Russia sees no need for renewing discussion of an oil-output freeze at current crude prices, while leaving open the possibility for the future, Energy Minister Alexander Novak told journalists in Moscow Monday.

“A basis for this has yet to develop, considering prices are still at more or less normal levels,” Novak said. “If prices will fall then that necessity will most likely arise.”

Russia, Saudi Arabia and other major oil exporters met in Doha in April in a bid to stabilize global markets by putting caps on output. The effort collapsed as Saudi Arabia demanded that rival Iran join the pact. At the time, Iran had ruled out any limits as it ramped up production after the lifting of international sanctions.

The Russian energy minister did not exclude the possibility that he could meet with his Saudi counterpart, Khalid Al-Falih, in Algiers next month.

Members of the Organization of Petroleum Exporting Countries intend to talk about oil markets and potential cooperation with other producing nations at the International Energy Forum in Algiers in September, but there are no specific plans to renew the freeze, according to two delegates from the group who asked not to be identified.

http://www.bloomberg.com/news/articles/2016-08-08/russia-sees-no-need-for-oil-freeze-talks-currently-novak-says

Trafigura has extended the credit period for two independent Chinese refiners to buy crude, marking a more aggressive push by the global commodity trader to
feed the growing appetite of so-called "teapot" refiners to import oil, sources said.

Trafigura has sold at least 3 million barrels of Latin American crude, worth around $125 million at current benchmark prices, to teapots Shouguang Luqing Petrochemical Co Ltd and Huifeng Petrochemical Group, according to three trading sourcesm with knowledge of the transactions.  

Delivered in May and June, Trafigura allowed the buyers to pay for the cargoes 90 days after loading, said these sources.  

Normally suppliers offer a tighter 30 to 60 days to make payment.

Teapots, which have boosted their imports after Beijing granted them import permits, are hungry to secure financing but the rush to purchase by the relatively inexperienced buyers has increased trading risks with cases when deals have soured.
 
One trader with knowledge of the recent Trafigura deals said that these type of deals should suit the Swiss trading house given its extensive operations but other suppliers might not be prepared to conduct similar trades.

"We will look very closely at how these deals unfold," another source, a senior oil banker, said. A Trafigura spokeswoman declined to comment when asked to
confirm these deals.
 
Under a "third-party processing" agreement, the Chinese counterparts committed to supply Trafigura with refined fuel,mostly gasoline, allowing the transactions to enjoy taxexemptions for the crude inflows and refined fuel exports, according to Chinese customs rules.

Under one of the deals, Trafigura sold 1 million barrels of Venezuelan Merey crude to Shouguang Luqing, a 60,000-barrel-per-day refinery in eastern Shandong province, and received a commitment for 50,000 tonnes of gasoline, according
to a Luqing procurement manager.

Trafigura also sold to Huifeng Petrochemical, a 116,000-bpd teapot refiner, 1 million barrels of Colombian Vasconia crude and 1 million barrels of Argentinian Escalante, under the same terms, according a Huifeng official.

Trafigura has emerged as one of the world's leading oil trading companies. It was the first to sell Iranian oil to teapots, selling part of a 2-million-barrel cargo on the Olympic Target tanker to at least two refiners.

The first teapot crude import licences were only granted last year and they have become a key driver behind the 14 percent rise in China's oil imports and its bulging fuel surplus.

Chinaoil, trading arm of China's state-run PetroChina, in July clinched a similar deal with Huifeng to supply 200,000 barrels of crude on credit and offtaking 10,000 tonnes of gasoline, said a trader with direct knowledge of the matter.

http://www.reuters.com/article/trafigura-china-teapots-idUSL3N1AJ2F3

The amount of Iranian oil on floating storage has decreased by

2.0 M Barrels

As the Navarz leaves the fleet

The Current Amount Of Oil Stored

46.6 M Barrels

Windward

https://mail.google.com/mail/u/0/?shva=1#inbox/15664de5f6f4f277?compose=156689db85b23b65
 

China fuel exports hit record in July, crude imports up 1.2 pct

China's fuel exports rose to a record in July as easing demand growth and a surplus in refined oil products pushed refiners to increase shipments to overseas buyers.

