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Collaborating Authors
Donnelly, John
Editor's column Later this month, Mexico will auction off 35 shallow-water blocks in the Gulf of Mexico, as its attempt to revive its oil and gas industry moves forward. It will be the ninth auction held under a reform program that began 4 years ago, and will follow the most successful auction to date. The 31 January deepwater auction surpassed expectations, drawing participation from supermajors and national oil companies (see page 42). Along with Argentina, Mexico has emerged as one of the upstream bright spots in Latin America. At the January auction, Mexican regulatory officials expected only 7–10 blocks to be awarded. But the event attracted bids from 11 different firms as 19 blocks were awarded, nine of those to Shell. Although the deepwater auction is thought to have the most valuable acreage, future tenders may also attract heavy interest. Last year, a consortium led by Talos Energy discovered as much as 2 billion bbl in place at its shallow-water Zama-1 well in the Sureste Basin. And Eni found as much as 1 billion bbl at the shallow-water Amoca field; startup is expected early next year, which would make Eni the first foreign company to produce hydrocarbons in Mexico in 80 years. Mexico’s decision to open its oil and gas sector to foreign investment could not have come at a worse time, months before oil prices abruptly declined and operators sharply cut spending. But, after weathering the early bid rounds, which attracted only light participation, Mexico appears on a roll. In addition to the March shallow-water bidding, 37 onshore blocks will be tendered in July, and there are plans of auctioning the first unconventional acreage, located near the Texas border, before the end of this year. The July blocks are located in northeastern and southeastern Mexico, covering 3,668 sq. miles and prospects of reserves for 260 million BOE of light crude and gas. The unconventional blocks are concentrated in the Tampico-Misantla and Burgos basins, south of the prolific Eagle Ford acreage in south Texas. The Mexican government previously announced auctions for unconventional acreage twice, but the first two events were canceled because of questions surrounding the potential regulation of hydraulic fracturing. The money from the bidding and the prospects of increased production are welcome news for Mexico. State oil company Pemex has been heavily strapped for cash, deterring advancement in deepwater and unconventional plays. Mexico’s oil production peaked in 2004 at 3.38 million B/D and has since fallen to less than 2 million B/D. The oil sector’s chief concern now is an upcoming presidential election. Leftist candidate Andrés Manuel Lopez Obrador has a sizable lead in public opinion polls ahead of the July election, and has been a critic of the energy reforms. He has vowed to review all contracts that have been awarded during the recent bid rounds. Many political analysts believe that he could indeed slow the pace of reform but would have a difficult time turning back the clock to the days when only Pemex was allowed to invest in the upstream.
- North America > United States > Texas (0.78)
- North America > Mexico > Tabasco (0.56)
- North America > Mexico > Gulf of Mexico > Bay of Campeche (0.25)
- Government > Regional Government > North America Government > Mexico Government (1.00)
- Energy > Oil & Gas > Upstream (1.00)
- North America > Mexico > Veracruz > Sureste Basin (0.99)
- North America > Mexico > Tabasco > Sureste Basin (0.99)
- North America > Mexico > Tabasco > Gulf of Mexico > Sureste Basin > Salina Basin > Block 7 > Zama Field > Zama-1 Well (0.99)
- (7 more...)
