Opening leases in the G.O. M

Anyone else read about 73 million acres will be opened up in the GOM in a five year leasing plan? I read the article here but couldnt get link to work. Again apologies for the link not working.

http://daileycaller.com/2017/03/07/trump-opens-all-available-gulf-of-mexico-water-to-oil-drilling/?utm_campaign=TrumpPence&utm_source=Facebook&utm_medium=Social

THANK GOD. Bring on the jobs. My dog is starving over here

As I stated in another thread yesterday about this subject. This is not going to move the needle on getting jobs going in the GOM. When they secure the lease the have up to 10 years to to develop it. They will hold onto it and do nothing until times are better. As long as OPEC is pumping it out, giving big discounts nothing is gonna change. The Cushing Oklahoma hub and many others are full up. There are tankers full of crude anchored all over the world. Onshore shale oil production is going to fuck us for some time to come. If you’re hurting for a job you may wanna look at the land drilling companies. They may slowly start hiring as current prices are in the right range to make profit on the lower price point for E&P.

If they even get enough bids, they will be low bids.

The 73 million acres is what is being offered, not what is actually picked up so I don’t see what the big deal. The sales since 2014 have been lackluster and I don’t expect this one to be any different https://www.boem.gov/OCS-Lease-Sale-Statistics-GOM-Oil-and-Gas-Lease-Offerings/

Press release for sale 249 is below:

WASHINGTON - U.S. Secretary of the Interior Ryan Zinke today announced that the Department will offer 73 million acres offshore Texas, Louisiana, Mississippi, Alabama, and Florida for oil and gas exploration and development. The proposed region-wide lease sale scheduled for August 16, 2017 would include all available unleased areas in federal waters of the Gulf of Mexico.

“Opening more federal lands and waters to oil and gas drilling is a pillar of President Trump’s plan to make the United States energy independent,” Secretary Zinke said. “The Gulf is a vital part of that strategy to spur economic opportunities for industry, states, and local communities, to create jobs and home-grown energy and to reduce our dependence on foreign oil.”

Proposed Lease Sale 249, scheduled to be livestreamed from New Orleans, will be the first offshore sale under the new Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022 (Five Year Program). Under this new program, ten region-wide lease sales are scheduled for the Gulf, where the resource potential and industry interest are high, and oil and gas infrastructure is well established. Two Gulf lease sales will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas.

The estimated amount of resources projected to be developed as a result of the proposed region-wide lease sale ranges from 0.211 to 1.118 billion barrels of oil and from 0.547 to 4.424 trillion cubic feet of gas. The sale could potentially result in 1.2 to 4.2 percent of the forecasted cumulative OCS oil and gas activity in the Gulf of Mexico. Most of the activity (up to 83% of future production) of the proposed lease sale is expected to occur in the Central Planning Area.

Lease Sale 249 will include about 13,725 unleased blocks, located from three to 230 miles offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters). Excluded from the lease sale are blocks subject to the Congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.

“To promote responsible domestic energy production, the proposed terms of this sale have been carefully developed through extensive environmental analysis, public comment, and consideration of the best scientific information available,” said Walter Cruickshank, the acting director of Interior’s Bureau of Ocean Energy Management (BOEM). “This will ensure both orderly resource development and protection of the environment.”

The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. BOEM’s proposed economic terms include a range of incentives to encourage diligent development and ensure a fair return to taxpayers. The terms and conditions for Sale 249 in the Proposed Notice of Sale are not final. Different terms and conditions may be employed in the Final Notice of Sale, which will be published at least 30 days before the sale.

BOEM estimates that the U.S. Outer Continental Shelf (OCS) contains about 90 billion barrels of undiscovered technically recoverable oil and 327 trillion cubic feet of undiscovered technically recoverable gas. The Gulf of Mexico OCS, covering about 160 million acres, has technically recoverable resources of 48.46 billion barrels of oil and 141.76 trillion cubic feet of gas.

Production from all OCS leases provided 550 million barrels of oil and 1.25 trillion cubic feet of natural gas in FY2016, accounting for 72 percent of the oil and 27 percent of the natural gas produced on federal lands. Energy production and development of new projects on the U.S. OCS supported an estimated 492,000 direct, indirect, and induced jobs in FY2015 and generated $5.1 billion in total revenue that was distributed to the Federal Treasury, state governments, Land and Water Conservation Fund, and Historic Preservation Fund.

As of March 1, 2017, about 16.9 million acres on the U.S. OCS are under lease for oil and gas development (3,194 active leases) and 4.6 million of those acres (929 leases) are producing oil and natural gas. More than 97 percent of these leases are in the Gulf of Mexico; about 3 percent are on the OCS off California and Alaska.

