Oil Prices

[CityFarmer]

A new info provided by IEA chief...

Ample crude supplies until mid-2016: IEA chief
26 Oct 2015 17:11
[SINGAPORE] The head of the International Energy Agency said Monday that ample supplies of oil in the world market would extend into the middle of next year, while investment is expected to decline further because of persistently low prices.

However, EIA executive director Fatih Birol said risks from seething geopolitical tensions in the oil-rich Middle East that could provide support to prices remain.

Oil investment is already down 20 percent worldwide this year and another drop is likely in 2016, Birol told an energy conference in Singapore - marking the first time since the mid-90s that spending has fallen for two straight years.
...
AFP

Source: Business Times Breaking News

[greengiraffe]

Woodside’s Coleman: energy sector takeover dance just begun

• THE AUSTRALIAN
  
• OCTOBER 27, 2015 12:00AM
  

0

Matt Chambers
[Image: matthew_chambers.png]
Resources Reporter
Melbourne

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Woodside CEO Peter Coleman: “You don’t always have to sweeten deals”. Picture: David GeraghtySource: News Corp Australia
[b]Woodside Petroleum managing director Peter Coleman says the energy sector takeover “dance has just begun” and that he will continue to stalk Oil Search, hoping the market turns things in his favour.[/b]
But at the same time, he has not ruled out raising the $11.7 billion scrip bid for Oil Search or a tilt at Santos, the other big locally listed oil and gas company that has become a takeover target.
In television interviews with Bloomberg and CNBC in Singapore yesterday, Mr Coleman said events in the sector last week — Santos knocked back a $7.1bn cash bid from Brunei-backed Scepter Partners, and Beach Energy agreed to an all-scrip merger with Drillsearch — signalled a more rational approach to mergers.
“You don’t always have to sweeten deals,” the Woodside chief said when asked about Woodside’s plan regarding the ­rejected $11.7bn all-scrip offer for Oil Search.
“What happens is, over time, expectations come together, and I think you’re starting to see some M&A in Australia post the ­approach we made to Oil Search where you can see people’s view of the world start to get a little ­closer.”
Oil Search has rejected Woodside’s one-for-four all-share offer as “grossly undervaluing” the Papua New Guinea-focused ­target and being “highly opportunistic”.
Woodside investors have ­queried the logic of going after a company that is not in any financial distress at a time of low prices.
Yesterday, Mr Coleman talked up Woodside’s strong capital ­returns.
“We think the strength of our dividend really becomes a compelling thing for Oil Search shareholders to look at,” he said. “I’d encourage them to look at that very strongly.”
While describing the offer for Oil Search as “very fully priced and something that is just going to take time”, Mr Coleman did not rule out raising the bid when asked specifically if a $13bn bid would win over investors.
“That’s a good question, we’ll just have to see how time plays that one out. I really can’t comment one way or the other on where we are going to go,” he said.
“I’d just watch the marketplace and I think the market is going to give us some signals.”
Mr Coleman stepped up his description of a potential merged Woodside and Oil Search, which he had previously described as forming a “regional oil and gas champion”.
“It would become not just a significant regional player, but a significant player on the world stage,” he said.
The Woodside boss would not say whether he was “kicking the tyres” on Santos, which is investigating selling assets while the company conducted a strategic review.
Santos executive chairman Peter Coates wants to get better value for shareholders than the Scepter offer.
“That’s the $64 million question and of course we’re not going to comment,” Mr Coleman said.
“But it’s been an interesting week in the M&A world, and I think you’ll see more of this. The dance has just begun, it’s going to be an interesting one.”
The only agreed energy merger of any size of late was the Beach-Drillsearch tie-up, where the Drillsearch board reversed earlier disinterest in a tie-up, not because it was distressed but because it had limited options to grow.
“Many companies are into cost-cutting mode. They’ll quickly move into a mode of saying ‘we can survive now in this environment but how do we grow and thrive?’ ” Mr Coleman said.
“I think that’s a different conversation that will play out over the next few months as I think the industry in total will start to realise oil prices are going to be at this level for some time, so they can’t wait for oil prices to bail them out.
“They are going to have to fundamentally change their business model and think really hard about what the future means for them as they go forward.”

