EIA Predicts U.S to be 2013’s Largest Petroleum Producer

 

http://oilprice.com/Energy/Energy-General/EIA-Predicts-U.S-to-be-2013s-Largest-Petroleum-Producer.html

 

The political gridlock in Washington has produced some interesting shutdowns as Congressional Republicans and Democrats sling charges of responsibility.

 

Want to visit the Lincoln Memorial?

 

Want to visit the Lincoln Memorial?

 

The U.S. Export Import Bank website? Also closed.

 

But some elements of the U.S. Department of Energy are doggedly soldering on, including some bureaucrats in the Energy Information Administration, who on Friday produced an article in its “Today in Energy” column with the simple but arresting headline, “U.S. expected to be largest producer of petroleum and natural gas hydrocarbons in 2013.”

 

The report notes, “The U.S. Energy Information Administration estimates that the United States will be the world's top producer of petroleum and natural gas hydrocarbons in 2013, surpassing Russia and Saudi Arabia. For the United States and Russia, total petroleum and natural gas hydrocarbon production, in energy content terms, is almost evenly split between petroleum and natural gas. Saudi Arabia's production, on the other hand, heavily favors petroleum.”

 

Related article: Brazilian Policies Scare off Oil Majors

 

“Since 2008, U.S. petroleum production has increased 7 quadrillion Btu, with dramatic growth in Texas and North Dakota. Natural gas production has increased by 3 quadrillion Btu over the same period, with much of this growth coming from the eastern United States. Russia and Saudi Arabia each increased their combined hydrocarbon output by about 1 quadrillion Btu over the past five years.”

 

“Comparisons of petroleum and natural gas production across countries are not always easy. Differences in energy content of crude oil, condensates, and natural gas produced throughout these countries make accurate conversions difficult. There are also questions regarding the inclusion of biofuels and refinery gain in the calculations. Total petroleum and natural gas hydrocarbon production estimates for the United States and Russia for 2011 and 2012 were roughly equivalent—within 1 quadrillion Btu of one another. In 2013, however, the production estimates widen out, with the United States expected to outproduce Russia by 5 quadrillion Btu.”

 

To say that the report has enormous implications for the future would be a vast understatement.

In just three years, from February 2010 to February 2013, according to the EIA's Petroleum Supply Monthly, in the U.S. lower 48 states onshore oil production, including crude oil and lease condensate, rose more than 2 million barrels per day, or 64 percent. Texas has more than doubled its production over the past three years, while North Dakota's output nearly tripled.

 

To put this increase in perspective, it is more than the output of Algeria or Norway, and over half that of Iran, which produces 3.5 million bpd, or more than the U.S. imports from the entire Persian Gulf region.

 

What was the reason for this dramatic increase? The EIA report notes, “In all of these states, increasing production was achieved by applying horizontal drilling and hydraulic fracturing to low-permeability rocks. In many fields (in basins such as the Permian, Uinta, and Powder River) enhanced oil recovery techniques such as CO2 injection are also boosting production from conventional reservoirs.”

 

The contentious practice of hydraulic fracturing, or ‘fracking,” is also largely responsible for the surge in U.S. natural gas production. Love it or hate it, the technique has unleashed so much natural gas that the EIA projects that U.S. natural gas inventories will reach 3,800 billion cubic feet by November.

 

Related article: How Iran Plays the Oil Game … and Wins

 

While the overall implications of the EIA’s startling news remain unclear as yet, a few overall aspects seem fairly clear at this point.

 

The burgeoning recent success of the U.S. hydrocarbon industries in adding output spell trouble for both renewable energy, which will find it harder to attract funding in such a scenario, and “King Coal,” which will see its market share drop even further.

 

In the international scene, the growing energy independence of the U.S. will lessen the political impact of both OPEC and Middle Eastern nations in Washington’s corridors of power, and energy companies are even beginning to discuss the possibility of exporting some of their surpluses, particularly LNG, to lucrative foreign markets such as East Asia.

 

All in all, a win-win situation for U.S. hydrocarbon energy producers.

 

By. John C.K. Daly of Oilprice.com

Government Settles More Than GH¢ 1 Billion TOR Debt

Managing Director of TOR, Ato Ampiah

 

http://www.gbcghana.com/index.php?id=1.1557431

 

Government pays more than GH¢ 1 billion of Tema TOR debt.