The current Five Year Program [2012-2017] has one final Gulf lease sale scheduled on March 22, 2017 for Central Planning Area Sale 247. The 2012-2017 Five Year Program has offered about 73 million acres, netted more than $3 billion in high bids for American taxpayers and awarded more than 2,000 leases.

All terms and conditions for Gulf of Mexico Region-wide Sale 249 are detailed in the Proposed Notice of Sale (PNOS) information package, which is available at: http://www.boem.gov/Sale-249/. Copies of the PNOS maps can be requested from the Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Notice of Availability of the PNOS will be available today for inspection in the Federal Register at: http://www.archives.gov/federal-register/public-inspection/index.html and will be published in the March 7, 2017 Federal Register.

Not so fast…

[QUOTE=Fraqrat;195966]Not so fast…[/QUOTE]

indeed…crude fell 5% today on news of higher than expected inventories. just shows to go that the price of a barrel of oil is still fragile and easily upset by unfavorable news although I do feel the slow climb back from the abyss of the $30/bbl will be sustained over the long run. I don’t see the $40/bbl happening unless some big swing producer (Saudi Arabia) floods the market with surplus crude however I don’t see them doing that now.

Shale Billionaire Hamm Says Industry Binge Can ‘Kill’ Oil Market
by Javier Blas and David Wethe

WTI plunges 5% to year-low just above $50 on oversupply fears
Saudi Arabia has warned about U.S. output growing ‘too fast’

Continental Resources CEO on Trump and Energy’s Future
Harold Hamm, the billionaire shale oilman, said the U.S. industry could “kill” the oil market if it embarks into another spending binge, a rare warning in a business focused on fast growth to compete with OPEC.
The statement, at an energy conference in Houston on Wednesday, comes as top shale companies announce large increases in spending for this year, and the U.S. government says domestic oil output next year will surpass the record high set in 1970. OPEC ministers have said they are keeping a close watch on shale production to decide in late May whether to extend their oil-supply cuts into the second half of the year.
Oil prices plunged 5 percent on Wednesday to their lowest level this year, falling just above $50 a barrel, on investor concerns about unbridled growth in America’s shale basins swelling U.S. inventories.

U.S. production “could go pretty high,” Hamm said at the CERAWeek by IHS Markit conference in Houston, one of the largest gatherings of oil executives in the world. "But it’s going to have to be done in a measured way, or else we kill the market."
Hamm runs Continental Resources Inc., one of the biggest shale producers in the country with drilling operations that run from the Bakken in North Dakota to Oklahoma. He also was an early supporter of Donald Trump’s candidacy, and remains an informal adviser to the president on energy.
Spending Announcements
After oil prices doubled over the past year, U.S. shale drillers have announced big increases in spending for 2017. Anadarko Petroleum Corp. this week said it planned to invest 70 percent more this year than in 2016. Last month, EOG Resources Inc., another big shale producer, said it will spend 44 percent more this year than last. Exxon Mobil Corp. plans to spend a third of its drilling budget this year on shale.
Shale producers are staging the biggest surge in drilling since 2012, with the number of oil rigs rising to more than 600 this month, nearly double the level of June. They are rushing to spend again after the Organization of Petroleum Exporting Countries and Russia agreed last year to cut its supplies, boosting oil above $50 a barrel after a two-year price rout.
The drilling boom has been led by the Permian Basin, which extends from western Texas and south-east New Mexico, and the Scoop and Stack plays in Oklahoma.

The Energy Information Administration this week said U.S. production will rise to 10 million barrels a day by the end of next year, more than 10 percent higher than now. If so, shale drillers will capture market share from OPEC, largely filling the increase in global oil demand.
“We are witnessing the start of a second wave of U.S. supply growth,” Fatih Birol, the head of the International Energy Agency, told Bloomberg in an interview on the sidelines of the Houston conference.
Saudi Arabia Energy Minister Khalid Al-Falih earlier this week warned CERAWeek attendees that what he called the green shoots emerging in the U.S. oil industry were perhaps growing “too fast.” ConocoPhillips CEO Ryan Lance quipped afterward that the green shoots looked more like “trees” to him.
Al-Falih, in a clear message to the U.S. industry, said it would be “wishful thinking” to expect that Saudi Arabia and OPEC “will underwrite the investments of others at our own expense” through production cuts.

