Analysis by the father of American Geopolitics Dr. Daniel Fine, MIT.

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Analysis: Oil market glut will lead to declining prices through 2020 by Dr. Daniel Fine


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.

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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


 


NEWS PROVIDED BY

LOGOS RESOURCES LLC

Mar 15, 2019, 09:52 ET

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.
DOLORES SILSETH
(505) 566-3402
SILSETHD@4CII.ORG

SOURCE LOGOS RESOURCES LLC

Related Links

http://www.logosresourcesllc.com

Dr. Daniel Fine: Trump and oil in trade geopolitics


The full article is here-> Full Article by Dr. Fine

“Unlike 1973, and its oil embargo against the United States, there is no supply threat from the Middle East. Consequently, only a demand unknown moves the price of crude oil. Permian/Delaware has displaced the Middle East as a source and even Mexico imports U.S. production.

This has caused euphoria in Santa Fe among lobbyists who prepare for a new Governor from the Democratic Party.

She will have to decide that the rhetoric of renewable energy is no match for her budget bounty made up of revenue flows from Lea and Eddy Counties. Token demonstrations for higher taxes from oil and gas producers no doubt will occur, but in Santa Fe only the price of oil is the threat that can take the punch off the table.

And here the connected experts publicly answer reporters that the Permian is an exceptionalism in oil and gas: it will never become a basin in a downturn.

However, all the charts and slides converge on upward supply without much on demand to offset the upward slope. It is almost impolite to ask where is the market for the massive supply of oil now and in the near-term future?  What about demand for oil?
China? Not quite as electric cars – yes, Tesla or Chinese versions appear as I-Phone-like technology against the combustion engine.

California, with 40 million people and seven states following its waiver, can set miles per gallon requirements on engines towards zero emissions.

This is the meaning of President Trump’s policy to force California back into the Union where Washington decides on what the combustion engine can and will do.

This a decisive battle over Climate Change and the “Resist” (Trump) movement of the Democratic Party.

After all, it is California which pledged to support the Paris Climate Change Treaty which Trump opposed.”

Oil producers want U.S. to restrict imports


By Kevin Robinson-Avila / ABQ Journal Staff Writer

The full story is here-> http://www.abqjournal.com/803674/oil-producers-want-u-s-to-restrict-imports.html

“ALBUQUERQUE, N.M. — New Mexico and West Texas oil producers are gearing up for a national effort to draw all major U.S. oil basins into a grassroots movement to restrict crude imports from overseas.

Leaders of the Panhandle Import Reduction Initiative, which launched in April in the Permian Basin, are seeking public meetings and rallies in other oil-producing zones to convert what’s now a regional initiative into a national movement, said Daniel Fine, associate director of the New Mexico Center for Energy Policy, who is working with local producers.

Those efforts will kick off in September with a presentation at the fourth Southeastern New Mexico Energy Summit in Carlsbad. After that, initiative leaders expect to hold public meetings in other shale oil basins, including the Bakken in Montana and the Dakotas and the Eagle Ford in South Texas.

“We’ll take it to Carlsbad first, and then it goes national,” Fine said. “We want to organize public rallies with producers and field workers whose jobs are at stake. This is a grassroots effort in the basins where the oil bust has taken place.”

The initiative is a reaction to the Organization of Petroleum Exporting Countries’ aggressive oil-pumping policies since mid-2014, which have helped drive global oil prices to ten-year lows and thrust domestic U.S. production into crisis. Initiative leaders say those policies were a deliberate effort by the mid-Eastern members of OPEC, particularly Saudi Arabia, to drive U.S. producers out of business.

Banning crude imports from overseas would undercut OPEC’s ability to manipulate prices, they say, and allow U.S. producers to ramp up domestic production to supply the U.S. market.”

Energy group hopes to reduce foreign oil imports


by James Fenton

The full article is at–> http://www.daily-times.com/story/money/industries/oil-gas/2016/06/14/energy-group-hopes-reduce-foreign-oil-imports/85855044/

“FARMINGTON – A group of oil and gas executives and energy policy experts from the Texas Panhandle and New Mexico’s piece of the Permian Basin are pushing a plan to restrict seafaring imports of foreign oil from coming into the U.S. in order to stabilize the oil and gas industry and bring back lost oilfield jobs.

The group’s plan, which would exempt crude oil imported from Mexico and Canada, is an effort to push back against the price wars the group said are being waged by OPEC, or the Organization of the Petroleum Exporting Countries, led by Saudi Arabia.

Members met at the School of Energy at San Juan College Tuesday to promote  the “Panhandle Import Reduction Initiative,” which they say could be implemented in multiple phases within 90 days of the next administration, with the ultimate goal of reducing heavy crude oil imports to about 10 percent of demand.

Launched in November, the initiative aims to cut foreign oil imports enough to activate more domestic drilling rigs and boost domestic production to meet current demand levels within four years.

Former state legislator and Four Corners Economic Development Chief Operating Officer Tom Taylor said the drop in natural gas prices eight years ago and the fall of crude oil in 2014, has delivered prolonged pain to the regional economy.