The refined fuel exports surged 52.3 percent from a year ago to a monthly record 4.57 million tonnes, data from the General Administration of Customs showed on Monday.

China imported 2.08 million tonnes of oil products in July, down 13 percent from last year, leaving net exports at 2.49 million tonnes, or 562,258 barrels per day (bpd).

China's exports of fuel products have risen sharply this year, up around 46 percent for the January-July period, reflecting this year's swelling refinery throughput at private oil processors and adding to worries that refining margins might come under persistent pressure.

"Growth in China's fuel exports will be strong throughout the third quarter," a Beijing-based trader said. "Refiners are starting to tighten crude runs as well as increase exports to balance the surplus in the domestic market."

The domestic oil product surplus and rising crude stockpiles are dragging on growth in crude oil imports, which rose just 1.2 percent from a year ago to 31.07 million tonnes in July, or about 7.32 million bpd, the customs data showed.

On a daily basis the volume was the lowest since January, and down from June's 7.45 million bpd. It was the second month that annual growth in crude imports had eased.

Thomson Reuters' Research had estimated July's crude imports

China's private or independent refiners, known as teapots, have been a main driver of crude imports, ramping up refinery runs despite the oil product glut and accounting for over half of incremental crude oil purchases in the first half of 2016.

International trading houses as well as major oil exporting countries are eyeing this new group of crude buyers, who are rushing to fulfil their import quota before the year end.

The National Iranian Oil Company (NIOC) sold a 2 million-barrel cargo to teapots in July, following rare shipments to the independents from Saudi Arabia and Kuwait.

For the first seven months of the year, China imported 217.6 million tonnes of crude oil, or 7.46 million bpd, up 12 percent.

http://www.reuters.com/article/china-economy-trade-crude-idUSL3N1AM2C0

China-Bound VLCCs Surge to 3-Month High: BBG. Last gasp to fill the SPR?

@zerohedge

Baker Hughes Incorporated announced today that the international rig count for July 2016 was 938, up 11 from the 927 counted in June 2016, and down 180 from the 1,118 counted in July 2015. The international offshore rig count for July 2016 was 226, up 3 from the 223 counted in June 2016, and down 38 from the 264 counted in July 2015.

The average U.S. rig count for July 2016 was 449, up 32 from the 417 counted in June 2016, and down 417 from the 866 counted in July 2015. The average Canadian rig count for June 2016 was 94, up 31 from the 63 counted in June 2016, and down 89 from the 183 counted in July 2015.

The worldwide rig count for July 2016 was 1,481, up 74 from the 1,407 counted in June 2016, and down 686 from the 2,167 counted in July 2015.

http://www.oilvoice.com/n/Baker-Hughes-announces-July-2016-rig-counts/928dcdaf05a0.aspx?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OilvoiceHeadlines+%28OilVoice+Headlines%29

For Norway, the collapse in crude prices has a silver lining: output has exceeded expectations every month for the past two years.

That’s likely to continue as oil companies boost efficiency and pump at full pace as revenue dwindles, according to the head of Petoro AS, the state-owned oil company that owns more than a quarter of the petroleum output in Western Europe’s biggest producer.

“Improvement efforts and the focus on profitability have led to very high regularity,” Chief Executive Officer Grethe Moen said in a phone interview on Friday from Stavanger, Norway’s oil hub. “There’s no sign this won’t last, at least thus far.”

Companies, led by state-controlled Statoil ASA, which operates about 70 percent of the fields, have slashed investments and sought to increase efficiency to combat a rout that has left oil prices 60 percent lower than two years ago. But even as spending on future production dwindles, current output has risen thanks to more efficient operations and past investments that have just started delivering barrels.

