By JOHN P. TRETBAR
Shanghai crude oil futures launched on Monday with mom-and-pop and institutional investors fueling much higher turnover than many expected. China’s new commodity benchmark, aimed at dominating the Asian market, has lured overseas interest. Global commodity trader and miner Glencore, and big merchants Trafigura and Freepoint Commodities were among the first to trade. Media in the region report early 15.4 million barrels of Shanghai’s most-active September contract changed hands during the morning session.
Foreign traders in the new Chinese crude futures get an exemption from income taxes on their commissions, according to an announcement last week from the Ministry of Finance. Reuters reports the tax exemption could help encourage foreign players, despite concerns about foreign exchange and other issues.
The Oklahoma Supreme Court approved an initiative petition seeking a public vote on whether to increase the oil and gas production tax to help fund education. The proposal would increase the tax on oil and gas production in Oklahoma by five percent, to be used mostly for teacher pay raises. In a statement, Oklahoma Oil and Gas Assocation President Chad Warmington said raising the tax again is not a long-term solution. If it makes it to the ballot, Warmington said the group will educate the public about the consequences, which he said could include job losses in the energy sector. Warmington said raising taxes on a single industry is not a cure-all for every financial woe, and said it’s dangerous to further tie education funding to a revenue source that fluctuates radically.
Baker Hughes reported a gain of four active oil rigs and one seeking natural gas, for a weekly nationwide rig count of 995. Canada saw another seasonal decline, down 58 rigs at 161. Independent Oil & Gas Service reports 13 active rigs in eastern Kansas, down two, and 28 west of Wichita, up two. Drilling is underway at one site in Barton County and two in Stafford County. Operators are moving in completion tools at two leases in Barton County, six in Ellis County, one in Russell County and two in Stafford County.
Independent Oil & Gas Service reports 26 new well completions for the week, 365 so far this year. There were two well completions in eastern Kansas. Out of 24 completions in the western half of the state, 11 were dry holes. One completed well in Barton County is producing pay dirt, while two in Stafford County turned out to be dry.
Operators filed 30 new drilling permits across Kansas last week, 10 east of Wichita and 20 in western Kansas. That’s 363 permits for drilling at new locations so far this year. There was one new permit filed in Barton County.
Some big oil and gas companies are beginning to shed some of their more valuable non-core assets to pay down debt and fund their more profitable plays. At least nine publicly traded companies are expected to sell properties over the next six months, according to analysts quoted by Forbes Magazine. Devon Energy, Pioneer Natural Resources, Reliance Industries, and EnerVest have all sold Texas properties in the Eagle Ford, Austin Chalk and Barnett Shale formations.
The United States is targeting South Sudan’s state-owned oil company, its oil and mining ministries and a dozen other oil-related entities in an attempt to stem the financial flow fueling the country’s civil war. According to a release from the State Department, South Sudan’s government and “corrupt official actors” are using oil and mining revenue to purchase weapons, fund militias and undermine peace.
China’s state-run national petroleum company has signed a deal worth $1.18 billion for 10% stakes in two offshore oil and natural gas concessions in the United Arab Emirates’ capital of Abu Dhabi. Major companies Total SA of France, and Italy’s Eni SpA also won shares. BP, whose concessions expired this month, will lose its share, estimated at 100,000 barrels per day.
Just after 9:30 p.m., Friday, police served a search warrant at a residence in the 200 block of Coolidge Street in Liberal as part of an ongoing drug investigation, according to Captain Patrick McClurg.
