Tag Archive | "oil and gas industries"

North Dakota boom: 1 million barrels of oil a day


WILLISTON, North Dakota (AP) — North Dakota has joined the ranks of the few places in the world that produce more than a million barrels of oil per day, due in large part to the rich Bakken shale formation in the western part of the state.

The April figures released Tuesday by the state’s Department of Mineral Resources showed the record tally. North Dakota had flirted with the million-barrel-per-day mark for months, but the harsh winter slowed the pace. In March, production had hit 977,000 barrels per day.

North Dakota’s oil fields now represent more than 12 percent of all U.S. oil production, and more than 1 percent of global production — a situation unfathomable just a decade ago, when technology hadn’t yet caught up to the challenge of extracting oil from the shale. Since then, the oil boom and the jobs it brings have transformed North Dakota, now home to the nation’s fastest-growing cities and its lowest unemployment rate.

“Reaching the 1 million barrel a day mark is a tremendous and timely milestone for the petroleum industry and our state, but it is also a tremendous milestone for our nation,” U.S. Sen. John Hoeven, a Republican, said in a statement, citing the need for the United States to build its domestic energy resources.

North Dakota joins Texas, Alaska, California and Louisiana as the only states ever to produce more than a million barrels per day. Of those, Texas is the only other state still producing above that level.

“Until April, only Texas, one Canadian province and 19 countries were producing 1 million barrels per day, putting North Dakota among the top oil producers in the entire world,” said Ron Ness, president of the North Dakota Petroleum Council, an oil lobbying group.

The state’s production is still dwarfed by behemoths such as Saudi Arabia, the world’s largest producer with nearly 10 million barrels of oil per day.

But North Dakota’s ascent has been rapid. Whereas eastern Saudi Arabia’s Ghawar field, the top-producing oil field in the world with 5 million barrels a day, has been operational since 1951, North Dakota’s oil fields have surged from producing 80,000 to 90,000 barrels per day a decade ago.

The Bakken and the Three Forks formation below it, which also stretch into Montana and Canada’s Saskatchewan province, account for the vast majority of North Dakota’s oil production.

Oil was first struck in western North Dakota in 1951 near the town of Tioga, but for decades, the area confounded oil producers, giving up trickles while promising potentially enormous gains. After a smaller oil boom went bust in the 1980s, many gave up on the state as a big oil producer. At one point in 1999, no drilling rigs remained in North Dakota.

But just over half a decade ago, advances in directional drilling and hydraulic fracturing finally unlocked the oil packed into the Bakken shale formation.

Now “North Dakota could be an OPEC country of its own in terms of production — it’s essentially the production of Ecuador,” said James Fallon, director of downstream energy at global information firm IHS.

Together with Texas’ Permian Basin and Eagle Ford oil plays, North Dakota’s production has played a pivotal role in turning U.S. production around in the past few years after more than 30 years of decline and cutting down on petroleum imports he added. Fallon said it is likely that because of these oil plays, the U.S. will surpass its 1970 production high of 9.64 million barrels per day within the next year and a half.

Lynn Helms, director of the Department of Mineral Resources’ Oil and Gas Division, said he expects North Dakota production to grow to 1.5 million barrels per day by 2017 before plateauing.

Besides the influx of jobs, high salaries have skewed the economy of the oil patch, with one-bedroom apartments renting for $2,000 a month. Police departments, health care services, schools, roads and other public services and infrastructure have struggled to keep up with the growth in the western part of the state.

Despite the trials that oil development has brought, the boom has largely been welcomed at a time when jobs can be hard to come by elsewhere in the U.S.

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Cuadrilla confirms Blackpool fracking plans


Shale oil & gas developer Cuadrilla yesterday confirmed it intends to submit planning applications by the end of this month to carry out fracking operations at two sites near Blackpool.

A planning application to Lancashire County Council to drill, hydraulically fracture and test the flow of gas from up to four exploration wells at its site at Preston New Road will be made before the end of this month.

A separate planning application for a second proposed exploration site, at Roseacre Wood, will also be submitted to the Council a few weeks after the Preston New Road application, according to a Cuadrilla statement yesterday.

“This application could be a really important milestone for Lancashire and the UK as we seek to unlock Lancashire’s shale gas potential,” said Cuadrilla chief executive Francis Egan.

“The development of the shale gas industry has the potential to bring significant investment, community benefits and opportunities for local people and the North West and UK economies.”

Exploration of the Preston New Road and Roseacre wood sites was first suggested by Cuadrilla in February, having decided to press ahead with the development of just these two sites on Lancashire’s Fylde coast rather than the six announced in summer 2013.