Q&A Your North America business is doing well. Will that continue to be your focus in the short term? We are really excited about our business in North America. We have always had significant investment in North America and as we look at the immediate future, it will be the busiest market. It is extremely impactful on many different stages. Do you see a slowdown in the unconventional business in North America, or do you think it is still on the way up? I think that North America is going to be very resilient in a $50–55/bbl world. There is a lot of demand for North America resources and I think the speed to market is really relevant and important, particularly as demand increases. Unconventionals can fill that demand most quickly because of the timing more than anything else, which is a real advantage relative to mature fields and particularly deep water. There is a lot of demand for what we do and I expect that we will be very busy in 2018. The sense I get from the customers is that the outlook is good at current commodity prices. We continue to reduce costs and make more barrels. And that’s how Halliburton spends most of its time—determining how to deliver the lowest cost per BOE. Any fear that equipment shortages or labor shortages could slow activity? I don’t think they will. The market is undersupplied today. We estimate that the market is about a million-and-a-half horsepower undersupplied for pumping equipment and I think the other services are also quite tight. Layer onto that the challenges with people and the shortages actually generate a flight to quality. One of the reasons I am confident about our business is that we have been disciplined about maintenance of our equipment and hiring people well ahead of time. That comes at a cost but the fact is there is no substitute for service quality. No substitute. Outside of North America, where are the highest priorities for Halliburton? We have outperformed the market through the downturn internationally in seven of the past eight quarters. The Middle East is extremely important to us. One of the things I am most pleased with is the ability of Halliburton to focus intently on North America, but at the same time steadily grow our international footprint. The fact is, we are present in every important market around the world today. That is something we could not have said 10 years ago and maybe even 5 years ago.
- North America (1.00)
- Europe > Middle East (0.25)
- Asia > Middle East (0.25)
- Africa > Middle East (0.25)
Editor's column Argentina’s Vaca Muerta shale play is considered one of the most promising unconventional resources in the world. Advertised for years as the next great shale resource outside of the US, foreign investment has now picked up and the play may finally begin living up to its potential. A comprehensive article beginning on page 26 outlines the current state of the Vaca Muerta, including geological and business challenges, as well as future development plans. Total output from Vaca Muerta in barrels of oil equivalent (BOE) has risen 60% since the start of 2016. Production is currently just over 75,000 BOE/D—split roughly evenly between oil and gas—but most of the money spent in the play so far has been in exploration; output is expected to rise sharply over the next decade. Most of the current output comes from the Loma Campana joint venture between YPF and Chevron, but other projects may ramp up soon. Production is expected to rise to 113,000 BOE/D by the end of this year, and as high as 1 million BOE/D within 15 years, according to consultancy Wood Mackenzie. The shale rock in Vaca Muerta is considered very high quality, on a par with several US shale plays such as Eagle Ford, Bakken, and Marcellus. Government-led reforms have been a major factor in its growth, in part because the country needs the economic benefits of Vaca Muerta. Once an energy exporter with a sound economy, Argentina last decade defaulted on $82 billion of foreign debt—the largest such default in history at the time. Elected president in 2015, Mauricio Macri vowed to put Argentina on sounder financial footing, and has his eye on replicating the shale boom in the US. After October’s elections consolidated his political power, he has embarked on a campaign to get international oil companies and domestic ones to up their investments in the shale play. More than 15 companies are currently exploring in the Vaca Muerta, including big names such as Chevron, ExxonMobil, Total, and Shell. YPF and the government are also working to lower labor costs. Trade unions made concessions on contracts in exchange for commitments on spending, which the government said could cut development costs by 20%. YPF has announced a $30-billion, 5-year investment plan for Vaca Muerta, and ExxonMobil has committed $200 million to a pilot project there. Before the country’s historic default, Argentina was a net exporter of oil and gas but lack of investment has turned it into an energy importer. Argentina’s oil production hit 489,000 B/D last year, down sharply from a peak of 847,000 B/D in the late 1990s. Gas output peaked at 4.5 Bcf/D in 2005 and is now roughly 3.7 Bcf/D. The US Energy Information Administration estimates that Argentina has the world’s second-largest shale gas and fourth-largest oil resources. If the current momentum continues, Vaca Muerta may become the only viable shale play outside of North America.
