Former Yukos head Mikhail Khodorkovsky knows where he stands in Vladimir Putin’s Russia regarding new charges brought against him and business associate Platon Lebedev. Once Russia’s richest man, Khodorkovsky is serving eight years on fraud and tax evasion charges, which he claims
were fabricated by his enemies in the Kremlin to punish him for his political ambitions. “It is absolutely clear what will happen next: Fake evidence, testimony from intimidated witnesses, and a quick guilty verdict,” Khodorkovsky claims in a statement written from his prison cell in eastern Siberia.
A Houston-based firm successfully tests a new drilling system designed to enhance the rate of penetration through hard rock. Particle-impact drilling (PID) is a closed-loop process in which hardened steel shot particles are injected into the drilling mud, circulated, and recovered from the mud system without allowing the shot to circulate through a rig’s pumps and surface equipment.
Fewer natural gas reserves are being added for every dollar spent on exploration and production, and higher costs are undermining the economics of drilling more gas wells, Cambridge Energy Research reports. “Conventional wisdom is that all producers are enjoying a windfall from higher prices; however, the less-visible cost of gas production has moved up as dramatically as market prices,” says J. Michael Bodell, CERA director.
Light sweet crude: $58/bbl Natural gas: $7.47/MMbtu US active rig count: 1714
Iran threatens to block the Strait of Hormuz in retaliation for tougher international sanctions against its nuclear program, which is widely believed to be developing nuclear weapons. The threats have remained verbal, but analysts believe trade disruptions or military confrontation could be possible. While crude oil has the option of being rerouted via pipelines to help mitigate a Hormuz blockage, LNG has no practical bypass options.
The US and Mexico sign an agreement allowing exploration and development of oil and gas resources along the two countries’ maritime boundary in the Gulf of Mexico. Under the agreement, US companies and Mexico's state-run Pemex can voluntarily agree to jointly develop reservoirs that cross the boundary. If a consensus can’t be reached, it provides a way for US producers and Pemex to develop resources on their respective sides.
Trafigura Beheer BV was in hot water last week after buying a cargo of Nile Blend crude aboard the MT Ratna Shradha, which was poised to offload at Japan's Kiire terminal, owned by JX Nippon Oil & Energy. “This is stolen oil and our legal experts are pursuing whoever buys it,” says South Sudan's Information Minister, after the country took legal measures to track down several vessels carrying the stolen oil across the globe.
Light sweet crude: $103/bbl Natural gas: $2.65/MMbtu US active rig count: 1994
About 1.7% of the methane in the US natural gas supply chain is emitted between extraction and delivery, according to a study by the US Department of Energy’s National Energy Technology Laboratory. Gathering systems, which the study called a significant and previously overlooked emissions source, and pneumatic controllers at production sites are two of the top contributors, according to the study.
US senators introduce separate bills aimed at restricting federal regulation of hydraulic fracturing in onshore oil and gas activities. The bills were introduced by Sen. Orrin Hatch (Utah) and Wyoming’s two Senate members, John Barrasso and Mike Enzi. “This bill does nothing to stop the federal government from implementing fracing standards in states where none exist. It simply says that regulations from the federal government cannot trump state action already in place,” Hatch said.
After making more than $1 billion in deals for Permian assets last year, Parsley Energy Inc., based in Austin, kicks off 2017 by spending $3.5 billion to continue its expansion in the basin. In January, the firm agreed in several deals to acquire undeveloped acreage and to produce oil and gas properties in both the Midland and southern Delaware basins for $607 million. The latest purchase, Double Eagle Energy, is Parsley's largest to date and increases the firm’s Permian net lease holding to 227,000 acres. Parsley says the deal gives it a “sufficient acreage footprint to support more than 20 rigs focused on horizontal development.”
Light sweet crude: $53/bbl Natural gas: $3.10/MMbtu US active rig count: 741
THE REST OF THE YARN
This month, we consider the politicrats, who was there, and a significant individual who wasn’t in attendance at The Barbecue.
The presence of Lyndon Baines Johnson was never missed. Johnson had certainly served the interests of those present, but he lacked the necessary polish spawned by the corporate process. He had remained his own basic, profane self even in the highest office, as large and irrepressible as his mistakes, as complicated and unreliable as his constituency. And he was too hidebound Democratic to eat canapes in support of incumbent Republicanism. He would later confide to a friend – after Nixon was reelected and Connally switched parties –regarding his apprentice and long-time political right arm, “I should have kept my eye on that boy.”
Symmetry was inherent in the gathering. Emerging from the house onto the patio, and moving among the group of guests, Allan Shivers was a reminder of the more exuberant 1950’s. His jacket of green checks was a bit overstated, but his presence was important. Exactly two decades before, Shivers had as Democratic governor led the campaign in the state for the election of Dwight Eisenhower. The Shivercrats were early proof that dominant Democrats in Texas more closely resembled national Republicans than Democrats. Shivers had headed the Texas delegation to the 1952 Democratic Convention after a bitter struggle within the state party that proved to be a watershed. Sam Rayburn and Lyndon Johnson made sure the Shivercrats were seated as the official Texas delegation. Subsequently, Eisenhower carried Texas, and the liberals never recovered.
Next month, we meet the press and various political operatives present at The Barbecue.
Between what two points and in what year did the first pipe movement of an oil product occur in the U.S.?
If you would like to participate in this month’s quiz, e-mail your answer to email@example.com by noon, February 15.
The winner, who will be chosen randomly from all correct answers, will receive a $50 gift card to a nice restaurant (courtesy of the ProTechnics Division of Core Laboratories).
ANSWER TO JANUARY’S QUIZ
“The Widowmaker” was the name of the famous mustang, so the story goes, that could only be ridden by legendary oil- country cowboy Pecos Bill.
DECEMBER'S QUIZ RESULTS
Congratulations to December’s winner – Robert Urbanowski with Precision Drilling