Scottish O&G Supply Chain Exports Jump 8.4%

Exports by Scottish oil and gas supply chain companies jumped 8.4 percent between 2011 and 2012 to $12.7 billion, according to figures released Monday by Scottish Development International.

Exports from Scotland's oil and gas supply chain now account for a record 47.6 percent of the supply chain’s total sales, which at $26.7 billion grew by 5.8 percent last year.

"The domestic market is still growing, but the international market is really growing," said David Rennie, international sector head for oil and gas at Scottish Enterprise, who was speaking to Rigzone at the Offshore Technology Conference in Houston Monday afternoon.

Rennie, who along with Scotland Minister of Energy Fergus Ewing is accompanying a delegation of 50 Scottish companies to the show, pointed out that North America still represents the largest export region for Scottish suppliers to the oil and gas industry, accounting for around $4 billion of sales (an increase of 2.8 percent over 2011).

However, Rennie also noted that Africa could see significant growth for Scottish exports. Already, the continent accounts for around 15 percent of exports from Scotland’s supply chain firms, making it the second-largest export region after North America.

"I would say that Africa is potentially a big market for us," Rennie said. "We've just taken a trade mission to Ghana and we've got an office opening there later this year."

Rennie pointed out that Scotland is close to Africa in terms of time zone, so "there's no reason why we can't service a lot of activity in Africa from the UK".

Currently around 70 percent of Scotland's oil and gas supply chain is about services – reflecting a significant level of expertise, particularly around the Aberdeen area.

"It's a hub. It's about supply chain, it's about the cluster, it's about quality, it's about access to engineering and it's about access to academia," Rennie said.

"Subsea services, well management, drilling … There’s a whole range of things that can be serviced form Scotland. And we now export to about 100 countries … If you go anywhere in the world to look for oil you will find a Scots person."

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Centamin bounces back as gold exports resume

Centamin (CEY) shares rebounded strongly on Monday morning as the miner announced the resumption of gold exports from Egypt.

The company said the halt by customs authorities on gold exports from the Sukari mine in the Middle-Eastern country had been lifted and the first shipment made on Sunday.

It was also implied that the dispute concerning fuel supply had been resolved, meaning operations at Sukari can be restarted in the "coming days".

Centamin has been hit by a series of incidents in recent months that have seen its Egyptian operations seriously hindered.

Last week, the firm revealed that a local fuel supplier had hit it with a $65 million (

View the Original article

Oil Sands, Refined Products, and Exports: Just the Facts

U.S. Crude Oil Stays in the United States. According to the U.S. Energy Information Administration (EIA), in 2011, 99.7 percent of the crude oil produced in (or imported into) the United States was also consumed here, which means less than one-half of one percent (0.3 percent) was exported. Simply put, the United States does not export crude oil in any significant way.

The United States Exports Very Little Gasoline. Of the total on-road fuel produced in the United States in 2011, 92 percent of it was refined and consumed in the United States; only eight percent was exported. And of all the petroleum products that the United States does export, finished motor gasoline only represents about 21 percent. The majority of exported products (79 percent) are things like propane, ethanol, heating oil, and kerosene, which are produced in amounts in excess of U.S. demand.

   

What the United States Is Exporting Is Going to Mexico, which Benefits the United States. Of the gasoline that is exported, 60 percent goes to Mexico, from which the United States imports crude oil. This exchange benefits the United States: Gasoline is worth more than oil, so we’re purchasing a good and then selling back a more expensive good, not only creating a net value-add for the U.S. economy, but also creating manufacturing jobs and generating tax revenue.

The Oil Sands Would Replace Declining Supplies. According to the EIA, increased imports from the Canadian oil sands would likely replace heavy crude imports from Mexico, Venezuela, and Ecuador. Heavy oil imports from those three countries are about 900,000 barrels per day less than what they were in 2005, and they are projected to decline by an additional 540,000 barrels per day by 2020 and 845,000 barrels per day by 2035.

No Reason to Export Heavy Oil. The U.S. Department of Energy (DOE), in reviewing the Keystone XL project, concluded that “there would be no economic incentive to ship Canadian oil sands [crude] to Asia via Port Arthur” without a surplus of heavy oil. And since heavy oil imports are declining (DOE noted that heavy oil imports “are likely to decrease by a significant amount within the next five years”), oil sands crude from Canada would be filling a gap, not creating excess supply.

View the original article here

O’Reilly - Oh So Wrong On Exports

Bill O’Reilly was beating the drum again last night about oil exports, once again displaying his lack of rhythm.  Here are his arguments in a nutshell:

Many Republicans want to drill baby drill but what's the point if all the oil goes to China?...You are not making as much money in U.S.A. as you could in China so you are just whipping it out and throwing it over to China. Is that right or wrong?... And we own 12 miles of ocean offshore. That's the U.S. sphere of influence. We own that; it's ours. All the 320 million American citizens. The government doesn't own it. The oil companies don't own it. So they take the stuff out of our land, and they send it to China. Does that make sense to you?