[greengiraffe]

• Oct 27 2015 at 9:21 AM 
  

Discount on US oil at widest in five months

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/1/m/9/r/v/z/image.related.afrArticleLead.620x350.gkj6lw.png/1445898072156.jpg[/img]"Crude has to be put in storage," said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. "There isn't enough demand." Bloomberg
by Grant Smith and Moming Zhou
The discount on front-month US crude futures widened to the most in five months after inventories reached the highest level for the season in 85 years.
West Texas Intermediate futures for December delivery closed at 92 cents less than January, the widest spread - also known as contango - since May. US crude inventories have risen 5 per cent in the past four weeks to 477 million barrels, the highest for the time of year in data going back to 1930, as the nation's production pulls back only gradually in response to lower prices.
Oil failed to sustain a rally earlier this month above $US50 a barrel as surging US inventories bolstered speculation that a global glut will be prolonged. World crude supplies will remain ample until at least the middle of 2016 while investment in the industry is set to shrink further, International Energy Agency executive director Fatih Birol said in Singapore on Monday.
"You are going to see some massive builds coming up," said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. "The widening contango is going to encourage more storage and put more pressure on spot prices."

WTI for December delivery fell 62 cents to end at $US43.98 a barrel on the New York Mercantile Exchange, the lowest close since August 27. The volume of all futures traded was about 30 per cent below the 100-day average.
 
Brent for December settlement was 45 cents lower at $US47.54 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $US3.56 to WTI.
Investors weighed a smaller reduction last week in the number of US drilling rigs at work against an interest rate cut in China.


The number of active machines targeting oil dropped by 1 through October 23 after declining by 45 over the prior three weeks, according to Baker Hughes. The rig count fell to 594, the lowest level since July 2010. Drillers have cut the number of active machines by more than 60 per cent since December.
 
"Crude has to be put in storage," said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. "There isn't enough demand."
"Alarmingly high" distillate fuel storage in the US and Europe may force refiners to cut runs and impact oil prices, according to Goldman Sachs Group Inc. Near-record refinery runs, modest demand growth and more supplies from the Middle East and China have pushed distillate stockpiles close to their highest levels, analysts including Damien Courvalin wrote in an October 25 report.

Oil at $US50 a barrel is a "gift to the world" as prices should be low enough to spur economic growth, according to Ali Al Mansoori, chairman of the Department of Economic Development in Abu Dhabi. Crude may climb to $US60 by the end of next year, he said in an interview Sunday in the capital of the United Arab Emirates, the fourth-largest producer in the Organisation of Petroleum Exporting Countries.
 



Bloomberg

[greengiraffe]

This is a warning to service support players as their principals get leaner and stronger in the face of tough global mkt conditions:

