our politician have better things to worry about, maybe they are going to change the laws so that land owner owns the oil/gas proceeds so they can force the land owner to sell it to them once a gas discovery is made. till then let it sit there.
Oil and gas reserves found in Mianwali, Punjab
- Thread starter Devil Soul
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our politician have better things to worry about, maybe they are going to change the laws so that land owner owns the oil/gas proceeds so they can force the land owner to sell it to them once a gas discovery is made. till then let it sit there.
niaz
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I have been out of UK for last two weeks for attending Asia Pacific Petroleum & Energy Conference (APPEC) which was held during Sept 7 -10, 2015 at Singapore. On the way back I dropped off at Karachi for a couple of days to visit my in-laws. Thankfully Karachi Law & Order situation is much better.
Main topic of discussion on the fringe meetings was the price of oil. Since there is already a significant lack of new investment in the shale oil/gas projects and market has largely factored in Iran’s entry after the end of sanctions, my view is that oil process will not break $40 per bbl. support, even it happens, it would be a very short time only. Many were of the opinion however that it could go down to £20. Goldman Sachs think so too!
GOLDMAN SACHS: Oil prices to $20 a barrel - Business Insider
Coming to the discoveries in Pakistan. All the oil & gas discoveries announced in the last 5 years even when added together represent ’ INSIGNIFICANT’ contribution to our requirements; hence continued gas load shedding. In fact output from the existing field is on the decline.
Not denying the fact that any commercial discovery is welcome, one should take the adjectives ‘large deposits’ with a pinch of salt. Let us face it; in a country where gas short fall is projected at 5,000 million cft per day by 2020, mere 3-million cft per day is barely a drop in the ocean. We need about one hundred discoveries of this size to make a small dent. Similarly 160 bbl. per day of additional crude is nothing much to shout about.
Most of the press reports do not mention estimated reserves. Should the oil price drop below £20 per bbl. and gas price to less than $2 per MMBtu; natural gas fields of less than 1 tcf reserves & oil fields with less that 100-million barrels of oil in place may no longer be commercially viable.
And is this because of decrease in reserves, or is there any other reason Sir?
Scary prospect for exploration companies and their employees in Pakistan, but good for the rest of us.
Faiez
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Oil can't go below $20 sustainably. I expect oil prices to recover within the next 5 years.
RealNapster
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haha.. very true.
On serious note, Same was the Policy of USA, but as they found shell oil. they start extracting them. As "as far as i know" they have largest reserves of shell oil.
Kamikaze Pilot
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It may make life difficult for us in Kashmir.
RealNapster
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Little Drops of Water Make the Mighty Ocean
just taking an example of Australia. they haven't any large dams with large capacities. they built small smalls dams on small rivers all across the Australia through which they generate 7% electricity. similarly they have 1886 wind turbines spread across 71 wind farms till 2014, which roughly make 25 turbines per farm. Through which they generate 30% of there electricity. So if you are not able to do something on large scale at one place, do it on small scale at many places. "Just like that
Faiez
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Oil is a different thing. You either have it or you don't. Working harder will not produce more oil underground. Unless offcourse the soviets were right about the oil origin theory. Then there may be some crazy way....
shaheenmissile
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Hope they don't sit on the oil/gas a Snake in treasure.
In KPK its normal to do that. Kohat has gas wells and all the surrounding villages have gas connection from there and nobody pays any bills.
This attitude is common in KPK where locals claim 100% of the Oil/gas discovered in their areas.
In KPK its normal to do that. Kohat has gas wells and all the surrounding villages have gas connection from there and nobody pays any bills.
This attitude is common in KPK where locals claim 100% of the Oil/gas discovered in their areas.
niaz
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Primarily because of reserves being depleted
Rather than buying oil or exploring oil Pakistan should be working on tapping shell gas reserves for energy purpose. If they can utilise that then they will never need to buy oil or gas from other countries.
Anyhow, welcome news for Pakistan.
Anyhow, welcome news for Pakistan.
niaz
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Primary reason for engineering the crude price fall by the Saudis was to make exploration of tight/shale hydrocarbons uneconomic. Average cost cost of production of Shale oil in the US is in the $51 per bbl range. In Pakistan it would be even higher as we would need to pay for the technology as well.
Quote
September 6, 2015 1:37 pm
US shale industry braced for bankruptcies
Ed Crooks in New York
Falling oil prices put groups with high costs under severe financial strain
T
he world may run on oil, but the oil industry runs on capital, and for US shale producers that capital is starting to dry up.