First let’s go back to this chart:

That’s right in 2011 99.7 percent of the crude oil produced or imported into the U.S. was processed here.  We simply do not export crude oil in any significant way.  We do export products manufactured from crude oil, including motor gasoline.  Let’s have a look at that from both the supply and demand side:

Now this might be hard to see because gas exported is quite small compared to gas supplied to U.S. consumers, but where you see spikes in exports corresponds almost exactly to dips in U.S. demand.  In other words the gas we are exporting is not gas taken from U.S. consumers, but rather gas that U.S. consumers aren’t using.  As explained yesterday, this is a good thing.  Having an export market ensures that refiners can operate efficiently and maintain U.S. refining capacity. Contributing both to energy security and keeping our workers working.

There has been a lot of talk recently about the need to boost American manufacturing, well this is what manufacturing looks like.  Taking raw materials and adding economic value to them. In the case of exported petroleum products, the U.S. produces or buys crude oil, refines it at U.S. refineries and then sells finished petroleum products at significantly higher value.   Exporting petroleum products does not increase prices, as John Felmy put it:

…when supplies are available to export – as they are today because of weak U.S. demand – they put downward pressure on the prices of the gasoline and other products we import. Exports also mean jobs for Americans, including good paying U.S. refinery jobs, and a lower trade deficit.  but reducing the supply of the crude oil does.

If O’Reilly really wants to contribute to the gas price debate he should focus on real solutions, not free trade bogeymen.  Back to Felmy for what these solutions look like:

The industry must be allowed to develop at home more of its ample crude oil and natural gas resources. More U.S. barrels on crude markets would help drive down crude costs and reduce gasoline prices. We need policies that ease access to U.S. oil and natural gas resources, which are still very ample. We also need policies that add critical infrastructure, such as building the Keystone XL pipeline, to bring in more of Canada’s vast supplies of oil, and policies that keep regulations and tax policy reasonable.

View the original article here

Fear Mongering on Exports

Kevin Hall, of McClatchy, writes:

“U.S. demand for oil and refined products - including gasoline - is down sharply from last year, so much that United States has actually become a net exporter of gasoline, unable to consume all that it makes.”

So far so good.

“Exports of U.S. refined product averaged 2.928 million barrels per day over the four weeks ending on Feb. 10, compared to 2.190 million barrels per day for the four weeks ending Feb. 11, 2011, the EIA said. This category is primarily gasoline, but it includes unfinished oils, fuel additives, ethanol and other blending components.”

Um.  No.  This category is not primarily gasoline.  Using the EIA data this is what we see:

Then we get the export fear mongering:

“The export picture suggests that when domestic demand rises, American motorists might be competing with drivers elsewhere for U.S.-made gasoline, which fetches a higher price as an export.”

Hall covers himself with the wiggle words, “suggests” and “might be” but this statement is still incredibly irresponsible given “the export picture” suggests no such thing. And we don’t even have to look elsewhere for proof, as this is made clear in the article! In his lead paragraph Hall makes clear that we are making more refined product than we are consuming and that exports are simply picking up the slack between domestic production and domestic demand.  Hence exports are up, and this is a very good thing:

Flexibility to export product in times of market imbalance helps refiners operate efficiently and maintains U.S. refining capacity. This contributes to U.S. energy security.  Not to mention keeping workers working.Refining enhances the U.S. economy by adding economic value to the raw material: In the case of exported petroleum products, the U.S. produces or buys crude oil, refines it at U.S. refineries and then resells finished petroleum products at significantly higher value.  This increase in value is what GDP measures.In 2011, fuel and other petroleum products were a significant part of U.S. exports (7 percent) as measured in dollars, at $107 billion. This was due in part to reduced domestic fuel demand (because of the lagging economy, increased use of renewables in finished petroleum products and more fuel-efficient cars) and in part because the industry produced at or near record amounts of gasoline and diesel in 2011.

Then article keeps the fear coming:

"To the extent that there is this export market that wasn't there before, it is certainly ... keeping prices higher than they otherwise would be," said [energy analyst John] Kilduff. "Exports were not material. Now they are becoming material."

Actually, the export market has always been there, providing refiners with a market when U.S. demand for various products is low.  But it isn’t keeping prices higher.  The EIA notes that in January 2012  refining costs AND profits made up 6 percent of the cost of a gallon of gas.

So refiners are getting only 20 cents a gallon of gross margin, of which, on average, 15 cents covers costs leaving a 5 cent per gallon profit. And yet we are to believe that taking away 8 percent of their market* would lower prices?

For too long the energy debate has been dominated by this sort of liberty with the facts.  And while it may sell newspapers it sells the American people short, and it isn’t going to lead to policies that get us where we need to go.

*Exports represent just 8 percent of the motor gasoline and ULSD produced in the U.S.

View the original article here

Fear Mongering on Exports

Kevin Hall, of McClatchy, writes:

“U.S. demand for oil and refined products - including gasoline - is down sharply from last year, so much that United States has actually become a net exporter of gasoline, unable to consume all that it makes.”

So far so good.

