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oil-production

U.S. Oil Production By President | From JFK To Trump

Over the past 60 years, U.S. oil production has seen its ups and downs. From the decline that began in 1970 through the fracking boom of the 2000s, U.S. presidents have overseen a wide range of oil production changes.

As I have explained previously, a president often benefits from the actions of his predecessor. For example, President Carter benefitted from President Nixon’s decision to approve the Alaska Pipeline, and Presidents Obama and Trump benefitted from the pro-fracking regulations of the President George W. Bush administration.

Thus, this article shouldn’t be seen as crediting particular presidents for the oil production that took place while they were in office. Generally, those trends were set in motion years earlier.

With that in mind, below I present the change in oil production during each presidential term since 1960. For presidents that served two terms, I broke it into two parts. Nixon’s term consists of about 5.5 years, and due to Nixon’s resignation Gerald Ford’s term was about 2.5 years.

Here are the terms:

  • John Fitzgerald Kennedy (JFK): 1961 – 1963
  • Lyndon Baines Johnson (LBJ): 1963 – 1969
  • Richard Milhouse Nixon (RMN): 1969 – 1974
  • Gerald Rudolph Ford (GRF): 1974 – 1977
  • Jimmy Carter (JC): 1977 – 1981
  • Ronald Wilson Reagan (RWR): 1981 – 1989
  • George Herbert Walker Bush (GHWB): 1989 – 1993
  • William Jefferson Clinton (WJC): 1993 – 2001
  • George Walker Bush (GWB): 2001 – 2009
  • Barack Hussein Obama (BHO): 2009 – 2017
  • Donald Trump (DT) 2017 – 2021

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Source: Oil Price

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us-oil-production

Soaring Methane Emissions Suggest U.S. Oil Production Is Bouncing Back

U.S. oil production remains about 2 million bpd lower than its pre-pandemic levels. Still, methane emissions are already back to their levels from before the coronavirus. Worrying as this is in itself, it could also threaten energy companies’ long-term growth prospects because investors’ priorities are changing. What investors want from oil and gas now is not just stable returns but a lower carbon—and methane—footprint.

The Financial Times reported recently, citing data from the Environmental Defense Fund, that methane emissions in the U.S. shale patch had rebounded to pre-pandemic levels already, after dropping sharply as oil and gas production dropped last year amid the pandemic. Methane is a much more powerful greenhouse gas than carbon dioxide, although it dissipates faster in the atmosphere and has recently been garnering growing attention from regulators, environmentalists, and, now, shareholders.

“The investor community that stuck with [the shale industry] is the steady ones, that want discipline, that want predictability,” Regina Mayor, global head of energy at accounting major KPMG, recently told Forbes in an interview. “That’s the investor base they are all pandering to now. The growth investors are gone.”

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Source: Oil Price

oil-gas Goldman Sachs

Goldman Sachs: Return Of Iranian Oil Won’t Shock Markets

Iranian oil potentially returning legitimately to the market. It will not be a shock. The complete return will not take place at least until the summer of next year. This is from the statement of Goldman Sachs says as the U.S. is taking part in indirect talks about the so-called Iran nuclear deal.

“With OPEC+ appearing to manage its exit for now, supply concerns will likely shift to the potential return of Iran to the JCPOA (Joint Comprehensive Plan of Action) agreement,” analysts at Goldman Sachs said in a note on Monday, as carried by Reuters.

The United States is engaging in indirect talks about the Iran nuclear deal. Moreover, there are diplomats from Europe, Russia, and China in Vienna.

Currently, the U.S. sanctions imposed by the Trump Administration are preventing Iran from exporting all of its oil, as many buyers around the world don’t want to risk their U.S. assets by doing business with Iran.

U.S. President Joe Biden has signaled a willingness to return to the nuclear deal. This is only if Iran returns to full compliance in its nuclear activities.

“We don’t anticipate an early or immediate breakthrough, as these discussions we fully expect will be difficult. But we do believe that these discussions with our partners and, in turn, our partners with Iran is a healthy step forward,” Ned Price, U.S. State Department spokesman, said on Monday.

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Source: Oil Price

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oil industry news venezuela

Can Venezuela’s Oil Industry Really Rebound?

