The world’s population is expected to reach 8.5 billion by 2030 and 9.6 billion by 2050. Most of the growth is supposed to slated to come from nine countries: India, Pakistan, the Democratic Republic of the Congo, Ethiopia, Tanzania, Nigeria, the US, and Indonesia. Population growth is being driven by longer lifespans. Population growth in developed countries has slowed to a trickle.

A report by Haynes and Boone shows that some 90 US oil and natural gas producers have declared bankruptcy in the last 19 months. The state of Texas leads with 44 bankruptcies.  The large international oil companies are entering a period of unprecedented problems with limited options for survival. Most are no longer earning enough revenue to cover traditional dividends and to carry out enough drilling to maintain production in the next decade. With conventional sources of crude oil that can be produced profitability at today’s prices nearly gone or under the control of state-owned oil companies, the major companies have been forced to turn to very expensive locations such as the Arctic, Kashagan, and deepwater ocean oil. The cost and environmental restrictions on producing this oil are now so high that it seems unlikely much of it will ever be produced.

Estimates by Bloomberg have shown that the major oil companies have doubled their combined debts to US$138 billion since 2014. That’s a staggering tenfold jump from the 2008 total oil major debts.

Thanks to the decline of the ruble and large foreign crude oil sales, Russia’s oil companies have been able to afford to increase their drilling at a time when most of the world’s oil companies are reducing capital spending.

Russia’s Gazprom Neft is making progress in its Arctic drilling program in the Pechora Sea. Four wells out of a planned 32 are now in production and producing 44,000 b/d. Some 10 million barrels of oil have been produced already from special ice-resistant offshore oil rigs.

The West African country of Nigeria is rapidly changing from a success story to a bankrupt failed state with little oil revenue. The Nigerian government is under considerable pressure these days. Not only is the selling price of crude oil less than half of what it was a few years ago, but domestic oil production is down on the order of 70% and the Islamic insurgents are storming across the northern provinces. Research into the distribution of Nigeria’s oil revenues shows that only 14% of the N96 trillion earned during the last 58 years of crude oil sales has gone to the producing provinces instead of the 50% that was originally agreed on but was jettisoned after the central government found out how much money was coming from oil sales.  This is the issue at the heart of the insurgency.

The European Commission announced it is allocating funding to end Finland’s energy isolation. The commission said it has allocated roughly $210 million to support the construction of the first-ever natural gas pipeline linking Finland to Estonia, called the Baltic-connector.

 

 

 

 

 

 

with h/t Tom Whipple

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