LONDON, Jan 25 (Reuters) – Oilfield services company
Halliburton blamed the upfront cost of rolling out its
“frac of the future” efficiency initiative, as well as lower rig
rates and idled equipment, for shrinking margins in its North
American business, when the company presented its Q4 results on
Frac (or frack as it also called) of the future maybe
causing the company some discomfort in the short term. But it is
a perfect case study of how the drilling industry is innovating
in response to pressure to cut costs and its environmental
LONDON, Jan 24 (Reuters) – Most analysts and journalists
still draw a sharp distinction between the production of oil and
gas from conventional fields and from unconventional resources
such as shale. The reality is more complex.
In practice it is not easy to tell where conventional
petroleum production ends and unconventional production begins.
LONDON, Jan 23 (Reuters) – OPEC’s influence on oil prices is
very visible in the short run, but it is less certain that its
pricing power can be maintained in the long term, according to a
thoughtful review published by Bassam Fattouh and Lavan Mahadeva
of the Oxford Institute for Energy Studies.
Fattouh and Mahadeva examine how the cartel’s strategy and
power over oil prices have varied over time depending on market
conditions and the interaction among OPEC members (“OPEC: What
Difference Has it Made?” Jan 2013).
LONDON, Jan 22 (Reuters) – China is already the world’s
fourth-largest gas consumer, but it will struggle to reach its
goal of doubling gas use to 260 billion cubic metres a year by
2015 unless a range of barriers can be overcome.
Lack of upstream investment is only one of many problems
facing China’s gas industry. Getting the price right is more
LONDON, Jan 21 (Reuters) – “The limit of production in this
country (the United States) is being reached, and although new
fields undoubtedly await discovery, the yearly (oil) output must
inevitably decline, because the maintenance of output each year
necessitates the drilling of an increasing number of wells.
“Such an increase becomes impossible after a certain point
is reached, not only because of a lack of acreage to be drilled,
but because of the great number of wells that will ultimately
have to be drilled.”
LONDON, Jan 18 (Reuters) – China’s petroleum resources are
roughly comparable to the United States’. There is no reason for
the country to become increasingly reliant on imported crude and
natural gas, provided it can successfully explore and develop
its enormous natural endowment.
For China’s top policymakers, the prize is huge. Boosting
domestic oil and gas output would significantly reduce the
country’s economic and military vulnerability. China could
emulate the success of the United States following the shale
revolution and achieve a greater measure of energy security.
LONDON, Jan 17 (Reuters) – China will almost certainly fail
to meet its target of producing 6.5 billion cubic metres of
shale gas per year by 2015. Even so, there can be no doubt it is
set to become one of the world’s largest shale gas producers
over the next decade.
In its latest annual outlook, published on Wednesday, BP
predicts China will be the most successful country outside North
America in developing shale gas by 2030. Given the country’s
enormous shale resources and large prospective market, coupled
with its ready availability of capital and proven engineering
expertise, it is hard to argue with that assessment.
LONDON, Jan 15 (Reuters) – For a decade, the oil industry
has worried about rising resource nationalism in producing
countries. Host governments have imposed tougher terms, demanded
bigger exploration bonuses and extracted a higher share of
revenues, in some cases expropriating foreign oil companies when
they failed to develop new fields fast enough.
Now the wheel may be turning as the prospect of big new oil
and gas finds from shale and in deepwater trigger a competition
among potential host countries to attract investment.
LONDON, Jan 11 (Reuters) – Fracking and a global surge in
offshore exploration pose the biggest challenge to Saudi
Arabia’s oil policy since the 1980s.
For Saudi policymakers, the question will be how to maintain
market share and export revenues amid a host of competing
supplies from shale and other unconventional deposits, offshore
fields in Latin America and Africa, the Arctic, and rivals
within OPEC such as Iraq and Iran.
LONDON, Jan 11 (Reuters) – There has been no official announcement but Saudi
Arabia’s effective target for oil prices appears to have risen from $100 to $110
per barrel, based on recent changes in the kingdom’s production levels.
In theory, the kingdom remains committed to an informal target of $100 for
Brent first announced in a CNN interview given by Oil Minister Ali Naimi in
January 2012. “Our wish and hope is that we can stabilise this oil price and
keep it at a level around $100,” Naimi said.