Permian Basin expected to drive fourth quarter U.S crude oil production increases
In its Short-Term Energy Outlook (STEO) update released this week, EIA forecasts that U.S crude oil production will average 9.4 million barrels per day (b/d) in the second half of 2017, 340,000 b/d more than in the first half of 2017.
EIA’s close monitoring of current rig activity in several producing regions shows continued production growth from tight-oil formations, such as shale in the Permian region, driving overall production increases (Figure 1).
The STEO projects that the most significant production growth in the second half of 2017 will be in the Permian region. Permian production is forecast to grow to 2.6 million b/d in the second half of 2017, a 260,000 b/d increase from the first half of 2017. Production in the Permian continues to increase, in part as a result of West Texas Intermediate (WTI) crude oil average monthly prices that have remained higher than $45 per barrel (b) since the second half of 2016.
Extending across western Texas and southeastern New Mexico, the Permian region has developed into one of the more active drilling regions in the United States because its large geographic size and favorable geology contain many prolific tight formations such as the Wolfcamp, Spraberry, and Bonespring. Increases in proppant intensity, lateral lengths, and changes to slick-water completions are also among the factors that have allowed the Permian to remain one of the most economic regions for oil production despite the low-oil-price environment. WTI spot prices averaged $50/b in the first half of 2017, spurring deployment of more rigs to the Permian, which rose steadily from 276 rigs in January to 380 rigs in September. The STEO projects that the Permian region rig count will continue to grow from an average of 341 rigs in 2017 to 371 rigs in 2018, and the WTI price is forecast to average $49/b for the second half of 2017 and $51/b in 2018.
The STEO forecasts Niobrara and Anadarko production to grow by 75,000 b/d and 42,000 b/d, respectively, averaging 500,000 b/d and 460,000 b/d, respectively, for the second half of 2017. This growth makes these two regions the second- and third-largest contributors to the STEO’s projected growth between the first and second half of 2017. Production in the Niobrara and Anadarko regions has grown continuously since January 2017 in response to increasing rig activity and a monthly WTI price range from $45/b to $53/b during the year. With an expectation that prices will continue to be near this range, rig activity and production are expected to continue to grow.
In the STEO forecast, the Bakken region is expected to maintain production at slightly less than 1.1 million b/d through 2017, increasing by 31,000 b/d between the first and second half of the year. The Bakken region predominately spans the Williston Basin, which contains the Bakken and the Three Forks formations. Although the Bakken region is large in geographic size (23 million acres), it contains fewer identified prolific formations than the Permian. In addition, operators in this region are affected by winter weather and have greater transportation constraints in moving oil to refineries and markets. Rigs in the Bakken region grew from 35 in January to 44 in May of this year, increasing further to 51 in September.
The STEO forecasts production in the Eagle Ford region to remain relatively flat in the second half of 2017 at 1.2 million b/d, a 5,000 b/d increase from the first half of 2017. Compared with the Permian, the Eagle Ford region has a significantly smaller geographic area with fewer prolific stacked formations and fewer opportunities to drill. Rigs in the Eagle Ford region grew from 57 to 98 from January through May of this year, but declined to 83 in September, in part as a result of a lagged response to lower WTI prices in the second quarter of 2017. More recently, the Eagle Ford region experienced temporary outages in production and rig activity in August and September because of Hurricane Harvey.
EIA expects Alaska production to remain relatively flat, averaging 460,000 b/d in the second half of 2017, a 22,000 b/d decrease from the first half of 2017, because of seasonal maintenance on the Trans-Alaska Pipeline System during the third quarter.
Production in the rest of the United States is expected to remain fairly constant, with relatively modest production declines in California (30,000 b/d) and the Federal Offshore Gulf of Mexico (7,000 b/d) in the second half of 2017.
In the Lower 48 states, observed rig counts typically follow changes in the WTI price with an approximate four-month lag (Figure 2). In addition to responding to the WTI price, rig counts are related to cash flow and profitability. If returns are positive at a given price level, an operator could choose to add rigs. In that scenario, prices do not have to continually rise to support increases in rig counts. For most predominately tight-oil regions to see continued growth in production, rig activity must continue to increase because of the well dynamics, which on average have high initial production rates but very fast declines (e.g., 60% over the first 12 months of production). However, with the number of rigs continuing to increase, especially in the Permian, EIA has assessed that new wells are being drilled at a pace sufficient to maintain and increase production levels. If that trend changes, EIA will continue its process of adjusting its forecast in regular monthly STEO updates.
