Saudi Arabia will discuss all issues at the OPEC meeting on Friday and listen to concerns of other members, said the nation’s Oil Minister Ali al-Naimi.

“We have a meeting on Friday, we will discuss all these issues,” al-Naimi told reporters Tuesday. “We will listen and then decide.”

Naimi spoke as he arrived in Vienna for a meeting that is widely expected to ratify the Organization of Petroleum Exporting Countries’ decision a year ago to defend market share rather than support prices. Some members including Iran and Venezuelacontinue to push for the group to reverse course and curb production.

Oil prices just completed the biggest monthly decline since July as OPEC, which pumps about 40 percent of the world’s supply, showed few signs of trimming production. Crude has fallen almost 40 percent the past year as a record surplus persisted while global producers fight for market share.

When asked if Saudi Arabia will stick to its strategy of defending its markets against competing supplies, al-Naimi said: “Who said we are keeping market share strategy? Did I ever say?”

Iranian Oil Minister Bijan Namdar Zanganeh sent a letter to OPEC calling for a cut in excess output, Mehr news agency reported Tuesday. The group should reduce current production of 31.3 million barrels a day to come back in line with its target of 30 million, Zanganeh said.

http://www.bloomberg.com/news/articles/2015-12-01/saudi-oil-minister-pledges-to-listen-to-other-opec-members

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Spare a thought for anyone who bet on a recovery in liquefied natural gas prices after last year’s 45 percent plunge.

LNG to northeast Asia, home to the world’s biggest consumers, plunged 25 percent this year, outpacing Brent’s 23 percent slump as of Tuesday. While analyst estimates compiled by Bloomberg show that crude will recover in 2016, prices for the super-chilled fuel will probably extend declines by as much as 25 percent, according to a survey by Bloomberg.

As the U.S. gears up to start a new LNG plant for the first time in more than four decades and output from Australia to Angola increases, the glut will peak in 2018, according to Sanford C. Bernstein & Co. LNG, which Goldman Sachs Group Inc. said will this year overtake iron ore as the world’s second most valuable commodity by trade, fell to its lowest level since 2010 in October, according to World Gas Intelligence in New York.

“The biggest story is the increase in LNG export capacity,” said Mike Fulwood, principal for global gas at Nexant Inc.’s Energy and Chemicals Advisory in London. Capacity will increase 14 percent through the fourth quarter next year, “while demand is increasing much more slowly in the main LNG importing countries.”

The outlook for prices, global demand as well as new capacity from U.S. and Australia are all topics that will be discussed by executives, traders and analysts this week at the World LNG Summit in Rome.

As the price plunge ripples through markets, the growing output is impacting the world’s biggest producers of the fuel. Qatar waived a $1 billion penalty for lower imports under an Indian contract, while Russia’s Gazprom PJSC offered its first-ever gas auctions in Europe in September.

LNG for delivery in the next four to eight weeks in Asia cost $7.55 per million British thermal units as of Nov. 23, according to WGI. The spot price may fall as low as $5.70 next year, according to the survey of nine traders, executives and analysts. Brent crude may average $57.30 a barrel next year, according to 48 estimates on Bloomberg. It traded at $44.30 on Tuesday.

Cheniere Energy Inc.’s Sabine Pass will be the first U.S. export facility since ConocoPhillips started a plant in Alaska in 1969. As a result of a boom in production from shale formations, the U.S. has become the world’s biggest oil and gas producer, also set to transform itself from an importer into a net exporter of LNG.

“The excess gas that exists in the U.S. will find its way out and will probably mean lower prices for the rest of the world,” Frank van Doorn, head of gas and LNG trading at Vattenfall AB’s trading unit, said in an interview in Barcelona on Nov. 25.

While the U.S. export facilities will add another 4.5 million metric tons, next year’s main addition will be in Australia, where another 27.2 million tons will come online. That compares with a total planned capacity of 326 million tons. Angola will also restart a plant that’s been shut since April 2014 because of technical issues.

http://www.bloomberg.com/news/articles/2015-12-02/lng-falls-faster-than-oil-as-u-s-fracking-spurs-growing-glut

Russian oil output in November hovered near a post-Soviet record set the previous month, shrugging off a crude-price slump before OPEC gathers for its annual meeting in Vienna.