Earlier in the year it was still relatively easy for US exploration and production companies to raise capital by selling debt or equities, in spite of last year’s oil price crash caused by a global glut. Now those sales have slowed sharply, and the financial strain on the industry is growing.
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The next turn of the screw is approaching, in the shape of another round of redeterminations of “borrowing bases”: the valuations of companies’ oil and gas reserves used by banks to secure their lending.
The shale industry, which has been responsible for rapid growth in US oil production since 2009, is not about to die. There are plenty of strong companies that have healthy balance sheets, low costs, or both, and they should be able to ride out the downturn. But there are very wide differences in resilience between companies. Those with high costs or high debts, or both, face a turbulent future.
“In retrospect, easy money and a difficult time for finding the right thing to invest in led to an overshoot in US [oil] production growth,” says Edward Morse, global head of commodities research at Citigroup. “Companies that should never have been brought to life were brought to life.”
Now that overshoot is heading for a correction. Analysts expect a wave of asset deals, acquisitions and corporate bankruptcies, as weaker companies struggle to avoid collapse, not always successfully.
Already 16 US oil production companies have defaulted this year, according to Standard & Poor’s, the rating agency.
The biggest failure has been Samson Resources, which was bought by a consortium led by KKR in 2011 for $7.2bn, and said last month it intended to seek bankruptcy protection in September.
There are eight oil producers with credit ratings of triple-C or lower, meaning that “they’ve got about a year or less before they burn out of cash”, says Thomas Watters, a managing director at S&P.
The next hurdles facing many of those companies will be their borrowing base redeterminations, which typically take effect on October 1.
The previous round in March and April was less brutal for the companies than some had feared. This one is likely to be significantly tougher, draining liquidity away from struggling companies.
Since the spring, expectations that oil prices might rebound have quickly faded, meaning that banks will be using lower assumptions when valuing reserves.
The banks are also being warned by the Office of the Comptroller of the Currency, the federal regulator, to watch out for the risks involved in lending to oil and gas companies, prompting fears that loans could be withdrawn from businesses that would be financially viable if they were given a little more time.
Mark Sadeghian of Fitch, the rating agency, argues that banks will again try to avoid cutting back their lending too sharply. “We don’t expect anything cataclysmic,” he says. “It makes sense for banks to broker a deal, as opposed to driving companies to the wall.”
Even if they keep fragile companies alive, though, the banks are still likely to want to cut their lending, he adds.
Buddy Clark, chair of the energy practice at Haynes and Boone, a law firm, says that when companies announce their new borrowing limits, investors should make sure they read the fine print. In some cases borrowing bases will be set at a comfortable level, but could be scheduled to reduce over six months, or have a shorter review period.
“The hope is that the market will pick up in time to allow them to sell equity to shore up the balance sheet,” says Mr Clark.
As companies seek to persuade investors and banks to back them, their costs are critical. Under pressure from the slump in the prices of both oil and natural gas, US exploration and production companies have achieved remarkable feats in cutting costs — in some cases by as much as 25 per cent — and raising productivity.
EOG Resources, the first company to produce shale oil successfully, said last month that it had reduced the cost of drilling a well and starting production in the Eagle Ford formation of south Texas to $5.5m, down from $6.1m last year, while making it yield more oil.
Whiting Petroleum, the largest producer in the Bakken formation of North Dakota, said earlier this month that “enhanced completions” — using higher volumes of sand when fracturing wells to release oil — could raise production by 40 to 50 per cent while increasing costs by only 15 per cent.
FT series
The new oil order
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However, the sector is a heterogeneous group. A recent study found that the oil producer with the lowest full-cycle cost per barrel — a measure that combines the expense of extracting crude plus the investment needed to replace reserves — was Seven Generations, at about $20. The highest-cost producers were Breitburn Energy Partners and Denbury Resources, at about $70, according to Moody’s, the rating agency responsible for the study.
The median full-cycle cost per barrel was about $51 for oil-focused companies, implying that at present prices of about $46 for US crude, more than half of the producers are losing money.
Eventually, supply and demand in the global oil market are expected to come back into balance, sending crude prices higher. US oil production is already falling, according to the government’s Energy Information Administration, reflecting the 58 per cent drop in the number of rigs drilling for crude since last October.
But this rebalancing of the market could be a lengthy process. While it is working through, more US shale producers are sure to fall by the wayside.
Unquote
I am having difficulty in cut/paste of the article. They expect one to subscribe before reading.
http://www.ft.com/cms/s/0/5974a3ce-52e0-11e5-b029-b9d50a74fd14.html#axzz3mMzEKziv
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RealNapster
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i never ever mentioned that "work harder". what i was saying is that if you have not any LARGE reserves, use the small one's .
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