president and broker at MF Global. "That's why gasoline futures are dropping. It's down so sharply that it's really going to be hard for crude or any of the energy commodities to show gains today."
Gasoline for July delivery fell Friday by 10.5 cents, more than 5 percent, to settle at $1.9244 a gallon. The plunge in gas futures dragged down other energy commodities as well.
Benchmark crude for July delivery dropped $1.82 to settle at $69.55 a barrel in light trading as the contract was set to close Monday. The August contract fell $1.89 to settle at $70.02 a barrel.
While overall demand for energy remains weak, money has poured into oil markets recently as the dollar fell against the euro. Investors for months have used crude as a hedge against inflation, betting that oil prices will likely increase as the economy improves and global supplies start to shrink.
Crude prices have doubled their value in three months, hitting a high for the year of $73.23 a barrel last week.
Meanwhile, retail gas prices added a half cent overnight to a new national average of $2.69 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of gas is 35.6 cents more expensive than a month ago, but at this time last year a gallon cost more than $4.
Pump prices could remain near the current level through the Fourth of July weekend.
"Gas prices should back off a bit after that," said Phil Flynn, an analyst at Alaron Trading Corp. "However, you still have a wild card with oil. If crude keeps driving higher, then gas will too."
Elsewhere, geopolitical events are also beginning to at least get some attention in oil markets for the first time in months.
In Nigeria, Africa's largest crude producer, a militant group said it blew up a major pipeline run by Italian oil company Agip. Violence has been escalating in the oil-rich southern region as the military intensifies operations to flush out rebels battling for a larger share of the Nigeria's oil revenues.
In Iran, protesters loyal to presidential candidate Mir Hossein Mousavi have been staging massive street rallies to protest what they believe to be a rigged election.
Last year, the escalating tension in Iran could have sent a jolt through energy markets. This year, however, there's so much extra oil production capacity around the world that experts say a drop in Iranian or Nigerian exports won't lead to any price spikes.
In other Nymex trading, heating oil dropped 5.03 cents to settle at $1.7867 a gallon, and natural gas for July delivery lost 6.1 cents to settle at $4.032 per 1,000 cubic feet.
In London, Brent prices lost $1.87 to settle at $69.19 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.
http://www.google.com/hostednews/ap/article/ALeqM5i4_q7DtiEHvUTVNlJoaJ9ufkd1kgD98TU7T80
Saturday, June 6, 2009
Oil and gas industry's costs of doing business slide
The oil and gas industry’s costs of doing business are falling amid a pullback in activity and the global recession, according to a pair of indexes kept by IHS/Cambridge Energy Research Associates released Friday.
However, the decline in costs is much slower than crude’s swift fall from last year’s unprecedented three-digit highs. Also, expenses for more fixed costs — like personnel or contracts for limited deep-water vessels — remain largely unchanged.
Daniel Yergin, IHS CERA chairman, said signs of the downward shift in costs emerged in the third quarter last year, before the recession really took hold.
But IHS/CERA’s latest cost analyses “place into clearer view the impact of the financial crisis, spending cutbacks and the fall in crude prices,” Yergin said.
The group’s Upstream Capital Costs Index, which tracks costs for construction of new oil and gas facilities, fell 8.5 percent in the last six months. The Upstream Operating Cost Index, which tracks operating costs of facilities already up and running, fell 8 percent.
The indexes track changes much like the Consumer Price Index tracks changes in prices consumers pay for goods and services.
Fewer projects
IHS/CERA said the capital cost reduction stems from fewer construction projects as well as sharp cuts in the prices of steel and subsea equipment, or that placed at the seabed for offshore installations.
Steel costs for oil and gas projects fell more than 25 percent between the third quarter last year and the first quarter this year. Steel costs rose more than 30 percent in the first two quarters last year as crude rode its all-time high.
And subsea equipment costs fell nearly 8 percent, reflecting less demand in West Africa and South America amid delays in launching new projects.
Combination of factors
The fall in operating costs also stems from less activity, from fewer wells being drilled to fewer rigs being hired, as well as decreased oil and gas demand amid the recession.
However, costs for offshore projects fell 6 percent, compared to 15 percent for onshore activity, because of limited availability of deepwater vessels.
Jeff Kelly, associate director for IHS/CERA’s operating cost analysis forum, noted that contracts for those vessels, signed pre-recession, remain firm. Such ships that drill deep-water wells or assemble deep-water oil and natural gas platforms at sea are usually contracted out for three to five years.
http://www.chron.com/disp/story.mpl/business/6460630.html
Saturday, May 23, 2009
Baker Hughes: US Oil, Gas Rig Count Down 18 To 900 This Week
The number of oil and gas rigs fell to 900, down 18 from the previous week, according to rig data from oil-field services company
The number of gas rigs in use peaked at 1,606 in September.
