Posts tagged ‘Austin’
The Full article in the Farmington Daily Times Energy Magazine (USA TODAY)
With the OPEC-Russia meeting ahead, the price of oil is at a crossroad.
President Trump wants lower prices for gasoline at the pump and the Democratic Party wants a shortage to lift prices higher. This is the 2020 presidential election, to re-elect Trump or a create a Democratic left-center White House.
Is OPEC-Russia ready to sustain output cutbacks for $70 Brent Oil or continue revenue maximum against market share? Curiously, in the conversation at Vienna the Oxy purchase of Anadarko will resonate. Why? Oxy must now increase its export of oil to lower its debt (Warren Buffet and more) and prevent a serious management miscalculation of paying too much for Anadarko.
Permian Delaware shale, with new high volume pipelines completed soon, must find expanding import markets of l.5 million barrels of oil per day or the equivalent of OPEC-Russia resuming late 2016 output for export.
As this writer concludes this column for the The Farmington Daily Times’ Energy Magazine, which Is going on hiatus in San Juan County after this edition, there is no change in an outlook that dates back to the oil price crash of 2014-2016.
There is too much oil (over-supply) against world demand for it.
Exxon-XTO in the Permian is prepared for $40 per barrel, and to still add $82 billion value in the New Mexican Permian or the Delaware in the next 40 years.
However, along with Chevron, Oxy, EOG and Pioneer, it must have a market for the economic recovery of reserves estimated at nearly 47 billion barrels in the Permian Delaware Basin. They must export against OPEC-Russia production.
The lifting cost of Saudi Aramco oil remains lower than Permian Shale. Saudi Aramco has sold debt (bonds) and 63% of its cash flow goes to its government? With oil demand slack and sluggish, and electric vehicles preparing for a 2024 market challenge both technically and politically (zero emissions).
While associated natural gas has partially become a free commodity from Permian Delaware producers, natural gas is up next, after coal, as a target for Green Energy. It should resemble oil on a smaller scale as price dependent entirely on exports in the form of LNG.
Will Persian Gulf, Australian, and Russian natural gas production roll backward in favor of American LNG? American exporters today cannot compete in a $5 per ton Asian LNG market.
Some San Juan Basin producers at the recent San Juan Basin Energy Conference openly discussed shifting capital spending
from natural gas to oil development.
This writer reaffirms his $50 average price for WTI oil in 2019 presented for the smaller independent producers at a briefing at Merrion Oil last December, but beginning early in 2020 forecasts a second half average of $38 per barrel .
In New Mexico, the Governor can adjust the Energy Transition Act basic law next February, but it should be a petroleum-revenue 30 day session without serious oil and gas organized opposition.
New Mexico is now a hybrid Green State with more exportable oil and gas than every OPEC country except Iraq and Saudi Arabia, and yet it will impose the most effective rules for methane capture.
No amount of ad hominem distraction against its policy and leadership will change this direction, and the nation could follow with the outcome of the national election next year.
Daniel Fine is the associate director of New Mexico Tech’s Center for Energy Policy. The opinions expressed are his own.”
Energy Industry Looks To The Future At 2019 San Juan Basin Energy Conference A recent influx of dynamic, new oil and gas operators are bringing innovative applications of modern technology to restore the San Juan Basin to its place as a leading basin in the United States
The San Juan Basin Energy Conference was founded to provide a forum for exchange of ideas regarding the development of the abundant energy resources found in the region. The theme of this year’s conference is “Looking to the Future”. A recent influx of dynamic oil and gas operators, bringing innovative applications of modern technology to the Gallup sandstone and the Mancos shale formations, promises to restore the San Juan Basin to its place as one of leading basins in the United States.
Regional producers continue to leverage their experiences to apply industry-best practices in efficient implementation of the recently-surging development. The San Juan Basin Energy Conference 2019, sponsored in part by Hilcorp, Whiptail Midstream, and LOGOS Resources II, LLC brings together the basin’s top companies and industry experts to share views on the industry and discuss plans for the future within the San Juan Basin.