Production of crude and gas condensate averaged 10.779 million barrels a day during the month, according to data from the Energy Ministry’s CDU-TEK unit. That’s an increase of 1.3 percent from a year earlier and slightly beneath the 10.782 million barrels a day record in October.

The Organization of Petroleum Exporting Countries meets on Dec. 4 to discuss its output limit a year after it chose to defend market share rather than cut production amid a supply glut. That decision compounded the price slump as Saudi Arabia pursued a policy that squeezed U.S. shale producers and other higher-cost output.

Russia, which isn’t a member of OPEC, continues to build output as a weakened ruble reduces costs for drilling and the nation’s tax system helps compensate for the lower price.

Crude exports reached 5.32 million barrels of oil a day in November, an 11 percent gain from the previous year and a 2.4 percent decline from the previous month.

http://www.bloomberg.com/news/articles/2015-12-02/russian-oil-output-stays-near-record-level-as-opec-set-to-meet

Chinese investment group Fosun International is interested in buying two small natural gas fields in the eastern Mediterranean from Israel's Delek Group, a source close to Delek said on Tuesday.

Delek, which controls a number of gas fields offshore Israel, is being forced to sell off some assets by the government in an effort to open the sector to new competition.

According to a government plan expected to be implemented in the coming weeks, the company will have 14 months to find a buyer for the undeveloped Tanin and Karish fields, which have combined gas reserves of 3 trillion cubic feet.

"Fosun is interested in the two fields," the source told Reuters on condition of anonymity.

A spokesperson for Fosun and officials at Delek declined to comment.

It would not be the first big deal between the companies. In June, Fosun bought a controlling stake in insurer Phoenix Holdings from Delek for 1.8 billion shekels ($464.12 million).

Already in the race is Italian utility Edison, which has entered talks to buy Tanin and Karish, and last month Israel's energy minister discussed a possible sale with the CEO of rival Italian group ENI.

Earlier this month Delek paid its partner Noble Energy $67 million for the rights to sell Noble's 47 percent stake in the two fields.

http://af.reuters.com/article/energyOilNews/idAFL8N13Q23O20151201

Private equity firm ArcLight Capital, together with commodities trader Freepoint, unveiled plans on Tuesday to buy the Hovensa refinery complex in St. Croix in the Caribbean and turn it into a massive oil storage hub.

The partners also said China's Sinopec, Asia's largest oil refiner, has leased 75 percent of Hovensa's existing crude oil storage capacity in a 10-year strategic deal for one of Asia's biggest oil market players, according to a statement on Tuesday.

Existing capacity at Hovensa is for 13 million barrels of crude and oil products. Freepoint, which supplies fuel oil to Puerto Rico's power utility, will lease 2 million barrels of fuel oil storage at the site.

Boston-based ArcLight, which has operated oil storage facilities around the world, will be the majority owner of Hovensa, a refinery formerly owned by Hess and Venezuela's state oil company, PDVSA, that has been shuttered in recent years.

Stamford, Connecticut-based Freepoint, a merchant trader of oil and other commodities, said it would have a 20 percent minority stake in the venture.

The partners have plans to invest at least $125 million to boost storage and tanker loading and unloading capacity at the site in the U.S. Virgin Islands by the end of 2016, a source familiar with the plans said.

The investment will bring Hovensa's total oil storage capacity to as much as 30 million barrels and make it one of the premiere oil storage and trans-shipment hubs in the strategic Caribbean region, the source said. The plans also involve deepening the port to allow for fully loaded very large crude carriers to dock at the hub.

Key to the deal is the long-term lease of most of Hovensa's 13 million in current operational oil storage capacity to Sinopec, which has rapidly become a major player in the Americas crude and oil product markets.

The revival of Hovensa comes as competing oil traders scramble to get hold of more Caribbean oil storage capacity during the rout in oil prices.

Current technical conditions in the oil futures market is rewarding oil traders that store oil for future profit instead of immediately selling it, creating high demand for storage assets like Hovensa's tanks.