 

Government has so far paid more than GH¢ 1 billion of the Tema Oil Refinery, TOR, debt. This covers 75% of TOR’s total indebtedness.

The Acting Managing Director of TOR, Ato Ampiah, disclosed this at the launch of the 50th Anniversary of the refinery.

He said government has also released $ 30 million out of the $ 67.7 million for its plant stabilization and profit enhancement programmes.

The Acting Managing Director of TOR, Ato Ampiah expressed gratitude to government for the payment.

He however hoped that the remaining amount would be made available soon to complete the programme to enable the refinery to stand tall in the sector.

He said as part of efforts to boost electricity supply and ensure that the refinery works even when there is interruption from the national grid, the company has invested in a 6.5 megawatt liquefied petroleum gas generator which is expected to arrive in the country by the 23rd of this month.

Mr. Ampiah noted that TOR, formerly Ghanaian Italian Petroleum Company, has undergone a remarkable transformation from a simple hydro skimming plant of 28,000 barrels per stream day to 45,000 barrels per stream day.

He said an expansion programme initiated in the year 2000, for a secondary conversion processing plant was commissioned in 2002 with an added capacity of 14,000 barrels per stream day.

Mr Ampiah said projections showed that if TOR can process crude regular it can bring in revenue of about $ 2 billion annually.

He said TOR may not have achieved all of the vision of Dr Kwame Nkrumah, first president of Ghana who initiated the project as the foundation for a petrochemical venture to propel other industries due to technical, operational and financial challenges.

In spite of this, he noted that they are striving to restore TOR to its former glory.

He thanked their partners, past and present management and staff for their contributions.

The Board Chairman of TOR, Eric Okai said plans are far advanced to turn TOR into a refinery entity and a refinery business where it will trade both crude oil and finished products.

He therefore urged the management and staff of the refinery to approach every activity they undertake from a business point of view to ensure success.

The Deputy Minister for Energy and Petroleum, Benjamin Dagadu urged the management and staff of the refinery to use the celebration to take stock of their performance and double their efforts to realise the vision of the founding fathers.

The celebration was under the theme: “50 Years of Refining and Fuelling the Nation; Achievements, Challenges, Opportunities and the way forward”.

GBC

Another VLCC earmarked for conversion

 

http://www.tankeroperator.com/ViewNews.aspx?NewsID=4765

 

Another VLCC will be converted into an FPSO shortly following the announcement that Mitsui, Marubeni and MOL have backed a long term project for a floating facility to be operated by MODEC.

The FPSO will be located in the Tweneboa, Enyenra, Ntomme (TEN) oil fields, offshore Ghana.

Mitsui, Marubeni and MOL have invested in TEN Ghana MV25 BV (MV25), a Dutch company established by MODEC, which will lease, operate and maintain the FPSO.

 

In August 2013, MV25 concluded the charter agreement with Tullow Ghana, the operator of TEN oil fields and a subsidiary of Tullow Oil. The charter contract initially runs for 10 years, with options for extension every year thereafter for up to 10 years additional years.

 

The loan agreement on a project finance basis was signed by the Japan Bank for International Cooperation (JBIC), Sumitomo Mitsui Banking Corp Co-operation (lead arranger), Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank, ING Bank and ABN AMRO Bank.

 

West Africa has seen numerous significant discoveries of expansive offshore oil fields in recent discoveries of expansive offshore oil fields in recent years, thereby giving rise years to expectations of fresh demand for additional FPSOs in the region, the partners said.

 

TEN oil fields are owned by a consortium of five companies, including Tullow Ghana as operator, Anadarko Petroleum Corp and Ghana National Petroleum Co.

 

The VLCC conversion project is planned to be completed and the FPSO deployed in 2016. It will have an oil processing capacity of 80,000 barrels per day, gas processing capacity of 170 mill cu feet per day and an oil storage capacity of 1.7 mill barrels.  

Ghana: Oil Tank Farm Under Construction Without Permit at Kpone

 

http://allafrica.com/stories/201309301623.html

 

The Kpone Traditional Council (KTC) has called on the Tema Development Corporation (TDC) to, with immediate effect, withdraw or suspend the processing of documents for Oasis Lubricant Ghana Limited to build an oil tank farm at Kpone-Kokompe.

 

The reason for the request stems from the fact that the proposal submitted to TDC and the Kpone-Katamanso District Assembly (KKDA) was to build offices for the company, and not an oil tank farm.

