wti oil: us$84.03 ilfieldnewsoilfieldnews.ca/archives/2012/ofn_2012_0620.pdf · between cushing and...
TRANSCRIPT
WTI OIL: US$84.03+$0.78 per barrel
July deliveryNYMEX: N Gas: US$2.545
-$0.090 per MMBTUJune delivery
Published By NEWS COMMUNICATIONS since 1977 Canadian Edition Wednesday June 20, 2012
NORTH AMERICAN RIG COUNTSThe U.S. rotary rig count was down 13 at 1,971 for the week of June 15, 2012. It is 111 rigs (6.0%) higher than last year. The number of rotary rigs drilling for oil was down 9 at 1,405. There are 421 more rigs targeting oil than last year. Rigs drilling for oil represent 71.3 percent of all drilling activity reaching another all time high for the weekly data Rigs directed toward natural gas were down 3 at 562. The number of rigs currently drilling for gas is 308 lower than last year's level of 879. Year-over-year oil exploration in the U.S. is up 42.8 percent. Gas exploration is down 35.4 percent. The weekly average of crude oil spot prices is 13.3 percent lower than last year and natural gas spot prices are 51.7 percent lower. Canadian rig activity is up 18 at 248 for the week of June 15, 2012 and is 29 (10.5%) lower than last year's rig count. The number of rigs drilling for oil was up 19 to 198 and is 3 (1.5%) lower than last year. Gas directed rig count was down 1 at 50 and is 26 (34.2%) lower than a year ago.
ENBRIDGE SEES QUICKERSEAWAY EXPANSION
Enbridge Inc, expects to complete an expansion of its newly reversed oil pipeline to Texas refineries by the end of this year, the company's incoming chief executive said on Monday. That would be sooner than previous forecasts used by the company and its U.S. partner. Enbridge and Enterprise Products Partners LP have been saying for months that they would boost the capacity of the Seaway pipeline from the Cushing, Oklahoma, storage hub to 400,000 barrels a day from 150,000 sometime in the first quarter of next year. It is one of a number of pipeline projects aimed at curing a bottleneck at the massive pipeline hub, which is expected to reduce deep price discounts for oil that travels there from rapidly expanding U.S. and Canadian oil fields. "We expect to bring another 250,000 barrels a day of capacity by the end of this year. But at some point, when we twin that Seaway line, we'll start to see a relaxing of this basis differential between Cushing and the Gulf Coast," Enbridge President Al Monaco told reporters following a speech in Toronto. Monaco is slated to become CEO of the company, which moves the bulk of Canadian oil exports to the United States, later this year. Faster-than-expected growth in North American oil output means his company's other pipelines could be at full capacity as soon as 2016 despite a recently announced C$3.2 billion ($3.1 billion) expansion of its system, he said. The company expects to complete the expansion of its North
ilfield NEWSoilfieldnews.ca www.markmilne.com
American pipeline network in 2014, bulking up its 2 million bpd mainline, and tapping new refining markets in Quebec. The planned mainline expansion will add more than half a million barrels a day of
new capacity within two years. However, any relief for oil producers from the 2014 expansion could be short-lived as forecasts call for production from Canada alone to rise by more than half by the end
of the decade. That could choke the system once more if lines such as Enbridge's planned 525,000 bpd Northern Gateway pipeline to the Pacific Coast are not completed. "I think we will be capacity-
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constrained going forward, probably in the range of 2016 and 2017," Monaco said. "There's a number of opportunities out there to further expand capacity, I think one of them, frankly, that is a great opportunity is Gateway ... And the advantage of Gateway, of course, is that it accesses a very large market." The C$5.5 billion Gateway project would offer
Canadian producers their first significant access to booming Asian markets and steer oil away from the glutted U.S. Midwest if completed on schedule in 2017.
MORE SANCTIONS IF NO RESULTS IN IRAN TALKS
Negotiat ions over Iran's nuclear programme will not last indefinitely and
Tehran should expect more sanctions if it fails to address international suspicions over the nature of its work, a senior U.S. administration official said on Tuesday. Speaking after two days of discussions in Moscow between Iran and six world powers that fai led to produce a breakthrough, the official said Iran needed to take concrete steps to avoid further
economic pressure. "Sanctions will be increasing. We have told the Iranians there will be more pressure coming if this (lack of progress) proceeds forward," the official said, speaking on condition of anonymity. The six powers and Iran agreed on Tuesday experts from both sides would meet next month to discuss technical details of how Iran could address
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international concerns that it is building an atom bomb and what Tehran could receive in return. But the U.S. official said negotiations on a political level - ones that could yield agreements - would be held only if there were signs Iran was engaging properly in discussions. "We are not going to get trapped in a process that we think is not a productive one, so we are taking it step by step. We want to see Iran will make a choice to make concrete progress," the official said. In discussions on Monday and Tuesday in the Russian capital, which followed two other rounds of negotiations since April, Iran had given negotiators a "considerable level of detail" over its nuclear activities. "But I want to be clear. A level of detail they provided, still left us with many questions. And they made assertions we obviously do not agree with ... We have quite a long way to go," the
official said. The six powers - the United States, China, Russia, France, Britain and Germany - want Iran to scale back its nuclear work and, in particular, stop enriching uranium to levels that bring it close to making an atom bomb. Last month, and again in Moscow, the powers asked Tehran to shut down the Fordow facility where uranium is being enriched to the 20-percent level of fissile purity and ship any stockpile out of the country. Iran denies its work has any military purpose and says the world powers should offer it relief from sanctions and acknowledge its right to enriching uranium before it meets their demands. New U.S. and European sanctions are due to come into effect in the next two weeks. The U.S. official said one area of disagreement in the Moscow talks related to how Iran characterises what goes on at the Fordow facility, adding that
technical talks set for July should address these differences. But, the official said, the six powers are eager to continue negotiations while they are producing results: "If we stop negotiations today, they will be making (20 percent) uranium every single day. So it is worth it to push the negotiations to a positive end."