Natural gas prices have plunged about 74% from summer highs amid robust production from U.S. onshore natural gas fields and slumping demand. Large industrial consumers have scaled back gas use to cut costs during the recession. In response to falling gas prices, producers such as
Analysts anticipate that the sharp decline in natural gas drilling activity will eventually bring supply back in line with demand and help bolster gas prices.
Gas for June delivery on the New York Mercantile Exchange was recently down
-By
(END) Dow Jones Newswires
http://money.cnn.com/news/newsfeeds/articles/djf500/200905221324DOWJONESDJONLINE000659_FORTUNE5.htm
05-22-09 1324ET
Copyright (c) 2009 Dow Jones & Company, Inc.
Sunday, May 17, 2009
Salazar sued for revoking oil, gas leases in Utah
SALT LAKE CITY (AP) — Energy producers suing the federal government contend Interior Secretary Ken Salazar should not have revoked oil and gas leases based on their proximity to national parks in Utah because the parcels are miles away.
The drilling companies said Thursday none of their parcels is closer than 15.5 miles to a park, and that some are 60 miles away.
Salazar voided 77 of the leases auctioned off by former President George W. Bush's administration in December because, he said, they were at the doorstep of Utah's redrock parks.
But lawyers for drillers who filed the federal lawsuit contend Salazar was misled about the proximity of the parcels to Arches and Canyonlands national parks and Dinosaur National Monument. Three of Utah's counties filed a separate lawsuit challenging Salazar's decision.
One of the plaintiffs, Denver-based Questar Exploration & Production Co., contends every one of the yanked parcels was adjacent to an existing and valid lease parcel. The company disputes environmentalists' claims that the 77 parcels would encroach on wild areas of Utah or despoil views from the national parks.
"This story has not been told until now," said Jay B. Neese, executive vice president of Questar's gas-producing division. "The withdrawn lease parcels had been open for leasing for the last 30 years, and many of these parcels contained rights of way for roads, transmission lines and pipelines."
Also suing are Denver-based Impact Energy Resources LLC and Peak Royalty Holdings LLC of Heber City.
Both companies are independent drillers and not just land speculators, their lawyers said.
The three Utah counties — Carbon, Duchesne and Uintah — said in their lawsuit they stand to lose thousands or millions of dollars in oil-and-gas royalties from Salazar's decision.
Salazar will reconsider the 77 leases once President Barack Obama's pick for the No. 2 job at the department is confirmed, his press secretary, Kendra Barkoff, said Thursday.
Senate Republicans blocked David Hayes' nomination on Wednesday.
That effort was led by U.S. Sen. Bob Bennett, R-Utah, who says Hayes doesn't have to be in place for Salazar to fulfill his promise to reconsider the lease parcels and have the U.S. Bureau of Land Management reissue some of the leases.
Neese indicated that the lawsuits were an attempt to nudge Salazar in that direction.
"We hope this dialogue will result in the BLM reinstating the companies' leases," Neese said. "More importantly, we hope to restore integrity to the BLM lease process."
Robert S. Thompson, one of the Denver lawyers who represent the drillers, said none of the parcels involved in the lawsuit is closer than 15.5 miles to a national park — and that those parcels are separated from Arches National Park by state Route 191.
"We believe the secretary was supplied with misinformation," Thompson said.
The 77 leases had already been put on hold by another federal lawsuit filed months ago in Washington, D.C., by conservation groups, and they said no judge can compel Salazar to reverse himself in the meantime.
For that reason, the legal challenge from the drillers and counties will be thrown out of court, predicted Steve Bloch, a staff lawyer for the Southern Utah Wilderness Alliance. Those lawsuits were filed Wednesday in U.S. District Court in Salt Lake City.
The Dec. 19 auction had problems from the start when a college student grabbed a bidder's paddle to run up prices and take parcels between Arches and Canyonlands national parks for safekeeping.
Tim DeChristopher, who acknowledged he couldn't pay for his leases, was indicted by a federal grand jury April 1 for interfering with and making false representations at a government auction. He has pleaded not guilty. Trial was sent for July 6.
http://www.google.com/hostednews/ap/article/ALeqM5gQ57gJPo7uVsEwipC2hTA0oWLRPwD986DDVG0
Saturday, May 2, 2009
US Oil, Gas Stocks Start May With Modest Gains
Energy stocks kicked off the month of May with gains Friday, despite flat-to-lower action in the broad market.
The Amex Oil Index rose 0.5% to 881 points. The Amex Natural Gas Index rose 1.1% to 392. The Philadelphia Oil Service Index rose 1% to 152.
Chevron Corp. (CVX) shares fell 33 cents to $65.77 after it said its profit fell by 64%.
Crude prices provided a lift to the sector, with futures on the New York Mercantile Exchange recently rising 88 cents to $52.
