Energy

OpEd: Where were you when Gazprom dethroned ExxonMobil?

(FinancialPress) — Isn’t this a day to remember not unlike the lunar landing or the day Kennedy was shot? Well, perhaps not that significant or is it? I’m talking about that point in time where ExxonMobil (NYSE: XOM) was dethroned. Dethroned you say? Well yes according to an article published in Oilprice.com. ExxonMobil has been a mainstay in that space. Who you say slayed the king?  Well that is Russian Gazprom (MCX: GAZP).  This the state sponsored energy giant which dominates Europe and is making inroads in China. Since the seventies (the rise of OPEC) we have seen where state owned, or controlled, entities have been muscling their way to gain a significantly larger voice in energy.  They have now risen to where we have little choice, but take them into account. Russia has nudged, shove...

OpEd: Oil producers gambling on price shifts and prudence

(FinancialPress) — Gambling is an interesting study of the mathematics of determining chance and the study of human psychology. The drama of self-preservation unfolding in front of us— as we watch a group act reflexively to provide for their own people and at least protect their status quo. We are today watching Saudi Arabia’s attempts to manipulate oil prices.  Saudi desires to keep their position as the “Swing Producer” of oil ,while keeping domestic issues in check. A tough, tough job indeed. All of this while trying to divest of a small share of ownership in state-owned Aramco  to keep social programs alive, and ultimately stem civil unrest. This effort is running against a push by U.S. companies compelled to drill more wells in the tight shale plays in the States, all while driv...

Kurdistan and South Sudan: A Tale of Two Breakaway Oil-Rich Nations

(FinancialPress)—A new oil-rich nation is on the verge of existence in the Middle East, after an important referendum in Kurdistan took place on Monday. A new independent state of Kurdistan could possibly be the first new nation since South Sudan’s international recognition of independence was granted in 2011. The results of the referendum for Kurdish Independence from Iraq held by the Kurdish Regional Government (KRG), showed overwhelming support to split from Baghdad—with nearly 93% in favour of independence. Voters answered a simple ‘yes’ or ‘no’ to the question, “Do you want the Kurdistan Region and the Kurdistani areas outside the administration of the Region to become an independent state?” Turnout for the vote was quite high, with estimates of 72% of the 8.4 million population takin...

Canadian junior lures Total SA into Exxon’s offshore Guyana hotbed

(FinancialPress)— Guyana’s offshore oil field produced one of the largest discoveries of the last decade, and has been making ExxonMobil (NYSE:XOM) look good ever since. So good, that France’s petro-giant Total SA (OTC:TTFNF) has taken notice, and has joined the fray. Through an option agreement announced earlier today, Total signed a deal with Canadian junior explorer Eco (Atlantic) Oil & Gas (OTC:ECAOF)(TSX.V:EOG) to acquire a 25% stake in Guyana’s offshore Orinduik Block. The deal also brings together Total with fellow major Tullow Oil (OTC:TUWLF) that owns a majority stake in the block. As per the terms of the deal, Total is still just dipping a toe, by agreeing to pay Eco Atlantic $1 million for an option to buy a 25% stake. Going forward, Total now has the option to acquire the q...

OpEd: Oil money moves where it wants

(FinancialPress)—In the international arena of oil and gas, governments are learning a hard lesson.  Investment is fluid and very mobile.  Yesterday’s darling is tomorrows pooch.  Oh it is not sudden, but you see it happening all of the time. Only four or five years ago, the Canadian oil patch was a buzz with announcements about who was getting into the Alberta Oil Sands—Money could not move fast enough or big enough it seemed. Names like Statoil (OSL), Nexen (A wholly-owned subsidiary of CNOOC Limited – Chinese Corporation), and Total SA (FP:EP) were making news.  Bold, and pricey entries into the business arena were announced with regularity.  Canada looked bright and the future was filled with very good things. As often happens, the bloom comes off of the rose. Statoil’s foray found the...

OpEd: Oil supply/demand imbalance a wild ride

(FinancialPress)—As the drama in the oil patch continues with OPEC and Non-OPEC producers trying to balance supply, demand and their own domestic issues, we get to see some things unfold. Some things are obvious as the group tries to keep supply reined in. Some things are not so obvious, like how the devastation brought on by hurricanes impacts global supply. China’s thirst for crude seems to be a good barometer. A couple of clues come to light in the last few days. Firstly, a drawdown of supplies stored at one of the large supply hubs is occurring. Total SA (FP:EP), Vitol Group and Mercuria Energy Ltd. are drawing down and selling from their stored volumes at Saldanha Bay, South Africa. The sale is suspected to be made to China. Secondly, China reported that the second of two pipelines fr...