Previous Cuadrilla operations in the Fylde coast area have been linked with causing seismic events, with fracking at its Preese Hall blamed for two minor earthquakes in Blackpool in 2011. These led the government to suspend all shale oil & gas development in the UK until December 2012.

As part of the the planning application for Preston New Road, Cuadrilla announced yesterday that plans will also be submitted to install a network of seismic monitoring stations within a 4km radius of the proposed exploration site.

Environmental campaign group Friends of the Earth (FOE) accused the government and Cuadrilla of colluding to promote fracking ahead of the two planning applications, and warned that the operations would damage the Fylde coast environment.

“The public is rightly concerned that fracking causes more problems than it solves – there are risks for our water supply, our health and the beautiful Fylde environment, and it won’t lower energy bills or create anywhere near as many jobs as renewables,” said FOE North West campaigner Helen Rimmer.

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Kenya’s first commercial oil discovery to generate approximately $10 billion


Despite growing global interest in Kenya’s oil and gas industry, its first competitive licensing round has been postponed to at least Q4 2014; however, this delay could serve as a long-term benefit for the country’s economy, as well as its oil and gas industry, says an analyst with research and consulting firm GlobalData.

John Sisa, GlobalData’s Lead Analyst covering Upstream Oil & Gas in the Sub-Saharan region, states that international interest in Kenya’s oil and gas sector has intensified over the last 20 months, following Tullow Oil(Tullow) and Africa Oil Corporation’s announcement of the country’s first commercial oil discovery in block 10BB/13T within the South Lokichar Basin.

According to GlobalData, block 10BB/13T alone could generate approximately $10 billion in revenue over a 30-year production period, based on regional geological characteristics and well test results. This volume of cash flow alone will cause Kenya’s Gross Domestic Product, which is currently at $40.7 billion, to grow at an average yearly rate of 0.83%.

Sisa says: “The delay in Kenya’s first licensing round could prove beneficial to the country’s economy, as International Oil Companies (IOCs) could make additional, commercial oil and gas discoveries before the end of the year. This would in turn strengthen prospectivity and interest in the country’s oil and gas industry.

“Additionally, competition among IOCs during the delayed bidding process may be significantly greater than at present, and the round could include higher licensing costs and tougher fiscal terms that would maximize government revenues.”

Sisa believes that the Kenyan government has indicated its willingness to develop an early oil production facility by 2016, which would allow Tullow to produce oil from block 10BB/13T at marginal rates until the proper infrastructure is in place for shipment.

“This early monetization of oil reserves would generate more revenue for the Kenyan government’s budget and would therefore act as a crucial component of economic growth. Similarly fundamental in accelerating such growth is the proposed development of the Kenya-Uganda crude oil pipeline, which is designed to pass through block 10BB/13T and South Sudan,” the analyst says.

A new port is currently being developed in Lamu, Kenya, which would also host a new refinery that receives oil from Uganda, South Sudan and Tullow’s block 10BB/13T. GlobalData expects this refinery to be launched by 2018.

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Siemens acquires Rolls-Royce power asset


Siemens has agreed a $1.3bn deal to buy Rolls-Royce’ energy aero-derivative gas turbine and compressor business.

The Bavaria-based company is looking to strengthen its position in the power generation and oil and gas industries, and close a profitability gap with rivals GE and ABB.

Rolls-Royce’s Energy gas turbine and compressor business has around 2,400 employees. In 2013, it was reported within the results of the Energy business where it contributed £871m of revenue and £72m of underlying profit.

The transaction excludes certain smaller power generation sector assets. On completion of the transaction, Rolls-Royce’s shareholding in the Rolls Wood Group (RWG) joint venture, that provides maintenance, repair and overhaul services, will be transferred to Siemens.

The transaction has been approved by the boards of directors of Rolls-Royce and Siemens, and is expected to complete before the end of December 2014, subject to closing conditions, including regulatory approvals.

In terms of results, Siemens (NYSE: SI) this week reported quarterly earnings that missed analyst estimates on more charges at Siemens’s power transmission unit.

As part of the Rolls-Royce deal, Siemens will pay the London-based company an additional $340m over 25 years to get exclusive access to aero-turbine technology in the 4- to 85 MW power output range. The turbines with an output below 66 MW fill a gap in Siemens’s product portfolio.

As part of an overall restructuring, chief executive Joe Kaeser has added Royal Dutch Shell Plc (RDSA) executive Lisa Davis to his team. She will join Siemens’s management board on in August with responsibility for power operations. Michael Suess will step down from a similar role “for personal reasons and by mutual consent” and with immediate effect.

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