EIA models oil production monthly in the STEO at the state and regional levels. The STEO forecast is based on recent trends in drilling and production and on anticipated future changes, driven largely by the WTI price. EIA evaluates past production trends on a well-by-well basis for all production documented since 2014 and uses that history to estimate future well performance and decline rates at the state and regional levels.
As indicated above, EIA has observed that changes in the WTI price affect the number of active drilling rigs within about four months. Changes in the number of active rigs lead to changes in production volumes within about two months. Consequently, the STEO oil production forecast is based on the historical observation that changes in production volumes typically occur about six months after a change in the price of crude oil. The forecast is also influenced by estimates of cash flow and production costs, which vary by region and over time. In addition, the STEO makes assumptions regarding how the inventory of drilled but uncompleted wells responds to price and how that response affects production at the state and regional levels.
All historical production data are benchmarked monthly to the EIA-914 survey data and to EIA’s Petroleum Supply Monthly (PSM) estimates at the state level. The October STEO forecast for oil production is benchmarked to the PSM data for July 2017.
Since it started in 2016, the Dallas Fed Energy Survey quarterly business indicator of the share of exploration and production firms that think oil production will increase or decrease has moved consistently with EIA’s 914 survey of oil production. Consistent with the updated STEO forecast for U.S. oil production, the recently released 2017 third-quarter report from the Dallas Fed survey (July–September) shows expectations of an increase in oil production in Texas, New Mexico, and northern Louisiana from an index of 10.2 in the second quarter to 19.3 in the third quarter.
Forecasting crude oil production is a dynamic process because of many uncertainties. Not all operators respond to price movements at the same time, which leads to uncertainty in the timing and degree of change in the production trend. Constantly evolving drilling practices within the industry, changes in well performance, pipeline infrastructure, and weather events can also have significant influence on the short-term outlook for crude oil production in the Lower 48 states. Production estimates have shifted (and are likely to continue to shift) as new geological information is gained, long-term well productivity is observed, and technological advances and better operational practices improve well productivity and reduce costs. Potential changes in market dynamics, such as recent indications that investors may require companies to focus more on returns and less on production growth, also add uncertainty to the pace and level of future production.
U.S. average regular gasoline and diesel prices fall
The U.S. average regular gasoline retail price fell over 6 cents from the previous week to $2.50 per gallon on October 9, up 23 cents from the same time last year. The East Coast and Midwest prices each fell seven cents to $2.52 per gallon and $2.33 per gallon, respectively, the Gulf Coast price fell over six cents to $2.32 per gallon, and the West Coast and Rocky Mountain prices each fell three cents to $2.95 per gallon and $2.54 per gallon, respectively.
The U.S. average diesel fuel price fell nearly 2 cents to $2.78 per gallon on October 9, 33 cents higher than a year ago. The East Coast price fell three cents to $2.79 per gallon, the West Coast and Gulf Coast prices each fell two cents to $3.09 per gallon and $2.60 per gallon, respectively, the Midwest price fell one cent to $2.74 per gallon, and the Rocky Mountain price fell less than one cent, remaining at $2.86 per gallon.
Propane inventories gain
U.S. propane stocks increased by 0.9 million barrels last week to 78.9 million barrels as of October 6, 2017, 25.0 million barrels (24.1%) lower than a year ago. Midwest, Gulf Coast and Rocky Mountain/West Coast inventories increased by 0.5, 0.4 and 0.1 million barrels, respectively, while East Coast inventories dipped slightly, remaining virtually unchanged. Propylene non-fuel-use inventories represented 3.8% of total propane inventories.
Residential heating oil price decreases, propane price increases
As of October 9, 2017, residential heating oil prices averaged $2.65 per gallon, 2 cents per gallon less than last week but 28 cents per gallon more than last year’s price at this time. The average wholesale heating oil price for this week is $1.83 per gallon, almost 7 cents per gallon less than last week but nearly 19 cents per gallon higher than a year ago.
