A Calgary based oil trader wishing to remain anonymous recently went on record to say that Irving Oil has "fixed the 299,235t Kamakshi Prem to ship crude on January 21 from Ras Tanura, Saudi Arabia to its 300,000 b/d refinery in St. John, NB in Canada." Yes you read that right, Canada’s largest refinery, the Irving Oil New Brunswick facility, imports oil from Saudi Arabia. If you study crude trading markets, that news won't come as much of as surprise since waterborne crude can originate [Read more]
The Ladyfern legend: huge reserves, frenzied drilling, and no one made money. Sound familiar?
North America is presently in a comfortable natural gas supply position. This is due to the rapid development of shale gas reserves. While shale deposits have been known about for decades, recent rapid changes in technology unlocked huge amounts of gas at moderate prices. New fracking techniques and more efficient capital usage enabled rapid development of these huge reservoirs. Production has indeed increased dramatically, and well productivity has also boomed. It’s almost like a [Read more]
United States now exporting oil and natural gas: deserving of the hype or overdue minor market balancing?
For the first time in 40 years, the US is exporting oil (other than to Canada, where shipments back and forth are common). At the same time, natural gas exports are now beginning to ship from the US Gulf Coast. Is this the start of a new era in global energy movements? Or just a peculiar set of circumstances as unremarkable as movements of wheat, corn, or copper? As is the case with those commodities, the world’s supply moves to areas of demand in various ever-changing patterns, and is business [Read more]
2016 energy predictions are anyone’s guess
No one has any idea what 2016 will bring, but that has not stopped 192 million people from taking a crack at predicting it, according to a quick Google search. It should be safe to say that in the energy business, we are going to see a fascinating collision between new found religions and cold hard truths. Rather than pay attention to predictions, which will sound smart or dumb depending on how close they are to your beliefs, it’s more useful to consider which viewpoints are currently the [Read more]
You call that a hedging opportunity Santa?
Hedging is the biggest double edge sword in the energy business. A hedge program can save your company, or destroy it. 'Destroy' may be a bit dramatic, but it nearly happened to a small Canadian producer a few years ago that locked in too much production at a low price, only to have to pay government royalties at an astronomical rate when natural gas prices skyrocketed. From one perspective, hedging means you will always be wrong; if prices go down, not enough was hedged, and if they go up, [Read more]
$400+ billion in global capital spending cuts will hurt (someday)
Energy in the media tends to have several broad themes. One in particular, is how the 'shale revolution' has redefined the global oil and gas marketplace. It’s an accepted truth that we are in a new era of cheap oil (the futures price for oil doesn’t hit $60 until 2022 or thereabouts, depending on the day) as well as with natural gas. Maybe it’s just the size and ferocity of the North American media business, but in some ways the shale revolution needs to be kept in context. The whole shale [Read more]
Paris Climate Conference: Bureaucrats gone wild? Yes. Dubious science? Maybe. Should you be scoffing? Absolutely not
Those of us who work in the oil & gas industry generally understand the sources of energy that power our way of life – where it comes from and what it takes to get to market. It's a specialized field, and broad understanding takes years. We also have developed an understanding of how cheap energy has enabled the dynamic way of life we take for granted. Oil patch observers tend to watch the Paris climate talks unfold with, let's say, something less than admiration, because that group [Read more]
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