Meanwhile, shares of natural gas company NiSource (NI) said first-quarter profit fell 16% to $159.3 million, or 58 cents a share, from $189.5 million, or 69 cents a share in the year-ago period. Shares rose 2% to $11.21.
Among movers in the energy patch, shares of Hess Corp. (HES) rose 1.1% to $55.40, Nabors Industries (NBR) rose 1% to $15.36 and Apache Corp. (APA) jumped 2.4% to $74.62.
http://online.wsj.com/article/BT-CO-20090501-707004.html
Friday, April 24, 2009
Tenn. university withdraws oil, gas drilling plan
The University of Tennessee on Friday delayed plans for oil and gas drilling in a forested tract in the Cumberland Mountains.
"We understand the need to balance the benefits of this project with the needs of public policy and the importance of gathering more input from broad constituencies," UT vice president Hank Dye said.
"We want to take more time and be sure that every concern is heard," he said.
Environmentalists claimed UT's plans to lease drilling rights on 8,600 rugged acres near Wartburg in Scott and Morgan counties could set a precedent and could place public lands across the state in jeopardy during a down economy.
UT officials had said the lease could bring the school $300,000 a year at a time when the university is facing cuts of $100 million in state funding over the next few years.
However, Dye said, the deal also could yield "valuable research and education opportunities."
Still, the university on Friday withdrew its request to the State Building Commission to approve the lease.
http://www.forbes.com/feeds/ap/2009/04/24/ap6336605.html
Friday, April 17, 2009
Brazil Petrobras Reports Oil, Natural Gas Find To ANP
RIO DE JANEIRO (Dow Jones)--Brazilian state-run energy giant Petrobras (PBR) has notified the National Petroleum Agency that it had discovered signs of oil and natural gas a second time at an inland exploration block.
Petrobras said late Thursday it found traces of oil and gas in a wildcat well drilled at the ES-T-505 inland block in the Espirito Santo Basin. The 4BRSA722ES well was drilled by the BCH Energy 1 rig at a target depth of 816 meters, according to drilling data.
Petrobras notified the ANP of a natural gas discovery in the same well on Monday.
Oil companies operating in Brazil must inform the ANP of indications of oil, gas or hydrocarbons in any exploratory well within 48 hours. The disclosures are routine, and do not indicate commercial viability.
http://online.wsj.com/article/BT-CO-20090417-712949.html
Wednesday, April 8, 2009
Energy-absorbing springs for oil and gas industry
The Clifford Spring Company has used Victrex PEEK polymer to develop springs to reduce wear and damage on seals, backup rings and shafts, eliminating the problems inherent with metallic springs
PEEK, the high-performance polymer manufactured by Victrex plc, with its unique combination of high and low temperature resistance, inherent strength, and chemical resistance, has become the material of choice for the manufacture of seal and backup rings in the oil and gas industry.
However, the weakness of seals has always been the necessary addition of the metallic energy absorber, which in extreme circumstances, if the seal wears, can come in contact with and irreparably damage the shaft.
The Clifford Spring Company based in Redditch in the UK, with over 40 years experience in manufacturing energising springs for this sector, has developed a solution to this challenging problem, producing energy-absorbing springs using Victrex PEEK polymer.
"The major benefits of using an energy absorber made with PEEK are that corrosion is eliminated in ferrous-based energy absorbers and the absorber made with Victrex PEEK polymer resists virtually all aggressive chemicals, solvents and lubricants used within the oil and gas industry," said John Clifford, managing director at Clifford Springs: "Further, if the seal should become worn and the energy absorber component is made from the same material as the seal itself, then there will be no damage to the shaft".
An additional benefit of using Victrex PEEK polymer in this application is that the overall weight of the seals is reduced due to the elimination of metallic components, and there are no issues with differing rates of thermal expansion as both the seal and the energy absorber have the same co-efficient of thermal expansion.
The energy absorber spring made with Victrex PEEK polymer can be manufactured as a totally encapsulated item, or as a Garter type spring where the spring made with Victrex PEEK polymer can be added to the seal as a secondary operation, following moulding or machining of the seal.
The total encapsulation method carried out by the seal manufacturer prevents the seal lipping out and therefore prolongs the life of the seal.
A further advantage of having a thermoplastic spring in the Garter type of seal, is that the monofilaments can be produced in virtually any colour in the spectrum, allowing instant identification ensuring the correct energy absorber has been fitted to the seal.
The energy absorbers made with Victrex PEEK polymer are available with an outside body diameter of 1.40mm up to 10.00mm.
The maximum single length that can be produced is 2.4M, this equates to a spring diameter of approximately 750 mm.
Multiple springs can be joined end to end to give a larger spring diameter.