“Exports of U.S. refined product averaged 2.928 million barrels per day over the four weeks ending on Feb. 10, compared to 2.190 million barrels per day for the four weeks ending Feb. 11, 2011, the EIA said. This category is primarily gasoline, but it includes unfinished oils, fuel additives, ethanol and other blending components.”

Um.  No.  This category is not primarily gasoline.  Using the EIA data this is what we see:

Then we get the export fear mongering:

“The export picture suggests that when domestic demand rises, American motorists might be competing with drivers elsewhere for U.S.-made gasoline, which fetches a higher price as an export.”

Hall covers himself with the wiggle words, “suggests” and “might be” but this statement is still incredibly irresponsible given “the export picture” suggests no such thing. And we don’t even have to look elsewhere for proof, as this is made clear in the article! In his lead paragraph Hall makes clear that we are making more refined product than we are consuming and that exports are simply picking up the slack between domestic production and domestic demand.  Hence exports are up, and this is a very good thing:

Flexibility to export product in times of market imbalance helps refiners operate efficiently and maintains U.S. refining capacity. This contributes to U.S. energy security.  Not to mention keeping workers working.Refining enhances the U.S. economy by adding economic value to the raw material: In the case of exported petroleum products, the U.S. produces or buys crude oil, refines it at U.S. refineries and then resells finished petroleum products at significantly higher value.  This increase in value is what GDP measures.In 2011, fuel and other petroleum products were a significant part of U.S. exports (7 percent) as measured in dollars, at $107 billion. This was due in part to reduced domestic fuel demand (because of the lagging economy, increased use of renewables in finished petroleum products and more fuel-efficient cars) and in part because the industry produced at or near record amounts of gasoline and diesel in 2011.

Then article keeps the fear coming:

"To the extent that there is this export market that wasn't there before, it is certainly ... keeping prices higher than they otherwise would be," said [energy analyst John] Kilduff. "Exports were not material. Now they are becoming material."

Actually, the export market has always been there, providing refiners with a market when U.S. demand for various products is low.  But it isn’t keeping prices higher.  The EIA notes that in January 2012  refining costs AND profits made up 6 percent of the cost of a gallon of gas.

So refiners are getting only 20 cents a gallon of gross margin, of which, on average, 15 cents covers costs leaving a 5 cent per gallon profit. And yet we are to believe that taking away 8 percent of their market* would lower prices?

For too long the energy debate has been dominated by this sort of liberty with the facts.  And while it may sell newspapers it sells the American people short, and it isn’t going to lead to policies that get us where we need to go.

*Exports represent just 8 percent of the motor gasoline and ULSD produced in the U.S.

View the original article here

O’Reilly - Oh So Wrong On Exports

Bill O’Reilly was beating the drum again last night about oil exports, once again displaying his lack of rhythm.  Here are his arguments in a nutshell:

Many Republicans want to drill baby drill but what's the point if all the oil goes to China?...You are not making as much money in U.S.A. as you could in China so you are just whipping it out and throwing it over to China. Is that right or wrong?... And we own 12 miles of ocean offshore. That's the U.S. sphere of influence. We own that; it's ours. All the 320 million American citizens. The government doesn't own it. The oil companies don't own it. So they take the stuff out of our land, and they send it to China. Does that make sense to you?

First let’s go back to this chart:

That’s right in 2011 99.7 percent of the crude oil produced or imported into the U.S. was processed here.  We simply do not export crude oil in any significant way.  We do export products manufactured from crude oil, including motor gasoline.  Let’s have a look at that from both the supply and demand side:

Now this might be hard to see because gas exported is quite small compared to gas supplied to U.S. consumers, but where you see spikes in exports corresponds almost exactly to dips in U.S. demand.  In other words the gas we are exporting is not gas taken from U.S. consumers, but rather gas that U.S. consumers aren’t using.  As explained yesterday, this is a good thing.  Having an export market ensures that refiners can operate efficiently and maintain U.S. refining capacity. Contributing both to energy security and keeping our workers working.

There has been a lot of talk recently about the need to boost American manufacturing, well this is what manufacturing looks like.  Taking raw materials and adding economic value to them. In the case of exported petroleum products, the U.S. produces or buys crude oil, refines it at U.S. refineries and then sells finished petroleum products at significantly higher value.   Exporting petroleum products does not increase prices, as John Felmy put it:

…when supplies are available to export – as they are today because of weak U.S. demand – they put downward pressure on the prices of the gasoline and other products we import. Exports also mean jobs for Americans, including good paying U.S. refinery jobs, and a lower trade deficit.  but reducing the supply of the crude oil does.

If O’Reilly really wants to contribute to the gas price debate he should focus on real solutions, not free trade bogeymen.  Back to Felmy for what these solutions look like:

The industry must be allowed to develop at home more of its ample crude oil and natural gas resources. More U.S. barrels on crude markets would help drive down crude costs and reduce gasoline prices. We need policies that ease access to U.S. oil and natural gas resources, which are still very ample. We also need policies that add critical infrastructure, such as building the Keystone XL pipeline, to bring in more of Canada’s vast supplies of oil, and policies that keep regulations and tax policy reasonable.

View the original article here