- North America (1.00)
- South America > Argentina > Neuquén Province > Neuquén (0.25)
- Geology > Rock Type > Sedimentary Rock > Clastic Rock > Mudrock > Shale (1.00)
- Geology > Petroleum Play Type > Unconventional Play > Shale Play (1.00)
- Energy > Oil & Gas > Upstream (1.00)
- Government > Regional Government > North America Government > United States Government (0.56)
- Government > Regional Government > Asia Government > Middle East Government (0.40)
Editor's column In this issue, SPE’s technical directors evaluate the current state of the upstream oil and gas industry and offer their outlook for what will drive the sector in 2018. After several years of low oil prices and heavy restructuring, it is no surprise that cost containment and adding value are at the top of the agenda, from drilling to completions. Parts of the industry are still adjusting to change. Shifting demographics, increased automation and digitization, and the ever-increasing flow of data will continue to have an impact on the industry for the foreseeable future. In general, analysts who study the industry predict that 2018 will be a year of stability and continued gradual recovery: oil prices should hold steady or slightly rise, and OPEC and non-OPEC producers will chart their course forward as the supply overhang gradually subsides, leading to a market in better balance than it has been in 3-4 years. The big picture will focus on OPEC and other large producers’ adherence to production cuts, the continued rise in shale output in the US, and whether global demand can whittle away at the oil surplus. Deloitte sums up the past year and how it will impact the new one in its 2018 Outlook On Oil and Gas. Among its observations is the surprise of the US coming into its own as an energy exporter. When the US oil export ban was lifted in January 2016, it was thought that it would have little effect on the global market. But the US has become a regular exporter of crude oil, especially unconventional, to as far away as Asia, as well as a force in liquefied natural gas and refined products. If the trend continues, the US will have gone from a heavy net oil importer to a truly global player in the market, especially as unconventional production continues to climb, in just a few years. That also has implications for national security and global geopolitics. Deloitte points out that the question coming into 2017 was whether cost reductions in unconventional production would be sustainable. “The evidence seems to tell us they are, with break-even costs across the major US shale plays still 30-50% below the levels of early 2015,” its report says. The downside is that, although many producers are not only surviving but doing well, the oilfield services industry is still reeling “and further consolidation may be in the cards.” OPEC’s extensions of cuts along with major producers such as Russia has been key to stabilizing prices. But with non-OPEC production climbing, the market still needs a significant demand boost to solidify prices. OPEC and the other producers first announced their cuts in late 2016, and the adherence to them has been stellar. The cuts were extended another 6 months and, in late November, another 9 months to the end of 2018. How long these producers, especially Russia, are willing to curtail output will have a major influence on oil prices in the coming year.
- North America > United States (0.56)
- Europe > Russia (0.47)
- Asia > Russia (0.47)
- (3 more...)
- Energy > Oil & Gas > Upstream (1.00)
- Government > Regional Government > Asia Government > Middle East Government (0.40)
Conference Review: SPE Annual Conference Highlights Sustainability, Disruptive Technologies
Carpenter, Chris (JPT Technology Editor) | Wilson, Adam (JPT Special Publications Editor) | Rassenfoss, Stephen (JPT Emerging Technology Senior Editor) | Whitfield, Stephen (JPT Senior Staff Writer) | Donnelly, John (JPT Editor) | Boschee, Pam (JPT Senior Editor)
More than 8,300 professionals from 60 countries attended the 2017 SPE Annual Technical Conference and Exhibition, which was held in October in San Antonio, Texas. Conference panels and technical sessions examined best practices and emerging technologies throughout the oil and gas industry, including discussions on the role of data analytics, contemporary research and development initiatives, sustainability, automation, and recent innovations. Here are highlights from this year’s conference. Disruptive Drilling Technology A panel on starting companies selling disruptive drilling technology began with the advice, “If you remember anything today, remember it is not about technology—it is about money.” The advice from Tom Bates, an energy investor from Fort Worth, Texas, began a discussion put on by the Drilling Systems Automation Technical Section (DSATS) about starting successful companies that sell digitally controlled drilling tools. When discussing money, the panelists kept coming back to the critical, sometimes maddening role people play in deciding who gets money and profits in the end. “Most profitable companies do not want things that disrupt” the status quo, said David Blacklaw, Shell global drilling automation lead. For change to happen, it may well require upper management to promote changes that have benefits that are not obvious to those in operations. Even decision makers who see the potential are wary about changes at a time when mass layoffs are a fresh memory. “Automation has a lot of people nervous about their job security,” said Todd Benson, president and CEO of Motive Drilling Technologies. The worries range from decision makers who do not want to stake their job on an unknown startup to workers who see their jobs threatened. Motive Drilling sells a directional drilling advisor, which offers turn-by-turn directions now delivered by directional drillers. While companies using it have continued to employ directional drillers, it changes what they do. If a worker sees something new as a job, “you are the enemy,” Benson said.
