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The U.S. House of Representatives may be close to a vote on a bill that would eliminate a ban on exporting crude oil that has been in place for 40 years now. Those export restrictions were a reaction to the 1973 oil embargo by OPEC – the Organization of Petroleum Exporting Countries.
But the U.S. oil market looks very different now, thanks to a dramatic increase in domestic oil production in recent years. The U.S. imported just 27 percent of the petroleum consumed last year – the lowest level since 1985.
Even now, there are exceptions to the ban, such as exporting to Canada or “trades” with Mexico, where American light sweet crude is exchanged for Mexican heavy sour crude. Such swaps were approved by the Commerce Department last month and are supposed to help both refineries in both countries run better.
Chesapeake Energy To Lay Off 15% Of Work Force
In a purported email/letter to employees Roughneck City received earlier today Chesapeake CEO Doug Lawler states;
The Russian government has announced that it is seeking to source equipment for offshore oil production from new countries due to the impact of sanctions by the European Union and the United States. However, as experts note, the development of Arctic fields is being hindered by low oil prices.
Russia’s Deputy Prime Minister Alexander Khloponin has admitted that Moscow was too slow to find alternative supplies of equipment for offshore oil production and needs cooperation with other countries that have experience in this area, the Interfax news agency has reported.
Due to the sanctions imposed to punish Moscow for its role in the Ukraine conflict, Russia's traditional partners – the U.S. and European companies – are prohibited from providing services to exploration and production on the Russian shelf at a depth of over 150 meters.
Royal Dutch Shell has stopped Arctic oil and gas exploration off the coast of Alaska after "disappointing" results from a key well in the Chukchi Sea.
Shell said it did not find sufficient amounts of oil and gas in the Burger J well to warrant further exploration.
Employees of Cenovus Energy Inc. are on tenterhooks, waiting to find out over the next few weeks if they will be affected by 540 job cuts aimed mainly at the head office ranks in Calgary.
And that’s not the end of it. An as-yet-undetermined number of field-based employees are also due to be laid off in 2016, company spokesman Brett Harris confirmed in response to a Herald inquiry Friday.
“People know what the (540) numbers are but they don’t know individually,” said Harris.
Federal lawmakers should overturn the ban on exporting crude oil produced in the United States. As recently as half a decade ago, oil companies had no interest in exporting U.S. crude oil, but that has changed.
Oil production has grown more in the United States over the past five years than anywhere else in the world, even as domestic oil consumption has declined. With these changes has come a widening gap among the types of oil that U.S. fields produce, the types that U.S. refiners need, the products that U.S. consumers want, and the infrastructure in place to transport the oil. Allowing companies to export U.S. crude oil as the market dictates would help solve this mismatch. Under federal law, however, it is illegal for companies to export crude oil in all but a few circumstances. Over the past year, the Department of Commerce granted licenses to several oil companies to export a small amount of U.S. crude oil. But these opaque, ad hoc exceptions are insufficient. Removing all proscriptions on crude oil exports, except in extraordinary circumstances, will strengthen the U.S. economy and promote the efficient development of the country's energy sector.
More job cuts could be coming to Halliburton after a media release reveals thousands of employees from the energy giant stand to lose their jobsall around the world.
Unfortunately, this means that additional staff reductions are underway, with the majority of the reductions in North America, the region hit hardest by market conditions."
History will record that in the last decade, the American oil industry staged one of the most miraculous recoveries in economic history. In its own way, this recovery ranks with the resurrection of the Japanese and German economies after WWII. The American oil comeback was driven, of course, by fracking. Recent reports indicate that despite facing strong headwinds, the fracking revolution continues to produce wonders.
These headwinds include the dramatically lower oil prices brought about by the decision of several major OPEC countries, most importantly Saudi Arabia, to vastly expand production. This expansion has dropped the price of oil from $100 per barrel to around $45. While this "new normal" price is below what these OPEC and other states (such as Russia) need to keep from drawing down their reserves of foreign currencies, these countries are producing as much oil as they must to keep their market share and give their citizens the level of support that keeps those citizens from becoming rebels. And some of these countries are pursuing a strategy aimed at stopping the fracking rebirth of American oil.
