Upstream

Nine U.S. states made the top 10 in a ranking of 143 jurisdictions worldwide based on their openness to upstream oil and gas activity, according to survey results compiled by the Fraser Institute in its “Global Petroleum Survey 2009.” Jurisdictions in North America, Europe, Australia and New Zealand generally were the most open, according to the 577 industry executives and managers who responded to the survey.

With its acquisition by Berkshire Hathaway’s MidAmerican Energy Holdings working its way through the regulatory process and plans to divest itself of its upstream gas assets and international coal and freight businesses already announced, Constellation Energy said Thursday it also intends to sell its Houston-based downstream gas trading operations.

With its acquisition by Berkshire Hathaway’s MidAmerican Energy Holdings working its way through the regulatory process and plans to divest itself of its upstream gas assets and international coal and freight businesses already announced, Constellation Energy said Thursday it also intends to sell its Houston-based downstream gas trading operations.

Production growth in the Raton Basin has prompted El Paso Corp.’s Colorado Interstate Gas Co. (CIG) to expand its transmission system serving the basin. CIG’s Raton Expansion would add 130 MMcf/d of incremental firm capacity from the Las Animas County, CO, area northward along the Front Range of Colorado to the Cheyenne Hub.

Upstream capital spending is pegged to jump a healthy 20% this year versus 2006. However, with most of the money earmarked for international oil projects, North American exploration and production (E&P) companies weighted to natural gas are not expected to deliver over-the-top earnings through the rest of the year, according to several energy analysts.

BP plc decided last week to ditch its dense business organization to zero in on its main businesses: the upstream and the downstream.

Upstream capital spending is pegged to jump a healthy 20% this year versus 2006. However, with most of the money earmarked for international oil projects, North American exploration and production (E&P) companies weighted to natural gas are not expected to deliver over-the-top earnings through the rest of the year, according to several energy analysts.

El Paso Corp. subsidiary Southern Natural Gas Co. (SNG) said Tuesday that the force majeure upstream of Toca at the Gate 6 platform offshore Louisiana due to a pipeline rupture remains in effect (see Daily GPI, Aug. 6; Aug. 7), potentially shutting in somewhere in the neighborhood of 600 MMcf/d of offshore production from market. Reduced gas supply for the Southeast could be problematic as the region currently bakes under some of the hottest temperatures of the year.

In an interim report, Chevron Corp. said its 2Q2007 results will gain on higher upstream commodity prices, stronger refining margins and the sale of its interest in Dynegy Inc. Partially offsetting earnings will be net charges related to debt redemption and other corporate items. Based on data from the first two months of 2Q2007 (April and May), Chevron said U.S. oil-equivalent production increased an estimated 1% sequentially from 1Q2007. Oil-equivalent growth follows restoration of Gulf of Mexico volumes following third-party pipeline disruptions. However, the higher output was partially offset by scheduled maintenance and other downtime. U.S. oil-equivalent production reached 755,000 boe/d in the first two months of the quarter, compared with 768,000 boe/d for the entire 2Q2006. U.S. natural gas output reached 1,714 MMcf/d in the first two months, compared with 1,832 MMcf/d for the entire 2Q2006. For the entire 2Q2007, Chevron said U.S. natural gas realizations were up 16 cents/Mcf, but bidweek pricing was mixed. Henry Hub gas prices averaged $7.56/Mcf for the entire 2Q2007, compared with $6.81 in 2Q2006. Rocky Mountain gas prices averaged $3.72/Mcf for the entire quarter, down from $5.26 in 2Q2006. Chevron is scheduled to report its quarterly results on July 27.