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As Countries Shun Russian Crude, Canada Plans to Boost Its Oil Exports

Jonathan Wilkinson, Canada's natural resources minister, reports that his country is looking at ways to increase pipeline utilization to boost crude exports as Europe seeks to reduce its reliance on Russian oil.

Enbridge Inc., the operator of the Southern Lights pipeline (part of the Mainline pipeline system), is in talks with the government, looking for ways to ease the current energy crisis. Network capabilities are the main point of discussion, as well as how fully they are utilized. Increasing exports to Europe is a key goal of the Canadian government.

At the moment, oil exports from Canada to the U.S. are approximately 4 million barrels of oil per day, with a small portion reexported to other countries. And this number is poised to rise.

In addition to Enbridge's Mainline pipeline, TC Energy's Keystone pipeline carries another 590,000 barrels/day of crude oil to the United States. However, no comment was provided by TC Energy as of yet.

What is known in the meantime, is that Enbridge's liquids and natural gas pipelines are near or at capacity, but the company has begun examining potential ways to supply more energy to U.S. and European markets. That strategy includes using facilities on the Gulf Coast for crude oil and natural gas export as one of the most feasible options.

This situation unveils following the geopolitical crisis in Eastern Europe. The Canadian government and other nations vowed not to import Russian oil after its military aggression in Ukraine. European leaders agreed to cut their reliance on Russian fossil fuels on March 10.

Ukraine's war has shown all of the European countries that they cannot be dependent on Russian oil and gas for long, which has sped up discussions about transitioning from natural gas to hydrogen. However, this cannot be done overnight.

Together with industry, the Canadian government is also analyzing how pipeline flows can be increased in response to such violence, but the extent of what can be done will not be known for another week.

Despite the fact that Canada is willing to increase pipeline export capacity, many producers have been reluctant to adjust their spending plans, which could significantly increase output.

There are currently no LNG export terminals in Canada, but a consortium led by Shell Plc and Petroliam Nasional Bhd is building a large facility on the west coast that will be open by the middle of the decade.

This will come in handy, as even by the end of 2021 Canadian oil companies exported a record amount of crude from the U.S. Gulf Coast, mostly to big importers India, China, and South Korea.

If you wish to learn more about pipeline routes or get a better understanding of the location of strategic resources, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.

Tel. +1 713-203-3128

Email: treitmeier@hartenergy.com

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To Be or Not To Be: Bakken Assets Could Fetch $5 Billion for Exxon Mobil

Exxon Mobil Corp. is weighing prospects of selling its assets in North Dakota’s Bakken, after gauging interest from potential buyers — 5 billion is the issue price, at least according to rumors. The price point came about after the news that the oilgiant is in the final round of hiring bankers to help launch the sale. Yet Exxon Mobil itself stays tight-lipped regarding the situation.

In light of the conflict in Ukraine, buyout firms are currently scurrying to make cash from the U.S. crudeprices reaching their highest level since 2008. And one of the largest privately-owned US-based oilproducers may be up for sale. EnCap Investments looks to sell its portfolio company Ameredev II for over $4 billion including debt. It’s important to note, however, that both EnCap and Ameredev II alike are staying tight-lipped on the matter.

Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.

The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.

No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.

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