- North America > United States > Texas > Tarrant County > Fort Worth (0.24)
- North America > United States > Texas > Bexar County > San Antonio (0.24)
- Information Technology > Data Science (0.49)
- Information Technology > Artificial Intelligence (0.46)
E&P Notes BHGE Shares Strategy for Integration of Services, Products, and Digital Platforms Pam Boschee, Senior Editor Marking 100 days as a new company after the merger of Baker Hughes and GE Oil and Gas, Baker Hughes, a GE company (BHGE), shared its strategies and plans for taking a fullstream approach to global oilfield services, products, and digital capabilities to improve productivity, safety, and project economics. Speaking at the SPE Annual Technical Conference and Exhibition in October, Mathias Schlecht, BHGE vice president of enterprise technology, described the concept as the full integration of services from upstream to midstream to downstream. “We know how to get the molecules and transport and use them. From molecules to megawatts, and deep sea to the cloud.” Accidental Discovery: Bitumen Pellets for Heavy Oil Transport Stephen Whitfield, Senior Staff Writer Researchers at the University of Calgary have developed something that may have a significant impact on the transport of heavy oil, and it is the size of a pill. The discovery is a pellet, self-sealing with a liquid core of either bitumen or heavy oil within a super-viscous, semi-solid, or solid skin that reduces the chance of a damaging spill during transport. The pellets can be designed to be buoyant and safe if they are spilled into the environment by incorporating agents within the pellets, like gas bubbles, catalysts, and solvents. Their outer coating is unreactive, making them much less likely to cause environmental damage than a liquid heavy oil or bitumen spill. Jones Energy CEO Tells of Company’s Transformation Joel Parshall, JPT Features Editor Jones Energy CEO Jonny Jones described his company’s transformation from a small private entity to a publicly traded company in a talk in October at the Leaders in Industry Luncheon, sponsored by the Independent Producers Association of America and the Texas Independent Oil Producers & Royalty Owners, at the Houston Petroleum Club. Jones highlighted the company’s entry into the Merge oil play, a newly defined play at the junction of the SCOOP (South Central Oklahoma Oil Province) and STACK (Sooner Trend, Anadarko and Canadian and Kingfisher [counties]) plays in central Oklahoma. Largest Gulf of Mexico Lease Sale Announced John Donnelly, JPT Editor The US Department of the Interior in October proposed the largest oil and gas lease sale ever held in the United States—almost 77 million acres offshore Texas, Louisiana, Mississippi, Alabama, and Florida. The sale would be held in March 2018 and is attempted to revive interest in a sector that has been reeling since oil prices fell sharply beginning 3 years ago. The sale includes all available unleased areas on the Gulf ’s Outer Continental Shelf. The Trump administration said the auction should make the US energy industry stronger. This proposed sale follows a lease sale in the Gulf of Mexico in August that attracted $121 million in high bids on 90 offshore tracts.
- North America > United States > Oklahoma > Kingfisher County (0.34)
- North America > Canada > Alberta > Census Division No. 6 > Calgary Metropolitan Region > Calgary (0.26)
- Government > Regional Government > North America Government > United States Government (1.00)
- Energy > Oil & Gas > Upstream (1.00)
- North America > United States > Texas > Anadarko Basin > Cleveland Formation (0.99)
- North America > United States > Oklahoma > Arkoma Basin > Cana Woodford Shale Formation (0.99)
- North America > United States > Oklahoma > Anadarko Basin > Sooner Trend Anadarko Canadian and Kingfisher Play (STACK) > Sooner Trend Anadarko Canadian and Kingfisher Play (STACK) (0.99)
- (3 more...)