Residential propane prices averaged almost $2.26 per gallon, nearly 3 cents per gallon more than last week and 21 cents per gallon more than a year ago. Wholesale propane prices averaged $1.02 per gallon, 2 cents per gallon higher than last week and over 33 cents per gallon more than last year’s price.
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
A lot of complications arise when a government changes. Particularly if the new government comes in on a mandate to reverse alleged deficiencies and corruption of previous governments. This is amplified when significant natural resources are involved. It has happened in the past – when Iran nationalised its oil industry by kicking out BP – and it could happen again in the future – in Guyana where the promise of oil riches in the hands of foreign firms has already caused grumbles. And it is also happening right now in Papua New Guinea, as the new government led by Prime Minister James Marape took aim at the Papua LNG deal.
Negotiated by the previous government of Peter O’Neill, the state’s new position that is the current gas deal is ‘disadvantageous’ to country. A complex set of manoeuvres – accusing O’Neill of multiple levels of corruption – led to a proposed vote of no confidence and an eventual resignation. With the departure of O’Neill, public opinion on the Papua LNG project (as well as the PNG LNG project) switched from being viewed as a boon to the economy to one of unequal terms that would not compensate the nation fairly for its resources.
So, despite a previous assurance in early August that the new government of Papua New Guinea would stand by the previous gas deal agreed with the Papua LNG stakeholders in April, Marape sent a team led by the Minister of Petroleum Kerenga Kua to Singapore to renegotiate with the project’s lead operator Total.
As the meeting was announced, suggestions pointed to a hardline position by Papua New Guinea… that they could ‘walk away from a new deal’ if the new terms were not acceptable. In a statement, Kua stated that the negotiations could ‘work out well or even disastrously’. From Total’s part, CEO Patrick Pouyanne said in July that he expected the government to respect the gas deal while Oil Search stated that it was seeking ‘further clarity on the state’s position’. The gas deal covers framework of the Papua LNG project, which was scheduled to enter FEED phase this year with FID expected in 2020, drawing gas from the giant onshore Elk-Antelope fields ahead of planned first LNG by 2024. So, the stakes are high.
With both sides locked into their positions, reports from Singapore suggested that the negotiations broke down into a ‘Mexican standoff’. No grand new deal was announced, and it can therefore be inferred that no progress was made. There is a possibility that PNG could abandon the deal altogether and seek new partners under more favourable terms, but to do so would be a colossal waste of time, given that Papua LNG is nearing a decade in development. Total and ExxonMobil have already raised the possibility of legal moves if the deal is aborted, with compensation running into billions – billions that the PNG government will not have unless the Papua LNG project goes ahead.
But the implications of the deal or no-deal are even wider. The PNG state has already stated that it will look at the planned expansion of the PNG LNG project (led by ExxonMobil and Santos) next, which draws from the P’nyang field. Renegotiation of the current gas deals in PNG may have populist appeal but have serious implications – alienating two of the largest oil and gas supermajors and two of PNG’s largest foreign investors could lead to a monetary gap and a mood of distrust that PNG may be unable to ever fill. Hardline positions are a good starting position, but eventual moderation is required to ever strike a deal.
Papua LNG Factsheet:
The U.S. Energy Information Administration (EIA) estimates that members of the Organization of the Petroleum Exporting Countries (OPEC) earned almost $711 billion in net oil export revenues in 2018 (Figure 1). The estimate is up 29% from 2017, but about 40% lower than the record high of almost $1,200 billion in 2012. The 2018 earnings increase is mainly a result of higher crude oil prices. The Brent spot price rose from an annual average of $54 per barrel (b) in 2017 to $71/b in 2018. However, EIA forecasts annual OPEC net oil export revenues will decline to $593 billion in 2019 and to $556 billion in 2020. Decreasing OPEC revenues are primarily a result of decreasing production among a number of OPEC producers.
