The Weekly Update: 2nd July 2012

The EIA predicts that tight oil production in the US will exceed 5.5 million bpd by 2035, more than oil produced from all US sources in 2011

Other notable trends predicted by the EIA; enhanced oil recovery (EOR) utilizing carbon dioxide will rise sharply after 2020 as current tight oil plays begin a substantial decline, and a large expansion in domestic natural gas production as LNG terminals for export come on line. Article here

Oklahoma ranked worlds best place for oil & gas investment

In the annual Global Petroleum Survey by the Fraser Institute, oil & gas executives were asked to rank jurisdictions in order of their attractiveness for investment, based on regulatory, environmental, legal system, political, and tax characteristics. The US placed 7 of its states in the top ten, also including Oklahoma, Mississippi, Texas, North Dakota, New Mexico, Kansas, and West Virginia. The two lowest-ranked states in the US were Alaska at 61st and New York, at 68th. Article here

ExxonMobil CEO: We are "losing our shirts" on natural gas in the US

Low prices due to excess production have affected all the natural gas producers, even the country's largest, ExxonMobil. In a recent press conference CEO Rex Tillerson also proclaimed that there was enough domestic natural gas to supply the country into the next century. This glut of domestic gas, along with world prices at three and four times that in the US, have a number of companies, including ExxonMobil, looking to LNG export options. Article here

Construction and maintenance costs still rising in upstream activity

According to IHS, the costs for building and maintaining upstream facilities rose by 2.3% over the last quarter of 2011 and the first of 2012. This was largely driven by the continued expansion in capex and opex budgets by E&P companies worldwide. IHS said that capex will rise from $586 billion in 2011 to $642 billion in 2012, while opex rises from $457 billion to $500 billion in the same time frame. The research organization expects upstream capital and operating costs to continue to rise in 2012 driven by increased costs in rig day rates, equipment and oilfield services. Article here

Gas rig count falls by seven this week to lowest level in 13 years