PERMIAN CACTUS II PIPELINE starting soon.Shippers Trafigura, Concho and Anadarko . . . Most of 670K bbls/day will be EXPORTED.

(edited)

YOU WILL START TO HEAR MORE TALK ABOUT STRANDED ASSETS . .  .  .  .  . .  . .

WHAT IS THE OPEC/SAUDI ANSWER  ?

Two more Permian to Gulf of Mexico pipelines to follow, now up to total 2.4 7 mm bbls/day (EPIC, GREY OAKS) .  The total 2.47 mm bbls/day will be fully online by Q1 or Q2 2020.

Does OPEC have an answer ? 

J.P. Morgan told Oil Bulls not to be complacent, "Don't get used to it" ,as OPEC will move to regain market share.  .  . LOL .  .  Great they will crash the market again.  It didn't work last time and won't now.

QUOTE FROM OIL PRICE ARTICLE:  The Saudis and OPEC aim to “support oil while they are effectively pregnant with all this economic growth and capital they have got to deliver. But, having said that, what we are saying to the bulls is: Don’t get used to it,” Malek told CNBC’s Squawk Box Europe.

Khalid al-Falih said this week all reserve basins grow, plateau and decline.  He reasons OPEC should be patient and wait U.S. Shale out .  . .  .  . LOL II.      .

“I have no doubt in my mind that U.S. shale will peak, plateau and then decline like every other basin in history,” Saudi Arabia’s Energy Minister Khalid al-Falih said in Vienna this week, as reported by Bloomberg.

OIL PRICE Article, PARASKOVA :

QUIZ 

How long will OPEC/SAUDIS have to wait out for Permian decline ?

1. A couple of months

2. A couple of years

3. A couple of decades loop

Edited by Falcon
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I‘d go with answer #2

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1 hour ago, Flemming Hoog said:

I‘d go with answer #2

Why would you go with no.2? Just curious. The Shale boom is really deep in debt, not sure anyone knows exact numbers, maybe 400 billion or so, and the pipelines add to that cost. Ya don't spend all this money for a couple of years worth of oil. 20 to 30 years unless new tech improves the yields. With OPEC (kSA) cutting back, my theory is their pools of oil is getting strained. 

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Whoopee! Pump more oil, drive the price back down so you go even further in debt. Must be a Harvard School of Business business model!

I go with a year or two at best.

 

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6 minutes ago, Douglas Buckland said:

Whoopee! Pump more oil, drive the price back down so you go even further in debt. Must be a Harvard School of Business business model!

I go with a year or two at best.

 

I can't tell if your serious or not. Current models show 20+ years @ 5mbd. Bakken, Eagle Ford, Permian….. We have a lot of oil and unfortunately Permian oil is best refined elsewhere. That is why the pipelines and shipping out. Our refineries are ancient and built for heavy and sour.

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(edited)

49 minutes ago, Old-Ruffneck said:

Why would you go with no.2? Just curious. The Shale boom is really deep in debt, not sure anyone knows exact numbers, maybe 400 billion or so, and the pipelines add to that cost. Ya don't spend all this money for a couple of years worth of oil. 20 to 30 years unless new tech improves the yields. With OPEC (kSA) cutting back, my theory is their pools of oil is getting strained. 

I think the middle east reservoirs are suffering from lack of investment and over-producing for too long during the lower for longer game and also this last little blast they did last fall for Trump seems to have been a problem for KSA.  I am skeptical they are keeping their production this low on purpose.

Edited by wrs
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1 minute ago, wrs said:

I think the middle east reservoirs are suffering from lack of investment and over-producing for too long during the lower for longer game and also this last little blast they did last fall for Trump seems to have been a problem for KSA.  I am skeptical they are keeping their production this low on purpose.

Correct, and is why they would like to split the Wafra Oil Field. Both Kuwait and KSA closed it years ago and at that time 1mbd. Telling actions on where KSA is going with other energy projects like LNG tell me they know they oil is being depleted rapidly. 

