By JOHN P. TRETBAR
The debate over the Keystone Pipeline expansion returns to Nebraska, and a big crowd is expected this week for a hearing on the latest proposed route. The Nebraska Public Service Commission plans to take comments on the project during a daylong hearing Wednesday in York, Nebraska. Nebraska is the only place where the route TransCanada proposed has not been approved. The Lincoln Journal Star reported plans by supporters and opponents to bring large numbers of people to the hearings.
President Donald Trump signed executive orders aimed at expanding offshore oil drilling and reviewing land-use restrictions (national monument designations under the Antiquities Act) made by his predecessors. The orders allows expanded offshore oil drilling and upends public lands protections put in place in Utah, Maine and other states. Trump ordered his administration, led by Interior Secretary Ryan Zinke, to review where the US could allow offshore energy development, revoking rules put into place after the BP oil spill in the Gulf of Mexico in 2010, and putting Arctic drilling back on the table.
A pair of big-oil earnings reports last week signaled some improvement in the entire industry. Chevron reported a $2.6 billion quarterly profit, and Reuters reported the company finally turned cash-flow positive, earning more than it spent. Exxon’s production fell during the first quarter, but the company reported its profits doubled to more than four billion. Reuters reported that cost cuts and asset sales provided a boost to both companies, but noted that the results highlighted the slowly improving dynamics for the energy industry. Chevron has sold more than $5 billion in assets since last year and is seeking buyers for its Canadian oil sands business. Both companies are bullish on the Permian Basin of Texas, where Exxon doubled its holdings in a deal worth $6.6 billion earlier this year.
Baker Hughes reported 870 active drilling rigs across the US last week, marking an increase of nine oil rigs and four targeting natural gas. The count in Canada was down 14 to 85 active rigs. Independent Oil & Gas Service reported 13 active rigs east of Wichita, down one, and 25 in western Kansas, down two for the week. They’re moving in rotary drilling tools, or preparing to, at sites in Barton and Russell counties.
There were just 24 permits filed for drilling at new locations across Kansas last week, including three in Russell County. There were seven new permits filed in eastern Kansas and 17 west of Wichita.
Independent Oil & Gas Service reported 19 new well completions across the state last week, 470 so far this year. There were 13 new completions east of Wichita and six in western Kansas, including one in Ellis County and one in Stafford County (a dry hole).
An Australian firm spudded its first oil well since the price plunge in Rooks County, Kansas. Empire Energy Group was expecting to reach 3,500 feet of total depth on its Thompson #9 well last week. By Monday (5/1), the company was waiting on completion tools, according to a drilling report by Independent Oil & Gas Service.
Oklahoma politics reached the boiling point last week. The Daily Oklahoman reported that for the second time in two days, Oklahoma Senate and House leadership abruptly canceled budget hearings that typically are used to roll out significant revenue-raising measures. At the heart of the matter was a GOP plan to raise the gasoline tax by six cents, which Democrats say would cost families an extra $150 at the pump each year. The Democrats would prefer to raise the state’s oil and gas production tax rate from 2 percent to at least 5 percent.
Oklahoma regulators and a pipeline operator initially blamed internal corrosion for the leak of about 450 barrels of crude oil from a pipeline on farmland northwest of Oklahoma City. The Oklahoma Corporation Commission notified the federal government about the spill April 21, and blamed corrosion, according to reporting by KFOR-TV4. Since then the OCC told AP that corrosion was not to blame. The Kingfisher County farmer estimated he might have lost about 120 acres of pasture and wheat crop from the spill, but officials now say the spill was contained to about 70 acres of farmland, a country road, and a small creek. This is the 25th pipeline incident for Plains All American Pipeline in the state of Oklahoma in the last ten years or so, with 14 of those blamed on corrosion.
The restart of two key oilfields in Libya pumped more crude into an already bloated market. Libyan crude production was at 491,000 bpd on Thursday according to Reuters. But the OPEC member is targeting 800,000 bpd soon and upwards of 1.1 million barrels per day by August.
BP reported a major discovery in an existing field in the Gulf of Mexico, crediting a new computing algorithm and supercomputer to better interpret seismic data. The find, worth a potential $2 billion in recoverable oil, according to reporting by the Houston Chronicle. The discovery is in an undrilled section of BP’s Atlantis field in 7,000 feet of water 150 miles from New Orleans. It has been obscured by a salt dome, which distorts seismic waves that oil companies use to map features below the earth.
The world’s largest crude oil exporter cut pricing for June exports to Asia, as it fights to defend sales in its biggest regional market. Bloomberg reported Saudi Aramco raised prices to all other regions. The Saudis are losing market share as a result of OPEC’s agreement to curb supplies to bolster prices. A Middle East researcher said the winners in the fight for market share are Iran and Iraq.
Saudi Arabia says its security forces foiled an attempt to blow up an oil product distribution center near its border with Yemen. The state-run news agency said they spotted a remote-controlled boat laden with explosives. The kingdom has been at war with Yemen since 2015, leading a coalition against Shiite militants aligned with Iran. Saudi Aramco is building a 400,000 barrel-a-day refinery in the area.
The relaxing of nuclear sanctions against Iran, and implementation of that country’s new plan of action, prompted a big spike in Iran’s oil 2016 exports. According to the head of the Iran Oil Terminals Company, about 780 million barrels of crude oil hit international markets from the Kharg Oil Terminal last year, compared to 432 million barrels the year before. More than 800 oil tankers arrived at the terminal to receive crude in the year ended March 21, compared to 540 vessels during the previous year.