“We find ourselves … in a situation now where we’re down about 6,000 jobs, most of those in the oil and gas industry,” Taylor said of the San Juan Basin. “We have about 11,000 people who have left (San Juan County) … So while we’re down 6,000 jobs and down 11,000 people, we’ve built seven fast-food restaurants, three more under construction, and two big box stores. It’s a different world out there.

“But the fact of the matter is that the economic base of the community is in trouble. And not only is the community in trouble, but the state of New Mexico is in trouble, and not only is New Mexico in trouble but our nation and its security. It’s all tied together. It’s a very difficult situation we find ourselves in when we have one country that can control oil prices. It goes beyond free trade. It’s a problem we need a solution to. We are at the dependence of foreign oil.”

Taylor said about a third of New Mexico’s general fund comes from the oil and gas industry in the form of taxes and fees.”

World Oil and Gas expert Dr. Daniel Fine: Oil at halftime, 2016


The full story is here-> http://www.daily-times.com/story/opinion/columnists/2016/05/28/fine-oil-halftime-2016/84610710/

“The question of the oil-price reality pervaded the talks and private conversations at the Four Corners Oil and Gas Conference earlier this month. From the lowest price per barrel in nearly eight years to a recovery halfway to $100 in less than three months!  Is the “bust” in the San Juan Basin dissolving as others before?

Yet, Ken McQueen, retiring vice president of WPX in the San Juan Basin, and the most effective in technical innovation in the basin, said: “price is not everything.”

This is the view of surviving management. It is not shared by financial institutional  players and speculators.

Before Thanksgiving 2014, I presented a forecast for the oil price in a new “crash” range of $23 to $28. This was based on analytical experience and petroleum economic history. The trade associations were then spinning that it was an opportunity and would turn around in weeks.

They had no understanding of Saudi Arabia and OPEC as the price-setter. The price of oil collapsed three months ago to $26.70.

There was an abortive effort by OPEC and Russia at Doha, Qatar, to freeze production at Jan. 1 levels to “re-balance” world demand and supply. It failed because OPEC was no longer outside the Middle East political and religious war — Shia-Iran, with oil export sanctions recently lifted, did not show up.

But a one-day oil field workers stay-at-home in Kuwait took one million barrels of oil off the over-supplied world market within 24 hours and the financial market players covered their short or future sale positions.

The bet was now that every “outage” or supply disruption in the world would “re-balance” demand and supply and move West Texas Intermediate prices higher.

Saudi Arabia alone is replacing all the “outage” oil while the San Juan Basin and Southwest producers have record lay-offs, bankruptcies, community economic dislocations, and cuts in production: a million barrels less per day by Christmas is anticipated.

Without the freeze of OPEC production, $50 a barrel prices are here nevertheless. Does the rig count recover — only 15 working in New Mexico from over 100 just 18 months ago?

Yes and no. Companies should start stimulating (fracking) the heavy inventories of uncompleted wells. A boom again? Hardly. With more drilling of uncompleted wells at $50, American Southwest unconventional production rises. Saudi Arabia and the Gulf nation producers would see once more the threat to market share which started the bust in the first place.

Higher oil prices equate to more production and energy-related banks and funds might find new borrowers. Is this the constraint of lower and longer oil prices? It doesn’t matter what supply forecasts come from traders’ prattle on cable TV. The final half of 2016 will be negative on price and oil demand. The price war with Saudi Arabia/OPEC continues.

There are three counter-strategies to Saudi Arabia and OPEC from American shale oil producers and communities:”

Link

New Mexico energy secretary visits Farmington to begin revising energy plan


New Mexico energy secretary visits Farmington to begin revising energy plan

Plan is expected to boost economic development in the state
By Chris Roberts The Daily Times

FARMINGTON — The New Mexico Energy Secretary visited Farmington on Wednesday to hear from oil and gas executives on a proposed revision of the state’s energy policy, which has not been substantially changed since 1991.

Dave Martin, secretary of the Energy, Minerals and Natural Resources Department, sat with T. Greg Merrion, president of Merrion Oil and Gas, and others and listened to the concerns and suggestions of local people involved in coal, natural gas, crude oil and energy production. It was the first stop in a tour that will include Hobbs, Santa Fe, Las Cruces and Albuquerque. During those other stops, topics of discussion will include energy efficiency, renewable energy and biofuels.

“All-of-the-above will produce more jobs,” Martin said of including renewable energy. “A lot of these things are going to be region specific.”

Martin said people invited to the Wednesday meeting at San Juan College were “targeted” for their local knowledge of the issues. Media was asked not to attend the actual discussions, so business leaders could speak freely, but when a reporter from The Daily Times showed up at the meeting, he was allowed to sit in. Martin spoke to the press after the meeting. For more of the article use this link–> http://www.daily-times.com/farmington-business/ci_24615895/encana-announces-multi-million-dollar-drilling-plans-2014

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