News From The Oil Patch 8/11/2014
11 August 2014
A fire July 29th was expected to keep the CVR refinery in Coffeyville, Kansas shut down for four weeks. Market analysts blamed the shutdown for a continuing downward trend in crude oil prices. The 115,000 barrel per day facility buys light, sweet crude oil from Cushing, which is about 100 miles away. Analysts expected reduced demand for the product as a result. Four people were hurt in the fire in the facility’s isomerization unit.
Tulsa-based Casillas Petroleum joins G-E Energy Financial Services in the purchase of some 500 producing oil wells spread across 14 counties in southwest Kansas. Terms of that deal were not disclosed. The oil and gas sector of the General Electric subsidiary has 25 partnership investments in more than 3,000 wells, producing about 11,000 barrels of oil equivalent per day. Casillas will operate the properties and serve as the general partner.
Baker Hughes reported 1,909 active drilling rigs across the US Friday, 19 higher than last week. That's above 19-hundred for the first time in two years. Canada: down five at 387. In Kansas there were 26 rigs actively drilling for oil and gas, down one from last week. Independent Oil & Gas reported 124 total rigs across Kansas, 36 east of Wichita, down three, and 88 in western Kansas, up three.
Kansas operators completed 52 wells last week, 3,565 so far this year. Independent Oil & Gas reports 11 of the 15 completions in western Kansas were dry holes. 37 new well completions were reported east of Wichita last week, and of those four were dry holes.
Independent reported 95 new permits across the state last week, which is 4,499 drilling permits so far this year. There were 45 permits in new locations in eastern Kansas, and 50 west of Wichita, including 6 in Barton County, two in Ellis County, one in Russell County, and one new drilling permit in Stafford County.
Another company now wants to export lightly processed oil. Plains All American Pipeline CEO Greg Armstrong said the only thing that might get in their way is "political arbitrariness.”
Venezuela confirmed that it is considering the sale of its US refining and distribution network Citgo. Oil Minister Rafael Ramirez said Venezuela will sell Citgo for $10 billion, but says the government is not in a hurry to make a deal.
The SEC accuses a Texas oil and gas company of making fraudulent claims about oil reserves in Columbia, asserting they "lacked any reasonable basis." Houston American Energy Corp. raised about $13 million in a public offering and saw its stock price jump from $5 per share to $20. At last check that share price was about 40 cents.
North Dakota Tribal leaders in the heart of the Bakken boom are now demanding producers pay royalties for lost revenue, for the huge amounts of natural gas being burned off at oil well sites. The Three Affiliated Tribes outlined the plan in a six-page document sent to oil companies, and obtained by the AP.
North Dakota officials are considering requiring energy companies to treat the crude they pump from the Bakken Shale to make it less volatile before it is loaded onto trains. The Industrial Commission plans to hold a public hearing in the coming weeks on possible steps to reduce volatility at a well site before oil is stored or transported, according to a spokeswoman for North Dakota Gov. Jack Dalrymple. The commission, the state's chief energy regulator, is considering issuing new standards for treating crude as well as monitoring requirements.
A U.S. oil industry group is recommending that all crude shipped by rail from North Dakota's Bakken fields be labeled as the most-dangerous type of oil cargo, a designation that could hasten the use of new or upgraded tank cars. That, despie the final report on a study that showed Bakken crude was little different from other forms of light, sweet U.S. crude, and poses no greater threat than the other fuels when transported by rail.
Oklahoma regulators reversed course and are now posting information about oil-by-rail shipments through the state, despite earlier efforts to block access to the information. The Oklahoma Hazardous Materials Emergency Response Commission is posting weekly, general reports, including how many trains carrying a million gallons of crude or more are passing through each county in the state.
EPA holds its second and final hearing on proposed new emission standards at oil refineries in a market that has eight of them. The hearing Tuesday in suburban Houston is the result of a consent decree that resolved a lawsuit which argued the agency was more than a decade late in reviewing and updating toxic air standards at refineries. Any new rules could be widely felt in Texas, where there are 27 oil refineries.
Both sides claimed victory on last week after Colorado energy companies and environmentalists agreed to a truce brokered by the governor. Instead of fighting it out at the ballot box, activists from both sides will form an 18-member task force to recommend solutions to the state legislature. The Washington Post points out that the deal saves the state's Democrats a difficult choice between the two powerful Colorado interest groups, and the two groups' campaign contributions.
Natural gas production from the Marcellus Shale hit another record: more than 15 billion cubic feet per day through July, according to the US EIA. The shale formation in and around Pennsylvania and West Virginia now accounts for almost 40 percent of U.S. shale gas production.
Mexican lawmakers gave final approval to rules for awarding private oil contracts in the country for the first time since 1938. The next step in the opening will come from the Energy Ministry, which will announce Sept. 17 the fields that the state-owned monopoly Pemex will retain.
Kinder Morgan Energy Partners is expanding its plans for that crude oil rail terminal in Alberta, Canada. The terminal is now almost a year into construction. The Edmonton Rail Terminal capacity will increase at startup next year to over 210,000 barrels per day and potentially up to a quarter-million.
"Exploring for hydrocarbons in the Barents Sea takes time and stamina." So says Statoil, after drilling three dry holes off their Arctic coast. The Noregian government-controlled energy firm drilled three exploration wells more than 185 miles north of the mainland, the farthest north they've ever ventured. A company statement said this summer's exploration campaign ended without any commercial oil or gas discoveries.