Tickets and sponsorship information are available at sanjuanbasin2019.com. Ticket prices are $250/person and sponsorship prices range from $1,000–$10,000. Net proceeds will go to San Juan College’s research park, Four Corners Innovations, Inc.
FOUR CORNERS INNOVATIONS, INC.
SOURCE LOGOS RESOURCES LLC
The article can be found here-> https://www.daily-times.com/story/opinion/columnists/2018/06/24/fine-oil-before-and-after-november-election/699460002/ The Trump Administration is moving towards less royalty rates on Federal land leases, less Bureau of Land Management discretion on Environmental Protection Act obstruction on the Application for Petroleum Drilling process, less coal and nuclear power generation decline, and less oil supply confidence in OPEC-Russia world price management.
This is the thrust of the signature world energy domination policy of Secretary Ryan Zinke for the last 16 months. It accounts for the action of OPEC-Russia 10 days ago. Saudi Arabia led OPEC to increase oil production to respond to President Donald Trump, but averted a price shock with gradualism. More output from OPEC offers increased revenue in the very short term.
It now faces an election to decide majority party control of Congress. Should the Democratic Party win at least in the House of Representatives, President Donald Trump will be set back on energy policy and its action realization. He will be forced to use executive power narrowly.
The Democratic Party will prepare for 2020 and the foreclosure of Trump-Zinke on world energy domination through an American petroleum system and public land dispensation.
What will the Democratic Party control of energy in Washington and Santa Fe look like?
Imported oil is consistent with a resumption of climate change energy policy which is less carbon in the economy and more renewables as the alternative.
World investment flows are putting solar and wind ahead of oil and gas for the first time. Electric cars are now one to every six in sales in California and soon in Europe, displacing diesel engines.
The Democratic Party in Washington in 2020 will no doubt align with the European Union in Climate Change with a roll-back of the Trump Administration regulatory reform.
Methane, public land access, a return of BLM dominance, along with tax and infrastructure incentives can be expected. Battery charging technology and its placement capacity expansion on the Interstates will promote the market for electric vehicles. New issues restricting unitization, spacing and density of oil and gas wells should appear on state and Federal land.
In Santa Fe, the current Martinez energy policy and plan (2015) would be rejected in favor of a new Democratic Governor’s choice to start over in 2019. It should be like Colorado’s energy policy but with strong regulatory hydraulic fracturing intervention and fresh water use conservation emphasis.
The oil and gas industry concentration on the Delaware, Permian, Williston (along with the Bakken Formation), Eagle Ford basins along with the Marcellus in natural gas will double up at heavier entry cost and consolidation.
This process, however, promises San Juan Basin natural gas higher prices. New exploration and production on public land would be minimal and legally challenged.
New off-shore U.S oil would be closed with “national monument” type public law.
The Democratic Party has no conservative business Democratic faction to offset the impact on American oil and gas as an industry.
In New Mexico, county leaders from San Juan, Eddy and Lea will continue to argue on the basis of statewide revenue. The Democratic Party in Santa Fe must demonstrate economic development through diversity while oil and gas is politically isolated.
With Canadian imports and even Russian gas in Boston harbor in very cold and snow-storm winters, the East Coast can return to the way it was before Trump on foreign oil imports – America no longer “First.”
The West Coast without refineries and wired power from natural gas is already there in Democratic Party dominance and declining combustion engines.
Dr. Daniel Fine is the associate director of New Mexico Tech’s Center for Energy Policy and the State of New Mexico Natural Gas Export Coordinator. The opinions expressed are his own.
It has been 70 years since a President of the United States has considered domestic oil and gas as a “power” in world affairs. With Secretary of the Interior Ryan Zinke charting a new course, the Trump Administration is considering a transfer of Federal Land management with natural resources to the Western States.
Coupled with Zinke’s proclamation of American energy world domination, a revolution on how to think about oil and gas in the San Juan Basin is taking place.
