Ukraine began a military-backed “anti-terrorist” operation in its eastern Donetsk region where militants have seized buildings as Russia’s prime minister said the country risks spiraling into civil war.
The global refining and marketing industry will continue to see pockets of earnings growth over the next year, but flat conditions overall, with product demand expected to increase modestly this year by 1.2 million b/d, according to a recent report from Moodys. That demand increase will be roughly in line with net global capacity additions, Moodys said. The outlook reflects Moodys expectations for the fundamental business conditions in the industry over the next 12-18 months, during which time it expects the Ramp;M sectors earnings before interest, taxes, depreciation, and amortization (EBITDA) to remain volatile but to rise by about 8% through mid- to late-2015. North American companies, particularly Gulf Coast refiners, have the most favorable positions, Moodys said, but capacity additions in China and elsewhere in the world will water down earnings growth for the overall sector. North American refiners will retain their advantage over competitors elsewhere, with cheaper feedstock and natural gas prices, and lower costs for renewable identification number contributing to 10% or higher EBITDA growth through mid- to late-2015. Shifting crude discount advantages to the Gulf Coast from the Midcontinent, plus strong export opportunities to Latin America and Europe, give an edge to refiners with big Gulf Coast operations, including Phillips 66, Marathon Petroleum Corp., and Valero Energy Corp., Moodys said. These three refiners also will continue expanding their logistics and midstream operations. Companies in the Midcontinent, such as HollyFrontier Corp. and CVR Refining, lack this export advantage. Refiners with a big presence in California, including Valero Corp. and Tesoro Corp., face a crucial year in 2015, when environmental rules become stricter (a href=http://www.ogj.com/articles/2013/09/us-appeals-court-upholds-california-s-low-carbon-fuels-standard.htmlOGJ Online, Sept. 19, 2013a). China will be the biggest source of new refining capacity worldwide in 2014-15, and significant Middle East capacity additions will likely go into service in 2015 but are less predictable. Moodys expects 2% EBITDA growth this year for the Asian Ramp;M sector overall. In China, the worlds largest source of demand growth for refined products, capacity additions of more than 1.2 million b/d through 2015 will outpace demand growth for refined products. Moodys anticipates about 1 million b/d of additional capacity for the Middle East, but notes that accurately projecting projects in certain countries can be difficult, since a national oil companys plans are not always visible. Indias demand for refined products will increase at a far-slower pace of 1% through mid- to late-2015, due to declining gross domestic product growth and government price increases on both gasoline and middle distillates. Latin American growth for refined products will remain strong through mid- to late-2015, with few capacity additions, but the regions reliance on costly refined product imports will hold back EBITDA growth to no more than 2%. Most of the regions big projects for boosting refining capacity have either been delayed or called off. Moodys doesnt expect Mexicos Petroleos Mexicanos (Pemex) or Brazils Petroleo Brasileiro SA (Petrobras) to pursue additional new refineries, but Colombias Ecopetrol SAs modest capacity expansions will come onstream in 2015. Growth for European refining operations will stay roughly flat through mid- to late-2015. Economic improvements in Germany, France, and elsewhere in the Euro-zone will modestly lift the regions demand for refined products, but Europe will need meaningful capacity rationalization to prevent margin erosion in 2015 and beyond. Europes older, less efficient, lower-complexity refineries, which rely on high-cost feedstocks, cannot compete easily with the new, high-complexity facilities of the Middle East. A number of integrated oil companies intend to reduce their European footprints, but political sensitivities in Europe can also stall or prevent widespread capacity curtailments (a href=http://www.ogj.com/articles/print/volume-111/issue-12/special-report-worldwide-report/western-europe-leads-global-refining-contraction.htmlOGJ, Dec. 2, 2013, p. 34a). Rather than shut down capacity, operators such as Murphy Oil Corp. often try to sell off unwanted capacity, even as they continue to generate losses. Italys Eni SPA plans to cut its refining capacity by 22% by 2017, thereby reducing its total capacity by one-third since 2012. Moodys notes that it would change its outlook to negative if net refining capacity additions worldwide begin to outpace growth in demand for refined products, particularly with Chinas growth slowing through 2015 alongside further capacity additions in China and the Middle East. Conversely, Moodys would change its outlook to positive if worldwide demand overwhelmed capacity additions, and if the US and Chinese economies began surging simultaneously.