OpEd: OPEC coalition still playing production cut poker

(FinancialPress)—OpEd—In high stakes poker, the ability to read your opponent decides who may win or who may lose. In the game that oil producing nations play today that high stakes game is being played. Kuwait is the player we focus on today. In an article published in Platts today Kuwait’s oil minister Essam al-Marzoug stated they are not ready to discuss extending its production cut agreement beyond its March expiry. Each of the Middle Eastern countries has spending they incur supported by oil exports and any reduction puts their economies at risk. Economies at risk means possible long term pain to the population. Let the game ratchet up as the balance between cheating and being caught cheating is being played. Kuwait’s economy has done well by reports on the matter. The issue was repor...

Valero refinery fire forces second shutdown in weeks

(FinancialPress) — Fire forced a shutdown of Valero Energy’s (NYSE:VLO) refinery in Port Arthur, Texas yesterday. The incident marked the second shutdown in the last three weeks, after severe damage along the Gulf Coast from Hurricane Harvey recently caused a two-week shutdown. The fire at the 335,000 barrel-per-day refinery began around midday. It’s not immediately clear whether the blaze was related to the restart process or effects caused weeks prior by the storm. Company officials assert that its emergency response team is on the scene, and that there’s been cooperation with local authorities and relevant agencies. The Port Arthur Fire Department is assisting with fighting the fire at the Valero plant, according to municipal updates. All employees have been accounted for, and there hav...

Will they or won’t they? OPEC flirts with 2018 output cut extension

(FinancialPress)—Representatives from the OPEC/non-OPEC coalition are mulling over potential options regarding an extension to their current crude oil output reduction deal, as per Iraqi oil minister Jabbar al-Luaibi at a conference earlier today. On the table are a variety of options, including a plan that would cut an additional 1% from crude oil supplies, and would also extend the cut’s original deadline of March 2018, through to the end of next year. Though no firm decisions have been made among the group, al-Luaibi opined that he didn’t personally see a need for further cuts, and believed any talk prior to the March expiry was “premature,” however he would support any consensus that OPEC arrives at. “All in all, the outlook seems to be bright and prices are rising,” said al-Luaibi dur...

Meet Iran’s $60bn Renewable Energy Rush

(FinancialPress)—It’s been less than two years since Iran was welcomed back into the international oil market, and already the Middle Eastern state is making a push towards a renewable energy revolution. Despite only currently representing 360 MW of the country’s 77,000 MW of power capacity, Iranian Deputy Energy Minister Houshang Fallahatian believes that his country can add 1,000 MW of new renewable power capacity every year over the next five years, and that revenues from such renewable sources should reach US$60 billion if he’s correct. Iran, most notably associated with fossil-fuel power, has the right mix of factors to make the leap into a more renewable driven power grid. For a country that has over 300 sunny days per year, delivering an average of 2,800 hours of sunshine, the move ...

Chesapeake Energy Corporation (CHK) Leads Basic Materials Laggards with a drop of 1.81% on September 14

Chesapeake Energy Corporation (CHK traded as high as $3.89 and as low as $3.79. Today’s decline came with about 44.95 million shares changing hands, compared to an average 30-day volume of 32.3 million for Chesapeake Energy Corporation. The price is currently below the 30-day volume weighted average price of $3.82 for CHK have traded as low as $3.76 and as high as $8.2. Technical traders will take note that at $3.79, shares of

OPEC’s slow August leads to oil price bump

(FinancialPress)—For the second straight day, oil prices received a boost, on news of the latest OPEC report’s revelation that the cartel’s oil production fell last month. The monthly report, released Tuesday morning by the Organization of the Petroleum Exporting Companies (‘OPEC’), stated that August output feel by 79,000 barrels per day, down to 32.76 million barrels per day. Following a summer that saw production inexplicably rise, amidst Saudi Arabia’s mulling over of a possible production-cut extension, the report quelled some fears over whether the stated production cut was in fact working. The report puts much of the blame on reduced output from Libya, Gabon, Venezuela, and Iraq in particular. In the case of Libya, which was exempt from last year’s deal, production had been rising s...

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