M&A worsening WorleyParsons’ plight, says MD

• THE AUSTRALIAN
  
• OCTOBER 28, 2015 12:00AM
  

0

Paul Garvey
[Image: paul_garvey.png]
Resources Reporter
Perth

Andrew Main
[Image: andrew_main.png]
Senior Business Reporter
Sydney

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Andrew Wood says M&A could come at the expense of new developments Source: News Corp Australia
[b]The wave of merger and acquisition activity sweeping through the oil and gas sector is likely to exacerbate the short-term headwinds facing WorleyParsons, the engineering group’s managing director has warned.[/b]
After the company’s annual general meeting yesterday, Andrew Wood said most of the company’s big oil and gas customers were using the low price environment to hunt for consolidation opportunities. That focus on acquisitions could come at the expense of investment in the new developments that form the core of Worley’s business in the short-term.
“While that activity is occurring, what tends to happen is it just slows activity levels a little as they reshape the business,” Mr Wood said.
“But in the end it means a stronger industry and better projects going forward.”
Australia’s oil and gas industry has been a particularly lively in terms of M&A in recent weeks, with local leader Woodside Petroleum making an approach to Oil Search and Adelaide’s Santos fielding a $7.14 billion cash offer from private equity group.
Worley has been among the many service providers hit hard by the downturns in both the oil and gas and mining industries. Its shares have fallen by 64 per cent since July last year, and the company has shed thousands of jobs in response to the weak conditions in its core industries.
The company yesterday flagged that more redundancies were likely in the months ahead, with Mr Wood saying it would incur another $20 million-$30m in redundancy costs in the current half.
“We have to have a business that is appropriately shaped for where we are today and how we position for the future,” Mr Wood said.
“That has to involve reshaping the business from the top to the bottom.”
Mr Wood acknowledged that the already challenging outlook for Worley had become more complicated in recent months as oil prices continued to remain at low levels.
“Talking to our major customers, there was some building of momentum in the market just prior to our results (in August), where there was some expectation that oil prices would recover,” he said.
“I think that dip in oil prices we had a little while ago has put our customers back on the back foot a little.”
Chairman John Grill faced inevitable shareholder unhappiness during the meeting over the falling share price and reliance on a specialisation that’s under serious pressure from low commodity prices, but noted that “we know that the market will recover”, if not in this financial year.

[greengiraffe]

http://www.bloomberg.com/news/articles/2...e-collapse

• Company reports net loss after taking $7.9 billion charge
  
• Third-quarter adjusted profit drops 70% to $1.8 billion
  

Royal Dutch Shell Plc reported its biggest net loss in at least 16 years after Europe’s largest energy group abandoned some projects and lowered its oil-price expectations, resulting in a charge of almost $8 billion.
The loss highlights the pain oil and gas companies are enduring as prices plunge, forcing them into the biggest belt-tightening in a generation. Eni SpA, the Italian oil group, also fell into a loss in the third quarter, while profit slumped at BP Plc and Total SA.
The oil price rout has wiped almost $500 billion since the end of last year from Bloomberg World Oil & Gas Index, which tracks energy stocks globally including Shell, ExxonMobil Inc and Chevron Corp.

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Shell, which is buying BG Group Plc in the energy industry’s largest deal this year, reported a third-quarter net loss of $7.42 billion, compared with a profit of $4.46 billion a year earlier. Adjusted for one-time items and inventory changes, profit dropped 70 percent to $1.77 billion, The Hague-based Shell said Thursday in a statement. That missed the $2.92 billion average estimate of 17 analysts surveyed by Bloomberg.
Shell took a $4.61 billion charge resulting from the withdrawal from offshore drilling in Alaska and an oil-sands project in Canada, and $3.69 billion triggered by cuts to its outlook for oil and natural gas prices.
BG Deal
The loss increases the pressure on Europe’s biggest oil producer, which has cut jobs and reduced spending this year, as Chief Executive Officer Ben Van Beurden prepares the company for enduring low prices. Shell’s market value fell last month to the lowest this decade amid concerns that it may be overpaying for BG.
“While our cash flow and our operating performance in the quarter were strong, the headline numbers we’re reporting today include substantial charges,” Van Beurden, 57, said. “These charges reflect both a lower oil and gas price outlook and the firm steps we are taking to review and reduce Shell’s longer-term option set.”

Shell abandoned the construction of the 80,000 barrels a day Carmon Creek oil sands project in Alberta, Canada, after having already started building it, a sign of the painful decisions the company is taking. It also walked away from drilling in Alaska in September after $7 billion of spending ended with a well that failed to find hydrocarbons.
Cash Flow
While the scale of the write-offs surprised the market, Oswald Clint, oil analyst at Sanford C. Bernstein & Co., said investors should take comfort from the progress Shell had made to balance its cash flow with spending. The company was able to cover its capital investment and dividends with the money it earned from its operations plus asset sales, a target “the other majors are all pushing towards by 2017,” he said.
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Shell, which is buying BG for more than $70 billion, said in July the deal will add to cash flow at $67 a barrel in 2016. Van Beurden insisted on Thursday the deal will benefit Shell, leading to higher dividends. The acquisition, to be completed early next year, will give Shell deep-water assets in Brazil, boost its position in Australian gas and expand its access to the U.S.’s emerging liquefied natural gas export industry. 
Shell’s B shares, the most widely traded, were 2.2 percent lower at 1,703.5 pence in London. The shares have dropped 24 percent this year.
Earnings Season
Eni SpA, Italy’s largest oil producer, also reported a net loss for the third quarter on Thursday. France’s Total SA posted a profit of $1.08 billion, 69 percent lower than a year earlier, as rising oil and gas production and growing profits from its refining operations helped to offset the slump in crude prices.
BG is due to announce earnings on Friday. Exxon Mobil Corp., the world’s biggest oil company by market value, and Chevron Corp. are also scheduled to release results the same day.
BP Plc’s third-quarter adjusted profit dropped 40 percent to $1.82 billion, yet itexceeded analysts’ forecasts by 44 percent on higher earnings from refining and natural gas trading. Statoil ASA’s adjusted net income fell 59 percent, missing estimates.