 

Even though not a single permit has been obtained from any of the institutions responsible for the issuance of permits for such purposes, which includes the KKDA, KTC, TDC, Environmental Protection Agency (EPA) and the Ghana National Fire Service (GNFS) among others, three tanks have already been built on the proposed site.

 

Another reason, for which the traditional authority is calling for the withdrawal of the permit, is that the land on which the oil tank farm is set up is within a residential area, an indication of the fact that in the event of any disaster, the environment, human lives, and properties would be in serious danger.

This was contained in a two-page letter, dated September 24 and addressed to the Managing Director of the TDC, and signed by the Registrar of the Traditional Council, which was intercepted by The Chronicle.

 

According to the KTC, several attempts to get the company to discontinue with its construction of the oil tank farm have proved futile, as management of the company is bent on continuing with the project.

 

When contacted on phone, Madam Evelyn Acquah, project manager for Oasis Lubricant Ghana Limited, explained that as far as she was concerned, the KKDA, which is the authorised body in charge of issuing permits for the construction of companies offices among others, had already given a permit to her outfit to operate.

 

She alleged that her company paid an amount of GH¢23,000 through the Acting Engineer of the KKDA, Mr. Vincent Yeboah, to the Assembly for the permit, an issue the District Engineer has denied completely.

 

She, however, admitted: "We are yet to get [a] permit from the Environmental Protection Agency (EPA) and the Ghana National Fire Service (GNFS), which is still in the pipeline."

 

Denying the allegation, Mr. Vincent Yeboah noted that it was never true that any permit had been granted to the company to operate for such an amount of money.

 

"We have two kinds of permits we give out, one from the government acquired area, and the other from the non-acquisition area.

 

"As an Assembly, we work on the government acquired areas, and permits are approved by the Statistical Planning Committee of the Assembly, which is chaired by the District Chief Executive, therefore, an individual, town planner or the engineer does not have that right single-handedly to give out [a] permit," he explained.

 

Mr. Yeboah continued that the final approval would be jointly granted by the EPA, KTC, KKDA and the GNFS, until then, whoever is found working on that parcel of land would be arrested by the police.

TOR, 50 years and suffering

 

http://www.ghanaweb.com/GhanaHomePage/business/artikel.php?ID=287561

 

In March 1957, when Ghana obtained its independence from British colonial rule, our first president, Osagyefo Dr Kwame Nkrumah, and the Convention People’s Party government sought to create a society that would offer a much better life and happiness for all its citizens.

Dr Nkrumah set up many state institutions that he envisaged would boost Ghana’s quest to achieve agricultural and industrial development. In pursuit of this objective the government set out to build a number of social services like hospitals, schools, housing and a good road network.

In the area of housing, the new Tema town serves as a testimony to the efforts made to house the working people of Ghana while the construction of the Tema harbour and the Akosombo Dam were clear indications that the first post-independence government of Ghana envisaged an industrialised country within a few years of independence.

Having awarded the construction of the Akosombo Dam on contract in recognition of the role energy played in the industrialisation of a nation, Dr Nkrumah inaugurated Ghana’s first and only crude oil refinery on September 28, 1963, exactly 50 years ago today. Then known as the Ghanaian Italian Petroleum Limited (GHAIP), it was later to be known as the Tema Oil Refinery (TOR).

In the words of Dr Nkrumah, the refinery was to serve as a “vital foundation for the establishment of other industries in Ghana”. Sad to say, however, 50 years on, TOR is a pale shadow of itself at a time that Ghana has joined the league of oil-producing countries and many expect that it would be operating at its peak.

The DAILY GRAPHIC is aware that the once vibrant oil refinery has gone through a lot of challenges which have led to frequent shutdowns. Among the myriad of challenges faced by the refinery are its debts, resulting from the resolve of successive governments to subsidise the price of fuel. This has led to the famous “TOR Debt”, which appears not to go away.

Another challenge is the refinery’s inability to have a working capital to be able to keep abreast of technological advancements in the sector.

One challenge facing TOR, and which is seldom talked about during discussions on the fortunes of the refinery, is the interest of big and influential oil business moguls in the success of the company. We are aware that these business people go to great lengths to ensure that the refinery is reduced to a storage facility for finished oil products to enable them to carry out their profitable business of importing finished products.