Come and see some of the energy absorbers made with Victrex PEEK polymer, fitted to seals on its stand at Offshore Europe, in Aberdeen 4th-7th September, in the Blue area stand 847.
http://www.processingtalk.com/news/vix/vix100.html
PEEK, the high-performance polymer manufactured by Victrex plc, with its unique combination of high and low temperature resistance, inherent strength, and chemical resistance, has become the material of choice for the manufacture of seal and backup rings in the oil and gas industry.
However, the weakness of seals has always been the necessary addition of the metallic energy absorber, which in extreme circumstances, if the seal wears, can come in contact with and irreparably damage the shaft.
The Clifford Spring Company based in Redditch in the UK, with over 40 years experience in manufacturing energising springs for this sector, has developed a solution to this challenging problem, producing energy-absorbing springs using Victrex PEEK polymer.
"The major benefits of using an energy absorber made with PEEK are that corrosion is eliminated in ferrous-based energy absorbers and the absorber made with Victrex PEEK polymer resists virtually all aggressive chemicals, solvents and lubricants used within the oil and gas industry," said John Clifford, managing director at Clifford Springs: "Further, if the seal should become worn and the energy absorber component is made from the same material as the seal itself, then there will be no damage to the shaft".
An additional benefit of using Victrex PEEK polymer in this application is that the overall weight of the seals is reduced due to the elimination of metallic components, and there are no issues with differing rates of thermal expansion as both the seal and the energy absorber have the same co-efficient of thermal expansion.
The energy absorber spring made with Victrex PEEK polymer can be manufactured as a totally encapsulated item, or as a Garter type spring where the spring made with Victrex PEEK polymer can be added to the seal as a secondary operation, following moulding or machining of the seal.
The total encapsulation method carried out by the seal manufacturer prevents the seal lipping out and therefore prolongs the life of the seal.
A further advantage of having a thermoplastic spring in the Garter type of seal, is that the monofilaments can be produced in virtually any colour in the spectrum, allowing instant identification ensuring the correct energy absorber has been fitted to the seal.
The energy absorbers made with Victrex PEEK polymer are available with an outside body diameter of 1.40mm up to 10.00mm.
The maximum single length that can be produced is 2.4M, this equates to a spring diameter of approximately 750 mm.
Multiple springs can be joined end to end to give a larger spring diameter.
Come and see some of the energy absorbers made with Victrex PEEK polymer, fitted to seals on its stand at Offshore Europe, in Aberdeen 4th-7th September, in the Blue area stand 847.
http://www.processingtalk.com/news/vix/vix100.html
Friday, April 3, 2009
Bolted joint reliability on oil+gas in the Caspian
Over the last 12 months, RotaBolt technology has been introduced into a wide variety of applications to deliver bolted joint reliability for oil and gas operators in Azerbaijan and the Caspian
Over the last 12 months, RotaBolt technology has been introduced into a wide variety of applications to deliver bolted joint reliability for oil and gas operators in Azerbaijan and the Caspian.
Offshore platform structures, cranes and a major new gas pipeline have all benefited from RotaBolt products and James Walker expertise.
At Azeri, there are now seven platforms that feature the RotaBolt tension control systems.
The unique, built-in technology of the RotaBolt constantly and accurately measures and maintains tension, and has been used on riser clamps, structural clamps, "J" tube bolting, flow line flanges and even on Christmas trees.
The fasteners are also used on the platform's cranes, delivering joint reliability on the main slew rings.
Recognised as a global centre of excellence for bolted joint technology, operators are increasingly turning to RotaBolt and its range of fasteners to deliver tension control, critical to bolted joint reliability.
At Shah Deniz, RotaBolts are used on riser compact flanges and flow line flanges, as well as on Christmas trees and the main slew rings of platform cranes.
"Operators are looking for a cost effective solution to bolted joint safety and reliability," commented John Hirst, RotaBolt Engineering Manager: "it is encouraging to see that a technology driven approach to tension control is becoming more widespread.
One of our biggest challenges remains one of education when there is a culture of tightening and fixing.
We are delighted that across a variety of applications, operators now see that to achieve bolted joint reliability you have to install bolts to their correct design tension and accurately maintain that tension - that's what our technology does".
Elsewhere, RotaBolt technology has also been used on gas coolers on offshore platforms to correct imbalances in gasket sealing.
In the original application, operators BP realised that joint reliability was dependant upon all the bolts being tightened to a uniform design tension, to develop the required gasket stress.
The decision was made to change out all the bolting to the RotaBolt tension control system.
The installation was carried out by the frame agreement tightening contractor, who had used traditional methodology in the past.
http://www.processingtalk.com/news/jaw/jaw101.html
Wednesday, March 25, 2009
Software for oil and gas transmission pipeline
The GE Energy Smallworld Global Transmission Office provides a comprehensive global data model for the management of the assets in a natural gas and liquid pipeline transmission network
This spatially-enabled network management solution brings together the essential applications needed to help pipeline transmission customers manage their networks and meet regulatory requirements in the industry.