[greengiraffe]

BP sees glut of hydrocarbons

• THE TIMES
  
• NOVEMBER 04, 2015 12:00AM
  

[b]Fracking and other new drilling techniques can nearly double the available supplies of oil and gas in the next 35 years, according to BP.[/b]
In a report published this week, the oil major says this impending glut of hydrocarbons has demolished fears that the world is running out of oil. It acknowledges, however, that the new approach has profound implications for greenhouse gas emissions and for climate change, which only the imposition of a firm price on carbon can restrain.
BP’s Technology Outlook reveals the internal assessment by its scientists on the impact of evolving technologies on the oil and renewable energy industries. The report claims that technological advances, which have enabled the extraction of previously unavailable reserves of oil and gas locked in deep underground geological formations, could boost the world’s proven reserves of oil from 2.9 trillion to 4.8 trillion barrels. That, BP says, is nearly double cumulative projected global demand of 2.5 trillion barrels of oil up to 2050.
David Eyton, BP’s group head of technology, said: “We are probably nearing the point where potential from additional recovery from discovered reservoirs exceeds the potential for exploration.” He added that with new exploration, resources could jump as high as 7.5 trillion barrels.
Mr Eyton warned that if all available oil eventually was used, it could have devastating environmental consequences. He said the developments meant a new approach would be needed to stabilise greenhouses gases.
“Without a price on carbon, fossil fuels are fiercely competitive,” Mr Eyton said. “You have to find a way to put a price on carbon, otherwise fossil fuels will keep on winning.”
Taking into account all accessible forms of energy, including nuclear, wind and solar, there are enough resources to meet 20 times what the world will need until 2050, BP says in the report.
Mr Eyton added: “Energy resources are plentiful. Concerns over running out of oil and gas have disappeared.”
The Times

[sgd]

BP sees glut of hydrocarbons

• THE TIMES
  
• NOVEMBER 04, 2015 12:00AM
  

Taking into account all accessible forms of energy, including nuclear, wind and solar, there are enough resources to meet 20 times what the world will need until 2050, BP says in the report.
Mr Eyton added: “Energy resources are plentiful. Concerns over running out of oil and gas have disappeared.”
The Times

The Times[/font][/size][/color]

After done my own research I realize that while there are other alternative energy around today but there's nothing that can replace oil, If you look at say a vehicle each wheel is made up of 7 gallons of oil, the plastics paints resins that go into it are all made up of oil, the vast amount of energy that is spent that go into smelting the steel aluminium and manufacturing the rest of the car frame the engine is made up of untold billions of barrels of oil.

there's around 700 million cars worldwide, the tires alone takes over 1 billion barrels of oil to produce, there's nothing in the world can replace oil if your tried to combine use of coal wind solar nuclear they cannot replace 700 million cars or anything. What about energy that goes into building ships planes appliances cosmetics chemical fertilizers pesticides to grow our food?

The saudis claim to have 250 billion barrels in the ground, how much of that is already pumped out since the 60's? One also needs to consider gravity as oil well pressure is released extraction gets harder, water can be used as oil is less dense than water how much of their fresh water is diverted for such use? How much energy that goes into desalination to produce water to extract oil? if the saudis claim to have so much oil in the ground then why do they also have around 50 offshore oil rigs? 