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(edited)

On 7/9/2019 at 6:22 AM, Flemming Hoog said:

I‘d go with answer #3

Edited by Falcon
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 Sorry, won’t be two decades, I’ll give it several years, even then the well conditions will continue to worsen, decline rates get steeper, financial and logistical constraints won’t ease up anytime soon, and core drilling spots are running low. And reserves are vastly overstated. 

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(edited)

Here is their answer with more answers to come from them over the years.

However, I do not see a US shale industry going away for atleast 2 decades.

______

Saudi Aramco moves ahead with 550,000 b/d Marjan and Berri field expansions

 

Saudi Aramco said Tuesday it has awarded $18 billion of contracts to expand the Marjan and Berri fields, adding 550,000 b/d of Arabian Crude to its capacity.

The projects will boost Marjan's potential output of Arabian Medium grade oil by 300,000 b/d, with an extra 250,000 b/d of Arabian Light to come from Berri, the state-owned company said in a statement.

"These two programs will significantly enhance Saudi Aramco's oil production and gas processing capabilities, both strengthening our position as the leading integrated energy supplier and meeting growing long-term demand for petroleum," said Amin Nasser, president and CEO of Saudi Aramco.

The company added that its maximum sustained capacity is 12 million b/d.

Saudi Arabia is under pressure to invest more in boosting capacity as it loses market share to the US, which is now the world's largest producer of crude and increasingly an exporter of oil. Saudi Arabia's output jumped by 150,000 b/d in June to 9.85 million b/d, according to the latest survey of OPEC production by S&P Global Platts.

Aramco said Tuesday that the Marjan field project would also add 350,000 b/d of natural gas liquids along with 2.5 Bcf/d of gas. The Berri project will include the construction of a new gas oil separation plant in Abu Ali Island, with capacity to process 500,000 b/d of crude, and gas handling facilities at Khursaniyah capable of processing 40,000 b/d of condensate.

Edited by ceo_energemsier
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WoodMac: Permian’s production growth could spur more infrastructure spending

The Permian basin will need extra crude oil takeaway capacity of up to 500,000 b/d by the end of the 2020s to accommodate growing production, Wood Mackenzie Ltd. researchers forecast.

 

The Permian basin will need extra crude oil takeaway capacity of up to 500,000 b/d by the end of the 2020s to accommodate growing production, Wood Mackenzie Ltd. researchers forecast.

A moderate overbuild of pipeline capacity is expected in the early 2020s when current pipeline investments are completed. Midstream operators appear set to add about 4 million b/d of new US Gulf Coast-bound capacity by Dec. 31, 2022.

Investments include seven proposals for new Permian pipelines, with four ultimately expected to reach a positive final investment decision (FID). More than 2 million b/d of this new capacity will flow into Corpus Christi, Tex., for export.

The rapid addition of pipeline capacity will result in 2-3 years of overbuild before normal long-haul capacity supply and demand conditions begin to re-emerge, WoodMac said.

John Coleman, WoodMac principal analyst, North America crude markets, said, “As production growth expands well into the 2030s, US Gulf Coast-bound pipeline capacity will tighten. By the mid-2030s, Permian-to-Gulf Coast pipeline utilization will surpass 92% in the absence of further investment, necessitating pipeline expansions or greenfield capacity.”

 

"We are in the midst of one of the largest crude infrastructure investment booms in US history, with much of the investment focused on the Permian basin," Coleman said. "As massive as this current investment wave is, we don't think the story is yet finished. Additional capacity adds will be needed again by the end of the next decade."

 

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Lucid Energy Group entered into a new long-term natural gas gathering and processing agreement with Exxon Mobil Corp. subsidiary XTO Energy Inc., Lucid announced Tuesday.

Per the agreement, XTO will deliver natural gas production from southeastern New Mexico to Lucid’s South Carlsbad gas gathering and processing system. The agreement also enables gas and natural gas liquids deliveries to Exxon’s downstream and chemical manufacturing sites on the U.S. Gulf Coast.