The suite of integrated applications allows transmission companies to leverage the GIS data to make better-informed decisions about their assets.
It is the only solution provided by a vendor that also provides the base GIS technology, giving customers a one-stop solution for their needs.
Key benefits for the customer include:.
* The global pipeline-specific data model can reduce time to "go live" by shortening the database design phase by as much as 80%.
* The standard application code and standard data model reduce total cost of ownership through minimised administration and by providing a standardised and smooth upgrade path.
* Product provides applications and standard methods for pipeline integrity management and compliance reporting to satisfy regulators.
"The Smallworld Global Transmission Office provides our pipeline customers with a standard 'off the shelf' product geared toward helping them operate and maintain their assets more efficiently reduce costs and comply with regulatory requirements" said Bob Gilligan, general manager of the GE Energy transmission and distribution business: "We are excited about providing a GIS pipeline product that will upgrade from one revision to the next, enabling our customers to reduce their total ownership costs".
Typical applications for the new suite include global data model to capture pipeline asset information, high-consequence area analysis, cathodic protection manager, alignment sheet generator, auto stationing and linear referencing, dynamic segmentation viewer, pipeline anomaly viewer, profile generator, close interval survey viewer, integration to integrity management and network and hydraulic analysis tools, inventory reporter, pipe book exporter, critical angle identifier and survey point manager.
http://www.processingtalk.com/news/ger/ger101.html
This spatially-enabled network management solution brings together the essential applications needed to help pipeline transmission customers manage their networks and meet regulatory requirements in the industry.
The suite of integrated applications allows transmission companies to leverage the GIS data to make better-informed decisions about their assets.
It is the only solution provided by a vendor that also provides the base GIS technology, giving customers a one-stop solution for their needs.
Key benefits for the customer include:.
* The global pipeline-specific data model can reduce time to "go live" by shortening the database design phase by as much as 80%.
* The standard application code and standard data model reduce total cost of ownership through minimised administration and by providing a standardised and smooth upgrade path.
* Product provides applications and standard methods for pipeline integrity management and compliance reporting to satisfy regulators.
"The Smallworld Global Transmission Office provides our pipeline customers with a standard 'off the shelf' product geared toward helping them operate and maintain their assets more efficiently reduce costs and comply with regulatory requirements" said Bob Gilligan, general manager of the GE Energy transmission and distribution business: "We are excited about providing a GIS pipeline product that will upgrade from one revision to the next, enabling our customers to reduce their total ownership costs".
Typical applications for the new suite include global data model to capture pipeline asset information, high-consequence area analysis, cathodic protection manager, alignment sheet generator, auto stationing and linear referencing, dynamic segmentation viewer, pipeline anomaly viewer, profile generator, close interval survey viewer, integration to integrity management and network and hydraulic analysis tools, inventory reporter, pipe book exporter, critical angle identifier and survey point manager.
http://www.processingtalk.com/news/ger/ger101.html
Tuesday, March 17, 2009
Energy-absorbing springs for oil and gas industry
The Clifford Spring Company has used Victrex PEEK polymer to develop springs to reduce wear and damage on seals, backup rings and shafts, eliminating the problems inherent with metallic springs
PEEK, the high-performance polymer manufactured by Victrex plc, with its unique combination of high and low temperature resistance, inherent strength, and chemical resistance, has become the material of choice for the manufacture of seal and backup rings in the oil and gas industry.
However, the weakness of seals has always been the necessary addition of the metallic energy absorber, which in extreme circumstances, if the seal wears, can come in contact with and irreparably damage the shaft.
The Clifford Spring Company based in Redditch in the UK, with over 40 years experience in manufacturing energising springs for this sector, has developed a solution to this challenging problem, producing energy-absorbing springs using Victrex PEEK polymer.
"The major benefits of using an energy absorber made with PEEK are that corrosion is eliminated in ferrous-based energy absorbers and the absorber made with Victrex PEEK polymer resists virtually all aggressive chemicals, solvents and lubricants used within the oil and gas industry," said John Clifford, managing director at Clifford Springs: "Further, if the seal should become worn and the energy absorber component is made from the same material as the seal itself, then there will be no damage to the shaft".
An additional benefit of using Victrex PEEK polymer in this application is that the overall weight of the seals is reduced due to the elimination of metallic components, and there are no issues with differing rates of thermal expansion as both the seal and the energy absorber have the same co-efficient of thermal expansion.
The energy absorber spring made with Victrex PEEK polymer can be manufactured as a totally encapsulated item, or as a Garter type spring where the spring made with Victrex PEEK polymer can be added to the seal as a secondary operation, following moulding or machining of the seal.