Crude production in the Scandinavian nation has exceeded the Norwegian Petroleum Directorate’s forecasts each month since July 2014, while gas output has missed expectations in only three months over that time. The amount of oil pumped in the first six months of 2016 was 2.8 percent higher than expected, the NPD said in July.

If oil production continued to exceed at the same pace for the remainder of the year, it would rise to 91.5 million cubic meters from 90.8 million cubic meters in 2015, Bloomberg calculations based on NPD figures show. That would defy a forecast drop and mean output unexpectedly rose for a second year. It would also be a third consecutive annual increase, after output halved from a peak in 2000 .

Gas output has beaten forecasts by 12 percent this year, on pace to surpass last year’s record 117.2 billion cubic meters.

That’s balm for the government, which is this year being forced to dip into its $880 billion wealth fund for the first time to make up for budget shortfalls. Direct income from its oil and gas fields, the cash it gets from Petoro, fell to a 13-year low in the second quarter.

For now, it’s hard to know how much of the companies’ cuts are actually lasting improvements, the Petoro CEO said. Savings need to be found in areas where they don’t only hurt the supply companies, which have been put under tremendous pressure to reduce the prices they charge for services and equipment from engineering and drilling to catering and platform construction.

“You also need to talk about real efficiency improvements,” Moen said. “It’s important to have a sustainable supplier industry in Norway, which can both deliver efficient products and develop the new technology that allows us to take the next step forward.”

Referring to the merger of Det Norske Oljeselskap ASA and BP Plc’s Norwegian unit, Moen said it wouldn’t be “unnatural” that the market downturn also led to a change in the industry structure through more transactions.

“What’s important to us is that we have a diversity of companies that have the ability to implement projects,” she said.

http://www.bloomberg.com/news/articles/2016-08-07/western-europe-s-biggest-oil-producer-has-a-surprise-for-markets

Libya has started maintenance work at Es Sider port, the nation’s largest oil export terminal, as part of plans to increase output from Africa’s biggest holder of crude reserves.

Exports should resume in a month once official orders are received to reopen the port, Galal Mohamed, head of operations at Waha Oil Co. , said in a phone interview Sunday from Libya’s eastern city of Ras Lanuf. Es Sider, operated by Waha Oil, has been closed since December 2014 when armed groups attacked the port. The state National Oil Corp. has engineers and other workers at the port to evaluate damages and decide when to resume exports, NOC’s Ibrahim Al-Awami said by phone.

“We haven’t received official orders to reopen the port and resume exports, but there were intensive meetings with the National Oil Corp. officials last week to discuss this,” Mohamed said. Six of the port’s 19 storage tanks are damaged from fighting over the last two years, he said.

Libya is seeking to boost crude production after rival leaders agreed last month to unify the state NOC under a single management. The bulk of the country’s oil infrastructure is either damaged or straddles disputed territory as armed factions fought for control of producing fields. The nation pumped 300,000 barrels a day of oil in July, compared with as much as 1.78 million a day in 2008, three years before a revolt led to the overthrow of the regime of Moammar al Qaddafi, according to data compiled by Bloomberg.

Oil Ports

Waha Oil will be able to produce 75,000 barrels a day in the first six months after resuming operations, Mohamed said. Waha fields stopped producing in 2014 after the Es Sider oil port was halted. Es Sider has export capacity of 340,000 barrels a day.

Libya’s unity government announced July 28 an agreement to pay salaries to Petroleum Facilities Guard members in exchange for reopening the ports of Es Sider, Ras Lanuf and Zueitina. The NOC said the resumption of exports from the ports and the release of budget money to the company would help boost production by more than 900,000 barrels a day by the end of the year.

NOC is working to overcome “difficulties and technical problems in the entire oil fields,” it said in a statement on its website Sunday.

