By JOHN P. TRETBAR
The operator of the Keystone oil pipeline says the facility returned to service Sunday following approval by regulators of the company’s repair and restart plan. T.C. Energy said it would operate the pipeline at reduced pressure as it gradually increases the volume of heavy crude moving through the system. A breach in the pipeline late last month leaked more than 9,000 barrels in North Dakota. The affected section of pipe was excavated and is being tested at a metallurgical laboratory. The company is not commenting on the cause of the spill until the investigation is complete.
Kansas Common Crude at CHS in McPherson starts the week at $47.50. That’s a dollar higher than at the start of the month, but three dollars less than a year ago at this time.
Baker Hughes reported another dramatic drop in its weekly Rotary Rig Count. The company reports 817 active drilling rigs nationwide, a drop of seven oil rigs. The count in New Mexico was down four rigs, while Texas was down three. The counts across Kansas were down slightly. Independent Oil & Gas Service reported seven active rigs in the eastern half of the state, up two, and 21 in Western Kansas, down three. Drilling is underway on one well in Barton County, and operators were about two spud two wells in Barton County and two wells in Ellis County.
Operators received 19 permits for drilling at new locations across Kansas last week.That’s 926 new drilling permits so far this year. There are nine new permits in eastern Kansas and 10 west of Wichita, including one each in Barton and Stafford counties.
Independent Oil and Gas Service reports 28 newly completed wells for the week, 1,195 so far this year. There were four new completions in eastern Kansas, and 24 west of Wichita, including two in Ellis County, two in Russell County, and two in Stafford County.
The U.S. Energy Information Administration says U.S. oil producers very nearly set another production record, pumping 12.584 million barrels per day for the week ending November 1. That’s just 10,000 barrels short of the weekly record set twice last month. EIA reports crude-oil imports were down 620,000 barrels to 6.1 million barrels per day. The four-week average for imports is down more than 17% from the same four-week period a year ago. The government said domestic crude inventories were up nearly eight million barrels last week, or about three percent above the five-year seasonal average.
Saudi Arabia’s state-owned oil giant Aramco released a lengthy preliminary prospectus for its public stock offering. Aramco said it would sell up to one half of one percent of its shares to individual retail investors. It did not indicate how much would be made available to institutional investors. The oil and gas company netted profits of$111 billion last year, more than Apple, Royal Dutch Shell and ExxonMobil combined.
Iran’s president announced the discovery of a new oil field in the country’s south with over 50 billion barrels of crude. That could boost the country’s proven reserves by one third, even as it struggles to sell energy abroad over U.S. sanctions.
Shale-gas pioneer Chesapeake Energy is warning of a deep downturn in its economic status. In filings with the Securities and Exchange Commission,the Oklahoma company said if “depressed prices persist there is substantial doubt about its ability to continue as a going concern.” CNN-Business reports the company is nearly $10 billion in debt, and the current glut in natural gas is holding prices down, making it tougher to pay off those debts. Chesapeake said in the filing it could be forced to default on its revolving credit facility and other loans. The company plans to slash its drilling and completion activity by 30% next year, and cut production and general expenses by about 20%. Executives said they will consider selling assets to raise cash.
New conventional oil and gas discoveries have fallen to their lowest level in 70 years.This year’s discoveries total nearly 8 billion barrels of oil equivalent, compared to 10 billion barrels of oil equivalent discovered in all of last year, according to reporting by the Web site oil price dot com. Russia announced huge discoveries in the Arctic region, but the Web site says getting that oil out of the ground has been a problem. Among other things, warmer temperatures are causing oil and gas infrastructure to sink into the ground in some areas. Sanctions continue to hamper Russian efforts to capitalize on new U.S. technologies. ExxonMobil has announced a string of 14 huge discoveries in the Guyana-Suriname basin, off the west coast of Africa. The company also announced the biggest natural gas discovery in two years off the coast of Cyprus.
Freight train traffic remains about nine percent below year-ago levels, but oil-by-rail showed slight growth last week. The Association of American Railroads reported 12,677 tanker cars moving petroleum and petroleum products in the week ending November 2, an increase of one tenth of one percent over a year earlier. The total so far this year is up nearly 15% over the same total last year. Total freight traffic was down 8.8% for the week. Oil-by-rail in Canada was down 5.4%.
Encana, once Canada’s biggest crude producer, is moving to the U.S. The Canadian Broadcast Corporation calls the move a bitter pill for the Canadian oil patch, which is already reeling from problems ranging from pipelines to politics. Critics, especially those in downtown Calgary, point the finger at the federal government for creating a poor investment climate, with too many regulations and not enough new export pipelines. Last week, a trade group painted a gloomy picture of the industry in the coming year. In its annual forecast, The Petroleum Services Association of Canada predicted 4,500 new wells would be drilled in Canada next year, down 500 wells from the revised forecast for this year.