There are signs that the crisis engulfing Venezuela’s shattered petroleum industry could start to ease. In a recent televised address, Venezuela’s President Nicolas Maduro stated that Venezuela was open for oil investment from the U.S. and around the world. That coupled with earlier plans to open the Latin American country’s state-controlled petroleum industry to private control of some petroleum projects has sparked a flurry of interest in the near-failed state.

These events have triggered considerable speculation that representatives of foreign energy companies are traveling to Caracas to explore the opportunities that exist in Venezuela’s broken energy sector. The petroleum-rich Latin American country is endowed with the world’s largest oil reserves, totaling 304 billion barrels, with many existing oilfields currently inactive because of PDVSA’s lack of resources. Those characteristics indicate there are considerable opportunities for foreign energy companies, especially if Maduro, as rumored, is willing to provide them with proprietary control of energy assets.

A Reuter’s January 2021 article highlighted that small domestic oilfield contractors were meeting with Venezuelan officials to discuss operating fields owned by national oil company PDVSA in exchange for receiving a share of the profits.

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Source: Oil Price

oil majors

Oil Majors Concern | Is Natural Gas Still A Safe Bet?

Increased scrutiny over the environmental impact of natural gas—a key source of methane, which is a much more harmful greenhouse gas than carbon dioxide—has some industry analysts questioning the long-term prospects of global gas demand in the energy transition.

Big Oil has bet big on natural gas developments in the past decade, expecting incessant growth in demand for decades to come. Today, the majors continue to expect solid demand for natural gas, justifying investments in more production.

But investors and buyers of natural gas have started to fret over the emissions impact of the fuel.

This could create risks for the biggest oil and gas corporations, including Shell, Total, and ExxonMobil, according to Sarah McFarlane of The Wall Street Journal.

Those three supermajors and many other oil and gas companies have bet big on growing their natural gas divisions to meet what they see as continued growth in global gas demand.

The net-zero and energy transition narrative, however, has changed the overall narrative in the gas industry—buyers want net-zero cargoes, while producers and sellers pledge carbon capture and reduction of methane emissions.

Natural gas demand will continue to grow in the coming years, after fully recouping this year the losses from the 2020 pandemic shock, the International Energy Agency (IEA) said earlier this year.

Asia is set to continue leading that growth, while many Western markets, including the European Union (EU), will start to pay more attention to the environmental credentials of natural gas.

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Source: Oil Price

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Offshore Oil & Gas Spending Set To Jump To $44 Billion In 2021

Last year is the lowest spending on new field developments in 30 years. The offshore oil and gas sector is set to increase capital expenditures significantly.

Upstream oil & gas spending will to surge to around US$44 billion this year. This is in comparison to just US$12.3 billion. It is worth of engineering, procurement, and construction (EPC) contracts awarded in 2020. In 2019, before the pandemic hit oil demand and prices, the EPC contracts in the industry were around US$40 billion.

“In 2021, we will see a significant uptick in activity”. This is what Thom Payne, Head of Offshore at Westwood Global Energy Group said at Riviera Maritime Media’s Annual Offshore Support Journal virtual conference and exhibition on Wednesday.

Most of this year’s capital expenditure and the biggest EPC contracts will go to major natural gas projects offshore Australia and deepwater oil project developments offshore South America.

The significant increase in 2021 will also help the offshore rig and support vessel markets this year, Payne said at the conference. It is part of which will come from the deferred spending in 2020.

Payne is mentioning in an analysis that offshore investment is set for a rapid rebound this year. It is through a deferral of projects from 2020 and a “resurgent Petrobras.”

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Source: Oil Price

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Big Oil hottest prospects

Big Oil’s Hottest Prospects In 2021

Judging by the first 3 months of 2021 it seems that this year has gone off to a wrong start. Instead of economic rebounds, we face the third rendition of a market slump. Nevertheless, 2021 will become much more prolific in oil discoveries than 2020. Many of the wildcats initially planned for 2020 were moved to the next year. It is for financial or health security reasons. All the while, some new frontier areas were opened up only very recently. With that 2021 will see its natural continuation there. Several wells have already been spudded, for instance the early top-5 contender Perseverance-1 (prospective resources of 770 MMbbls) spudded in the offshore zone of the Bahamas has encountered oil, however, in non-commercial volumes. Read more about Big Oil hottest prospects below.