Total has released a statement claiming that it has started production at the Incahuasi gas and condensate field in Bolivia. The development is the company’s first in Bolivia, and has a production capacity of 50 000 boe/d. The field is located over 5600 m beneath the Andean foothills, and 250 km from Santa Cruz de la Sierra, Bolivia. The development is operated by Total (50%), alongside partners Gazprom (20%), Tecpetrol (20%) and YPFB Chaco (10%).

The President of Total Exploration & Production, Arnaud Breuillac, said: “Incahuasi is one of the largest gas and condensate fields brought on stream in Bolivia. Incahuasi’s production will contribute to Bolivia’s gas exports to Argentina and Brazil as well as domestic consumption.

“Delivered within budget, Incahuasi is the fourth start-up this year and as a low-cost project with a long production plateau, it will contribute to the Group’s production growth in 2016 and beyond.”

The first phase of the field development will involve three wells, a gas treatment plant and 100 km of associated export pipelines. The second phase is currently being considered, and would involve an additional three wells.

http://www.lngindustry.com/liquefaction/05082016/Total-commences-production-at-Bolivian-gas-field-2866/

The National Iranian Gas Co. (NIGC) is in talks with a “well-credited” unnamed German company concerning gas trading, a deal that could pave the way for exports and gas shipments to Western Europe, Kallanish Energy understands.

According to Iranian state news agency Shana, NIGC’s director of international affairs, Azizollah Ramezani, said “talks are underway for Turkmen gas swap with Azerbaijan through a private company.”

The official added Iran aims to increase its global gas trade and is currently negotiating with Oman, Kuwait and the UAE. The Iranian ambition to expand its global share will cover liquefied natural gas (LNG) markets in Turkey, Armenia, Azerbaijan, Afghanistan, eastern and western Europe, India, China and Southeast Asia, he said.

Major international firms such as Gazprom, Siemens, SK Telecom and Kogas have already signed contracts with NIGC, covering cooperation in natural gas, LNG, financing, natural gas storage among others, Ramezani revealed.

http://www.kallanishenergy.com/2016/08/04/iran-eyes-european-gas-exports-german-trader/

An Aim-listed oil and gas explorer will today claim that its prospects could be “transformed” after making a “material” discovery with a well in Morocco.

Sound Energy, which is a member of London’s junior market, will confirm that the gas encountered by its TE-6 onshore well in the Tendrara licence in the north east of the country is a “significant” discovery and is flowing at “a highly commercial rate” of 17.5m standard cubic feet per day.  

The company will now press on with its second well in the licence area and is planning a third for later in the year.

“I am absolutely delighted to confirm a material commercial gas discovery at Tendrara,” said James Parsons, Sound’s chief executive who has previously spent 12 years working for oil major Royal Dutch Shell.

He claimed that Tendrara together with the adjacent Meridja permit area, in which Sound also has a stake, “have the potential to be a material hydrocarbon province on a regional scale and therefore to transform both Sound Energy and the Moroccan gas industry”.

Confirmation of Sound’s find at the Tendrara licence, in which it owns a 27.5pc stake, has been highly-anticipated by investors, with the explorer’s shares almost trebling in the last month to 59¾p, valuing the company at about £315m. The company will say today that the flow rate of TE-6 is “significantly above initial expectations”.  

Sound’s partners on Tendrara include the American oilfield services giant Schlumberger and Morocco’s Oil & Gas Investment Fund. The explorer also has assets in Italy.

http://www.telegraph.co.uk/business/2016/08/08/sound-energy-boosted-by-morocco-gas-discovery/

Companies added more drilling rigs to the Texas oilfields as the total U.S. rig count continues to grow.

The number of rigs actively seeking oil grew by seven this past week, and all of them in Texas’ Permian Basin or Eagle Ford shale. The overall rig count only grew by one, because the amount of rigs drilling for natural gas fell.

The total rig count is now at 464 rigs, up from an all-time low of 404 rigs in May, according to data from the Baker Hughes oil field services firm. Of the total tally, 381 of them are primarily drilling for oil.

