OPEC pumped more oil in November than in any month since late 2008 and forecast little increase in demand for its crude next year, pointing to a larger supply surplus even as low prices hurt rival producers.

The Organization of the Petroleum Exporting Countries in a report also forecast supply from non-member countries will fall more sharply next year, which would suggest its strategy, reaffirmed last week of defending market share, is working.

OPEC's report follows an acrimonious OPEC meeting on Dec. 4, where it rolled over a policy of pumping crude to safeguard market share, despite oil prices LCOc1 that have more than halved to $40 a barrel in 18 months due to excess supply.

A year ago, Saudi Arabia pushed though an OPEC decision to defend market share instead of cutting output to support prices, hoping to slow growth in rival supplies such as U.S. shale oil.

"U.S. tight oil production, the main driver of non-OPEC supply growth, has been declining since April," OPEC said in the report. "This downward trend should accelerate in coming months given various factors, mainly low oil prices and lower drilling activities."

Supply outside OPEC is expected to decline by 380,000 barrels per day (bpd) in 2016, the report said, as output falls in regions such as the United States and former Soviet Union. Last month, OPEC predicted a drop of 130,000 bpd.

But OPEC also increased its 2015 non-OPEC supply growth forecast by 280,000 bpd, citing upward revisions to output from the United States, Brazil, Russia and the UK, among other countries.

As a result of the report's changes to 2016 and 2015 non-OPEC supply forecasts, demand for OPEC crude next year is expected to average 30.84 million bpd - just 20,000 bpd more than OPEC expected previously.

OPEC production, which has surged since the policy shift of November 2014 led by Saudi Arabia and Iraq, is far higher than forecast demand. Supply rose by 230,000 bpd in November to 31.70 million bpd, said the report, citing secondary sources.

That is the highest monthly rate since late 2008 when Indonesia was still an OPEC member, according to a Reuters review of OPEC's previous reports on the group's website. The latest figure does not yet include Indonesia, which rejoined OPEC last week boosting its ranks to 13 countries.

With extra barrels coming from OPEC and no sizeable increase in demand for OPEC crude, the report points to a 860,000-bpd supply surplus next year if the group keeps pumping at November's rate, up from 560,000 bpd indicated in last month's report.

OPEC left its 2016 oil demand growth forecast unchanged, predicting global demand would rise by 1.25 million bpd, marking a slowdown from 1.53 million bpd in 2015.


Read more at Reutershttp://www.reuters.com/article/us-opec-oil-idUSKBN0TT1DK20151210#TQO2IAw7Ce1FM3ek.99

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Output from the Organization of Petroleum Exporting Countries rose by 230,100 barrels a day in November to 31.695 million a day, the highest since April 2012, as surging Iraqi volumes more than offset a slight pullback in Saudi Arabia. The organization is pumping about 900,000 barrels a day more than it anticipates will be needed next year.

Benchmark Brent crude dropped to a six-year low in London this week after OPEC effectively scrapped its output ceiling at a Dec. 4 meeting as de facto leader Saudi Arabia stuck to a policy of squeezing out rival producers. Members can pump as much as they please, despite a global surplus, Iran’s Oil Minister Bijan Namdar Zanganeh said after the conference. Brent futures traded near $40 a barrel in London on Thursday.

Non-OPEC supply will fall by 380,000 barrels a day next year, averaging 57.14 million a day, with an expected contraction in the U.S. accounting for roughly half the drop, the organization said Thursday in its monthly report. It increased estimates for non-OPEC supply in 2015 by 280,000 barrels a day.

The group maintained projections for the amount of crude it will need to pump next year at 30.8 million barrels a day.

Iraqi production increased by 247,500 barrels a day to 4.3 million a day last month, according to external sources cited by the report, which didn’t give a reason for the gain.

Iraq has pushed output to record levels this year as international companies develop fields in the south, while the semi-autonomous Kurdish region increases independent sales in the north, according to the International Energy Agency. Production had dipped in October as storms delayed southern loadings and as flows through the northern pipeline were disrupted, according to Iraq’s Oil Ministry.