Hovensa could also regain its stature as a major trans-shipment and oil-blending facility perched near U.S. and Latin American markets. It could also be a staging point for crude exports to Asia, including through the Panama Canal, which is being expanded to accommodate larger tanker ships.

For Freepoint, which leases other oil storage facilities in the Americas, the deal represents an expansion of capacity to boost its trading in the Americas. It is also an ideal staging point to deliver fuel oil to Puerto Rico, where it has a long-term supply deal with the island's utility, which uses fuel oil for power generation.

Freepoint said it helped to negotiate the long-term lease of crude storage at Hovensa to Sinopec. Terms of the leasing deal were not disclosed.

The Hovensa deal, including the forthcoming investments to expand the facility, is likely to expand Caribbean region merchant oil storage capacity by as much as 42 percent, ArcLight and Freepoint said. They added the deal could establish the partners as market rivals to Buckeye Partners, currently the biggest regional player.

Read more at Reutershttp://www.reuters.com/article/2015/12/01/hovensa-refinery-storage-idUSL1N13Q17J20151201#ICjRzZiEcarDdQEd.99

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Santos Ltd retail investors took up 57 percent of their entitlements in a A$1.35 billion ($987 million) share offer, the oil and gas producer said on Wednesday, better than the one-third uptake some media reports had flagged as energy prices remain weak.

The sale to retail investors was part of a A$2.5 billion entitlement offer announced in November after Santos snubbed a takeover proposal and sold some assets to cut debt and prepare for a prolonged period of weak oil prices.

The offer was fully underwritten by Citi, Deutsche Bank and UBS, who will put the remaining shares up for auction, due to be completed before the market opens on Thursday.

Institutions last month took up 86 percent of their entitlements in the earlier leg of the offer which raised A$1.17 billion. The unsold shares from that offer were sold off at A$4.60 a share, a premium to the entitlement offer price of A$3.85.

"The results of the...offer demonstrate recognition from shareholders of the long-term value in Santos and their support for the initiatives the company has taken to substantially strengthen its balance sheet," Executive Chairman Peter Coates said in a statement.

The Australian Financial Review newspaper had said there had been talk the underwriters were left holding between A$900 million and A$1 billion worth of shares in the retail offer.

The A$3.85 offer price was pitched at a massive 35 percent discount to Santos' closing price before it was announced.


Read more at Reutershttp://www.reuters.com/article/2015/12/02/santos-ltd-equity-idUSL3N13R1SY20151202#dP6SOdTgUDsgBf6Z.99

Separately, a Canadian think tank said that of 14 jurisdictions having large oil and natural gas reserves, Texas topped the list followed by the UAE, Alberta, Qatar, and Kuwait.

The Fraser Institute of Calgary reported that Texas was the most attractive jurisdiction for oil and gas investment worldwide based on an annual global survey of petroleum sector executives.

The 2015 Global Petroleum Survey rated 126 jurisdictions around the world based on barriers to investment such as high taxes, costly regulatory obligations, and uncertainty over environmental regulations as well as on estimated oil and gas reserves.

“Texas remains a beacon of stability in the oil and gas sector with its wealth of proven reserves and clear and consistent regulatory environment,” said Kenneth Green, Fraser Institute senior director, natural resource studies, and director of the Global Petroleum Survey.

The survey also featured an alternate ranking format, which ignored proved oil and gas reserves and focuses solely on survey responses about the extent to which government policies can deter oil and gas investment.

In this format, seven out of the top 10 were US locations. The Netherlands ranked No. 1, followed by Alabama, Oklahoma, Texas, Mississippi, Kansas, Arkansas, Saskatchewan, North Dakota, and Manitoba.

http://www.ogj.com/articles/2015/12/market-watch-oil-prices-fall-slightly-ahead-of-opec-meeting.html

The drilling rigs are gone from the hills surrounding this Pennsylvania town of 30,000. The hotels and bars are quieter too, no longer packed with the workers who flocked in their thousands to America's newest and biggest gas field.

The drilling boom of the past seven years is over, even though thousands of existing wells in the Marcellus region still produce a fifth of U.S. natural gas supply. Now, exclusive data made available to Reuters points to a slump in drilling that could hit production next year, defying government and industry expectations of a further rise in output.