For as long as their importation businesses prosper, these moguls make sure, through obvious means, to keep TOR where it has been reduced to. We are inclined to believe that successive governments have been unable to look at the activities of these business people because all of them have members who are engaged in the importation of finished products and for whom the success of TOR would mean a collapse of their lucrative businesses.

This situation needs to change. The state must support TOR to be more relevant.

While inaugurating the plant in 1963, Dr Nkrumah charged GHAIP to, in the event of Ghana finding crude oil, purchase and refine the crude oil. Ghana has found crude oil now and is in business. Let no one tell us that is not possible. To the ordinary man in the street, it makes no sense for Ghana to be an oil producer and still import finished petroleum products. We await that time when Ghana will have an ‘integrated’ oil industry.

Diesel Tankers Turning Profitable After Five-Year Rout: Freight

 

http://www.bloomberg.com/news/2013-09-30/diesel-tankers-turning-profitable-after-five-year-rout-freight.html

 

The biggest expansion in Middle East crude refining on record is driving rates for vessels hauling everything from diesel to jet fuel toward a six-year high, boosting profit for Scorpio Tankers Inc. (STNG) and Frontline 2012 Ltd. (FRNT)

 

The Middle East will this year increase capacity to process crude by 530,000 barrels a day, or 6.4 percent, the most in data going back to 1994, says Pareto Securities AS. More cargoes will diminish the number of idle vessels and daily rates for Long-Range tankers, each hauling 75,000 metric tons, will rise 29 percent to $18,000 in 2014, the average of four analyst estimates compiled by Bloomberg shows.

 

The expansion means more exports to Europe, Japan and Australia, voyages that can stretch to 8,400 miles, tie up ships for longer and reduce available capacity in the fleet of 1,324 vessels. Refineries in India and the U.S. are also adding cargoes. The rate forecasts would make the carriers profitable for the first time since 2008 after a glut of ships caused a slump of as much as 93 percent.

 

“There will be a lot of product available for shipping,” said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo, whose recommendations on the shares of shipping companies returned 24 percent in the past year. “It’s all going to have to go long-haul, so that’s very good for owners.”

Rates Rally

The Middle East will process an extra 1.3 million barrels of crude daily in the next four years, a 17 percent advance that is equal to about two cargoes a day, according to data from the International Energy Agency, the Paris-based adviser to 28 oil-consuming nations. Saudi Arabian Oil Co. and Total SA (FP) shipped the first fuel from a new refinery in Jubail, Saudi Arabia, on Sept. 23. The plant will handle 400,000 barrels a day.

 

Middle East nations previously sent more crude to Europe and other regions for refining. Now they are processing more at home and exporting higher-value jet fuel, diesel and heating oil. That’s increasing demand for product tankers at the expense of crude-oil carriers. Rates on the latter vessels are averaging the lowest in at least in 16 years.

 

Tankers carrying refined fuels earned an average of $13,962 a day since the start of January on the industry’s benchmark route to Japan from Saudi Arabia, 22 percent more than a year ago, according to data from Clarkson Plc (CKN), the largest shipbroker. They need about $17,000 to break even, says Carnegie AS, an investment bank in Oslo. Rates peaked at $76,228 in 2008 and dropped as low as $5,387 in 2010.

Record Shares

Shares of Monaco-based Scorpio, which has 21 tankers including those being built, rose 37 percent to $9.89 in New York since the year began. The stock will reach $11.89 in 12 months, the average of 12 analyst forecasts shows. The company will report profit of $21 million this year, from a loss of $26.5 million in 2012, according to the mean of six predictions.

 

Frontline 2012, based in Hamilton, Bermuda, will say profit surged to $74.1 million, from $1.4 million, the mean of five estimates shows. Shares of the company rose 47 percent to 41.20 kroner ($6.85) in Oslo since Jan. 2 and will reach a record 62.45 kroner in 12 months, according to the average of six forecasts. Frontline 2012 also has ships hauling coal, iron ore and liquefied petroleum gases.

The two companies have the most orders for new tankers, Clarkson data show. The vessels are the kind most commonly used for longer-distance deliveries from the Persian Gulf, according to Eirik Haavaldsen, an analyst at Pareto in Oslo.

Refineries Shift

The prospect of profitable rates is prompting owners to order new ships, threatening another glut upon delivery in about 18 months. The order book for LR tankers increased to 20 percent of the existing fleet from 15 percent in December, according to IHS Maritime, a research company in Coulsdon, England.

