The U.S. is expected to see an uptick in oil and natural gas rigs in operation this year, as some operators plan to add rigs in increments, analysts say. "We do expect the rig count to rise minimally through the remainder of this year [at an estimated] small 3%-5% increase through year-end, so maybe 25-40 incremental rigs," said Daniel Katzenberg, senior research analyst for exploration and production at Robert W. Baird. Operators are most likely to add rigs in the Permian Basin, followed by Oklahoma resource plays and the Bakken Shale, analysts said.
Imposing higher royalty rates on oil and natural gas extraction from federal lands, as proposed by some groups and Democratic lawmakers, is an ill-advised effort that would burden producers with excessive costs and prompt them to move to private and state lands, energy companies say. Jason Hutt, a partner at Bracewell and Giuliani representing energy companies, said raising the fees would lead to lower royalty revenues for the government and discourage bidding for federal leases. According to the American Petroleum Institute, "These changes could further disincentivize leasing of federal lands."
An Imperial Oil-led consortium, which includes ExxonMobil and BP, has put its exploration program in Canada's Beaufort Sea on hold, citing a lack of time to conduct test drilling before the expiration of the lease in 2020. Imperial Oil last week asked the National Energy Board to allow a retroactive extension of the lease to 16 years, which "would provide sufficient time to undertake the necessary technical studies and develop the technology and processes to support responsible development" in the region. The agency said it is weighing the application.
The House of Representatives last week approved amendments to a fiscal-year 2016 spending bill targeting Environmental Protection Agency rules, including carbon emissions rules for power plants, by a voice vote. The chamber also agreed to a reduction of about $100 million in the agency's funding. The legislation will be considered again after the House ends its recess on July 7.
The Energy Department last week authorized Cheniere Energy to export an additional 1.38 billion cubic feet of liquefied natural gas per day from its Sabine Pass LNG expansion project in Louisiana to countries that lack free trade agreements with the U.S. The company had previously secured a permit from the department to export 2.2 billion cubic feet of LNG per day for a 20-year period.
Royal Dutch Shell is preparing to send its Noble Discoverer rig to Alaska's Chukchi Sea for an oil drilling exploratory program, although it still needs to secure federal drilling permits and letters of authorization, company spokesman Curtis Smith said. "At the end of this process are the permits to drill, which are regularly or typically granted very, very late in the process," he said, noting that preparing rigs ahead of approvals is not unusual. The company believes it will secure the required permits and that all of its "permit applications are based on sound science," Smith added.
The Obama administration shouldn't delay in authorizing proposed deep penetration seismic surveys in the Atlantic waters, considering the proven public support for realizing economic and environmental potential through energy development in the region, writes Brent Greenfield, director of offshore policy with Consumer Energy Alliance. "[C]onsumers and businesses across the country fully understand that the either-or choice presented by anti-energy activists is false. They understand that we can and do conduct offshore energy activity and at the same time protect the environment," Greenfield writes.
Oil production in Texas reached an average of 2.31 million barrels per day in April, similar to that in March, according to data from the Texas Railroad Commission. Output, which came from 164,316 wells, was up over 10% from the previous year, data showed.
Plains All American Pipeline assured a California Senate select committee at a hearing last week that it will continue cleaning up the last 6% of the oil spilled by its ruptured Santa Barbara County pipeline along the state's southern coastline. The company released the results of its laboratory tests, suggesting that the spill has affected the shoreline from Gaviota to Santa Barbara, as tar balls collected from the areas between May 19 and May 25 were linked to the crude in the pipeline.
Oil production in the Lower 48 states for the week ended June 19 reached 9.18 million barrels per day, up by 76,000 barrels per day from the previous week, according to an Energy Information Administration report. The output growth led to an increase in the overall U.S. production, which hit 9.6 million barrels per day, the report said. Meanwhile, oil output from Alaska declined 12% to 417,000 barrels per day.