AER shows its teeth over orphan wells

February 22, 2017 1 Comments

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Now more than ever the Alberta’s Energy Regulator (AER) is showing producers will not bully it. Ultimately they expect the responsible management of our resources and the associated equipment As Albertan’s we should cautiously applaud proper resource development with an eye on the economy.

The AER announced the suspension of 1,380 wells Lexin Resources Ltd, along with its facilities and pipelines, as this company announced that they could not continue to maintain acid wells, these emanate acid gas containing the deadly hydrogen sulfide.

Since last summer the AER has been talking about this issue with producer Lexin and issued an environmental protection order to prevent this company from complying only with the parameters it wants.

The law caused the company to change its sweet gas acid wells south of the city which makes this a minor concern. Lexin owes more than $ 70 million in security deposits for its end-of- life obligations, according to the AER.

In addition to suspending licenses, the environmental protection order issued to the company and an affiliated entity: LR Processing Ltd., requires them to address environmental concerns at its Mazeppa sour gas plant. The AER has taken a strong stand in this case and conducted 276 inspections of Lexin facilities last year.

As part of the AER action, the Orphan Well Association has assumed the "care and custody" of Lexin wells and services for the time being. The critical reaction of the Alberta energy regulator makes it possible to protect not only the environment but also the economy and lives of people living in nearby cities.

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Watch Grande Prairie in 2017

January 6, 2017 0 Comments

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Grande Prairie figures to have a much stronger 2017, and it’s not just locals saying it. Among the energy rebound, the Montney play looks to be very active and competitive this year. It is also economical enough to compete on the international stage.

The world oil price this 2017 is very likely to stabilize and have a rise, at the same time enters into this equation electric cars that could make unbalance the balance of this non-renewable natural resource. Peter Tertzakian, Executive Director of ARC Energy Research Institute in an interview with the Calgary Eyeopener, said he expects OPEC to maintain its plans to cut global oil production to get a low rise in prices per barrel by the end of this year.

Also, it is quite optimistic about the oil-rich Montney area which is located in northwestern Alberta and occupies 130,000 square kilometers of North America. Another real factor that determines the Montney is that the cost of production is much lower which makes all the products extracted from these deposits is a direct competition with the United States, which in past decades was a high consumer and in the current Moments has become a great competitor.

The entry into the game of the US executive is a factor to be taken into account in the sense that its policies are aimed at maintaining its production and increasing its capacity of competition. In that sense, Tertzakian said literally “It is a call to be more efficient and make sure we do not lose the discipline that our producers have imprinted in the course of the last years.” Click here to read more:

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Alberta offers $500 Million incentive

December 6, 2016 0 Comments

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Alberta is providing $500 million in incentives to encourage petrochemical projects in Alberta. Pembina sees these types of incentives as crucial to keep investment in Alberta and not south of the border.

Ultimately these petrochemical projects will provide jobs for upwards of 240 people in Alberta. Given all the negativity it is refreshing to see the government make real efforts to help the province. The government is providing $ 500 million in incentives to two planned petrochemical projects, paid for three years after they begin operations.

In return, they will create more than 240 full-time jobs, along with several thousand temporary jobs and indirect jobs. Different companies are investing 5 billion dollars in Alberta which translates into jobs for men and women of this locality.

This program is based on the selection of companies that will receive 500 million dollars in royalties from the province in exchange for building two petrochemical plants. Both projects to develop the petrochemical industry in Alberta would create some 3,700 to 4,200  jobs during the primary phase of construction. It means that traders and skilled workers such as welders will have bread to take home after a sharp recession Economic development.

These two initiatives carried out by Pembina Pipeline Corp, and Inter Pipeline will become the first industries to produce polypropylene in Canada. Also, the production costs in the province are small compared to those of other localities, so the proposal is interesting and attractive for these investors.

Thanks to low-priced propane gas, these petrochemical developments have a lot of future in Alberta.

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Lower oil discoveries should help supply

September 11, 2016 0 Comments

Oil discoveries are at a lower level than has been seen in fifty years. It should help with the demand/price levels that we have been seeing. It should be another factor in climbing back out of the rut we’ve been experiencing.

Explorers in 2015 discovered only about a tenth of the oil they have annually on average since 1960. Due to falling oil prices globally, oil companies have reduced their exploration budget for new oil fields to ridiculous levels. In 2015, only 2,700 million barrels were discovered, the lowest amount since 1947. It is a context that draws much attention since the US energy information management indicates that demand for crude will grow by 2026 to 105.3 million barrels per day.
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In future years this fall in the investment of explorations of new deposits will be felt, by 2025 this effect of scarcity will be felt, producers will be able to replace a little more than one of every 20 barrels consumed this year. Global spending on exploration, from seismic surveys to actual drilling, has been cut to $ 40 billion this year, from about $ 100 billion in 2014.

The result is lower drilling, despite the fact that the market crash has reduced the cost of operations. There were 209 wells drilled through August this year, down 680 in 2015 and 1,167 in 2014.

This situation will naturally increase oil prices in the years to come, especially beyond 2025. Given current levels of industry-wide investment and declining rates in existing fields, a significant supply gap could open for 2040.