Production in Saudi Arabia slipped by 25,200 barrels a day to 10.13 million a day in November, OPEC’s report showed.

The report didn’t make any reference to how OPEC’s data will re-incorporate output from Indonesia, which rejoined the organization on Dec. 4 after an absence of seven years.

http://www.bloomberg.com/news/articles/2015-12-10/opec-says-crude-production-rose-to-three-year-high-in-november

China's oil reserves stood at 26.1 million tonnes, or 190.5 million barrels, in mid-2015, the country's statistics bureau said on Friday.

The figures include strategic and some commercial volumes.

China made its first announcement on the size of its strategic reserves in November 2014, putting them at 91 million barrels at the time.


Read more at Reutershttp://www.reuters.com/article/china-oil-reserves-idUSB9N13W00W20151211#mTgXiU3Q8Cu0HFBp.99

BP Plc, Chevron Corp. and the other partners in Australia’s largest oil and gas venture approved a $2 billion expansion in the project, the fourth major gas development at the North West Shelf in the past seven years.

The Greater Western Flank Phase 2 off the north-west coast will develop 1.6 trillion cubic feet of gas from six fields, the operator of the North West Shelf, Woodside Petroleum Ltd., said Friday in a statement. This project will start production in the second half of 2019, Woodside said.

The North West Shelf, which accounts for more than a third of Australia’s oil and gas production, represents investments of more than $34 billion, according to the project’s website.

The six equal participants own a 16.67 percent share. In addition to Woodside, BP and Chevron, the partners are BHP Billiton Ltd., Royal Dutch Shell Plc and Japan Australia LNG (MIMI) Pty, which is a joint venture between Mitsubishi Corp. and Mitsui & Co.

http://www.bloomberg.com/news/articles/2015-12-10/bp-chevron-back-2-billion-north-west-shelf-development-phase

The $24.7-billion Australia Pacific liquefied natural gas (APLNG) project, offshore Queensland, has started LNG production at its Curtis Island facility. 

ASX-listed Origin Energy reported on Friday that the project remained on track to export its first cargo by the end of the year. “With first LNG production, APLNG has now achieved its last major milestone prior to exporting LNG to customers in Asia,” said Origin CEO for integrated gas David Baldwin. 

“The Origin-operated upstream activities, which deliver gas to Curtis Island, are fully operational and performing well, and Origin, along with partners ConocoPhillips and Sinopec, are now focused on achieving first export.” The APLGN project comprises two processing trains, each with a 4.5-million-tonne-a-year nameplate production capacity.

http://www.miningweekly.com/article/production-starts-at-aplng-2015-12-11

Statoil acquires Alfra Sentral stake, becomes main operator in Eagle Ford

Norwegian operator Statoil has become the sole operator in the US Eagle Ford shale play after striking a number of deals with Repsol.

The company has acquired the Spanish players 13% interest in the acreage, as well as assuming operatorship of the BM-C-33 licence in Brazil’s Campos basin.

Statoil said it has also farmed down a 15% interest to Repsol in the Gudrun field on the Norwegian Continental Shelf.

It will still remain the operator and largest equity holder with a 36% interest.

The operator will also acquire a 31% equity share in the UK licence for Alfra Sentral, a field which spans the UK-Norway maritime border.

John Knight, Statoil’s executive vice-president for global strategy and business development, said: “We are delighted to be deepening our relationship with Repsol. In the current challenging market environment, these are innovative, value-enhancing transactions which will help control costs and strengthen Statoil’s portfolio for the long term.

“Statoil has ambitious goals for future activity, production and value creation on the Norwegian Continental Shelf and this deal supports our long term ambition.

“We are bringing a strong partner into Gudrun, an important NCS asset, and our increased interest in the Alfa Sentral development will strengthen our efforts to develop the important Sleipner area towards 2030”.

https://www.energyvoice.com/oilandgas/95547/statoil-acquires-alfra-sentral-stake-becomes-main-operator-in-eagle-ford/

ConocoPhillips, the largest U.S. independent oil company, said on Thursday it expects its 2016 capital expenditure to be 25 percent lower than this year's estimated budget, as it responds to a slump in oil prices.

