Iran will return to the global oil market with maximum capacity once the sanctions against the country are lifted following Iran's nuclear deal with world powers, a deputy oil minister was quoted as saying on Tuesday.

Iran views the Asian market as a top priority for selling its crude oil, Mohsen Qamsari, director of international affairs at the National Iranian Oil Company was cited as saying by Shana, the oil ministry's news agency.

"We will try to maximise our crude export capacity to Europe and restore 42 to 43 percent share in the European market before the sanctions were imposed," said Qamsari.

Oil Minister Bijan Zanganeh said last month that Iran was aiming to add 500,000 barrels per day (bpd) to production within two months of easing Western sanctions that have halved shipments in recent years, and as much as 1 million bpd in six to seven months.

But years of underinvestment mean Iran may struggle to get its oil industry anywhere near full potential, analysts say. It will also take time for Tehran to raise output as nuclear inspectors verify Iran's compliance with the terms of any deal and sanctions are slowly removed.

A Reuters poll of 25 oil analysts from leading banks and brokerages forecast Iran would be able to raise crude oil output by 250,000 to 500,000 bpd by the end of this year and by up to 750,000 bpd by mid-2016.


http://www.reuters.com/article/2015/07/14/iran-nuclear-oil-idUSL5N0ZU22J20150714

Two gas tankers built by the Sinopacific Offshore and Engineering were named on Tuesday, and will soon be shipping shale gas to Europe from the United States, officials said.

The ships will join an eventual eight-strong fleet of tankers operated by Swiss-headquartered petrochemical manufacturer Ineos Group Ltd, which will carry 800,000 tons of shale gas annually from the U.S. to its European manufacturing plants.

Jim Ratcliffe, Ineos' founder and chairman, said the $1 billion project will help revolutionize the European chemicals industry by reducing both feedstock and energy costs.

"Bringing U.S. shale gas to Europe is a huge undertaking, involving Ineos experts from across the globe. To see these two ships finally completed here in China means that this vast project will soon be fully operational."

Simon Liang, Sinopacific Offshore and Engineering's chairman and CEO, said more than 2,000 people had been involved in the building of the two "Dragon Class" ships, each of which required about one-million man hours of work.

The JS Ineos Insight and JS Ineos Ingenuity will join six other vessels in creating what the company described as a "virtue pipeline", to transport over 800,000 tons of gas a year at minus 90 degrees centigrade across the Atlantic to plants in Norway and Scotland.

Each ship will be the length of two soccer pitches and be able to carry over 27,500 cubic meters of liquefied gas. The first two ships will begin their maiden voyage this month.

"We have seen U.S. shale gas revolutionize U.S. manufacturing and we believe the completion of this project will help do the same for Europe," said Ratcliffe.

http://en.chinamining.com.cn/News/2015-07-15/1436923552d72923.html

Gas imports in the UK increased by 9.1 percent to 156.3 TWh in the first quarter of this year, as compared to the same period in 2014.

Liquefied natural gas imports accounted for 22 percent of total imports, according to data by the Department of Energy & Climate Change (DECC).

The majority of the UK imports originated in Norway (61 percent) and the LNG from Qatar (19 percent).

According to DECC, the UK’s gas demand rose by 9.6 percent in the quarter reflecting cooler temperatures and an increase in demand for space heating.

Energy industry saw a 13 percent increase in gas use, domestic and other final user demand also increased by 13 and 12 percent respectively.

Gas consumption within the iron and steel industries increased 8.4 percent and within other industry by 2.4 percent.

Total production of natural gas in the first quarter of 2015 was 114.8 TWh, 0.5 percent lower than a year before.

http://www.lngworldnews.com/uk-q1-gas-imports-up-9-1-percent/

Russian oil and condensate production reached a new post-soviet record of 10.7 million barrels a day in 2015, according to the latest analysis from Wood Mackenzie.

The research firm claims that condensate production will increase by 50 percent by 2018, compared to 2014 levels, although Wood Mackenzie warns that Russia could face a sizeable production gap after 2020, when the impact of Western sanctions kick in.