Certainly, the sustained period of low prices is making it a challenge for domestic energy producers – even the biggest ones – to remain profitable. And it has caused the American resurgence to temporarily stall. The most recent data show that the U.S. dropped to 9.3 million barrels per day (BPD) in June, down 3% from its 2015 peak hit in April. Citi Research estimates another drop of as much as 500,000 BPD as oil producers face capital shortages – the equivalent of ExxonMobil's total U.S. production.
Halliburton is paying $18.3 million in back wages to more than 1,000 U.S. field workers who were misclassified as salaried professionals and thus exempt from overtime.
The investigation, part of the U.S. Department of Labor’s initiative into wage practices in the oil and gas industry, focused on Halliburton’s misclassification of employees nationwide in 28 occupations as salaried professionals and, thereby, exempt from overtime and minimum wages. The jobs include field service representatives, pipe recovery specialists, drilling tech advisers, perforating specialists and reliability tech specialists.
Low oil prices have slowed spending at companies throughout the oil patch and could erase or delay up to $1.5 trillion in oil-field projects, according to a report released Monday by energy analyst Wood Mackenzie.
Besides reduced activity onshore in North America, the Wood Mackenzie report also said 46 large-scale, international drilling projects have been deferred because of the lower prices.
After igniting a wave of investor angst, Weatherford International quickly backpedaled on a proposal to raise $1 billion, raising questions about whether the oil field services company remains in the running to buy up assets for sale as two of its competitors prepare to fuse together.
In an unusual about-face, the Switzerland-based company that operates out of Houston pulled the plug on plans to issue debt and stock offerings less than 24 hours after making a Monday announcement that triggered a massive sell-off in shares of Weatherford's stock.
The company initially said it intended to use the money raised to fund potential acquisitions and for general corporate purposes, spurring speculation that Weatherford was gearing up for a big buy as services giant Halliburton prepares to sell off assets to gain regulatory approval for its proposed $35 billion takeover of Baker Hughes.
Oil prices have plummeted to six-year lows, with the price for West Texas Intermediate crude briefly dipping below $39 per barrel. But oil production in the United States has not plummeted the way some had expected.
Conventional wisdom had pegged the break-even cost for oil wells using horizontal hydraulic fracturing, aka "fracking," to be between $65 and $85 dollars per barrel. Many expected smaller American producers to go belly-up as a result of low prices.
However, advances in drilling and well-completion technology, such as multi-well drilling pads and walking rigs, have made oil and natural gas production far more efficient. The walking rigs have essentially kept frackers far from "dead."
After almost a year of painfully low oil prices, OPEC members are beginning to believe they are winning against upstart U.S. shale producers in a short-term market share contest.
Yet insiders and experts say OPEC is looking for a longer-lasting impact on other high-cost production oil field plans, many in deep oceans, with bigger time scales, even if that means a period of cheap oil prices lasting for years.
Privately, OPEC's core Gulf members say they have resigned themselves to the idea that the U.S. shale industry's high-tech flexibility means it will respond quickly when prices start rising again, making the United States the new swing producer in world oil, the role held for so long by Saudi Arabia.
In April, Halliburton closed its Minot offices and transferred workers from there to Williston and Dickinson, although they declined at the time to say how many.
“Halliburton has made adjustments to its workforce in Williston based on current business conditions,” says Emily Mir, director of public relations for Halliburton. She is based in Texas. “We are committed to ensuring separated employees are treated with dignity and respect.”
The company would not disclose how many were being laid off from the Williston offices.
A long-delayed federal investigative report into a Gulf well blowout two years ago blames the drilling rig's crew for not using a dense enough fluid to control natural gas in the well and for reacting too slowly when the blowout started.
The government report, released last week, looked at the root causes for the blowout of a Walter Oil & Gas well off the central Louisiana coast on July 23, 2013. The rig, provided by Hercules Offshore, burned for 72 hours and was destroyed at a cost of nearly $60 million, according to Bureau of Safety and Environmental Enforcement regional director Lars Herbst.
