By JOHN P. TRETBAR
For the first time, the government reports weekly crude production in the United States of 11 million barrels per day. Weekly totals from the Energy Information Administration, rounded to the nearest 100,000 barrels, have been hovering at 10.9 million barrels per day for several weeks.
Baker Hughes reported a dip in the national rig counts, dropping five oil rigs and two gas rigs to 1,046 nationwide. The counts were down three in Oklahoma and down five in Texas. Canada reports 211 active drilling rigs, up 14 over the last week. Independent Oil & Gas Service reports the statewide drilling rig count in Kansas was flat last week, 19 active rigs east of Wichita, down one, and 30 in western Kansas, up one. The total is more than two percent higher than a week ago, and nearly 29% higher than a year ago. Drilling is underway or about to begin at four sites in Barton and Stafford counties. Operators are moving in completion tools to four wells in Barton County and five in Ellis County.
Operators filed 21 new drilling permits last week across Kansas, 906 so far this year. There are 13 new permits in eastern Kansas and eight west of Wichita, including one in Ellis County. Independent Oil & Gas Service reported 37 newly-completed oil and gas wells across Kansas for the week, 20 of them east of Wichita and 17 in the western half of the state, including one in Ellis County. Operators have completed 853 wells so far this year.
Meridian Energy group moves forward with efforts to build a refinery situated in the heart of the Bakken Shale region of North Dakota but also about three miles from a national park. Meridian has let a contract for site, civil design and construction services for the first new refinery to a Bismarck, North Dakota firm. Earlier, three environmental groups filed another lawsuit, this time to block the air-quality permit granted by the state’s health department last year. Another lawsuit challenges the zoning decision.
The State of North Dakota set production records for oil and gas in May, but did not meet the state’s goals to reduce flaring. The state’s Oil and Gas Division reported production of 1.24 million barrels per day for the month of May, beating the previous record from December of 2014 by more than 17,000 barrels. The gas capture rate fell 2% short of the state’s goals, which are set to go up in November.
North Dakota on Friday demanded $38 million from the federal government to reimburse the state for costs associated with policing large-scale and prolonged protests against the Dakota Access oil pipeline. An administrative claim against the Army Corps of Engineers contends the agency allowed protesters to illegally camp without a permit and failed to maintain law and order, which “…required North Dakota to provide a sustained, large-scale public safety response.”
A tanker is scheduled later this month to deliver the largest shipment of crude oil from Vancouver to China since January 2015. The Aframax tanker Serene Sea left a Kinder Morgan terminal in Vancouver July 4 with about 514,000 barrels of Canadian crude, and is expected to arrive in southern China July 26. Such shipments are rare, but Reuters reports they’ve picked up in recent months. For years, Canadian officials have pushed for an escalation in crude exports to rapidly growing Asian markets, but companies in oil-rich, and land-locked Alberta have limited capacity to move crude to the nation’s western coastline. Most of that winds up in the U.S.
Pipeline takeaway capacity in the Permian basin is tight and getting tighter. The US Energy Information Administration reported on one indicator, the number of drilled but uncompleted wells in the basin, which were up another 164 wells in June, following increases of 169 in May and 133 in April. Platts reports some experts are concerned that wells will need to be “banked,” held up for the next year or so, until new midstream pipeline capacity comes online late next year. Permian production is expected to add another 73,000 barrels per day in August, according to a government report. The U.S. Energy Information Administration predicts production among the top seven shale basins will rise 143,000 barrels per day in August, the second highest jump on record.
Concho Energy completes its merger with rival RSP Permian in a $9.5 billion deal. Concho becomes the largest unconventional shale operator in the Permian Basin with more than 1.2 billion barrels of oil equivalent in proved reserves.
The US has urged Russia and China to clamp down on repeated breaches of the oil sanctions regime imposed on North Korea, saying America had evidence of at least 89 illegal ship-to-ship oil transfers this year. Secretary of State Mike Pompeo made that call at the UN, the day after Russia and China rejected a call to step up sanctions.