Rates are still below breakeven and have been on an annual basis since 2008, when the global economy endured its worst recession since just after World War II. Supply of product tankers expanded 34 percent in the past five years as trade gained 17 percent, Clarkson data show.

 

The economy in Europe, the biggest source of demand for fuel tankers, probably stagnated in the three months through Sept. 30 after contracting in the five preceding quarters, according to the average of economist estimates compiled by Bloomberg. The data are compiled from forecasts across the region, including the 17-nation euro area. The continent accounts for at least 24 percent of seaborne imports, according to Clarkson.

 

Europe’s refining industry will contract more quickly than demand for at least the next five years, according to the IEA. About 15 refineries processing 1.7 million barrels a day shut from 2008 to 2012, leaving capacity of 15.1 million barrels. As a consequence, the region is buying more from the U.S., the Middle East and India, the IEA said in June.

More Cargoes

More cargoes from the Middle East boost tanker demand because they mean longer voyages. An average shipment to France from Saudi Arabia is about 6,200 miles. Moving fuels from Latvia to France, a benchmark route for European rates, is 1,300 miles. Cargoes to Japan from the Persian Gulf travel 6,600 miles. Shipments to Australia are 8,400 miles. Japanese refining capacity will decline to 4 million barrels a day by 2018, from 4.6 million barrels a day in 2012, the IEA estimates.

 

Shipments of refined fuels are also expanding outside the Middle East, led by cargoes to Latin America from the U.S. Gulf of Mexico. Trade on that route will rise 25 percent to 2 million barrels a day this year, according to Clarkson. America’s refineries have more oil to process in part because of fracking, which taps reserves in shale-rock formations. The nation’s crude output averaged 7.2 million barrels a day since the start of January, the highest level since 1991.

Maritime Industry

Exports of refined fuels from India rose 5.7 percent to 5.15 million tons a month in the first half, according to data from the International Trade Centre, an agency of the United Nations and the World Trade Organization. The country’s Jamnagar refinery complex is the world’s largest, handling 1.2 million barrels a day.

 

Freight rates across the maritime industry measured by the ClarkSea Index averaged $9,259 a day this year, set for the lowest annual average since at least 1990, Clarkson data show. About 90 percent of world trade is hauled by sea, according to the Round Table of International Shipping Associations.

While refined-product shipments are expanding, the amount of crude carried at sea is stagnating. Seaborne trade in unrefined oil will be little changed at 38 million barrels a day this year, Clarkson data show. The largest crude tankers earned $7,288 daily in the past nine months, headed for the lowest annual average since at least 1997.

Million Barrels

Saudi Arabia, Iran, Qatar, the United Arab Emirates and Iraq, the Middle East members of the Organization of Petroleum Exporting Countries, shipped an average of 478.2 million barrels a month in the first half, 7.4 percent less than in 2012, according to data compiled by Bloomberg.

 

“For the product-tanker market, it’s tremendously positive,” said Haavaldsen at Pareto, whose recommendations on the shares of shipping companies returned 16 percent in the past year. “There’s some tanker evolution going on. In future you will see more and more products being transported along the same routes as crude.”

 

To contact the reporters on this story: Alaric Nightingale in London at anightingal1@bloomberg.net;

 

Rob Sheridan in London at rsheridan6@bloomberg.net

 

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

2H Offshore Wins TEN Contract

                           

 

http://www.petroleumafrica.com/2h-offshore-wins-ten-contract

 

2H Offshore was tagged by Tullow Oil as the lead riser engineering consultancy for the delivery of the flexible riser system for its Tweneboa, Enyenra, and Ntomme (TEN) field development, offshore Ghana.

 

The TEN development is located in the Deepwater Tano block west of the Jubilee field and consists of oil and gas production wells, water injection wells, and gas injection wells. Production will be gathered through subsea manifolds and flexible risers to the FPSO. 2H will ensure the riser engineering design complies with ISO 13628-2 and provide recommendations on riser optimization, installation, and overall assurance that the risers meet the project Basis of Design (BOD) and specification.

 

“We are delighted to have the opportunity to work with Tullow Oil in leading an integrated riser engineering team to deliver the flexible riser system for the TEN development,” said 2H Director, Hanh Ha. “Our in-depth knowledge and experience with flexible risers will enable us to develop and optimize the system to meet the project’s combined challenges of deep water, complex subsea bathometry and aggressive delivery schedule.”