By JOHN P. TRETBAR
Kansas Common Crude at CHS in McPherson starts the new year at $50.75/bbl, compared to $44 last year at this time, $27.25 in 2016, and $73.25 on January 1, 2014.
The final weekly rig count summary of the year from Baker Hughes showed the oil rig count unchanged for the second week in a row. The nationwide total for the week ending December 29 was 929, reflecting a drop of two rigs seeking natural gas. Canada reports a seasonal drop of 74 to 136 active rigs.
The Kansas Corporation Commission reports 112 new intent-to-drill notices filed last month, bring the total for the year to 1,561. That’s an improvement over last year’s dismal 1,166, but far below the 7,104 intents filed statewide in 2014. There were two new intents filed in Barton County, which makes 47 for the year. One new intent in Ellis County brings the annual total to 47. There were no new intents filed in Russell County, where operators filed 24 during the rest of the year. There were three new intent notices filed in Stafford County, which makes 34 for the year.
A labor headhunter in Midland, Texas tells Bloomberg that Permian Basin oil producers will need to hire more than 3,000 more truck drivers at the rate the play is growing today. That could be a tough sell to those fired during the oil-price collapse of 2014. About 3,000 oil truckers are currently at work in the region. That’s more than the tally before the price bust.
The Interior Department has quietly rolled back an Obama-era policy aimed at protecting migratory birds, stating in a solicitor’s opinion that it will no longer prosecute oil and gas, wind and solar operators that accidentally kill birds.
Regulators in the Trump administration are proposing to roll back safety measures put in place after the 2010 Deepwater Horizon oil spill, a revision that would reduce the role of government in offshore oil production and return more responsibility to private companies.
The prolific Permian Basin in west Texas and southeastern New Mexico reached a new oil-production record, beating it’s previous record, set in 1973, by more than 25 million barrels. IHS Markit says it will revise final production figures after year-end production reports are in, but the company asserts the Permian will produce roughly 2.75 million barrels per day, or more than 815 million barrels for the year.
In a recent survey by the British bank Barclays, 90 percent of U.S. oil producers said they expect oil field costs to climb next year. The Houston Chronicle reports that increased revenue will be good news for oil field service companies, which have slashed payrolls and prices to keep business alive during the price downturn.
Industry analysts warn that because of the recent downturn in the oil and gas industry, global energy companies have focused on cost cuts and not on conventional or off-shore exploration. A report in the Daily Oklahoman notes that global discoveries have dropped to the lowest levels in at least 70 years, seven billion barrels. In 2012 the totals for new conventional discoveries were more than four times higher.
Russia led all nations in crude exports to China for the ninth month in a row last month. Russia’s shipments to China were up 11 percent from a year ago.
Arguments mounted over China’s alleged transfer of crude oil to ships bound for North Korea. The South Koreans acknowledged they have seized one of the ships believed involved. The Lighthouse Winmore was intercepted on its return trip, and remained in South Korea. Officials say that on October 19, instead of going to Taiwan as scheduled, the vessel transferred its crude cargo to a North Korean ship and three others in international waters. The transfer was one of more than 30 reportedly captured in US satellite photographs. Numerous Chinese officials said China said there had been no sanction-breaking oil sales by Chinese ships to North Korea.