Editor's column After 3 tough years of cost cuts and downsizing, the oil industry is seeing signs of new life in a lower-price environment. Companies are hiring again, salaries have rebounded, and large producers are posting profits. The oil and gas industry is finally hiring and may begin to face worker shortages in some areas. Since oil prices crashed in 2014, more than 440,000 jobs in the industry have been cut worldwide. But next year, almost 90% of employers expect that staffing levels will either stabilize or increase in 2018, according to a survey by NES Global Talent and oilandgasjobsearch.com. Almost 60% of employers expect to recruit significantly over the next year. Of the companies that are hiring, 23% expect to increase their workforce by 5%, 19% plan to increase staffing by between 5 and 10%; and 17% expect to increase hiring by more than 10%. Almost half of employers expect salaries to rise. SPE’s annual industry salary survey also paints a brighter picture. Industry professionals reported average total compensation of $194,649 this year, a $9,000 increase from 2016 although still down from 2014 and earlier. Compared with 2016, mean base pay, other compensation, and total compensation all rose in 2017. Oil prices have finally crossed the $50/bbl threshold, with Brent over $60/bbl in mid-November. Rising prices, along with sharp cost cutting, are leading to operator profits. The supermajors—including ExxonMobil, Total, Chevron, Shell, and BP—all posted healthy third-quarter earnings and solid year-over-year improvement in cash flow and profits. In delivering their earnings, both BP and Shell said they would remain profitable even if oil prices dipped into the high-$40/bbl range. The large service companies, such as Schlumberger, Baker Hughes, and Halliburton, were more circumspect in their outlooks but see a foundation laid for better days ahead. OPEC also sees positive days ahead in its latest forecast. It predicts that global oil demand in 2018 will grow and that non-OPEC production will not increase as fast as previously thought. Along with its production cuts, that will continue to reduce excess oil in storage. OPEC, Russia, and a handful of other producers agreed to cut output by 1.8 million B/D, and compliance with the agreement has been stellar. OPEC’s report concedes that it did not kill off North American shale when it flooded the market with oil 3 years ago, and that shale will continue to see strong supply growth. A new International Energy Agency reports confirms OPEC’s conclusion on shale’s staying power. The IEA said the supply surge in shale output will lead to the largest gains in the history of the industry. By 2025, the US will match Saudi Arabia in oil production and surpass the former Soviet Union in gas output, according to its World Energy Outlook. The US oil industry “weathered the turbulent period of lower oil prices since 2014 with remarkable fortitude,” according to the report.