EIA estimates net oil export revenues based on oil production—including crude oil, condensate, and natural gas plant liquids—and total petroleum consumption estimates, as well as crude oil prices forecast in the August 2019 Short-Term Energy Outlook (STEO). EIA’s net oil export revenues estimate assumes that exports are sold at prevailing spot prices and adjusts the prices for benchmark crude oils forecast in STEO (Brent, West Texas Intermediate, and the average imported refiner crude oil acquisition cost) with historical price differentials among spot prices for the different OPEC crude oil types. For countries that export several different varieties of oil, EIA assumes that the proportion of total net oil exports represented by each variety is the same as the proportion of the total domestic production represented by that variety. For example, if Arab Medium represents 20% of total oil production in Saudi Arabia, the estimate assumes that Arab Medium also represents 20% of total net oil exports from Saudi Arabia.
Although OPEC net export earnings include estimated Iranian revenues, they are not adjusted for possible price discounts that trade press reports indicatedIran may have offered its customers after the United States announced its withdrawal from the Joint Comprehensive Plan of Action in May 2018. The United States reinstated sanctions targeting Iranian oil exports in November 2018. Similarly, EIA does not adjust for Venezuelan crude oil exports to China or India for volumes that are sent for debt repayments to China and Russian energy company Rosneft, respectively, and thus do not generate cash revenue for Venezuela.
If the $711 billion in net oil export revenues by all of OPEC is divided by total population of its member countries and adjusted for inflation, then per capita net oil export revenues across OPEC totaled $1,416 in 2018, up 26% from 2017 (Figure 2). The increase in per capita revenues likely benefited member countries that rely heavily on oil sales to import goods, fund social programs, and otherwise support public services.
In addition to benefiting from higher prices, some OPEC member countries have increased export revenues by reducing domestic consumption and consequently exporting more. For example, Saudi Arabia has significantly reduced the amount of crude oil burned for power generation. Limiting crude oil burn allowed Saudi Arabia to export more crude oil and to maximize revenues.
Others have been able to charge higher premiums based on the quality of their crude oil streams. As the global slate of crude oil has changed with more light crude oil production (with higher API gravity), OPEC members have benefited from a narrowing price discount for their heavy crude oils, which are typically priced lower than lighter crude oils because of quality differences. Smaller discounts for OPEC members’ heavier crude streams contributed to higher spot prices for the OPEC crude oil basket price, which incorporates spot prices for the major crude oil streams from all OPEC members (Figure 3).
Despite the increase in annual average crude oil prices in 2018, OPEC revenues fell during the second half of 2018, mainly because of lower production and export volumes from Iran and Venezuela (Figure 4). EIA estimates that OPEC total petroleum liquids production decreased slightly in 2018 when increased production in Saudi Arabia, Iraq, and Libya could not offset significant declines in Iranian and Venezuelan production. Combined crude oil production in Iran and Venezuela fell by almost 800,000 barrels per day (b/d), or 14%, in 2018 and again by over 1.0 million b/d in the first seven months of 2019. Although Iranian net oil export revenues increased by 18% from 2017 to 2018, a year-to-date comparison indicates a significant decrease in revenues in 2019 (Figure 4). EIA estimates that from January to July 2018, Iran received about $40 billion in export revenues, compared with an estimated $17 billion from January to July 2019. Further decreases in OPEC members’ production beyond current EIA assumptions would further reduce EIA’s OPEC revenue estimates for 2019 and 2020.
U.S. average regular gasoline and diesel prices fall
The U.S. average regular gasoline retail price fell nearly 3 cents from the previous week to $2.60 per gallon on August 19, 22 cents lower than the same time last year. The Gulf Coast price fell nearly 6 cents to $2.27 per gallon, the East Coast price fell nearly 4 cents to $2.52 per gallon, the West Coast and Rocky Mountain prices each fell nearly 2 cents to $3.24 per gallon and $2.67 per gallon, respectively, and the Midwest price fell nearly 1 cent, remaining at $2.52 per gallon.
The U.S. average diesel fuel price fell nearly 2 cents to $2.99 per gallon on August 19, 21 cents lower than a year ago. The Midwest price fell over 2 cents to $2.90 per gallon, the West Coast and East Coast prices each fell nearly 2 cents to $3.56 per gallon and $3.02 per gallon, respectively, the Gulf Coast price fell more than 1 cent to $2.75 per gallon, and the Rocky Mountain price fell less than 1 cent, remaining at $2.94 per gallon.
