[sparky]

.
And now the shoe drop ........projects are put on ice
http://uk.reuters.com/article/2014/12/0 ... D220141205

[Tanada]

.
And now the shoe drop ........projects are put on ice
http://uk.reuters.com/article/2014/12/0 ... D220141205

The most relevant part from your link,

LEAST LIKELY

Projects in Canada's oil sands, which require expensive and complex extraction techniques, are the most unlikely to go ahead given their high investment requirements and relatively slow returns. Total (TOTF.PA) recently decided to postpone the FID on the Joslyn project in Alberta, the cost of which Hodée estimated at $11 billion.

Shell's liquefied natural gas (LNG) project in Canada's British Columbia, already under pressure from a looming supply surge, faces further strain in the current price environment, analysts said. According to research by Citi, the project requires oil at $80 a barrel to break even.

Royal Dutch Shell's (RDSa.L) chief financial officer Henry Simon indicated in October that it was "less likely" to go ahead with unconventional projects in West Canada if oil falls below $80 a barrel.

Asked by Reuters what the company's current thinking was, a Shell spokesman would not comment on "internal decision-making."

Even in the Gulf of Mexico, one of the most attractive oil production areas in the world, projects are facing challenges.

BP (BP.L) last year put on hold a decision on its Mad Dog Phase 2 deep water project in the Gulf of Mexico after its development costs ballooned to $20 billion and the oil major is now expected to further delay an investment on the field's development.

"BP were talking positively about bringing it back, but now it may be put on hold," BMO Capital Markets analyst Iain Reid said.

BP's chief financial officer Brian Gilvary however said in an analysts briefing in October that he expected Mad Dog Phase 2 to be sanctioned in the first quarter of 2015.

Statoil's Johan Castberg field in the Barents Sea, which was expected to get its FID in 2015, seems unlikely to get the go-ahead at the moment given it has an estimated project cost of $16-$19 billion, Hodée said.

Statoil said that the final project design is due in the summer of 2015. Its giant Johan Sverdrup field in the North Sea is still on track for development with a price tag of $32.5 billion.

(Additional reporting by Oleg Vukmanovic in Milan and Balazs Koranyi in Oslo; Editing by Sophie Walker)

I think the fundamentals remain the same as always, if the field in question will produce a steady return for a long time it is far more likely to proceed at some point. If the project is small potato's then it will get developed when prices are high enough to justify the infrastructure needed to develop it.

[ROCKMAN]

T - "I think the fundamentals remain the same as always". Yep... same ole same ole. Some folks seem to think they discovered some great secret the oil patch has been hiding. The "secret": only projects that can be economically developed are pursued. But it follows the silly position held by some that the increase in oil prices wasn't the primary driver behind the surge in the US oil production surge.

[TheDude]

When the EIA puts out US gasoline demand stats, it usually uses US Product Supplied as a proxy not Refiner sales volume. I believe that US gasoline sales were down just under 9% between 2005 and 2013 and it can be explained by a drop in VMT.

US VMT indeed has plateaued:



So refiners have turned to customers overseas, no surprise there. This has been going on for a decade now.

Sustained high prices I check up to Libya going offline, sanctions against Iran, and attendant general tight supplies. China has "weak growth" and they still build their demand year after year, same goes for the rest of the BRIC, the developing world in general, and let's not forget ever-increasing domestic demand in exporting nations themselves, whose citizenry would absolutely freak over having to pay 25 cents a gallon.

[ROCKMAN]

Loki - "I'm actually surprised so much gasoline used to be retailed directly by refiners." And this may be the source of the confusion: how many times have you pulled into a refinery and filled up? LOL. So are we talking about refineries selling to independent gasoline retailers vs shipping it to their own marketing division? IOW when an ExxonMobil refinery ships gasoline to an ExxonMobil gas station is that counted as retail sales and when it ships it to a Love gas station it's counted as whole sale?

So I'm not sure I've heard an explanation yet: what is the implication, as presented by the EIA, of "US Total Gasoline Retail Sales by Refiners" dropping from 60 million gal/day in 2006 to 20 million gal/day today? Who received that extra 14.6 BILLION gallons of retail gasoline sales in 2006 that isn't receiving it today? Since all the data is coming from the same source it must be consistent so it isn't a question of being correct. But what do these metrics mean? A loss of 14.6 BILLION gallons of retail sales by refiners in just 8 years is obviously meaningful. But what does it mean?

[phaster]

what's the old adage "be careful what ya asked for"

for longer than I care to remember, I seem to recall news reports saying there is a general public out cry of prices at the pump, and its almost followed by some pandering politician saying its time for an investigation of "greedy" oil companies manipulating prices (but scant news ever reports the "strategic" picture of oil demand in the global market)

long story shop, this latest down turn in the market, will in time lead to another sunup in cost, where I'm sure there will be another sound byte "report" of a consumer at a gas saying big oil companies are screwing the guy on the street, and it will be followed up by a shot of a politician saying they are going to start an "investigation" looking into the matter.....

[Loki]

So are we talking about refineries selling to independent gasoline retailers vs shipping it to their own marketing division?

Yes.

IOW when an ExxonMobil refinery ships gasoline to an ExxonMobil gas station is that counted as retail sales and when it ships it to a Love gas station it's counted as whole sale?

Yes.

So I'm not sure I've heard an explanation yet: what is the implication, as presented by the EIA, of "US Total Gasoline Retail Sales by Refiners" dropping from 60 million gal/day in 2006 to 20 million gal/day today? Who received that extra 14.6 BILLION gallons of retail gasoline sales in 2006 that isn't receiving it today?

It appears to be primarily domestic retailers who buy gasoline on the wholesale market but aren't owned by the refiners. There's been some increase in exports, but that doesn't even come close to accounting for the 35 mil gal/day you keep mentioning, as I've already shown.

I think a change in ExxonMobil's business model may account for a large chunk of this. ExxonMobil claims to be "the largest global refiner" (link). Wikipedia's entry for ExxonMobil says:

On June 12, 2008, ExxonMobil announced that it was transitioning out of the direct-served retail market, citing the increasing difficulty of running gas stations under rising crude oil costs. The multi-year process will gradually phase the corporation out of the direct-served retail market, and will affect 820 company-owned stations and approximately 1,400 other stations operated by dealers distributing across the United States. The sale has not resulted in the disappearance of Exxon and Mobil branded stations; the new owners will continue to sell Exxon and Mobil-branded gasoline and license the appropriate names from ExxonMobil, who will in turn be compensated for use of the brands.

It appears other oil companies are also dumping their retail operations.

In 2010, Chevron and Texaco ended retail operations in the Mid-Atlantic US, removing their brand from 1,100 stations in Delaware, Indiana, Kentucky, North Carolina, New Jersey, Maryland, Ohio, Pennsylvania, South Carolina, Virginia, West Virginia, Washington, D.C., and parts of Tennessee.
http://en.wikipedia.org/wiki/Texaco#21st_century