Oil Slumps to Lowest This Year as Traders Focus on Record Supply
by Mark Shenk

Crude stockpiles rise to 528.4 million barrels last week: EIA
‘Exodus may be beginning’ as funds pull back bullish bets

Investors Are Taking Record U.S. Oil Stockpiles Seriously
Investors are finally taking record U.S. oil stockpiles seriously.
Oil slumped the most in more than a year after government data showed production cuts from OPEC and other exporters have not been enough to reduce U.S. supplies. Saudi Arabia’s Oil Minister Khalid Al-Falih said in Houston Tuesday that global supplies have been slower to decline than OPEC and its partners expected, leaving the door open for an extension of cuts that started in January.

“The crude market is losing patience,” Mike Wittner, head of commodities research at Societe Generale SA in New York, said by telephone. “The big rally in December after the OPEC agreement was based on expectations that the cuts would balance the market. While it looks like OPEC has cut more than 1 million barrels a day of output it’s difficult to see any impact on U.S. stockpiles.”

West Texas Intermediate for April delivery dropped $2.86, or 5.4 percent, to settle at $50.28 a barrel on the New York Mercantile Exchange, the lowest close since Dec. 7. It was the biggest decline since Feb. 9, 2016. Total volume traded was about 55 percent above the 100-day average.
Brent for May settlement tumbled $2.81, or 5 percent, to $53.11 a barrel on the London-based ICE Futures Europe exchange, also the lowest close since Dec. 7.
Saudi Arabia and Russia, the architects of the deal, presented a united front on complying with the cuts at the CERAWeek conference Tuesday in Houston. Alongside officials from Iraq and Mexico, they insisted the curbs are working.
Managed money reduced its record wagers on price climbs in data released last week. They held almost 1 billion barrels of WTI and Brent crude futures and options at the peak, government and exchange data show.
Great Exodus
"There’s close to record speculative length and looks like it could be the start of the great exodus," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone. “The comments at the conference weren’t reassuring to the market and the crude inventory builds are going to continue for a while given the low utilization rates.”

Supplies climbed 8.21 million barrels to the highest in weekly data going back to 1982 as production rose to the highest in a year.
Wednesday’s market swoon has led to a return of volatility. The Chicago Board Options Exchange Crude Oil Volatility Index climbed to the highest level in two months after falling to the lowest since October 2014 on March 1.
“As long as inventories do not drop the market will be volatile,” Total SA Chief Executive Officer Patrick Pouyanne said Wednesday in Houston.
Energy companies were the worst performers on the Standard & Poor’s 500 Index. The S&P Oil & Gas Exploration and Production Select Industry index fell 3.1 percent to the lowest level since November.
Oil-market news:
Oil prices will tumble to $40 a barrel if OPEC doesn’t extend its pact later this year to cut output, according to Scott Sheffield, chairman of shale producer Pioneer Natural Resources Co.
Production from Libya’s Waha Oil Co., a venture between the state oil company and foreign partners, may be suspended Wednesday as clashes in the country’s eastern oil region keep the main export terminals out of service.

So now the price of US (WTI) Crude oil is dropping because they are overproducing again?? Surprice, surprice.
It must be those pesky foreigners that is to blame, NEVER US!!! WE HAVE THE RIGHT TO DO WHAT WE WANT!!!

Here from Reuters today: http://www.reuters.com/article/us-global-oil-idUSKBN16G02Y

But it is not as simple as it looks, since speculators sits on large amounts of Crude in floating storage, which can be released on the market at any time: http://www.reuters.com/article/us-usa-oil-storage-analysis-idUSKBN1630I2?il=0

You could give the leases away and they still wouldn’t do anything with them. As long as the shale players are doing dumb shit to make a quick buck there won’t be any new activity offshore.

the tight shale frac’ing boom will put the offshore in a coma for decades to come. as long as oil can be had on land by pumping a load chemicals down a hole there will be no good reason for any players to spend the billions upon billions of bucks to try to get oil out from under the sea. it’s just economics

WTI crude down to below $50 today

[B]Oil dips below $50 for first time this year on supply glut
[/B]

By Bloomberg News on March 9, 2017

(Bloomberg) — Oil dropped below $50 in New York for the first time since December as concerns that OPEC’s output cuts are failing to rein in record U.S. stockpiles triggered the biggest slump in more than a year.

West Texas Intermediate fell as much as 3% after losing 5.7% the previous three sessions. Crude supplies rose 8.2 million to the highest level in weekly government data since 1982. Harold Hamm, the U.S. shale oil billionaire, warned on Wednesday that the industry could “kill” the market if it embarks on another spending binge. The market swoon stoked the second-highest WTI options trading volume ever and sent volatility surging.