The resilient Permian Basin in West Texas added five rigs in the past week, while the Eagle Ford tacked on four additional rigs. However, northern Texas’ Barnett shale lost a rig, as did Colorado’s DJ-Niobrara region.

Despite this week’s jump, the oil rig count is down 76 percent from its peak of 1,609 in October 2014 before oil prices began plummeting.

Apart from the Permian, other additions included three more rigs in Texas’ Barnett shale, two in the Eagle Ford, and one in the Granite Wash in the Texas Panhandle

After dipping below $40 a barrel early this week, the price of crude oil has since rebounded to nearly $41.50 a barrel. The price of U.S. oil hit a low $26.21 on Feb. 11.

http://fuelfix.com/blog/2016/08/05/the-oil-rig-count-keeps-growing-in-texas/

While oil is mired in a bear market, prices in an obscure corner of the fuel world are only going higher.

Renewable fuel credits surged 32 percent in the past two months, even as oil slumped. This year, U.S. refiners from CVR Refining LP to Valero Energy Corp. will pay $1.8 billion for the credits, known as RINs, adding to the pain of the lowest summer profit margins in five years. The market has gotten so frothy that fuel makers are looking to increase exports to avoid the cost and ethanol lobbyists are calling for an investigation into potential price manipulation.

"RINs continue to be an egregious tax on our business and have become our single largest operating expense, exceeding labor, maintenance and energy costs," Jack Lipinski, chief executive officer of CVR Refining, said last week in the company’s second-quarter earnings call. "As a matter of fact, RINs are double our labor cost."

A Renewable Identification Number, or RIN, is created along with each gallon of ethanol or biodiesel that’s produced. Refiners and importers need to meet a biofuel quota set by the government, either through blending fuel with ethanol or buying RINs. Companies that don’t operate retail gasoline stations are feeling a growing financial burden from the rising costs, as they are unable to generate the credits by blending biofuels with the petroleum-based fuels they produce.

Prices for 2016 ethanol credits rose to 97.75 cents July 13, according to data from Progressive Fuels Ltd. compiled by Bloomberg, and were pegged at 91.25 cents Wednesday. The credits last rose this high in 2013, when government quotas for using biofuels such as ethanol were increasing faster than gasoline demand, leaving fuel makers with an obligation they couldn’t meet by blending ethanol into gasoline. This year, similar fears of a credit shortage are driving prices higher.

The 2016-vintage credits are forecast to average 95 cents each this quarter, the highest quarterly cost on record, according to Tudor Pickering Holt & Co. The prior high was set in the third quarter of 2013 at 85 cents, during the summer of RINsanity.

"It’s called RINsanity the sequel," said Andy Lipow, president of Houston-based Lipow Oil Associates LLC. "The reason that it’s the same as 2013 is because we see an ever-increasing amount of renewable fuels being mandated into a pool that, for a variety of reasons, cannot be accommodated."

Program Complaints

On Thursday, the American Fuel and Petrochemical Manufacturers trade group petitioned the Environmental Protection Agency to shift the responsibility of program compliance with distributors who blend gasoline with ethanol for delivery to filling stations, not with refiners who make the petroleum-based fuels. The appeal comes six months after Valero, the country’s largest independent refiner, sued the agency that enforces Renewable Fuel Standard program. Valero and the others believe the blending program needs restructuring to even the playing field.

"The simple fact is that RINs were intended to be a certificate of compliance under the RFS, not a method of extracting value or creating winners and losers based on asset configuration in the value chain," George Damiris, HollyFrontier Corp.’s chief executive officer, said on the company’s second-quarter earnings call.

This week the biofuel industry’s top lobbyist, the Renewable Fuels Association, urged Timothy Massad, the U.S. Commodity Futures Trading Commission Chairman, to investigate potential manipulation in the RIN market.

"While various theories have been advanced, the real reasons for this dramatic increase in RIN prices remain unclear. Basic market fundamentals suggest RIN prices should have remained stable — or fallen — following the proposal’s release," Bob Dinneen, president of the Renewable Fuels Association wrote.