The total encapsulation method carried out by the seal manufacturer prevents the seal lipping out and therefore prolongs the life of the seal.
A further advantage of having a thermoplastic spring in the Garter type of seal, is that the monofilaments can be produced in virtually any colour in the spectrum, allowing instant identification ensuring the correct energy absorber has been fitted to the seal.
The energy absorbers made with Victrex PEEK polymer are available with an outside body diameter of 1.40mm up to 10.00mm.
The maximum single length that can be produced is 2.4M, this equates to a spring diameter of approximately 750 mm.
Multiple springs can be joined end to end to give a larger spring diameter.
Come and see some of the energy absorbers made with Victrex PEEK polymer, fitted to seals on its stand at Offshore Europe, in Aberdeen 4th-7th September, in the Blue area stand 847.
http://www.processingtalk.com/news/vix/vix100.html
PEEK, the high-performance polymer manufactured by Victrex plc, with its unique combination of high and low temperature resistance, inherent strength, and chemical resistance, has become the material of choice for the manufacture of seal and backup rings in the oil and gas industry.
However, the weakness of seals has always been the necessary addition of the metallic energy absorber, which in extreme circumstances, if the seal wears, can come in contact with and irreparably damage the shaft.
The Clifford Spring Company based in Redditch in the UK, with over 40 years experience in manufacturing energising springs for this sector, has developed a solution to this challenging problem, producing energy-absorbing springs using Victrex PEEK polymer.
"The major benefits of using an energy absorber made with PEEK are that corrosion is eliminated in ferrous-based energy absorbers and the absorber made with Victrex PEEK polymer resists virtually all aggressive chemicals, solvents and lubricants used within the oil and gas industry," said John Clifford, managing director at Clifford Springs: "Further, if the seal should become worn and the energy absorber component is made from the same material as the seal itself, then there will be no damage to the shaft".
An additional benefit of using Victrex PEEK polymer in this application is that the overall weight of the seals is reduced due to the elimination of metallic components, and there are no issues with differing rates of thermal expansion as both the seal and the energy absorber have the same co-efficient of thermal expansion.
The energy absorber spring made with Victrex PEEK polymer can be manufactured as a totally encapsulated item, or as a Garter type spring where the spring made with Victrex PEEK polymer can be added to the seal as a secondary operation, following moulding or machining of the seal.
The total encapsulation method carried out by the seal manufacturer prevents the seal lipping out and therefore prolongs the life of the seal.
A further advantage of having a thermoplastic spring in the Garter type of seal, is that the monofilaments can be produced in virtually any colour in the spectrum, allowing instant identification ensuring the correct energy absorber has been fitted to the seal.
The energy absorbers made with Victrex PEEK polymer are available with an outside body diameter of 1.40mm up to 10.00mm.
The maximum single length that can be produced is 2.4M, this equates to a spring diameter of approximately 750 mm.
Multiple springs can be joined end to end to give a larger spring diameter.
Come and see some of the energy absorbers made with Victrex PEEK polymer, fitted to seals on its stand at Offshore Europe, in Aberdeen 4th-7th September, in the Blue area stand 847.
http://www.processingtalk.com/news/vix/vix100.html
Friday, February 27, 2009
Obama's budget plan targets oil, gas tax breaks
President Obama's proposed 2010 budget takes pointed aim at oil and gas companies, eliminating myriad tax breaks and proposing new fees on the providers.
The plan put out Thursday would repeal tax breaks intended to spur oil and gas exploration and penalize companies that don't develop wells on land leased from the government. It could raise tens of billions of dollars the next decade.
OBAMA BUDGET: Unprecedented size, scope
TAXES: 'Good news' for lower, middle classes
The industry says the blueprint would discourage investment aimed at cutting oil imports.
"New taxes could mean fewer American jobs and less revenue at a time when we desperately need both," says Jack Gerard, president of the American Petroleum Institute (API).
But consumer advocates cheered the proposal.
The financial impact is "peanuts compared to the excessive profits they're earning," says Mark Cooper of, the Consumer Federation of America.
Oil giants such as ExxonMobil posted record profits in 2008, but fourth-quarter earnings plunged as crude oil prices tumbled. Among other things, the proposal over 10 years would raise:
• $5.3 billion by imposing a new 13% excise tax on offshore oil and gas production in the Gulf of Mexico to close loopholes that gave companies relief from certain royalty payments.
•$1.2 billion by charging a fee on companies that don't produce on their Gulf leases. Environmentalists say offshore drilling should not be expanded while existing leases lie fallow. But API spokeswoman Cathy Landry says unused leases are ultimately surrendered.
•As much as $10 billion by reinstating taxes to clean up hazardous waste sites.