Nouriel Roubini, chairman of Roubini Global Economics LLC and a professor at New York University, discusses the U.S. ecomomy with Francine Lacqua on Bloomberg Television's "The Pulse" from the Ambrosetti Workshop in Cernobbio, Italy. (Source: Bloomberg)
Hedge funds reduced their bets on rising West Texas Intermediate crude prices by the most in almost nine months as U.S. inventories climbed and concern eased that sanctions against Russia will disrupt oil supplies.
a href=http://www.conocophillips.com/Pages/default.aspx target=_blank adhocenable=falseConocoPhillipsa has increased its estimated resource base in the a href=http://www.ogj.com/topics/eagle-ford.htmEagle Forda play to 2.5 billion bbl of oil in place from 1.8 billion bbl, as well as its estimated production from current volumes to more than 250,000 boe/d by 2017. ConocoPhillipss wells in the Eagle Ford have the highest oil rates per well and are leading the industry in value, said Ryan Lance, ConocoPhillips chairman and chief executive officer. Lance added, This is attributable not only to the fact that we are in the best part of the play, but also to our relentless focus on technical innovation and drilling and completion cost efficiencies. He said, We are applying these benefits and efficiencies across our unconventional portfolio in the a href=http://www.ogj.com/topics/bakken-shale.htmBakkena, Permian, a href=http://www.ogj.com/topics/niobrara-shale.htmNiobraraa, Canada, and outside of North America. During fourth-quarter 2013, the company reported production of 218,000 boe/d from the Eagle Ford, Bakken, and Permian, a 31% increase compared with fourth-quarter 2012. The Eagle Ford and Bakken reached respective peak rates of 141,000 boe/d and 43,000 boe/d during that time (a href=http://www.ogj.com/articles/2014/01/conocophillips-reports-higher-2013-earnings-expects-higher-production-in-2014.htmlOGJ Online, Jan. 31, 2014a). bProduction growth expectedb ConocoPhillips has outlined a plan to consistently deliver 3-5%/year compound growth in production and margins from major development programs and projects already under way in the US Lower 48, Canadian a href=http://www.ogj.com/topics/oil-sands.htmoil sandsa, the UK and Norwegian North Sea, Malaysia, and Australia. Beginning this year, we will be growing production and margins across our diverse asset base, and allocating 95% of our annual capital expenditures to growth projects and programs with margins that are higher than our average margin today, said Lance. Over the next several years, the company intends to execute a $16 billion/year capital program and achieve the companys organic reserve replacement target of more than 100%. ConocoPhillips since 2009 has added 6.7 billion boe of resources, boosted in part by the Gulf of Mexicos Tiber, Gila, Shenandoah, and Coronado discoveries. Further activity targets offshore prospects in Australia, Angola, and Senegal; conventional exploration in Norway and Indonesia; and unconventional exploration in North America, Poland, and Colombia.
President Barack Obama can sample all the barbecue he likes and even don a cowboy hat, but he won't get the full Houston experience because the leader of the free world never sits in traffic. Houstonians, however, are likely to get a heapin' helping of traffic congestion and transit changes as Obama makes his way around the area. Officials do not disclose the president's route or scheduled road closings for safety reasons, said Cynthia Marble, special agent in charge of the Secret Service's Houston office.
* Gazprom and Ukraine locked in gas price dispute* Russian gas transit to Europe via Ukraine stable (Adds detail, comments)MOSCOW, April 8 (Reuters) - Russian natural gas producerGazprom said on Tuesday
President Barack Obama said indifference to Russia’s attempt to unilaterally redraw the boundaries of Ukraine would ignore the lessons that are written in the cemeteries for the dead in two world wars.
The world’s top industrial powers threatened further sanctions to deter Russian President Vladimir Putin from taking over other parts of Ukraine and suspended Russia from participating in the Group of Eight.