- Energy > Oil & Gas > Upstream (1.00)
- Government > Regional Government > Asia Government > Middle East Government (0.40)
Editor's column JPT publishes summaries of 144 technical papers a year, choosing from among more than 4,000 papers to ensure that it is publishing the “best of the best.” Although this has been standard practice for the magazine for years, many SPE members, as well as nonmembers, are unclear how these papers are selected. It starts with dedicated volunteers. The JPT Editorial Committee comprises 47 oil and gas industry professionals who are experts in their field. Committee members volunteer their time to review technical papers and abstracts that have been presented at SPE conferences as well as the multisociety Offshore Technology Conference, Unconventional Resources Technology Conference, and International Petroleum Technology Conference and identify the most relevant, high-interest, and practical papers for publication. Occasionally, papers that have not been presented at a conference but submitted directly to JPT are reviewed. Reviewers also attempt to ensure that the papers represent the industry’s geographic and corporate diversity. JPT staff then summarize the chosen papers in 2–3 pages with access to the full-length paper available online. SPE members can access the full-length papers for free for 2 months at www.spe.org/jpt. Over the course of the year, JPT will publish summaries of 12–16 papers monthly in a variety of upstream areas such as hydraulic fracturing, formation evaluation, completions, and enhanced oil recovery to name a few. The committee members have diverse positions in the industry as well as backgrounds. They include professionals at operators, service companies, national oil companies, independents, consultancies, and in academia. Qualifications to serve on the committee include SPE membership, be a recognized industry expert on a particular technical topic, have at least 10 years of experience in the oil and gas industry, and have been an author of SPE technical papers. The chair of the committee serves a 3-year term as do the committee members. Current members of the committee and their job affiliations can be found to the right of this column. The goal of publishing these technical paper summaries is to provide readers with short versions of important papers. In years past, JPT published full-length technical papers but that allowed for publication of only a few over the course of the year. Publishing summaries allows readers to be exposed to a variety of ideas and technology applications and an avenue to easily access the full-length paper if interested. This help meets JPT’s, and SPE’s, goal of disseminating and sharing knowledge about recent state-of-the-art developments, best practices, and solutions in E&P technology. Each reviewer also picks additional papers for a recommended reading list, for those interested in more high-quality information on a topic, and prepares an article on the state of the technology in that particular discipline. So far this year, the committee has reviewed 3,795 papers and will have reviewed more than 4,000 by the end of the calendar year. The process is distinct, but sometimes confused, with peer review. SPE’s online technical journals publish peer-reviewed papers, which is a more lengthy process involving industry experts carefully evaluating a paper and working with the author to clarify or validate certain assumptions or statements.
- Asia > Middle East > Saudi Arabia (0.24)
- North America > Canada > Alberta (0.16)
- Asia > Middle East > Kuwait (0.16)
- Energy > Oil & Gas > Upstream (1.00)
- Government > Regional Government > Asia Government > Middle East Government (0.39)
Editor's column In August, Mexico’s National Hydrocarbons Commission delayed the date of its next deepwater auction by a month to January 2018 to give companies more time to study the acreage on offer. Although postponing bid rounds is usually taken as a sign of lack of interest by private firms, the opposite is true in Mexico. Discoveries announced over the past few months have validated Mexico’s historic energy reform effort and may propel the oil industry there to reverse years of decline. In a sector hampered by the downturn in oil prices, Mexico’s offshore has emerged as a bright spot. In July, US independent Talos Energy, Sierra Oil and Gas of Mexico, and Premier Oil of the UK announced one of the largest shallow-water finds of the past 20 years. The block, located off the coast of Tabasco state, holds an estimated 1.4 billion to 2.0 billion bbl of oil. The find, which came with Talos’ first exploration well, was the first since Mexico began auctioning off onshore and offshore properties in 2013. The block found up to 650 ft of oil-bearing reservoir of light crude around 28–30 °API. That same month, Italian major Eni announced the discovery of the shallowwater Amoca field in the bay of Campeche, which it said holds 1.3 billion BOE, of which 90% is oil. It is fast-tracking the development with hopes to produce from 30,000 to 50,000 B/D of 25–27 °API crude in early 2019. Consultancy PIRA Energy expects the discoveries to add up to 200,000 B/D of crude production, and believes they are economic at a $50/bbl oil price, but not for at least another decade. Although deepwater and perhaps unconventional reserves hold the most promise for reviving Mexico’s oil sector, the country does not have a lot of time. Years of blocking the private sector out and underfunding the state oil company Pemex have taken their toll. The country’s oil and gas output is down 40% from its peak; oil production is 2.0 million B/D compared with its peak of 3.4 million B/D in 2004. That led the government to finally open the entire oil and gas sector to private money, but the reform launch could not have come at a worse time. Oil prices soon lost more than half their value, severely curtailing companies’ exploration budgets. But the discoveries of Talos and Eni have breathed new life into Mexico’s upstream and attracted the interest of independents and supermajors. That is in contrast to the early bid rounds, which attracted only light participation. To date, seven auctions have been held—three covering onshore, three for shallow offshore, and one for deep water. Pemex has also negotiated farmout agreements with private firms. Another three are scheduled for next year. The key will be interest in the January auction. Thirty deepwater oil and gas blocks will be up for bid in areas thought to be potentially lucrative. Mexico’s deep water has been off limits to private firms and barely explored by Pemex. If resources there are anything like those found in the neighboring US Gulf of Mexico, the country’s upstream sector may become one of the globe’s offshore bright spots.
