Halliburton leaving Russia

[BA Deere]

This isn`t marketing advice, I`m just a dude with a shag haircut, but I`m wondering if it might be a good idea to top off the tanks.  Russia will be hopeless without Halliburton`s expertise in the oil fields.  

This from Peter Zeihan

https://www.youtube.com/watch?v=2xsCSP8Ic6w   

https://www.theguardian.com/business/2022/mar/19/halliburton-schlumberger-suspend-operations-russia   

Two giant US oil field services companies, Halliburton and Schlumberger, have said they are suspending operations in Russia, in response to US sanctions over the invasion of Ukraine.

Halliburton said on Friday it had suspended future business in Russia in compliance with sanctions that prohibit transactions and work, including for certain state-owned Russian customers.

Halliburton said it would prioritize safety and reliability as it wound down its remaining operations in Russia.  

Halliburton said it halted all shipments of specific sanctioned parts and products to Russia several weeks ago and had no active joint ventures there.

[sdholloway56]

The profile of drilling in Russia is quite different than the US.

Here, fracking dominates and you get a fast payoff but have to drill and frack constantly to stay ahead of depletion.

There, more large scale conventional drilling and enhanced recovery.

It’ll matter, but not so much in the short term.

As far as current production, not nearly as bad as our drillers going on “capital discipline” strike while oil is $100.

[erikjohnson61y]

SD, you're making money hand over fist with $7 corn and $16 soybeans old crop prices made with $500 fertilizer (if that) and $2.25 diesel. 

And with war and bad weather around the world I think you have an ethical and moral obligation to spend whatever it takes to produce a bumper crop this year. Just throw your spreadsheets out the window.

It's like your local coop saying they don't like you and they don't like your product and your product is too expensive so you damn well better produce more and sell it at lower prices or we'll haul you in front of the Coop board to explain why you're hogging all that grain in your bins.

Ever think that since Brandon is out begging the Saudi's and Venezuelan's to produce more, and arranging for Iran to re-enter the market, that the oil producers here figure there's a good chance it will be a lot less profitable by the time production from new wells hits the market?  That said, Baker Hughes North American rig count is up from 503 a year ago to 839 now. (And of course it's not the drillers that are "on strike" - Nabors, H&P, and the rest would be happy for the business!  It's the E&P companies that have been burned before by over producing that are cautious now. At least THEY seem to learn that overproduction leads to misery. We farmers can't seem to figure that out...).

[BA Deere]

80% of Americans want the Keystone finished, if Awesome man won re election it`d be finished right now today and Canadian oil replace russian oil without missing a beat.

[roarintiger1]

Increasing the ethanol percentage wouldn’t hurt either. 

[k-289]

Pipeline  or  not , why  do  the  Canadians  not  want  to  refine  the  '' stuff '' at  home ,  then  move  it  to  markets - ? 

Moving   tar  sand ( 2500+ miles ) to  a  refinery - export  terminal  ,  reminds  me  of  the  word  Edsel  -  -  - 

[sdholloway56]

Baker Hughes North American Rotary Rig Count (ycharts.com)

Weekly oil rig count still way down- nearly 2/3rds of what it was in early '19. 

Please know what the hell you're talking about before going all condescending-y. But a lot of that going around.

[erikjohnson61y]

SD - Just trying to figure out your pattern - one day you argue to stop using hydrocarbons in favor of covering Kansas with solar panels, and the next day you're excoriating oil companies for not going all-in on drilling...  And as far as being condescending-y, please check the mirror!!

And comparing the rig count to a year ago is (IMO) the proper context to measure the oil companies' response to the current run-up in oil prices - continuing to add rigs (despite an unfriendly administration in place). In 2019, that little thing known as "COVID" hadn't arrived yet. As you'll recall, prices for oil briefly went *negative* on the London exchange in March 2020 (and I contracted 4000 gallons of diesel at $1.61). Consequently, rig counts fell through the floor, but have been building steadily since the end of 2020. So the chart you linked to actually proves my points. 

The oil biz has always been boom & bust. When I first moved to Houston in 1987, in the middle of one of the busts, you would see bumper stickers saying "Please, Lord, Let There Be Another Oil Boom. I Promise Not To Piss It all Away Next Time!!"

[erikjohnson61y]

K- Regarding why not build the refinery at the "mine" for the Canadian tar sands:

1 - The tar sand oil is too heavy for Canadian refineries to process. Most Canadian oil (previous to the tar sands projects) was lighter oil - closer to the West Texas Intermediate. There are existing refineries in Illinois and Texas that can process the heavy crude. The ones in Texas were build to handle Venezuelan crude, which is also a heavier, sour crude. ("Sour" means it has more sulfur in it that has to be removed for air quality reasons).

2 - After refining, you need a lot more pipelines to carry the refines products, and that infrastructure doesn't exist in Canada, beyond what they need for their own consumption. It would be like building a new power plant and then having to run new wires to customers' homes, instead of just plugging the power into the existing grid.  The product pipelines exist in the US to supply gasoline and diesel to regional distribution centers, from where it is trucked to service stations for sale.

3 - Even if you wanted to build the refinery where the tar sands are located, that's Fort McMurray, Alberta, at the northern fringes of civilization (with apologies to Alaskan's). Fort McMurray has a population of around 65,000, which is not enough to support a major refinery and all the infrastructure that goes with it. It is 270 miles south to Edmonton, the next nearest major population center. 

4 - Just for Clarification, the Keystone pipeline is completed and operational, bringing the Canadian tar sand oil to the US. It goes south from Fort McMurray to Calgary, then heads east through Saskatchewan to Manitoba, then heads south through eastern North Dakota, South Dakota, and Nebraska to a town called Steele City.  There one branch goes east to Illinois, while the main line continues to the hub in Cushing, OK, and then on to the gulf coast. The Keystone XL pipeline would have expanded that capacity from under 600,000 barrels/day to over 800,000 barrels/day by making a shortcut connection from Calgary to Steele City through Montana and South Dakota. It would have picked up oil from the Bakken oil fields in North Dakota as well, allowing that oil to be shipped by pipeline instead of rail, which would be much safer.  https://www.washingtonpost.com/wp-srv/special/business/keystone-xl-map/  

[k-289]

erik - been  to  R R  track  jobs  next  to  Cushing Ok ( BNSF )  ,  lots  of  refining  done  there  -  -  -

Seadrift  Texas  - refining -  export  area ,  is  the  destination  of  line  2  - with  double  R R track  (  U P  ) support  installed in  2003 in  the  pipeline  outlook  forecasts    -  -  -

In  the  last  2  years  the  refinery  in  Canada  would  have  been  in  place  to  refine  the  junk  product ,  and  then  there  is  the   gas  flaring   situation  in  N  Dakota ,  to  make  LOTS  of  fertilizer & etc. -  and  the  flimzy  excuse  of  you  can't  build  a  new  refinery  goes  out  the  window  with  the  E- Plants  that were  constructed  the  last  20  years  -  -  -

 Unit  trains  haul  Ethanol  every  direction  in  the  US ,   so  why  the  issue  of  refined  Canadian  fuel ,  even  though  we  export  fuel  products  to  Canada  currently  '' $2,5  billion''  worth in  2019  -  -  -

It's  an  interesting  shell  game  these  days,  of  unknown  destinations  -  -  -