Oil plunging to unprecedented lows with more output cuts on the way

H

Hoid

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Canadian Drillers May Shut-In More Than 1.3 Million Bpd In Second Quarter

https://oilprice.com/Energy/Crude-O...re-Than-13-Million-Bpd-In-Second-Quarter.html

In light of recent guidance revisions and the wider collapse in drilling and completion activity in Western Canada, Rystad Energy now expects total 2020 Canadian upstream spending to fall below C$21 billion. This represents a 41% year-over-year decline, with reductions in shale and oil sands accounting for more than 80% of the decrease.

In percentage terms, 2020 represents the most drastic spending reduction in Canada in recent memory, and far surpasses year-over-year declines of 31% in 2015 and 33% in 2009. In our estimate, the country’s upstream spending this year will sink to levels last observed in the early 2000s, when conventional onshore activity and the then-nascent oil sands sector still dominated the upstream space.

In addition to spending cuts, we have increased our near-term base case curtailment forecast to approximately 1.2 million bpd for the second quarter of 2020. Our most recent estimate accounts for deeper production cuts at the ConocoPhillips-operated Surmont thermal oil sands project and across Husky Energy’s heavy oil portfolio in Alberta and Saskatchewan, which includes shut-ins at both thermal and conventional heavy projects.

“Canadian curtailments are already in full swing and the building storage crisis will continue to test operations as we approach May, when global storage is likely to reach full functional capacity. Unless more significant upstream volumes are cut globally, Canadian curtailments may ultimately exceed 1.3 million bpd in the second quarter,” says Rystad Energy’s senior analyst Thomas Liles.

Our estimates account for the combined impact of operational shut-ins caused primarily by the Covid-19 pandemic, as well as curtailments stemming from low prices and global demand destruction.
 
captain morgan

captain morgan

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Twin_Moose said:
Do you think this is a good thing for Canadian's and Canada in general?
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Ole tater tot is going to be desperate for employment and cash in the coming weeks and considering that TMX has been going full speed all through the pandemic, I really wonder if he won't be opening the flood gates for mining and O&G in an attempt to refill the fed coffers.

That said, it's obvious that there will be no money to subsidize wind farms and solar arrays from the public purse... Bad news for that sector I guess
 
mentalfloss

mentalfloss

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The tot has been making some big moves, that's for sure.

Sour grapes for decades to come. :D
 
Twin_Moose

Twin_Moose

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mentalfloss said:
The tot has been making some big moves, that's for sure.
Sour grapes for decades to come. :D
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This will work out better than Energy East which he helped shelf because Quebec was against it without a bigger kickback.

Irving Oil targets summer for tanker shipments of Western Canadian crude

Irving Oil, the operator of the country's largest refinery, is aiming to begin receiving more crude from Western Canada — delivered to New Brunswick in tanker ships — starting this summer.
The privately held refiner applied last month to the Canadian Transportation Agency (CTA) to use foreign tankers in order to increase the amount of domestic crude it gets from offshore Newfoundland and Western Canada.