The company forecast 2016 capital budget of $7.7 billion, and also said it expects to raise $2.3 billion from non-core asset sales.

A more than 60 percent fall in oil prices since June last year has forced oil and gas companies to scale back spending.

Global exploration and production spending is expected to fall by 11 percent in 2016, adding to a 20 percent decline in 2015, according to analysts at Evercore ISI.

Conoco said it expects 2016 production to grow 1-3 percent from an estimated 1,515-1,525 thousand barrels of oil equivalent per day (MBOED), on an adjusted basis, this year, excluding Libya.

The company raised $600 million from asset sales in the first three quarters of the year, and has agreements in place to raise another $1.7 billion from asset sales.


Read more at Reutershttp://www.reuters.com/article/conocophillips-spending-idUSL3N13Z42F20151210#fWoZeD5T19uyykQ5.99

Centrica, Britain's largest energy utility, expects to spend less than the 1.05 billion pounds ($1.6 billion) it had previously envisaged, mainly due to a cut in upstream investments, the company said on Thursday.

Centrica, which owns Britain's main household energy supplier British Gas, was forced to cut its dividend earlier this year as it has been hit hard by a fall in energy prices and slowing demand.

It said it was on track to deliver full-year earnings in line with expectations despite a second round of retail price cuts made in August. This year's adjusted operating cashflow is set to exceed 2 billion pounds, Centrica said, compared with 2.7 billion pounds in 2014.

"We are seeing underlying performance improvement against a softening commodity market," said Chief Executive Iain Conn, the former head of BP's downstream refining and marketing business who took over at Centrica at the start of the year.

Centrica expected its 2015 organic capital expenditure to come in slightly below its target as its spending on exploration and production, its most expensive investments, was on target to be less than 800 million pounds.

This would fall below 600 million in 2016, Centrica added.

Analysts welcomed the results as positive and shares in Centrica were trading up nearly 3 percent at 0832 GMT at 212.2 pence.

"We regard today's statement as relatively positive, and we continue to think that Iain Conn and his team are moving Centrica in the right direction," said Whitman Howard analyst Angelos Anastasiou.

After joining Centrica in January, Conn initiated a strategic review that will include 1 billion pounds worth of upstream and wind power divestments. It didn't provide further details on Thursday.

The utility, whose market share has been attacked by smaller rivals, said its customer account numbers were largely unchanged since the middle of the year.

Many utilities across the European continent are at a crossroads requiring a new business strategy as the decades-old model of centralised, predictable energy supplies and consumption is giving way to a modern and more flexible system.

Germany's E.ON and RWE, two of Europe's largest utilities, have taken the drastic step of separating their conventional power plant and 'renewable' energy businesses.

Britain's energy suppliers also face tighter regulation on the back of a competition investigation that could impose a limit on the most expensive energy tariffs.


Read more at Reutershttp://www.reuters.com/article/centrica-results-idUSL8N13Z16J20151210#2CdeJHz5YJJlUU8I.99

The discovery of a 'super well' in Argentina's prized Vaca Muerta shale and the presidential victory of a pro-industry candidate raises the stakes in this market-defying venue and positions the only junior on the scene for massive gains.

The 'super well'- discovered in October by state-run YPF in partnership with Chevron (NYSE: CVX) in the Vaca Muerta block in Neuquen--offsets Madalena Energy Inc.'s (MVN.V) Couron Amargo acreage, where this last remaining junior in the sea of supermajors is conducting a multi-well horizontal program.

And shortly after the super well discovery, Argentina's shale prospects in general-and Madalena's high-profile plays here-got another bit of long-term good news: Conservative pro-business candidate and former Shell executive Mauricio Macri won Argentina's November presidential run-off elections, paving the way for a new government which is intent on seeing the shale boom through.