Goldman Sachs analyst Neil Mehta downgraded PBF Energy Inc. to neutral in late June, citing higher RIN costs. "We view higher RINs prices as a headwind for merchant refiners without large retail/wholesale businesses," Mehta wrote in a June 29 note.

More Exports

Merchant refiners like PBF and Valero may find some relief from rising RIN costs by exporting the fuels that would otherwise come with an obligation to buy the credits. And just as exports provide relief from RINs, some importers of gasoline and diesel will bear a bigger burden.

"Since fuel importers incur a liability to hold RINs for the gasoline they send to the U.S., the rising price of the credits is a potential stumbling block for importers," Robert Campbell, head of refined products research at Energy Aspects, wrote last month. Campbell also noted that prices fell sharply after 2013’s surge.

"Pricing in the RINs market is notoriously opaque and volatile, and we would not be surprised if prices were to fall back suddenly," he said.

PBF has been taking steps to increase its export capabilities in refineries acquired from Exxon Mobil Corp. Gasoline export cargoes began to depart from Chalmette, Louisiana, in the first quarter after PBF made repairs to the marine facilities that Exxon left in "disrepair." The newly-acquired Torrance, California, refinery near Los Angeles may also provide fresh outlets for PBF’s gasoline.

"Very, very importantly, we want to get into the export market," Thomas Nimbley, PBF’s chief executive officer, said on the company’s second-quarter earnings call. We see the benefits "both from a RINs perspective and an overall netback standpoint," he said.

http://www.bloomberg.com/news/articles/2016-08-04/oil-refiners-cry-foul-as-rinsanity-returns-amid-margin-squeeze

Crew Energy Inc. is pleased to announce our operating and financial results for the three and six month periods ended June 30, 2016, and an update on the Company's continued progress developing our world-class Montney assets in northeast British Columbia.

Q2 HIGHLIGHTS

Achieved production of 21,950 boe per day, 24% higher than the same period in 2015, and 8% lower than the previous quarter, reflecting reduced capital spending, lower activity levels and the continued shut-in of uneconomic production during the second quarter;

Generated funds from operations of $16.0 million ($0.11 per diluted share), 37% higher than the first quarter of 2016, primarily attributable to materially lower cash costs and improved oil and liquids pricing;

Lowered total cash costs per boe by 28% over the same period in 2015, highlighted by a 31% reduction in operating costs per boe, a 42% reduction in general & administrative expenses per boe, and a 62% reduction in royalties per boe year over year;

Successfully lowered operating costs to $6.04 per boe, 6% lower than the previous quarter, with operating costs at Septimus and West Septimus ('Greater Septimus') falling 9% from first quarter 2016 to average $4.02 per boe;

Completed our second quarter capital program investing $15.1 million in the quarter with approximately 84% allocated to drilling, completions, equipping and tie-in, including approximately $7.6 million that was directed to completing wells at Greater Septimus;

Continued to enhance drilling and completion techniques at Greater Septimus, achieving record low well costs between $3 and $3.5 million to drill, complete, equip and tie-in;

Improved completion design in three wells at West Septimus which materially improved flow test rates that averaged 11 mmcf per day over a five to eighteen day flow test period at an average flowing casing pressure of 1,120 psi;

Successfully completed a well at Septimus in a new Lower 'B' Upper Montney Stratigraphic interval that achieved a production rate of 8.7 mmcf per day at an average flowing casing pressure of 1,730 psi at the end of a five day test period; and

Maintained ongoing financial flexibility and a strong balance sheet with quarter-end net debt that was $3.1 million lower than the previous quarter at $242.7 million, including $150 million of senior notes (including deferred financing costs) and $97.2 million of bank debt or 41% drawn on the Company's $235 million credit facility

http://www.oilvoice.com/n/Crew-Energy-announces-second-quarter-2016-results/5ee5775200a5.aspx?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OilvoiceHeadlines+%28OilVoice+Headlines%29