Logically speaking if the world guzzles 90 million barrels of oil a day, 1 billion barrels only last 11 days ? And that's just waking up in the morning turn on the light, water heater, cooking stove, commute, run machinery, check your email etc ..

[greengiraffe]

Russia’s Gazprom tumbles in global energy rankings

• GEOFF HISCOCK
  
• THE AUSTRALIAN
  
• NOVEMBER 09, 2015 8:18AM
  

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Employees pass beneath pipes leading to oil storage tanks at the central processing plant for oil and gas at the Salym Petroleum Development, a joint venture between Shell and Gazprom Neft. Source: Supplied
[b]Battered by a plunging rouble and a poor long-term credit outlook, Russian state-owned gas giant Gazprom has plunged from fourth to 43rd on the annual ranking of publicly traded energy companies compiled by commodities information provider Platts.[/b]
Gazprom, which has 17 per cent of the world’s gas reserves and accounts for 12 per cent of world gas production, saw its output and export revenues decline sharply in 2014-15 as domestic demand slowed and the Ukraine crisis brought shipments there to a halt. In April this year, Gazprom reported its 2014 profit dropped more than 80 per cent to just under $US3 billion, on revenue of $US102 billion.
As a consequence, Gazprom’s market capitalisation today is about $US50 billion, a far cry from its high of $360 billion in 2008.
With Russian President Vladimir Putin pushing Gazprom to make expensive geopolitical commitments such as the Power of Siberia trunk pipeline that will increase gas capacity to China, the company’s outlook is for further financial pain before the gain from its new China and North Asia trade kicks in.
Still, Gazprom CEO Alexey Miller is relentlessly upbeat, telling a gas conference in St. Petersburg last month that the Russian gas industry “has been and will remain the driving force of our economy.” He said gas sales to Germany were running at record levels in the second half of 2015 and it was clear European customers would need more gas in the near future. Sales to Ukraine resumed last month.
Russia’s top oil producer, state-owned Rosneft, fared better than Gazprom in 2014, reporting a $US6 billion profit on revenue of $US100 billion, despite what it said were challenging economic conditions and the impact of US and European sanctions against Russia over Ukraine. Like Gazprom’s Miller, Rosneft CEO Igor Sechin is regarded as being close to Putin.
Rosneft is the only Russian energy company in the top 10 on the 250 Global Energy list released by Platts last week, down from sixth last year to 10th spot.
In contrast, three state-backed Chinese energy companies have made the top 10: oil and gas explorer-producer CNOOC in fourth spot behind global oil majors Exxon, Chevron and Shell; PetroChina — the listed arm of China National Petroleum Corp (CNPC) -- at No. 5 and coal miner China Shenhua Energy at No. 9. But a Chinese top-10 entrant last year, China Petroleum and Chemical Corp, slipped from ninth to 11th.
For US-based Exxon, it is the 11th straight year it has been rated the world’s top listed energy company, based on a combination of revenue, profit, asset worth and return on invested capital in the 2014 financial year. Likewise, Chevron and Shell usually rank in the top three or four names.
Among global majors, UK-based BP, which ranked second last year, dropped to 29th spot on weaker profits and low return on invested capital. French company Total, which lost charismatic CEO Christophe de Margerie in a Moscow plane accident in October last year, dropped to 26th from eighth spot in 2014. Two new names in the top 10 this year are U.S. refining companies Phillips 66 at No. 6 and Valero Energy at No. 8. ConocoPhillips moved up from 10th in 2014 to seventh this year.
According to Platts data, the top 10 listed companies between them had total revenue in 2014 of $US1.87 trillion and combined income of $US120 billion.
The highest-ranking Indian company is the Mukish Ambani-controlled Reliance Industries at No. 14, followed by state-owned Oil & Natural Gas Corp (ONGC) at No. 17. Coal India, known as the world’s largest pure coal miner, rose from 47th spot a year ago to 38th in 2015, after impressive output gains.
The highest-ranking Australian energy company this year is Woodside Petroleum at No. 50, followed by AGL Energy at 130 and Oil Search at 232.
In Latin America, Brazilian oil and gas giant Petrobras plunged from 27th last year to 161 in 2015, on the back of a massive $US17 billion writedown linked to a long-running corruption scandal. Like Gazprom, Petrobras was valued by the market at more than $US300 billion in 2008, but today its market capitalisation is just $US30 billion.
While the annual Platts Top 250 ranking is a valuable guide to the performance of listed companies, by definition it must omit some of the largest players in the global energy scene. These include the single biggest oil producer, Saudi Aramco, which is the national oil company of Saudi Arabia. According to data published by the Organisation of Petroleum Exporting Countries (OPEC) in June this year, Saudi Arabia’s petroleum exports in 2014 were valued at $US285 billion. Another $US347 billion in exports came from four other national oil companies in the Middle East: those of the UAE ($US108 billion), Kuwait ($US98 billion), Iraq ($US84 billion) and Qatar ($US57 billion).
The Platts list skips the major diversified resources companies with extensive energy interests, such as BHP Billiton, Rio Tinto and Glencore. It also omits the big unlisted energy trading companies such as Vitol, Trafigura, Gunvor, Mercuria and AOG — all of which turn over many billions of dollars annually in energy sales — and the Japanese trading houses Mitsubishi, ITOCHU, Mitsui, Marubeni, Sumitomo, Sojitz and Toyota Tsusho.
Similarly, in the US, Koch Industries, the private company run by brothers Charles and David Koch, counts a substantial slice of energy business in its $US115 billion-plus annual turnover.
According to Platts, the North American shale revolution remains at the centre of energy developments, helping to bring 89 US and 14 Canadian companies into the Top 250 this year, up from 103 companies in 2014.
“Despite being in its fifth year and in a much lower price environment, the shale oil revolution in some places of the US has barely begun,” it said. It pointed to basins such as the Permian in West Texas and Mexico becoming more productive, and to continuing falls in the cost of production.
Geoff Hiscock writes on international business and is the author of “Earth Wars: The Battle for Global Resources,” published by Wiley

