After nine years of construction work, the Panama Canal has a third set of locks and deeper navigation channels that will open in this month, doubling the isthmus’s capacity for carrying cargo between the Atlantic and Pacific oceans. The deeper channels will accommodate large liquefied natural gas (LNG) tankers, shaving eleven days and a third of the cost off the typical round trip to the Far East.

Since 2013 the US has been the world’s largest producer of both natural gas and petroleum, according to that country’s Energy Information Administration.

Some analysts are wondering where the world’s crude oil supply is going to be in the next decade.  A new report by Rystad Energy says that new conventional oil discoveries were only 12 billion barrels last year due to the massive cuts in capital spending by the world’s oil companies. With the continuing decline in capital spending, new discoveries are likely to be still smaller this year. Given that the world currently is consuming some 35 billion barrels of oil each year, and that production from current wells is falling at 7-8% each year from depletion, shortages are almost certain to develop within the next 5-10 years unless there is a major revival of drilling. While some are looking to a revived shale oil industry, others believe that the US will be out of “sweet spots” where oil that is profitable below $100 a barrel will be gone soon.

Venezuela is weeks or perhaps even days away from financial and political collapse. There are serious shortages of food, water, electricity, medicines and nearly everything else. Looting of food stores and trucks has begun.  The country owes $50 billion in foreign debt and should it default, it risks losing the investment in Citgo Petroleum which owns three refineries in the US and is the main generator of cash. The government is selling off its gold reserves to continue imports.

Venezuela’s state oil company PDVSA owes other foreign suppliers $20 billion in unpaid invoices. The company has begun offering it creditors heavily discounted company bonds in return for canceling the debts.  US oil service contractors have begun to reduce their services to PDVSA for lack of payment, and the company’s oil production is slowly dropping. Should Venezuela collapse, all or much of the country’s crude oil and refined product exports could stop. This would be devastating to several small Caribbean countries that are totally dependent on cheap Venezuela oil for their survival.

Poorer crude oil-producing countries which took out loans to be repaid in oil at the old high prices, now  have to send three times as much oil to lenders to meet repayment schedules now that oil prices have fallen. This has crippled the finances of countries such as Angola, Venezuela, Nigeria and Iraq and raises questions about the survival of OPEC.

Norway has awarded ten new oil and gas licenses to explore an untapped area of the Arctic Barents Sea. Energy experts say this area could be home to 15% of the world’s undiscovered crude oil and 33% of the world’s undiscovered natural gas.

The low world price for oil has hurt Norway’s economy. Oil and gas comprise almost 20% of its gross domestic product and nearly 40% of its export revenue.

Oil-exporting countries in the Persian Gulf, from Qatar to Saudi Arabia, are selling government bonds to raise money as shrinking oil revenues erode their budgets. Qatar, which owns some of the world’s largest gas reserves, announced plans to sell about $9 billion worth of bonds.

The North Yorkshire County Council voted to allow UK-based Third Energy to use hydraulic fracturing to extract shale gas from an existing natural gas well in northern England. This is the first permit to frack for shale gas in Western Europe since 2011.

The US can supply Europe for many years if liquefied natural gas (LNG) prices remain around $7-$8/million BTUs, based on long-run marginal costs for additional infrastructure, according to US LNG exporter Cheniere.

A strike in France over new labour laws has spread to all of the country’s eight oil refineries, in an escalating dispute between unions and the national government. An estimated 20% of petrol stations have either run out of product or are low on supplies.

Saudi Arabia plans to install 9.5 gigawatts of solar energy under its Vision 2030 program announced last month.  The is about 14% of the country’s current electricity generating capacity.

 

 

 

with h/t Tom Whipple

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