Noble Dutch/Shell said on Wed it will go in advance with the world’s biggest offshore gas and oil production task, pushing the boundaries of technology to create from practically 2 miles (3. 2 km) down in the Gulf of Mexico.
Arriving three years after the Macondo oil spill tragedy, Shell targets first development by 2016, demonstrating assurance in big offshore jobs in spite of a downturn in oil prices.
Perdido, in 8,000 feet (2,438 meters) of water, is at present the world’s deepest producing offshore project. That is 60 percent deeper than Macondo, the BP well which ruptured in April 2010 in an accident that killed 11 men and spewed crude into the sea for nearly three months.
Stones is deeper than Perdido at 9,500 feet (2,896 meters).
Production during the first phase of Stones is expected to peak at 50,000 barrels of oil equivalent (boe) per day, Shell said, but the project is multi-phase, and is estimated to have 2 billion barrels of oil equivalent in place.
2015 proved to be a tough year for the oil and gas industry. Hundreds of thousands of workers were let go by oil companies, Many oil companies filed bankruptcy, others managed to survive. At one point it looked as if the shale oil industry would cease to exist. Today there’s new light being shed on the future of shale oil.
Oil is setting itself up for prices only a mineral owner could hope for. We’re looking at oil potentially reaching the $200 mark and possibly flying by it. The perfect storm is brewing, here’s what you need to know.
The year 2015 and into 2016 proved to be a major challenge, as many shale oil companies all but stopped drilling. Rig numbers were cut down to levels unseen for some companies. Production slowly started dropping as a whole. As a result of the crashing crude oil prices, oil companies were drilling holes and then capping them. It was not economical to set the wells into production and pay to have it shipped. The cheapest storage point is in the ground.
As OPEC officials gathered this week to formulate a long-term strategy, few in the room expected the discussions would end without a clash. But even the most jaded delegates got more than they had bargained with.
“OPEC is dead,” declared one frustrated official, according to two sources who were present or briefed about the Vienna meeting.
This was far from the first time that OPEC’s demise has been proclaimed in its 56-year history, and the oil exporters’ group itself may yet enjoy a long life in the era of cheap crude.
Saudi Arabia, OPEC’s most powerful member, still maintains that collective action by all producers is the best solution for an oil market that has dived since mid-2014.
Oil prices surged on Thursday after a raging wildfire near Canada’s oil sands region curbed
output that mainly flows to the United States, before settling off their highs as a rebounding
dollar and a huge U.S. stockpile build cut into gains.
While the oil sands facilities are mostly to the north of the wildfire in city of Fort McMurray in
Alberta that is spreading south, as much as a third of Canada’s daily crude capacity has been
cut and some major pipelines closed after more evacuations were ordered.
A stranded Glencore oil cargo in Libya, after a standoff between eastern and western political
factions, also fed the rally at first.
In 2015 there was an uptrend for oil as well, but ended way down as we all know. This year analysts at Citigroup including Seth Kleinman say this rally has what it needs.
“The extra year of low prices has finally derailed the supply resilience that defined markets last year,” writes Kleinman.
Kleinman and his team say the biggest difference between last year and this is what will happen in the markets in a few months from now. The 24-month WTI futures are at $49 a barrel versus $65 in the 2nd quarter of 2015. This is good because producer’s can’t lock in a profit as easily at $65. So you cannot produce as much and supply should fall. Therefore some analysts think the futures pricing is much more important than the current price. Continue reading »
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