Iriving Oil's application included a proposal for the tankers to transport oil from a terminal in Burnaby, B.C., through the Panama Canal and on to Irving Oil's refinery in Saint John, N.B.
On Friday, a company official confirmed the applications had received regulatory approval and it is now working through the details of the federal process for approving individual vessels.
"Over the ... next few weeks here, we'll be acquiring crude oil, organizing shipping and then finalizing the approvals for those ships to transport the crude oil," said Kevin Scott, chief refining and supply officer for Irving Oil.
Scott said they hope to receive their first barrels from Western Canada by ship in late June or early July.
The company wants to increase the mix of Canadian crude it uses, which is currently in the range of 20 per cent.
"We'd love to see that get much higher and get above the majority — if technically it works and from a logistics perspective all of that works out," he said.
Increasing the amount of Canadian oil the refinery uses would displace the crude imports the company gets from around the world, but it's not clear which shipments might be affected.
Scott said the refinery uses a "significant" amount of oil from the United States
"Part of this is really opening up the option for us to run more Canadian crude," Scott said.
"We have limited options today. And, really, when we're being challenged to be creative in terms of Canadians helping Canadians, this was one way that we said it was possible for us to do that.
"And, of course, all of the approvals and issues around the ships is really what we're working to get in place ... so that we have that option to buy Canadian crude as easily as we buy crudes from anywhere else in the world."
That could be welcome news for a sector that has been hit hard by a steep plunge in demand for fuel as both consumers and businesses throttle back activity in the face of the COVID-19 pandemic.
Earlier this week, the Canadian Association of Petroleum Producers said, in the short term, the Irving proposal offers a "desperately needed" expansion of the domestic market.
Alberta Energy Minister Sonya Savage said Friday she is glad Irving Oil will begin using more Western Canadian crude, adding that Alberta produces enough to supply the country.
"However, it is unfortunate that Irving is forced to use complicated marine shipping routes either around the entire continent or up from the Gulf of Mexico," she said in a statement.
"The proposed Energy East Pipeline would have provided a safe and faster route."
In its application to the CTA, Irving Oil said it recognized recent events had caused the economy, and the energy sector in particular, to be in a state of crises, and that "it is a time for Canada to come together."
The application stated that it is the company's intent to enter into long-term agreements with Canadian crude suppliers for the nomination of barrels over a one-year timeframe.
Irving Oil's plan is to use foreign oil tankers to ship Canadian crude from three key points, including from the West Coast, down through the Panama Canal and on to Saint John.
It also wants to take delivery of Canadian oil from suppliers in Newfoundland and Labrador, as well as terminals on the U.S. Gulf Coast, where crude from Western Canada can be delivered by pipeline.
Irving Oil currently receives some oil from offshore Newfoundland as a routine part of its mix, Scott said, as well as a "small amount" of Western Canadian crude by rail.
"This would increase our capability to get access to Western Canadian crude, either from Vancouver or from the U.S. Gulf Coast, which is a slightly shorter route," he said.
Asked if the company's refinery could use Alberta's heavy grade of oil, Scott said it can use "some amount" and that it has been doing modelling and testing.
"Today we run some synthetic crude oil, which is lighter, from from Western Canada," he said.
"This will allow us to access the heavier crude by marine [transportation]. But we would expect that it will be a mixture of crudes. Much like our refinery today, we would run a mixture of different types of crudes from different locations, ultimately to get the right mix to make the products that we're looking for."
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Interesting the big move to purchase and go ahead and Twin a pipeline to Burnaby is now going to ship that Oil all the way around North, through Central America back to the East coast, yep all the right moves SMH
 
mentalfloss

mentalfloss

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These low oil prices are fantastic news for China.

Oil-hungry Asian nations pounce on low prices to build stockpiles

The high cost of building reserves has stopped many countries developing them to sufficient levels.
In Asia, India uses caverns to store its reserves but other countries, such as Japan, put theirs in above-ground tanks.

In China, the Shanghai International Energy Exchange last month gave approval for state-owned Sinopec Petroleum Reserve to add more storage capacity.

One storage depot in southern Guangdong province can hold up to 600,000 cubic meters (3.8 million barrels), while another in northern Hebei province can hold up to one million cubic meters.

https://www.arabnews.com/node/1668831/business-economy
 
captain morgan

captain morgan

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Twin_Moose said:
This will work out better than Energy East which he helped shelf because Quebec was against it without a bigger kickback.
Irving Oil targets summer for tanker shipments of Western Canadian crude
Interesting the big move to purchase and go ahead and Twin a pipeline to Burnaby is now going to ship that Oil all the way around North, through Central America back to the East coast, yep all the right moves SMH
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Doesn't get any stupider than that
 
Avro52

Avro52

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Mar 19, 2020
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mentalfloss said:
These low oil prices are fantastic news for China.
Oil-hungry Asian nations pounce on low prices to build stockpiles
The high cost of building reserves has stopped many countries developing them to sufficient levels.
In Asia, India uses caverns to store its reserves but other countries, such as Japan, put theirs in above-ground tanks.
In China, the Shanghai International Energy Exchange last month gave approval for state-owned Sinopec Petroleum Reserve to add more storage capacity.
One storage depot in southern Guangdong province can hold up to 600,000 cubic meters (3.8 million barrels), while another in northern Hebei province can hold up to one million cubic meters.
https://www.arabnews.com/node/1668831/business-economy
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They are going to burn every last drop of it.
 
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