The U.S. Energy Information Administration sees the price of oil dropping as a result of increased production in years to come. BP, despite recent onshore asset sales, still has an interest in the shale market and a Canadian firm purchases assets in the Eagle Ford basin for $3.1 billion.
The American Petroleum Institute (API) has stepped up its efforts to urge congress to approve the Keystone XL Pipeline. The organization has TV, Radio, and online ads running in Colorado, Minnesota, New Mexico, South Dakota, and Delaware suggesting Senators put politics aside and take action. API Downstream Operations Senior Manager, Refining and Oil Sands, Cindy Schild commented, “It’s time for members of the Senate to vote yes on KXL and take a stand for middle class Americans who desperately need and want the thousands of jobs Keystone XL would create.”
The U.S. Energy Information Administration predicts Brent crude to average $106 per barrel in 2014 and $102 per barrel in 2015. The West Texas Intermediate discount to Brent is expected to average $10 and $11 per barrel for 2014 and 2015 respectively. The drop in price is due to an estimated increase in production. April had the highest monthly average production of crude oil since March of 1988 at 8.3 million barrels per day. It’s expected that production will average 8.5 and 9.2 million barrels per day for 2014 and 2015 respectively, while 2013 averaged 7.4 million.
A Canadian energy producer, Encana Corp, wants in on the oil-rich Eagle Ford basin. The company agreed to pay $3.1 billion to acquire 45,500 net acres across Karnes, Wilson, and Atascosa counties in South Texas. The producing assets pumped about 53,000 barrels of oil equivalents a day during the first quarter according to Encana. “Gaining a position in a world class, oil-rich resource play like the Eagle Ford accelerates the transition of our portfolio and underscores our investment focus on high margin assets,” commented Doug Suttles, Encana President & CEO in a statement.
In an effort to better compete in the U.S. Shale Market, BP will split off its lower 48 onshore business into a new subsidiary. John Minge, BP America CEO, says the new shale focused unit will rebrand and have a new name that potentially excludes the BP name. “It’s very dynamic, lower-margin, lean business that’s better suited for the independent style. It’s hard for a super major to compete with that,” said Minge during a roundtable discussion at the Offshore Technology Conference in Houston.