NEXEN PLANS BUZZARDTURNAROUND IN Q3
Nexen Inc said on Monday it plans an extended four-week maintenance turnaround at the 200,000 barrel per day Buzzard oil field in the North Sea during the third quarter for the platform's five-year regulatory inspection, a spokesman for the company said. Davis Sheremata, a spokesman for the company, said no date has yet been set for start of the turnaround. "We have not confirmed yet when it's going
to start," he said. Buzzard is the UK's largest oilfield and feeds into Forties, one of the four crude oil streams comprising the dated Brent benchmark, which is used to price about two-thirds of global crude oil.
BRENT MOVES LOWERUS CRUDE HIGHER
Brent crude edged lower on Tuesday on relief that negotiations to defuse the dispute over Iran's nuclear program led to plans for technical talks in July, while hopes for more monetary stimulus from the Federal Reserve helped lift U.S. crude. While Iran's two-day talks with world powers did not resolve differences on Tuesday, the parties agreed to hold a technical follow-up meeting in Istanbul on July 3. "It is significant that Iran agreed to meet after the European Union embargo (on Iranian oil) begins. There was
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definitely a growing sense that they were at their breaking point, ready to walk out," said John Kilduff, partner at Again Capital LLC in New York. Brent fell to a 17-month low before Spain managed to sell debt at its latest auction. Then, Brent steadied even though Spain's borrowing costs rose and the threat of a spreading debt crisis lingered as Greek political parties tried to form a government. U.S. crude bounced after support held again near $82 a barrel. It settled higher on expectations that weekly inventory reports will show U.S. crude oil stocks fell again last week, especially at the Cushing, Oklahoma, hub. Brent August crude fell 29 cents to settle at $95.76 a barrel, after slumping to $94.44, the lowest intraday price since January 10, 2011. Brent has retreated more than 25 percent from its 2012 peak above $128 a barrel struck in March. U.S. July crude rose 76 cents to settle at $84.03, having traded from $82.28 to $84.41 ahead of the July contract's expiration on Wednesday. U.S. August crude gained 75 cents to settle at $84.35 a barrel. Total Brent crude trading volumes outpaced U.S. turnover and Brent volume was 5 percent above the 30-day average. U.S. volume lagged its 30-day average by 9 percent. Brent's premium to U.S. crude slipped to $11.53 a barrel based on August settlement prices. The $11.36 intraday low was the weakest the premium has been since January 31. The Brent/U.S. crude spread has
narrowed in reaction to the mid-May reversal of the Seaway pipeline, allowing U.S. crude to be brought from the Cushing, Oklahoma, storage hub to the refinery-rich Gulf Coast. Enbridge In said late on Monday that it expects to complete an expansion of the pipeline by the end of the year. The most recent U.S. government data showed total crude stocks fell and inventories at Cushing, delivery point for the U.S. light sweet crude contract, fell in the week to June 8, with the Cushing stocks slipping from a record high level.
HSE SHAREHOLDERS VOTE FOR PROPOSED SALE
HSE Integrated Ltd. has announced that ISS Canada, a leading independent proxy firm and an affiliate of Institutional Shareholder Services Inc. has recommended that HSE shareholders vote FOR the proposed sale of all the issued and outstanding shares of the Company to the Canadian affiliate of DXP Enterprises, Inc. for $1.80 per share cash in a Plan of Arrangement announced May 1, 2012. The Annual and Special Meeting o f Shareho lders a t wh ich HSE shareholders will be given the opportunity to vote on the transaction among other items will be held in Calgary, Alberta on June 29, 2012. ISS Canada is a unit of ISS Governance Services. ISS's experienced research time provides comprehensive
analysis of proxy issues and complete vote recommendations for more than 40,000 meetings in over 100 worldwide markets. ISS is Canada's leading independent proxy advisory firm and the leading authority on proxy voting and corporate governance issues in Canada with over 1,700 clients. ISS has been providing advisory and voting services to leading pension funds, investment managers, mutual funds and other institutional shareholders since 1987. At the conclusion of a comprehensive review of the DXP/HSE transaction ISS Canada concluded, "Given the premium on the transaction and sound strategic rationale, shareholders' support for the
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