[greengiraffe]

Think their bums are hurting as well so must hint hint... basic economics...

Saudi minister says low price to spur oil demand growth
DateNovember 9, 2015 - 9:00AM

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Oil demand in Asia will rise by about 16 million barrels a day to almost 46 million by 2040.

Oil demand will soon reflect the "attractiveness" of the current level of crude prices, and Asia will be a vital engine of economic expansion for decades, Saudi Oil Minister Ali al-Naimi said. OPEC's chief joined him in seeing Asia as the main hub for growth.
Oil demand in Asia will rise by about 16 million barrels a day to almost 46 million by 2040, Abdalla Salem El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said in an article posted on the International Energy Forum's website. The region will need to import 40 million barrels a day of crude oil and refined products by then, he said.
Many Asian countries welcome the recent decline in oil, and demand "will soon reflect the attractiveness of the current prices," al-Naimi said in an a separate article posted on the IEF's website. "That said, it is not high prices or low prices that we want - and by 'we' I mean producers and consumers - it's stability of prices." The Riyadh-based IEF's members, including the US and China, account for more than 90 per cent of global supply and consumption of oil and gas.
Saudi Arabia and other members of OPEC face greater competition for crude sales in Asia as Russia and producers in Latin America and Africa send more cargoes to the region. Crude has slumped more than 40 per cent in the past year amid speculation that oversupply will persist as OPEC continues to pump above its collective target in an effort to force high-cost producers, including some US shale companies, to curb output. OPEC supplies about 40 per cent of the world's oil, and Saudi Arabia is its biggest producer.
Asia's role key to demand growth
Brent crude, a global pricing benchmark, fell 1.2 per cent on Friday to $US47.42 a barrel on the London-based ICE Futures Europe exchange. Prices slid 3.4 per cent last week.
"The global economy has been buffeted over the past few years and major adjustments are taking place," said al-Naimi, who sees further growth ahead. "Urbanisation continues, populations are expanding, prosperity is increasing, as is social mobility," he said. "All of this requires energy to power it and, in my view, this equates to oil demand growth. Key to this is the role of Asia."
The region is "a vital engine of growth for the world economy and I have no doubt it will continue in this role throughout this century," al-Naimi said. "Asia will - and should - assume a greater influence in global energy affairs."
El-Badri, the OPEC chief, said Asian oil use has increased by more than 40 per cent to 30 million barrels a day since 2000, while consumption in Europe and the Americas fell over the same period. "Asia will remain the main hub for oil demand growth," he said. "Putting this into some perspective, the demand increase in Asia by 2040 is projected to be more than double the increase in all other growing regions combined."
Russia sees the Asia-Pacific region driving energy consumption in the "medium term," even with China's economy growing more slowly, Russian Energy Minister Alexander Novak said in an article on the IEF's website. His country plans to more than double oil exports to Asia-Pacific buyers by 2035, Novak said, without specifying volumes.
Russia is also seeking to boost natural gas exports to Asia, targeting shipments of 128 billion cubic meters by 2035 from 14 billion cubic meters in 2014, he said. Russia's Eastern Gas Program calls for four large gas production centres and construction of pipelines toward China, according to Novak.