The Four Corners BLM management could move across Farmington to the New Mexico state office. The Bureau of Land Management’s Washington control might move to Denver.
It is more than speeding up Applications for Petroleum Drilling (APD): it is who decides and implements Trump-Zinke. How is San Juan natural gas to advance American oil and gas first in a redesign of domestic resources on a world stage?
Farmington and Carlsbad would control, as New Mexico State offices of oil and gas, new rules with national and global meaning. The San Juan Basin future would have natural gas reserves managed for strategic and economic purposes in the Baltic and Black Seas. Management would be drawn from New Mexico.
What is the cost for this historic transfer of power from Washington or a non-oil and gas Potomac?
The State of New Mexico must legislate expansion budgets to overcome the limitations of Santa Fe staff in numbers and expertise. Under State Oil and Gas Law, inspectors are needed to inspect wells (62,000).
Inspection of Federal oil and gas wells (transfer from Washington BLM) requires a budgetary alignment with the strategy and vision of Secretary Zinke.
There is a return to the economic development history of America. San Juan Basin natural gas does not depend on localized manufacturing alternatives into natural gas in the Four Corners. Pipelines take care of markets. The expansion to ultimate economic recovery is in the new policy of this Administration.
I was the lunch keynote speaker at the Jicarilla Apache Energy Conference in Dulce. Indian nation natural gas must not be outside American oil and gas first. Investment and production is now a different opportunity. Deals with conventional oil and gas companies were part of the excitement.
Readers of this column in the Energy Magazine have followed a forecast made 11 months ago, in which I have seen warning signs of oversupply of world oil in 2019.
The Initial Public Offering (IPO) shares in Saudi Aramco is doubtful. China or BP could buy non-controlling blocks of shares as an alternative. If this IPO fails, Saudi Aramco will have little reason to throttle OPEC production downward.
This would open the way for a trend-line similar to 2014. Saudi Arabia is in the first phase of instability. What happens to Mohammed bin Salmon, the Crown Prince, lies in Qatar, and with the Kurds.
It is important to recognize that the IPO process called for the right of women to obtain driving permits. Underwriters were on notice that such discrimination would distract buyers of Saudi Aramco shares.
Hilcorp’s female staff at Dulce added that they (women in Saudi Arabia) must be 30 years of age and will not be able to drive at night.
Daniel Fine is the associate director of New Mexico
The full article is here-> http://www.daily-times.com/story/opinion/columnists/2016/10/29/fine-opec-oil-and-ours-who-wins/92440428/
This is an excerpt of the article ”
Has the oil price and market share war ended with a Saudi Arabian win? Or, as some fund managers and speculators argue, has Midland won? We are now in a trading range high of $50 per barrel for West Texas Intermediate.
Looking back two years, Wall Street, the oil and gas industry and its trade associations got it all wrong. I was a minority of one in New Mexico with my OPEC analysis of a low of $23 to $28 per barrel which was realized earlier this year. Once again there is triumphalism and hubris about winning the war against OPEC.
What is it all about? If OPEC agrees to freeze production at August output that would put OPEC between 32.5 and 33 million barrels per day. In 2013, OPEC was below 30 million. If they “freeze” it will be at 2.5 million more than early 2014 while our production had dropped almost 1.5 million.
In other words, OPEC oil expanded its market share and more significantly has displaced our oil here at home in the American market by nearly one million barrels per barrel. This is a double win for OPEC and Saudi Arabia: more of their oil imported into our market and fewer barrels of our oil produced, which is the loss of rigs and jobs and a painful downturn.
The Permian Basin and its Delaware Basin extension into New Mexico has become the new North Slope Alaska of the 1970s. It is there that drilling rigs and well completions will be re-activated next year. The “breakeven” price is lower because of geology and cost-cutting service contracts. The downturn contracts, however, will expire and non-Haliburton contractors will ask for more. Margins will tighten as costs increase. But North Dakota has leveled off and Eagle Ford is not the Permian.”