ConocoPhillips deepwater discovery in the Gulf of Mexico
On March 19th, ConocoPhillips had announced that they have discovered oil at the Shenandoah well. Yesterday, they had discovered another well in the Gulf of Mexico. ( The Coronado well).
"The Coronado discovery adds to our exploration success in the prolific Lower Tertiary Trend," said Larry Archibald, senior vice president, Exploration. "The exciting results from the Coronado and Shenandoah discoveries confirm the value of our portfolio in the Gulf of Mexico and provide visibility on our future plans to grow through organic exploration."
ConocoPhillips is one of the largest leaseholders in the deepwater Gulf of Mexico with approximately two million net acres. In 2013, the company plans to drill between five and eight wells, including the Ardennes prospect, which spud earlier this quarter, and the Thorn well, scheduled to spud in the second quarter of 2013.
Oil production increases Railroad growth
“US President Barack Obama in his second inaugural speech called for a $50 billion upgrade of the US transportation infrastructure, including rail that political analysts say will be hard to finance.”
“The rapidly growing need for more rail transportation of crude has triggered sizeable investments in both loading and unloading facilities and soaring orders for tank cars “making movement of oil by rail a major growth market for North American railroads,”
The rapid increase of North American crude production has resulted in pipeline bottlenecks in some areas, forcing more reliance on rail transportation to access some of the highest-value markets
Is the Keystone XL Pipeline Worth Getting Arrested For?
“Last week, four dozen opponents of the Keystone XL pipeline were trying to convince President Obama to reject federal approval for the line, which aims to carry crude oil from Canada and North Dakota’s Bakken shale crude to the U.S. Gulf Coast. But if opponents of the Keystone pipeline are going to stop the flow of crude, they are going to have to do more than just get arrested or hold a rally—they are going to have block nearly every north-south rail line in North America.”
The Keystone XL is designed to transport 830,000 barrels per day. There is currently nothing new in moving oil by rail cars. Currently, U.S. and Canadian oil producers are building rail car terminals so they can ship their product to the market. Other countries around the world are doing the same as well.
Refineries are booming every year
“Refiners are set to beat all except three of 154 industry groups on the Standard & Poor's index for 2012, as a U.S. production glut let them buy oil at a record average of $17.46 a barrel below the global benchmark. That spread will diminish in 2013 as more than 20 new pipelines enter service and route oil to new buyers along the Gulf Coast, Deutsche Bank AG forecast.”
“While transportation projects including oil-by-rail and pipelines are booming, providing a natural diversification for refiners, some of the world's most successful investors are betting that the companies have at least another year of gains.”
With that being said, Valero Energy Corp., a San Antonio refiner that may create a crude transportation unit, was named the top energy stock pick of 2013. As well as your other larger companies such as Philips 66. They plan to earn as much from pipelines and making chemicals as refining crude.
Recycling fracking water
It was just a few years ago that fracking was introduced and the process is now being currently used. (Fracking refers to the procedure of creating fractures in rocks and rock formations by injecting fluid into cracks to force them further open. The larger fissures allow more oil and gas to flow out of the formation and into the wellbore, from where it can be extracted.)
No one ever thought twice about reusing the water until now.
“Disposal Solutions will pump well-site water from trucks, put it in retention ponds where it can be cleansed of chemicals, dirt and rocks, and send it back out to drilling operations.”
This idea is still new but companies such as Apache Corp., and Devon Energy are trying to head off any potential shortage of water to be used for fracking. Recently, a study estimated that fracking use up roughly 13 million gallons of water. With this being said, there is a need to recycle all this water being used, especially where there are places that are suffering because of droughts and they have no water.
40 New Pipeline Projects planned for 2013 and 2014
Some of the companies included in the 40 new projects are Occidental Petroleum Corporati, Chevron Corp, Andarko Petroleum, Marathon Oil Corp and of course many others.
“We have 20 major pipeline projects being developed and starting in 2013 alone for about 4 million barrels a day of oil transport into Houston by 2015, which we think is the biggest single oil pipeline infrastructure addition ever seen in the world. …We have same thing happening in 2014, another 20 pipelines for a similar amount for additional oil transport.”
Bakken Crude Express
Bakken Crude Express Pipeline would have been an approximately 2,092 km, crude-oil pipeline with the capacity to transport 200,000 bbl/d of light-sweet crude oil from multiple points in the Williston Basin in the Bakken Shale in North Dakota and Montana to the crude-oil market hub in Cushing, Oklahoma.
ONEOK Partners, LP, says that it did not receive sufficient long-term transportation commitments during its recently concluded open season for the Bakken Crude Express Pipeline. As a result, the partnership has elected not to proceed with plans to construct the pipeline.
Natural gas today
“Surging gas production has led the drilling industry to seek out new markets for its product, and energy companies, increasingly, are setting their sights on the transportation sector.”
“Touting natural gas as a cheaper, cleaner-burning alternative to gasoline and diesel, drillers, public utilities and government officials are trying to boost demand for natural gas buses, taxis, shuttles, delivery trucks and heavy-duty work vehicles of all sorts, while simultaneously encouraging development of the fueling infrastructure that will be needed to keep them running.”
Natural gas costs about $1.50 to $2 per gallon equivalent less than gasoline and diesel. That can add up to tens of thousands of dollars in savings for vehicles that guzzle the most fuel.
BP fines two engineers who may have been the cause of the explosion
As you can recall, the damage caused in the Gulf of Mexico by the BP oil spill in 2010 was massive. The explosion killed 11 workers, lost between 50,000 and 75,000 barrels of oil a day and all the oil flowed into the gulf for more than 100 days killing many animals and endangering their habitats. BP has spent roughly about $42 billion dollars since then.
“…2 engineers made what turned out to be a catastrophic misjudgment about a critical safety test. Now the men face criminal charges in a court case starting later this month that experts say will be a tough test for both the prosecution and defense.”
“Don Vidrine, 65 years old, and Robert Kaluza, 63, are slated to appear in U.S. District Court in New Orleans on Nov. 28 on charges including "seaman's manslaughter" that could send them to prison for a decade or more.”
“The charges stem from their failure to properly interpret a key safety test on the drilling rig before the deadly blowout, which killed 11 people and caused the largest offshore oil spill in U.S. history. “
Gas prices just under $3.00 in Oklahoma
“The statewide average price of a gallon of regular unleaded gasoline settled at $3.27 on Friday, down more than 46 cents over the past month, according to AAA's FuelGaugeReport.com. The price sets Oklahoma with the third-lowest statewide average, just behind Ohio and Missouri.”
This is exciting news for those of us who live in the states mentioned where the gas has dropped. I live near Tulsa, which means my V8 luxury car can fill up and not go over $60.
“The average price in Tulsa is $3.11, off 53 cents over the past 30 days.”
Similar information can be found on Gasbuddy.com, but the news is better for Oklahoma residents, as motorists there have been paying prices below $3.00 in parts of Oklahoma City and Tulsa. However, this could all change for the coming hurricane Sandy in the mid- Atlantic area. Refineries there could be shut down, for an unknown amount of time. Gas prices then might just go back up.
As of right now, it’s good news for us in Oklahoma, but diesel is not part of the major drop in prices of gas. ““Typically demand does not fluctuate with diesel because it is mostly used by 18-wheelers, which don't have a demand season or an off season,”