[LionFlyer]

http://www.channelnewsasia.com/news/busi...50008.html

Yet more negative news.

LONDON: Oil is unlikely to return to US$80 a barrel before the end of the next decade, despite unprecedented declines in investment, as yearly demand growth struggles to top 1 million barrels per day, the International Energy Agency said on Tuesday.
In its World Energy Outlook, the IEA said it anticipates demand growth under its central scenario will rise annually by some 900,000 barrels per day to 2020, gradually reaching demand of 103.5 million bpd by 2040.
The drop in oil to around US$50 a barrel this year has triggered steep cutbacks in production of U.S. shale oil, one of the major contributors to the oversupply that has stripped 50 percent off the price in the last 12 months.
"Our expectation is to see prices gradually rising to US$80 around 2020," Fatih Birol, the executive director of the IEA, told Reuters ahead of the release of the report.


"We estimate this year investments in oil will decline more than 20 percent. But, perhaps even more importantly, this decline will continue next year as well."

"In the last 25 years, we have never seen two consecutive years where the investments are declining and this may well have implications for the oil market in the years to come."
Oil companies have grappled with the downturn and a "lower for longer" price outlook by slashing spending, cutting thousands of jobs and delaying around US$200 billion in mega-projects around the world.
The IEA estimates investment has already fallen by 20 percent this year.
Higher-cost producers in Canada and Brazil, as well as the United States are likely to fall victim to low oil prices faster than most exporters, but these declines could be offset by supply growth in Iraq and Iran.

OIL SECURITY
Birol said the Middle East, which already provides about a third of the world's oil, could see exports equate to more than two thirds of total supply, particularly in a sustained environment of US$50 oil prices.
"We have to think carefully about the oil security implications of a very few number of countries exporting a big chunk to the global markets alone," he said.
Yet unrest in Iraq, now OPEC's second-largest producer, and ageing infrastructure could hamper raising output there. Iran, expected to be free of Western sanctions this year, needs major investment to return to the 2.5 million bpd in production seen prior to 2012.
On the demand side, the IEA expects total energy consumption in China, the world's largest commodity consumer, to be double that of the United States by 2040.
But greater efficiency and a shift away from heavy industry for economic growth will mean China will need 85 percent less energy to generate each unit of future economic growth than it did in the past 25 years.
India will be the chief driver of rising demand, where the IEA expects consumption to increase more than anywhere else, hitting 10 million bpd by 2040.
Birol said that while the agency's base-case scenario was not one in which the oil price languished around US$50 a barrel for the next decade, it could not rule out a sustained period of low oil prices.
Low near-term global economic growth and a lasting switch by OPEC to a policy of pumping oil at record rates to increase its market share and more resilient non-OPEC supply could conspire to keep the oil price lower for longer.
"The oil price in this scenario remains close to US$50 a barrel until the end of this decade, before rising gradually back to US$85 a barrel in 2040," the IEA said in its report.
"In the low-oil price scenario, the Middle East's share in the oil market ends up higher than at any time in the last forty years," the report said.
(Reporting by Amanda Cooper; Editing by William Hardy)