If demand won’t improve this reduction in supply could be just what we need. Click here to read more:

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How far can oil rally?

June 14, 2016 0 Comments

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Investors are betting on an oil rally beyond $100. Should we all be hopeful or is it too early to say? Given the recent strength in price and signs of growing activity, it is hard not to be cautiously optimistic.

Call it a lottery ticket, but someone in the oil market has been busy making a bold bet  by buying contracts that will be profitable if crude rises again at $ 100 a barrel. The $ 100 buyout option in December 2018 – a contract that gives you the right to purchase December 2018 futures at $ 100 a barrel – was the most traded contract on Tuesday in the entire ICE Brent market, which is the strongest signal of renewed optimism in oil.

The deal does not mean that the market believes that the value of $ 100 per barrel will materialize, but that with its bullish bets some are increasingly confident that the Organization of Petroleum Exporting Countries will be able to rebalance supply and demand

Options are likely to cost just over a million dollars, according to data compiled by Bloomberg. They will be worth several times that amount if the prices of futures contracts rise in the short term. It is also possible that the negotiations have been part of a broader coverage program.

The confidence in higher prices has returned since OPEC, Russia and other producers subscribed earlier this month their first agreement to reduce production in 15 years.

The International Energy Agency says that if producers meet their commitments, oil demand could exceed supply in the first half of next year, a significant change after three consecutive years of oversupply.


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AER building database of Oil & Gas Infrastructure

April 26, 2016 0 Comments

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With the entry of Inactive Well Compliance Program (IWCP) in its second year, the Alberta’s Energy Regulator (AER) is working on a database of pipelines and wells that will need attention. Taking into account the amount of energy equipment scattered throughout the province, a database and a plan make a lot of sense.

The aging of the oil and gas infrastructure in Alberta is a serious problem for this region. The AER has created a database that analyzes and locates miles of abandonment wells in Alberta. But it continues with this work concerning pipes and compression stations.

In addition to the database to all the pipelines and the entire structure of the underground and surface of what will take some time, is a century of accumulated scrap and industrial infrastructure that is unused. The

information will be gathered from the agencies that preceded the current regulator, which brought together three different organizations in 2013.

This compilation ends in early 2018; the database detailed the time, location and location of some 415,000 kilometers of pipeline and precisely 50,000 kilometers of oil and gas competing for pipelines. They are detailed and classified according to the risk they pose to human health and the normal environment.

The AER has made a significant effort to clean wells and pipes abandoned until January of this year have cleaned 6,800 oil wells and works well on a base of 37,000 wells which is what has been counted until now.


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Floating Storage in decline-will WTI increase?

March 21, 2016 0 Comments


Floating storage is in less demand than it has been. Is the supply glut over and what will this mean for West Texas Intermediate (WTI) prices? The reduction in storage needs points to stabilization in the WTI market. Are we on an upswing?

Although stockpiling of oil on the ground is far from exhausted, the cost of storage at sea has risen, making it no longer profitable to use this type of alternative when storing excess oil.

It is because the price of rental and storage on these ships has increased substantially due to high demand for crude oil, the daily rate on the route from Japan to Saudi Arabia increased according to data from the London Stock Exchange to 66.64 dollars,

This means an increase of 30% compared to the previous month. According to Bloomberg and Gibson Shipbrokers LTD, an oil company would lose about 7.6 million dollars if they wanted to protect for six months at sea in a ship two million barrels.

The WTI basket is increasing its monetary value since US oil production is finally falling and threatening to fall to less than 9 million bpd for the first time since November 2014, which makes the oil market no longer so flooded with that commodity.

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$40 Oil, will it keep climbing?

March 8, 2016 0 Comments

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Oil is trying to make a race upwards of $ 40 per barrel, is the goal of all oil countries included and not included in the Organization of the Petroleum Exporting Countries (OPEC). Many companies are associated with this vital nonrenewable resource for life in the modern world; we will see if it can sustain the trend.

Independently, it is positive for the world economy (private and public) to see the rise in prices. We may still be looking for an abundance of supply, but any upward movement is refreshing.

The rise in oil prices drives stock markets, given the optimism generated by the cut in global output. There is a world commission made up of five oil producing countries: Kuwait, Algeria, Venezuela, India, and Oman, which are members of OPEC. They are responsible for monitoring compliance with the agreement to reduce world oil production by 1.2 million barrels per day.

These company and country-driven tactics seem to bear fruit and rescue prices from below $ 29.80 per barrel per OPEC basket just as it was a little more than a year ago in the first quarter of 2016, to more than $ 40 a barrel as it stands currently.

It means they're doing things right to avoid another downturn and continue on an upward trend and to break financial barriers steadily.

By the end of 2017 the price of all the oil baskets: West Texas Intermediate (WTI), OPEC and Brent is expected to exceed the $ 50 barrier.

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5 things to know about Alberta’s inactive wells-IWCP

February 12, 2016 2 Comments


Since April 1st, 2015 Alberta has implemented its Inactive Well Compliance Program – IWCP to get control of non-compliant wells in Alberta. What exactly does this mean and is this the kind of project that could help stimulate a lagging industry?

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