“We have continued to grow our relationship with XTO in the northern Delaware Basin since its entry into New Mexico,” Lucid CEO Mike Latchem said in a company statement. “Lucid’s assets are strategically positioned for XTO’s development plans and complement what its affiliates are planning for midstream infrastructure within the basin and out of the basin to the downstream markets.”

Currently, Lucid’s system in the northern Delaware Basin encompasses more than 2,000 miles of pipeline spanning five counties in Texas and New Mexico.

Lucid Energy Group is the largest privately held natural gas processor in the Delaware Basin offering a full range of gas midstream services.

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(edited)

On 7/9/2019 at 9:09 AM, wrs said:

.

Edited by Falcon

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Just now, Falcon said:

A good source says Sandi's largest reserves can not increase production much without seriously compromising pressure, thus future production.  

Formation pressure is key to all wells, shale in particular.  The whole reason shale declines quickly is because formation pressure is very high and it declines quickly. The shallower reservoirs had lower formation pressure but the are spread over a much larger space/volume so it takes much longer to lose pressure because the volume is so large.  With shale, the volume is local and formation pressure declines with PV=nRT where n depletes fairly quickly for the frac'd volume.  In a larger reservoir, the n that gets pumped out by a single well is small enough that it doesn't affect P as much but eventually because n drops and V is constant, P drops and thus, artificial lift is required.  This is my take on it and I could be wrong but that's how I simplistically think it works.

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(edited)

On 7/10/2019 at 10:20 AM, wrs said:

Formation pressure is key to all wells, shale in particular.  The whole reason shale declines quickly is because formation pressure is very high and it declines quickly. The shallower reservoirs had lower formation pressure but the are spread over a much larger space/volume so it takes much longer to lose pressure because the volume is so large.  With shale, the volume is local and formation pressure declines with PV=nRT where n depletes fairly quickly for the frac'd volume.  In a larger reservoir, the n that gets pumped out by a single well is small enough that it doesn't affect P as much but eventually because n drops and V is constant, P drops and thus, artificial lift is required.  This is my take on it and I could be wrong but that's how I simplistically think it works.

Edited by Falcon
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On 7/9/2019 at 2:49 AM, Falcon said:

WHAT IS THE OPEC/SAUDI ANSWER  ?

Two more Permian to Gulf of Mexico pipelines to follow, now up to total 2.4 7 mm bbls/day (EPIC, GREY OAKS) .  The total 2.47 mm bbls/day will be fully online by Q1 or Q2 2020.

Does OPEC have an answer ? 

J.P. Morgan told Oil Bulls not to be complacent, "Don't get used to it" ,as OPEC will move to regain market share.  .  . LOL .  .  Great they will crash the market again.  It didn't work last time and won't now.

QUOTE FROM OIL PRICE ARTICLE:  The Saudis and OPEC aim to “support oil while they are effectively pregnant with all this economic growth and capital they have got to deliver. But, having said that, what we are saying to the bulls is: Don’t get used to it,” Malek told CNBC’s Squawk Box Europe.  

Great Call MALKEK !  You think J.P. Morgan is gunning to be the lead on the IPO ? You bet ya !

Khalid al-Falih said this week all reserve basins grow, plateau and decline.  He reasons OPEC should be patient and wait U.S. Shale out .  . .  .  . LOL II.      .

“I have no doubt in my mind that U.S. shale will peak, plateau and then decline like every other basin in history,” Saudi Arabia’s Energy Minister Khalid al-Falih said in Vienna this week, as reported by Bloomberg.

OIL PRICE Article, PARASKOVA :

"OPEC Plans Move To Seize Market Share From US Shale"  ,  https://oilprice.com/Energy/Crude-Oil/OPEC-Plans-Move-To-Seize-Market-Share-From-US-Shale.html

QUIZ 

How long will OPEC/SAUDIS have to wait out for Permian decline ?

1. A couple of months

2. A couple of years

3. A couple of decades

.

.

.(correct answer # 3) 

 

 

#3 for certain.  Everyone is whining about the Permian exhausting itself, but they're still discovering new reserves. 

The cost is also declining as technology improves and economies of scale are achieved.  Shale isn't over yet. 

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