In Latin/South America, besides the Bahamian dry Perseverance prospect, many hopes were in a pin to the continuation of drilling in the Guyana/Suriname Basin. Despite clinching a total of 18 discoveries within the Stabroek Block, ExxonMobil’s drilling programme has been disappointing lately.

First, the Tanager-1 well (although this was on the Kaieteur block to the north of Stabroek) turned out to be dry in November 2020, then Hassa-1 wildcat “did not encounter hydrocarbons in the primary target reservoirs” in January 2021 and now Bulletwood-1 (Canje Block) ended up being non-commercial. Guyana will still have an opportunity to bounce back in 2021 with the Kawa-1 wildcat,

However, it seems that if the basin is to wield any significant discoveries. There will be a location change in Suriname’s offshore where several high-potential wells are on schedule for this year. Most notably the  Goliethburg-Voltzberg North-1.

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Source: Oil Price

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gas-drilling and energy transition

Energy Transition Leads To Higher Oil Prices, Metals Shortage

According to a World Bank report, 3 billion tons of metals and minerals is the requirement for the energy transition.  Demand for some of these, such as copper, lithium, cobalt, and graphite. According to the same report, it is set to increase 500 percent by 2050. Copper which is the market for some of them is already near a deficit.

Copper prices are close to record highs last seen in 2011. One analyst at least expects demand to exceed supply before this year’s end. Demand, Natalie Scott-Gray from StoneX said last month, as quoted by Mining.com, will rise by 5 percent this year while supply will only inch up by 2.3 percent. The longer-term problem is that additional supply takes time to come.

“We see the use of electric vehicles, wind farms and solar requires up to five times the amount of copper,” Jeremy Weir, chief executive of Trafigura, said at this year’s edition of CERAWeek, as quoted by Reuters. “You can’t turn on the switch and produce more copper.”

Weir added that copper mines take between five and ten years to develop, which means a tighter supply in the observable future. The situation is similar to other minerals that are essential for the energy transition. Cobalt prices are on the rise, too, at the moment, because of expectations that supply will tighten due to rising demand. And Tesla’s Elon Musk recently inked a deal to make the company a technical adviser at the Goro mine in New Caledonia to secure its long-term nickel supply—another key battery metal.

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Source: Oil Price

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oil-drilling

Kern Supervisors Ready Plan to Allow Thousands of New Oil Wells

After a state appeals court blocked Kern County’s supervisors effort to speed up new oil and gas drilling, officials overseeing the state’s prime oil patch have revised an ordinance that could permit tens of thousands of new wells over the next 15 years.

The Kern County Board of Supervisors is poised to vote Monday on the plan that would streamline the permitting process by creating a blanket environmental impact report for drilling as many as 2,700 wells a year.

While the petroleum industry supports the changes, environmentalists and community groups have said the plan has barely changed and doesn’t address violations of the California Environmental Quality Act.

The 5th District Court of Appeal in Fresno last year found the 2015 plan violated the law by not fully evaluating or disclosing environmental damage that would occur from drilling.

“They’re attempting this huge end-around of this fundamental environmental protection,” said attorney Hollin Kretzmann of the Center for Biological Diversity. “If you drill a well in Kern County, you’re going to get a rubber-stamp permit.”

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Source: Gvwire

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offshore-rig

Why Big Oil Expects Record Cash Flow In 2021

The world’s largest oil companies are set for a cash flow bonanza this year, probably at record levels, as massive cost cuts in the wake of the 2020 oil price and oil demand collapse have significantly lowered the corporate cash flow breakevens for many firms.

After posting record losses in 2020, a year which company executives described as one with “the most challenging market conditions,” Big Oil is looking at 2021 with increased optimism, mostly because oil prices have rallied in recent weeks. Moreover, the ultra-conservative capital spending plans and the huge cost cuts have allowed international oil companies (IOCs) to materially lower their cash flow breakevens.

These factors are set to result in a record cash flow for the biggest oil firms this year if oil prices average $55 per barrel, Wood Mackenzie said in new research.

Currently, investment banks largely believe that a tightening oil market, easy monetary policies from governments to boost economies, and oil as a hedge against inflation for investors would lead to oil prices averaging around $60 a barrel this year, with possible spikes to $70 and even $75 before or during the summer.

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Source: Oil Price