•$11.5 billion by barring companies from writing off drilling costs, such as labor, and by limiting their ability to write off lease payments.
•$13.3 billion by scrapping a 6% tax deduction that benefits all U.S. manufacturers.
The moves could cost the industry several billion dollars a year. Industry profits in the U.S. totaled $125 billion in 2007, according to the Energy Department. Argus Research analyst Phil Weiss says the industry would be far more adversely affected by a windfall profits tax.
http://www.usatoday.com/money/industries/energy/2009-02-26-obama-budget-tax-plan-energy_N.htm
The plan put out Thursday would repeal tax breaks intended to spur oil and gas exploration and penalize companies that don't develop wells on land leased from the government. It could raise tens of billions of dollars the next decade.
OBAMA BUDGET: Unprecedented size, scope
TAXES: 'Good news' for lower, middle classes
The industry says the blueprint would discourage investment aimed at cutting oil imports.
"New taxes could mean fewer American jobs and less revenue at a time when we desperately need both," says Jack Gerard, president of the American Petroleum Institute (API).
But consumer advocates cheered the proposal.
The financial impact is "peanuts compared to the excessive profits they're earning," says Mark Cooper of, the Consumer Federation of America.
Oil giants such as ExxonMobil posted record profits in 2008, but fourth-quarter earnings plunged as crude oil prices tumbled. Among other things, the proposal over 10 years would raise:
• $5.3 billion by imposing a new 13% excise tax on offshore oil and gas production in the Gulf of Mexico to close loopholes that gave companies relief from certain royalty payments.
•$1.2 billion by charging a fee on companies that don't produce on their Gulf leases. Environmentalists say offshore drilling should not be expanded while existing leases lie fallow. But API spokeswoman Cathy Landry says unused leases are ultimately surrendered.
•As much as $10 billion by reinstating taxes to clean up hazardous waste sites.
•$11.5 billion by barring companies from writing off drilling costs, such as labor, and by limiting their ability to write off lease payments.
•$13.3 billion by scrapping a 6% tax deduction that benefits all U.S. manufacturers.
The moves could cost the industry several billion dollars a year. Industry profits in the U.S. totaled $125 billion in 2007, according to the Energy Department. Argus Research analyst Phil Weiss says the industry would be far more adversely affected by a windfall profits tax.
http://www.usatoday.com/money/industries/energy/2009-02-26-obama-budget-tax-plan-energy_N.htm
Wednesday, February 18, 2009
Oil and gas
Oil and Gas: Liquefied natural gas (LNG) is one of the fastest growing energy markets in the world. Long considered a niche product, LNG consumption is increasing 10% a year, compared with pipeline gas, which is growing at 2% a year. By 2010, the LNG market will produce 55 million tons a year, compared to seven million tons a year between 1999 and 2001. The LNG industry relative to 2004 is expected to double within five years. Although companies are attempting to increase production, meeting demand is a challenge. Many of the largest gas reserves are located in regions of geopolitical conflict. Costs for gas production have been rising due to the heightened prices of basic construction materials necessary to build extraction facilities, and the number of engineering companies building these facilities is insufficient. In order to cut costs, LNG producers are seeking out stable ties to engineering and building firms, improving technology for efficiency and capacity, and optimizing project management.
http://findarticles.com/p/articles/mi_hb6656/is_17_15/ai_n29316966?tag=content;col1
http://findarticles.com/p/articles/mi_hb6656/is_17_15/ai_n29316966?tag=content;col1
Tuesday, February 10, 2009
Oil industry faces policy changes, slumping prices
One of the oil industry's biggest challenges this year will be managing exploration and production amid the worst global recession in a generation, trying not to scale back so much that it sets the stage for another round of painful price spikes.
At the same time, industry leaders will certainly want a say as President Barack Obama shapes the nation's energy policy and looks to reduce America's dependence on fossil fuels.
Some of the energy sector's heaviest hitters will meet in Houston this week at an annual conference organized by Cambridge Energy Research Associates, a consultancy. CERA is chaired by author and economic researcher Daniel Yergin.
The list of scheduled speakers includes the top executives of European oil giants BP PLC and Royal Dutch Shell PLC and Saudi Arabia's oil minister, Ali al-Naimi.
The five-day conference, which begins Monday, comes only a week after many oil and gas companies reported their worst quarterly earnings in years, dragged down by crude's 60 percent price drop in the final three months of 2008.
Oil continues to hover near five-year lows around $40 a barrel.
Everyone in the business — drillers, producers, service companies — is trying to muscle through the latest boom-bust cycle. So far, the world's biggest oil companies aren't scaling back spending on new oil and gas projects as much as smaller and mid-size producers. But any curtailment of production could cause supply problems once the world's economies start to rebound.