The report comes on the heels of an inspector general's report criticizing the agency for understaffing its investigation unit and as Republicans are mounting loud opposition to tougher safety rules proposed by the Obama administration.
New numbers out this week from the Bureau of Labor Statistics showed the overall rate of fatal work injuries last year was about three out of every 100,000 full-time workers. But for workers in the oil and gas industry, who work long hours with a lot of dangerous equipment, it was more than five times higher.
“We’ve known for quite a few years that it's a high hazard industry,” said Kyla Retzer, an epidemiologist with the National Institute for Occupational Safety and Health who focuses on safety and health in oil and gas extraction.
The BLS report said 142 people in oil and gas sector died last year from work-related injuries, an increase of 27 percent from the year before.
Only a year ago, with oil trading near $100 a barrel, residents of this proud and pretty South Texas boomtown had only one chief complaint: traffic.
Townspeople don’t have that worry anymore, with roads half-empty as the oil and gas game has slowed.
Cindy Simpson will probably never know why her husband died.
She says Oklahoma officials promised her they'd find out after David Simpson died last year. Fellow oil workers found the 57-year-old truck driver slumped over a tank hatch at an oil well here. But officials didn't do an autopsy or test for petroleum exposure.
"I just feel like he was totally ignored by Oklahoma," Cindy Simpson said. "Isn't that what they're supposed to do in an investigation -- find out what happened? And they didn't."
Gross natural gas production from the top US oil and gas fields by volume declined slightly in August and should drop further this month as new output fails to offset declines from aging wells.
Total production from those seven fields — which include the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian basin and Utica — dropped to 45.17 Bcf/d (1.3bn m³/d), down by 0.4pc from July, according to the US Energy Information Administration's (EIA) monthly Drilling Productivity Report.
The report focuses on the most prolific US fields and includes production of associated gas from oil wells. The fields included in the report accounted for 95pc of domestic oil and natural gas output growth between 2011 and 2013, the EIA said.
General Electric is continuing its expansion into oil and gas by bidding on units Halliburton needs to sell to get regulatory approval for its Baker Hughes acquisition, according to reports.
GE has been expanding its oil and gas segment as part of its focus on core industrial businesses while shedding its banking and finance assets. In 2013, GE completed its purchase of oilfield pump maker Lufkin Industries for $3.3 billion.
The Organisation of the Petroleum Exporting Countries has given the clearest signal yet that it believes it is winning its oil price war with the US shale industry.
The group of 12 mainly Middle Eastern producers has said that output from outside the cartel in 2016 will be over 100,000 barrels per day (bpd) lower than it had previously predicted, as lower prices shut down more production.
In its closely-watched monthly market report, Opec said: “There are signs that US production has started to respond to reduced investment and activity. Indeed, all eyes are on how quickly US production falls.”
An unprecedented study of the hazards rooted in America's largest oil patches will be launched next year by federal health officials in Colorado who hope to cut the dangers faced by oil and gas workers.
Scientists from the Denver office of the National Institute for Occupational Safety and Health — which is part of the Centers for Disease Control and Prevention — will distribute questionnaires to 500 oil field workers in North Dakota, Texas and another unnamed state.
Institute personnel will fan out to so-called "man camps"; training centers; equipment and trucking yards; well sites; and community centers in oilfield towns.
When Joe Morales found him, Jim Freemyer was standing over the hatch, dazed and miming the gestures of measuring the crude oil tank with nothing in his hands.
After that, Freemyer, a truck driver from nearby Evans, Colo., demanded a mask to protect him from the fumes.
America's oil drillers are bracing for another tough year.
"'Baby, it's raining and it's going to rain for a long time,'" Anadarko Petroleum Corp. CEO Al Walker said during a presentation at the Barclays Energy-Power Conference in New York, quoting a fellow oil executive. "'We're all going to get wet. A few people are going to drown.' And I think that probably sums it up."
The US oil rig count declined again this week, according to driller Baker Hughes.
Last week, 13 oil rigs were taken offline. It was the biggest drop in three months, preceeded by six weeks of additions.
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