US oil drillers deployed two new rigs to US oilfields last week, bringing the US oil rig count to 751, while the number of natural gas rigs remained unchanged, according to Baker Hughes. The Permian Basin and the Eagle Ford Shale led the gains with three rig additions each, offsetting losses in Colorado, North Dakota, Oklahoma, Ohio and Kansas.
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The oil and natural gas industry is expected to continue on its growth trajectory next year even though production increases will likely keep oil prices in the $40-to-$60-per-barrel range through 2019, according to the Moody's oil outlook for 2018. Exploration and production companies and oilfield service firms could see earnings rise by 10% to 12% in 2018, with the North American onshore market providing the best opportunities for growth.
Technical analyst Fawad Razaqzada says oil prices, which are far above last year's lows, might be threatened by increasing shale output and an early end to OPEC's production cut. Razaqzada says higher prices mean "less incentive for the OPEC and [non-OPEC] Russia to maintain their oil-supply collusion, especially as US shale producers continue to win market share. Thus, there is a risk that the agreement could end prematurely, resulting in another supply war."
In a complaint with the Federal Energy Regulatory Commission, oil major Chevron, oil refiner Valero Energy and the trading division of Delta Air Lines accused Colonial Pipeline of charging rates that "greatly exceed just and reasonable levels." The three fuel shippers say Colonial charged them a combined $64.1 million more than it should have between Oct. 1, 2015, and Sept. 30, 2017, and are asking FERC to probe Colonial's current rate structure.
A Bureau of Land Management lease sale of more than 2,100 acres in New Mexico's Eddy and Lea counties drew more than $30 million worth of bids. The sale also set a new record for the highest bid per acre at $40,001.
Offshore drilling rigs declined worldwide last month compared with October, as did the number of land rigs in North America, oilfield services company Baker Hughes reported. The global offshore rig count was 204 last month, falling from 227 in October, and the number of North American land rigs stood at 1,094 in November, compared with 1,103 the month before.
The Trump administration is considering using federal authority to circumvent state decisions in a bid to fast-track pipeline projects. "We have to break that logjam, to stop one state from having virtual veto power," said Natural Gas Supply Association President Dena Wiggins.
In an attempt to boost transparency, the North Dakota Industrial Commission last week passed a rule requiring oil and natural gas companies to provide explanations each time they make a deduction from mineral owners' royalty checks. The North Dakota Petroleum Council said the rule could cost the industry several million dollars.
The RP 1174 has been developed for liquid pipeline operators to align industry, government and emergency response organizations' expectations, practices and competencies, with the goal of promoting safe, timely and effective responses to incidents. Read more.