Preliminary figures provided by DrillingInfo, which monitors rig activity, showed drilling permits issued for the 90,000-square mile (233,100 sq km) reservoir beneath Pennsylvania, Ohio, and West Virginia, slumped to 68 in October from 76 in September. There were still 160 permits issued in June and over 600 a month at the peak in 2010.

"The fact that it is slowing and the speed at which it is slowing" sums up the state of U.S. shale gas industry, Allen Gilmer, chief executive officer of DrillingInfo, told Reuters.

Recent months are subject to revisions, DrillingInfo said, but a retreat of such magnitude, combined with falling output from older wells, would mark a turning point for the Marcellus - and the whole U.S. gas market.

The Energy Information Administration now forecasts overall U.S. gas output to hit a record in 2016 for the sixth year in a row. A drop in Marcellus production could snap that streak and help prop up prices that have fallen by two thirds since 2010.

U.S. natural gas production has risen 30 percent since 2008 when the development of hydraulic fracturing, or fracking, and horizontal drilling unlocked vast shale gas reserves, swamping the market with new supply and causing a collapse in prices.

The Marcellus area makes up nearly half of those shale reserves and the government expects the region to keep producing more in the coming years, albeit at a less furious pace.

To be sure, the impact of the slump in drilling permits could be mitigated by other factors. New pipelines coming online in 2016 will allow hundreds of wells already drilled to be hooked up to the grid. A harsh winter could also boost heating demand for natural gas.

Still, the retreat could weigh on Marcellus production well into next year, said Grant Nulle, an oil and gas economist at the EIA. "Those are very low numbers," Nulle said. "It is possible that producers could wait six months to drill after obtaining a permit, which could impact production into May or June," he added.

An as yet unpublished outlook from the EIA, which does not take into account the permit numbers, anticipates lower Marcellus production only through March, and a rise for the rest of the year. The EIA does not expect a full year's decline until 2019.

While gas keeps flowing, the drilling crews are gone and with gas prices near 14-year lows, producers have choked hundreds of wells in the region in the hope that falling supply will stem the slide.

Several gas producers, including Chesapeake Energy and Cabot Oil and Gas, have announced production cuts in the region.

Inflection Energy, a Denver-based privately-owned company with an office in Williamsport, has cut production from 50-70 percent of its wells, company spokesman Matt Henderson said.

"It is better to choke back than to sell into this market," Henderson said.


Read more at Reutershttp://www.reuters.com/article/2015/12/02/usa-marcellus-decline-idUSL8N13M49D20151202#45IzYCte4YmhXuYJ.99

If it’s proven that Exxon Mobil Corp. misled investors and the public on the science of climate change, Secretary of State John Kerry said he would be “outraged, furious” and predicted the company could be hit with a record lawsuit.

“I think that Exxon Mobil stands potentially to lose billions of dollars in what I would imagine would be one of the largest class-action lawsuits in history,” Kerry told Rolling Stone in a wide-ranging interview on foreign policy and climate change.

Asked if he would support such a lawsuit, Kerry said, “I would support the investigation into what happened, and, based on the facts, I'd pursue the facts. You pursue the truth in this kind of a situation.”

Reports by InsideClimate News and a team of Columbia University journalists in the Los Angeles Times have accused the oil giant of quietly studying the negative impacts of carbon dioxide on the atmosphere while publicly questioning the science of climate change.

Exxon has denied the claims. In a letter to Columbia officials earlier this month, the company accused the journalists of engaging in unethical practices and ignoring evidence from the company.

The reports have led environmental groups and the three major Democratic presidential candidates to push the Department of Justice to investigate. New York Attorney General Eric Schneiderman has also launched a probe.

Kerry said that, if true, Exxon’s actions would be on par with those of cigarette companies that ignored the cancer-causing nature of their products.

“It's the same thing,” he said. “It's immoral and incredibly damaging to everybody's global interests. It's a betrayal.”

http://thehill.com/policy/energy-environment/261668-exxon-could-lose-billions-in-climate-suit-kerry-predicts