Propane/propylene inventories rise
U.S. propane/propylene stocks increased by 4.0 million barrels last week to 90.5 million barrels as of August 16, 2019, 10.2 million barrels (12.7%) greater than the five-year (2014-18) average inventory levels for this same time of year. Gulf Coast, East Coast, Midwest, and Rocky Mountain/West Coast inventories increased by 2.0 million barrels, 1.0 million barrels, 0.7 million barrels, and 0.4 million barrels, respectively. Propylene non-fuel-use inventories represented 4.4% of total propane/propylene inventories.
Student guardian visa subclass 590 allows you to stay in Australia as a guardian or custodian or relative of an overseas student who is pursuing an education course in Australia. With 590 student guardian visa, You can stay with your child to take care of him/her in Australia until the course complete. Your child age must below then 18th years old before applying for a student guardian visa 590. If you're a relative then you can stay with the child by submitting written permission of a child’s caretakers like a guardian or grandparents. If your child is older then eighteen years then to apply for visa subclass 590 you need to show that you have special emergency circumstances. You can apply for a 590 student guardian visa outside from Australia and acquire enrollment in alternative courses up to three months with a 590 visa. You will be authorized to take care more then one child if you have. You can do the other study or coach just for 3 months with this Student Guardian Visa Subclass 590.
Step By Step Process About 590 Visa
1.Before Applying for Visa
Meet Eligibility Criteria
• You must be a parent or grandparents or relative of a non-Australian child who is below 18th of age.
• If you want to apply from inside of Australia then you need to hold a substantive visa except for domestic worker, temporary work visa, transit visa, visitor visa, etc.
• If your another child who is below 18th and not coming to Australia with you then you need to give evidence that you have made welfare arrangement for the child.
• You have to account for your all healthcare expenses so make sure that medical insurance can only reduce your expenses.
• Your past immigration history must be credible like you must not have any visa cancellation history.
• Your intention should be genuine at the time of applying for student guardian visa 590 and it should be not against Australian culture and policies.
• If your family members are also applying with you then they also need to meet health policies of the Australian government
• Only a parent or grandparents or custodian or step parents of an overseas student visa 500 holder can apply for this student guardian visa subclass 590.
• If parents are not present due to any reason for looking after the visa subclass 500 holder student then any relative can apply for this 590 student guardian visa.
• You must be a guardian of an international student who must be below 18th of age except for exceptional circumstances.
• You have to give assurance to immigration authorities that you will be able to provide welfare.
• Your age must be above 21 years old before going to apply for a student guardian visa 590.
• You have to pay back any type of debt to the Australian government if you have.
• If you have another child aged 6 years old then you can bring him/her to Australia but if your child if older then 6 years then you need to show emergency condition to bring him/her to Australia.
•Provide character certificate and other national identities.
•Submit bank documents and salary slips to prove that you will be enough capable to give welfare to the student.
•Provide guardianship documents to prove your credibility to that child.
•Translate your non-English documents into English.
•Submit legal student guardianship form.
•Provide dependent under 6 documents if you bring your child who is under 6 years of age.
2. Processing Time And Cost Of This Visa
Visa subclass 590 cost starts from AUD 560. This visa 590 may proceed in 2 to 4 months. But in case you forget to submit any documents then you processing time of visa can be increased. Your visa application processing time can be increased if you provide incomplete information.
3. Apply For The Visa
You need to apply online for the 590 student guardian visa 6 weeks before the student’s course starts. At the time applying for the visa, you have to prove that you are genuine and legal applicant by submitting legal documents. If you submit illegal information to immigration authorities then they have the authority to cancel your visa application immediately. You and your relative which is listed in visa application will not able to get a visa for the next 10 years in case of any fraud by you. You should contact an experienced Immigration Agent Adelaide.
4. Conditions After You Have Applied For The Visa
• You are not allowed to do any type of work in Australia.
• You can study only for 3 months.
• With visa subclass 590 you can’t apply for another visa
• At the time of leaving Australia, you must have brought the student to your country.
• If you have another child who is below 6th years of age then you can bring him/her to Australia.
Get The Direction To Migration Agent Adelaide - ISA Migrations and Education Consultants.