"We see Russia defying expectations in terms of 2015 liquid production levels achieving a new post-soviet record of 10.7 million barrels per day. The steady increase seen in the first half of this year is contrary to many pessimistic predictions, due to the turbulent geopolitical situation for the country as a result of the Ukraine crisis and subsequent Western sanctions. We see actual growth in liquids being driven by condensate, but given the unfavourable macro-economic situation with a volatile Rouble and depressed oil price, there is significant uncertainty for Russian production in the longer-term, post 2020."

"Despite West Siberia's production peaking in the 1980s, the region remains core and is expected to contribute 60 percent of Russia's liquids production this year. Russian operators are looking at deeper and more complex reservoirs such as the Tyumen and Achimov, these areas are widely regarded as 'hard-to-recover' but are still far easier to develop than unconventional shale plays such as the gargantuan Bazhenov expanse. Currently the Tyumen and Achimov areas each contribute between 6-7 percent of West Siberian (4 percent of Russia's overall) production and we expect this could more than double by 2020."

- See more at: http://www.rigzone.com/news/oil_gas/a/139608/Russian_Oil_and_Condensate_Production_Hits_PostSoviet_Record?rss=true#sthash.nOmzcYMV.dpuf

Oil producer Afren Plc warned that its near-term production would likely be "materially lower" than expected as uncertainty over the results of a business review made it unable to assess its financial position.

The London-listed company said that the uncertainty spurred it to seek the suspension of trading in its shares.

Afren, which has been burdened by debt, said it would talk to its bondholders regarding its request for a further $30 million funding.

http://www.reuters.com/article/2015/07/15/afren-restructuring-idUSL4N0ZV2TS20150715

Oil and gas producer WPX Energy Inc said it would acquire privately held RKI Exploration & Production LLC for $2.35 billion, the latest in a series of deals brought on by a steep drop in crude prices.

WPX, which will also assume $400 million of RKI's debt, said the deal would give it access to the liquids-rich Permian basin of Texas and New Mexico - the biggest and fastest growing U.S. shale oil field.

The deal comes two months after Noble Energy Inc said it would buy Rosetta Resources Inc for about $2 billion in the first significant shale deal since the oil rout began last summer.

A nearly 50 percent drop in crude prices since highs of over $100 per barrel in June last year has lead to several big-ticket acquisitions, including Royal Dutch Shell's $70 billion deal for BG Group.

The assets WPX is buying produce about 22,000 barrels of oil equivalent per day, 69 percent of which is oil and natural gas liquids.

With the acquisition, WPX expects oil to account for nearly a third of its output in 2016 compared with about 20 percent now. The deal is expected to close by the end of the third quarter.

WPX said on Tuesday it planned to increase the rig count in the Permian basin to six from four by the end of the year.

With crude prices steadying at about the $50 mark, several oil producers including EOG Resources Inc, Concho Resources Inc and Devon Energy Corp are putting rigs back to work and boosting production.

The deal excludes RKI's operations in the Powder River basin in Eastern Wyoming, WPX said. RKI will divest or transfer the assets before completion of the deal.

http://www.reuters.com/article/2015/07/14/rki-exploration-production-ma-wpx-energy-idUSL4N0ZU3LV20150714

Canadian oil-sands company Suncor Energy Inc. said Tuesday that it and several partners will begin a pilot project using radio frequencies to produce heavy crude, which the company said was the first such production test of the technology on subterranean oil-sands deposits.

The consortium, which includes oil-sands producers Devon Energy Corp. andCnooc Ltd. unit Nexen Energy ULC, along with Melbourne, Florida-basedHarris Corp., will start small-scale test production at a pair of wells on Suncor’s Dover site in northern Alberta and run the pilot for about two years.

Radio-frequency-based extraction holds the promise of being more environmentally friendly and cheaper than standard oil-sands production. It could reduce or eliminate the need for steam generated by heating water with natural gas, an expensive and carbon-intensive process.

“If successful and commercially viable, it has the potential to improve economic and environmental performance in the oil sands by eliminating the need for water” to produce oil, Gary Bunio, Suncor’s general manager of oil-sands strategic technology, said in a statement.