"You don't want to fall into the type of situation we had after the 1998 price collapse, when Wall Street put enormous pressure on energy companies to cut back investments," said Yergin, whose history of the oil industry, "The Prize," won a Pulitzer Prize in 1992. "When demand started again, people were running double time to try and catch up.
"It's very challenging," he noted. "You're making investments that will have a 10- to 15-year time horizon."
Where prices go in 2009 is anyone's guess. Some forecasters see oil slipping below $30 a barrel, while others have it averaging about $50 a barrel. The biggest factor is the recession's duration, and most economic news right now points to a protracted downturn.
That scenario is playing out in the heart of the oil patch.
For the 11th straight week, the number of working oil and gas rigs dropped in the United States last week, with the most severe decline in Texas, noted analyst Stephen Schork. The drop off in drilling activity shows how badly the recession has cut into energy demand and slowed spending.
"More to the point, the number of total rigs employed in the U.S. dipped below 1,400 for the first time since July 2005," Schork wrote in a report.
Falling crude prices have affected the global energy complex, including the Organization of Petroleum Exporting Countries, which produces 40 percent of the world's oil.
OPEC Secretary General Abdalla el-Badri said Monday because of falling prices, member states have postponed 35 of 150 new oil and gas production projects. That likely will mean OPEC will not meet its goal of raising capacity by five million barrels a day by 2012, when most expect the recession to be a bad memory.
In the U.S., even as the industry navigates this difficult period, it's preparing to adjust to Obama's plans for a "green energy economy."
Obama's new energy secretary, Steven Chu, has vowed to aggressively pursue policies aimed at addressing climate change and achieving greater energy independence by developing clean energy sources.
Chu is a Nobel Prize-winning physicist who has promoted alternative energy and warned of global warning as director of the Lawrence Berkeley National Laboratory in California.
"I think it's very clear there's going to be a big emphasis on climate change," Yergin said. "The appointment of Steven Chu is a notable statement."
Some in the industry are leaning toward a cap-and-trade system to cut carbon emissions over a tax on them. ConocoPhillips Chairman Jim Mulva has suggested cap-and-trade — which allows a company with reduced emissions to sell a credit to another business that needs to exceed the emissions limit to operate — is more widely understood and has a better chance of working through the political process.
But Exxon Mobil Corp. chief Rex Tillerson has said a carbon tax would be more transparent and effective. A cap-and-trade system, he noted, would require establishment of new markets to trade carbon credits and new regulators to monitor them.
"There's a strong sense we're going to be moving into an era in which there's going to be more focus on energy policy," Yergin said. "But the reality is there's no simple answer for such a policy in a $14 trillion economy."
http://www.google.com/hostednews/ap/article/ALeqM5heki26GP91C6nqUCEWxy0JDJqZsQD9684H681
Wednesday, February 4, 2009
Ex-wildlife managers: Approve new oil, gas rules
About 60 former state and federal wildlife managers are urging legislators to approve new oil and gas regulations in the face of industry warnings that the rules will cost the state jobs and tax revenue.
The letter sent Monday to legislators says the regulations developed over 18 months are weaker than what they believe are necessary to protect Colorado's big-game herds, native trout and other wildlife in the aftermath of record natural gas development.
Despite the concern, the 61 wildlife experts, including two former Colorado Division of Wildlife directors, said they support the rules passed in December by the Colorado Oil and Gas Conservation Commission. They wrote: "In the end, all of us who love this state want to ensure that our world-class natural resources are left in as good or better shape than when we inherited them."
If the Legislature approves the rules, they will take effect April 1.
The rules would implement two laws requiring more weight be given to the environment, public health and safety and wildlife when approving oil and gas development. The Legislature overwhelmingly passed the measures in 2007.
Now, however, industry officials and some legislators argue that a recession is no time to clamp down on businesses that have generated thousands of jobs and billions of dollars in revenue for the state. Uncertainty about the regulations' effects is causing companies to leave Colorado or scale back operations, they argue.
Critics also contend that the rules go beyond what the Legislature intended.
http://www.forbes.com/feeds/ap/2009/02/03/ap5999654.html
Sunday, January 18, 2009
Colorado regulators defend proposed oil, gas rules
DENVER - The battle over new rules for Colorado's oil and gas industry continues — this time at the state Capitol where regulators are defending the rules against claims that they are aggravating energy companies' problems amid a recession.
A legislative committee looking at ways to jump-start the economy heard Friday from the state Department of Natural Resources which said the rules were developed over 18 months with significant input from the industry. Department director Harris Sherman says plunging natural gas prices and a lack of pipeline capacity are bigger factors than the proposed rules.
The Legislature passed bills in 2007 requiring more consideration of environmental and health issues when oil and gas development is approved. If passed by lawmakers, the rules would take effect April 1.
http://www.msnbc.msn.com/id/28698289/
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