The news could not have come at a better time for Madalena, which is now preparing its first multi-stage frac well in the Vaca Muerta, not only right next to the YPF/Chevron 'super well', but also offsetting Shell's impressive horizontal drilling results.

This small, ambitious and highly intuitive Canadian energy company is sandwiched right in between the biggest players in the world, who are coming up with discovery after discovery.      

All eyes are on Madalena as it drills with two rigs in Argentina's high-impact Curamhuele block, targeting two unconventional plays, and another rig at Coiron Amargo. While majors such as Chevron, Shell and ExxonMobil (NYSE: XOM) are hard at work here, it is Madalena that stands out for investors because it is the only remaining junior in this big game.

Argentina is home to 27 billion barrels of recoverable oil and 802 trillion cubic feet of natural gas and its two shale basins could end up being bigger than the Eagle Ford and Bakken.

Productivity is high and domestic oil and gas prices are fixed above international benchmarks, while costs per well could decline by 25 to 30 percent. Regulated oil prices are around $75-$77, despite low global prices.  

In addition to this, the government's $11-million-plus incentivized oil program has spurred steady growth.

Macri's party, Cambiemos plans to continue this price initiative, which was originally set to expire on 31 December.

Madalena Energy is the only small independent with positions in key unconventional Argentinean resources; it is debt-free, generates substantial operational cash flow and has a rapidly increasing production and resource.

Focused on drilling four strategic resource plays this year and next, Madalena has been described as a 'sleeper' that awakened earlier this year with successful horizontal test results on the Loma Montosa oil resource play at Puesto Morales.

The junior will also be drilling back-to-back horizontals on its Coiron Amargo block, which is a prime Vaca Muerta shale play that also has attractive conventional development across multiple light oil pools-even more so now with the 'super well' discovery.

Madalena is gearing up in the first part of 2016 to conduct a multi-stage frac and test of this Curamhuele well to delineate and unlock 365 million barrels of oil equivalent of risked recoverable resources where the Company has over 500 net horizontal locations in the Lower Agrio Shale alone.

If all the drilling activity isn't enough to make a believer out of any shale skeptic in this market, Madalena'sQ2-2015 financial and operational results will. They realized a Q2 2015 oil price of CDN $96.33/bbl and$6.28/mcf for natural gas. They also managed to increase oil and gas production by 155 percent from 2014, to 3,996 boe/d, and a 30 percent increase in revenues to $83.50/boe, up from $64.08/boe from the same time last year.

All this while corporate operating netbacks were over $37/boe in Argentina, with funds flowing from operations an impressive approximately $6.2 million (not including a one-time charge).

Even in a tough energy market, it has been a solid year for Madalena, with each new discovery and each new horizontal well drilled by the supermajors right next to its own land position further de-risking operations and making this one of the most valuable juniors in the international energy sector.

http://www.prnewswire.com/news-releases/argentina-shale-poised-for-boom-with-super-well-and-pro-industry-president-561402701.html

Canadian oil producer Cenovus Energy Inc said it expects to lower its capital budget for 2016 by 19 percent, from its estimated budget for this year, in response to tumbling crude prices.

The Calgary-based company expects to spend between C$1.4 billion ($1.03 billion) and C$1.6 billion in 2016, down from its estimated 2015 budget of C$1.8 billion-C$1.9 billion.

Cenovus, which jointly operates Foster Creek and Christina Lake oil sands projects with ConocoPhillips, plans to use about 80 percent of its 2016 budget to sustain capital investments, with the remaining budget to be allocated mainly to oil sands growth projects.

The company said even if Brent crude prices remain in the $40 per barrel range through 2016, company expects to continue to fund its current dividend level.

Brent futures were trading at $40.16 per barrel on Thursday.

The company, which has already been cutting jobs, said it will focus on achieving additional cost reductions next year.

http://www.reuters.com/article/cenovus-energy-spending-idUSL3N13Z3NF20151210#bHvM3YMti1UoV2Da.97