The pilot project will cost about 44 million Canadian dollars (US$34.6 million) and, if successful, will lead to a full commercial scale field test, according to a Suncor spokesperson.

The new technology involves sending electromagnetic waves into hockey-puck-hard deposits of oil embedded in sand underground, something like an underground microwave oven. The liquefied crude, or asphalt, is then mixed with a recyclable chemical solvent and retrieved via a horizontally-drilled well.

Known as enhanced solvent extraction incorporating electromagnetic heating, it is one of a handful of developing technologies that may be used in the future to exploit large-scale deposits of oil sands that are too deep underground to reach by strip mining.

http://www.wsj.com/articles/suncor-partners-test-radio-frequency-based-crude-extraction-1436920921

SandRidge Energy Inc. was supposed to be an undervalued turnaround story with the potential to double its stock price in short order. That was when the stock was at $5 per share and oil was persistently in the triple digits. Now, however, with oil hovering around $50 a barrel, the stock is under a buck per share. It's a stock price that suggests that there isn't much hope left for SandRidge Energy investors that this company will ever turn around as its issues continue to mount.

While the persistently weak oil price is at the center of SandRidge Energy's troubles, it is far from its only issue. A more pressing issue is the gargantuan amount of debt it borrowed to fund its growth over the past few years. It's debt that is becoming a nearly insurmountable weight as the company doesn't stand a chance of drilling its way out of it as it had planned to do in years past.

After its most recent $1.25 billion debt issuance, SandRidge now has $4.6 billion in debt outstanding. That's an incredible amount of debt and, for perspective, there are oil companies 10 times its size with similar levels of outstanding debt. Worse yet is the fact that the PV-10 value of SandRidge's reserves, or the present value of its proved reserves discounted by 10%, is a mere $3.04 billion at recent projected forward oil and gas prices. It's an imbalance that suggests that SandRidge Energy could be insolvent if current prices persist.

To make matters worse, SandRidge's ability to repay that debt is in serious jeopardy. For example, last quarter 64% of SandRidge Energy's revenue didn't come from its oil and gas sales, but from oil and gas hedge gains. It's a safety net that Bloomberg recently reminded investors is going away as SandRidge's hedges begin to roll off as we head into 2016. In fact, as Bloomberg pointed out, SandRidge hedged 90% of its production in 2015, but only has about a third of 2016 production hedged. That suggests its cash flow will drop significantly in 2016, leaving it with less cash to drill new wells along with less cash to maintain its debt.

Another emerging concern is the rash of earthquakes to hit the state of Oklahoma, where SandRidge Energy operates. The state's energy regulator recently called the spike in quakes a "game changer" and is now considering tougher restrictions on drilling activity. The driving force behind these quakes is believed to be high-volume wastewater injection wells, which are critical to the operations of companies like SandRidge Energy as these wells significantly reduce the costs of trucking wastewater away from wells.

Not only is this system critical to SandRidge Energy's operations, but it had planned to put its entire saltwater disposal system into an MLP and use that business to raise capital via an IPO. That would enable it to recoup some of the more than $600 million it invested into the system. Its capital that the company needs given its hefty debt load, but money it might never see if regulators put restrictions on these wells.

SandRidge Energy's main focus right now is to get its well costs below $2.4 million, which would enable it to earn a 50% internal rate of return on new wells at current commodity prices. That return just happens to be the same one the company was earnings when oil was in the $80-per-barrel range when its well costs were north of $3 million per well. If it's successful, the company will be able to cut its capital spending from its current rate of $700 million down to an annual average of $400 million to maintain flat production.

All that being said, even if that plan works, it really just has the company stuck in neutral. It doesn't grow its cash flow so that it can support its debt load. Furthermore, it's questionable whether the company will even be able to generate $400 million in cash flow to support that type of capital program given its debt load. Instead, its only hope of surviving is for oil prices to rally meaningfully higher and it's anyone's guess when, or even if, that will happen.

http://www.fool.com/investing/general/2015/07/14/is-there-any-hope-left-for-sandridge-energy-inc-in.aspx?source=eogyholnk0000001