Oil had fluctuated above $50 a barrel since the Organization of Petroleum Exporting Countries and other countries started trimming supply for six months starting Jan. 1 to reduce a global glut. While U.S. shale output has rebounded, larger-than-expected cuts elsewhere and signs of growing demand suggest stockpiles will eventually decline, according to Goldman Sachs Group Inc.

“People are nervous about the global supply-demand balance,” Adam Sieminski, a scholar at the Center for Strategic and International Studies in Washington and former head of the Energy Information Administration, said by telephone. “Shale is coming back with $50 oil and there’s uncertainty about whether OPEC and its partners are going to roll-over the production agreement.”

West Texas Intermediate for April delivery dropped $1.15, or 2.3%, to $49.13 a barrel at 11:09 a.m. on the New York Mercantile Exchange. Futures touched $48.79, the lowest since Nov. 30 . Total volume traded was more than double the 100-day average. The contract fell 5.4% to $50.28 on Wednesday, the biggest decline since February 2016.
Huge Spike

Brent for May settlement slipped $1.06 to $52.05 a barrel on the London-based ICE Futures Europe exchange. Prices fell to $51.60, the lowest since Dec. 1. The global benchmark crude traded at a $2.37 premium to May WTI.

WTI options volume jumped to 518,604 Wednesday. Oil market volatility, as measured by the CBOE Crude Oil Volatility Index, rose to a six-week high.

“We’re seeing a huge spike in demand for options on the move below $50 for WTI,” Clayton Rogers, an energy derivative broker at SCS Commodities Corp. in Jersey City, New Jersey, said by telephone.

Saudi Arabia’s oil minister Khalid Al-Falih said this week global inventories are falling slower than expected, opening the door to extend the output-cut deal beyond its initial six months. Producers will meet in Vienna in May to decide on the next steps.

“I think there will be a rollover of the agreement, but I don’t think the Saudis are going to rollover to Russia, Iran and Iraq,” Sieminski said. “We will have to see compliance from them.”

Saudi Arabia put a price to continue its new-found cooperation with Russia and other oil producers. While Al-Falih didn’t rule out extending the duration of the supply cuts, he insisted the kingdom wouldn’t act alone.

“The bottom line here is you have wide compliance within OPEC with the production cuts and on the other hand you have increased production out of the U.S.,” Hans Goetti, chief strategist for the Middle East and Asia at Banque Internationale a Luxembourg, said in a Bloomberg television interview. “The shale oil industry in the U.S. has made great strides to cut costs.”

U.S. crude production increased for a third week to 9.09 million barrels a day, the EIA said Wednesday. The nation’s output is projected to surge to a record 9.73 million barrels a day next year, according to the EIA’s monthly Short-Term Energy Outlook on Tuesday.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, rose a second week to 64.4 million barrels, the EIA reported.

“The market was very hopeful abut what OPEC was doing and that we were going to see inventories decline as a result,” Jacques Rousseau, a managing director of the Washington-based research firm ClearView Energy Partners, said by telephone. “The numbers from the EIA were pretty brutal.”

this is deja vu all over again…at least for those who were around in the 80’s

How about a little positivity??? Oh wait… a bitching sailor isn’t a happy sailor.

Please correct me if I’m wrong. I seem to remember a certain event known as the President Obama GOM oil drilling moratorium in 2010. At that time output from oil fracking in the U.S. was about 1 million barrels per day. That quickly became more than 3 million barrels per day by 2013. Well what a surprise, he got re-elected in 2012. His base of environmentalist have always been out to shut down offshore oil? Looks like BP helped him achieve his goals, and how about all these great employment figures. They seem to leave out the fact that half a million people lost their jobs in the offshore oil industry. Now they can finally have their dream job as a Walmart greater. Thank you Mr. President.

Well I’d say yeah you’re wrong. The 6 month moratorium was challenged in court successfully. But even so new permits were withheld to some degree. I don’t think you can draw a straight line from that period to the dramatic increase in frac’ing or the loss of .5 mill jobs.

Too many other factors like OPEC and it’s just plain costs less to frac Oklahoma into permanent earthquake conditions than drill in deep water.

Start here
https://en.m.wikipedia.org/wiki/2010_United_States_deepwater_drilling_moratorium

Can’t wait for that lease sale I just know things are gonna turnaround in no time.

[QUOTE=Fraqrat;196390]Can’t wait for that lease sale I just know things are gonna turnaround in [B]no time[/B].

https://www.bloomberg.com/news/articles/2017-03-19/oil-holds-below-49-as-u-s-rig-gain-counters-opec-output-cuts[/QUOTE]

No time soon.