- Government > Regional Government > North America Government > Mexico Government (1.00)
- Energy > Oil & Gas > Upstream (1.00)
- North America > Mexico > Gulf of Mexico > Bay of Campeche > Sureste Basin > Campeche Basin > Area 1 > Amoca Field (0.99)
- North America > Mexico > Gulf of Mexico > Bay of Campeche > Sureste Basin > Campeche Basin > Area 1 Production Sharing Agreement > Amoca Field (0.99)
Editor's column Consensus is growing around the idea that oil prices will fluctuate in the $45–60 bbl range, both in the short term and perhaps even for the long term. This has led to a rash of studies about what this means for operators and service companies in the “new normal.” On the operator side, much of that depends on what oil price translates to profitability, both in the unconventional and conventional sectors. Some anecdotal evidence is trickling in. Public companies reported second quarter earnings in late July and early August. According to earnings reports, 15 of the largest shale producers posted total net losses of $470 million. During that time (April–June), WTI oil prices averaged $48/bbl. That was a marked improvement over the past quarter and past year. Those same companies reported total losses of $3.7 billion in the first quarter of 2017 and losses of $7.4 billion in the second quarter of 2016. The financial improvement in the second quarter came from more efficient operations, cost cutting, and a rise in oil prices. But at what oil price are shale producers profitable? Analysts have thrown around figures of as low as $40/bbl, but a detailed study of the issue by consultancy Wood Mackenzie sheds new light on the subject and is examined on page 47 of this issue. The consensus is that $50/bbl brings most companies closer to profitability than $40/bbl, but perhaps needs to be over $50/bbl to be sustainable. Operators are taking the “lower for longer” outlook seriously and are adapting. Occidental Petroleum announced that it was tying a company-wide compensation plan to the firm being profitable at $40/bbl. Some of the largest majors are beginning to sanction projects once again—although cautiously. More new oil and gas fields were given the green light in the first half of this year than in all of last year, including projects by ExxonMobil, Shell, and BP. But about three-fourths of those conventional projects are expansions of existing fields or satellite developments that tie back to existing pipelines and platforms, according to Wood Mackenzie. Shell, for example, is now tying its Kaikias project in the US Gulf of Mexico to its existing Ursa production hub to limit costs. When BP reported its earnings, Bob Dudley, the company’s chief executive, said the firm was planning on the basis of oil prices being at current levels for the next 5 years. Noted oil historian Daniel Yergin agreed, adding, “The industry is in the middle of re-engineering its processes and its technologies to be a $50/bbl industry, not a $100/bbl industry.” Major oilfield services companies Halliburton, Schlumberger, and Baker Hughes reported increased revenue for the second quarter of 2017 compared with the first quarter, with revenue up 15.8% for Halliburton, 8.2% for Schlumberger, and 6.3% for Baker Hughes. Halliburton earned a slight profit while the two other companies posted net losses. Dave Lesar, chairman of Halliburton, sees a bit of a slowdown coming in shale, saying that producers were “tapping the brakes” on drilling as oil prices remain under $50/bbl and the global supply glut appears to have life left in it.
- Asia > Middle East > Israel > Mediterranean Sea (0.25)
- Asia > Middle East > Saudi Arabia (0.24)
- North America > Canada > Alberta (0.16)
- Asia > Middle East > Kuwait (0.16)
- Energy > Oil & Gas > Upstream (1.00)
- Government > Regional Government > Asia Government > Middle East Government (0.39)