U.S. crude exports to Canada see significant increases

by Patrick C. Miller, The Bakken Magazine, August 27, 2014 via API SmartBrief

The export of United States crude to Canada has skyrocketed in recent years, thanks to dramatic increases in the production of sweet, light crude from the Bakken [please see remarks below -- D.R.] and other shale plays in the U.S. [...]

Presidential approval is usually required to export U.S. crude—except for Canada as long as it’s used within the country. The small volumes of crude exported to Canada over the years have increased dramatically from 32 (thousand barrels per day) in December 2010 to 350 MBPD in June 2014 [my emhasis - D.R.].

According to the TM&C report, “The U.S. has passed OPEC (Organization of Petroleum Exporting Countries) member Ecuador in total crude exports (which averaged 272 MBPD in 2013) and have become the principal feedstock for Canada’s Atlantic Coast refineries.”

U.S. crude imports over the past several years have declined while domestic production rose. U.S. production has increased from 5 million barrels per day (MMBPD) a few years ago to 8.5 MMBPD and continues to increase.

“This growth has been an important ‘relief valve’ for U.S. producers as the ability of domestic refiners to absorb more light barrels approaches its limits, and exports to other countries are restricted,” the report said.

Despite this, the U.S. continues to import significant volumes of light and medium quality crude from Canada.

“Infrastructure limitations, regulations (export policy, Jones Act, etc.) and differing regional refinery capabilities all influence these movements. [...]

Factors outlined in the report that could impact the trend of increased crude exports to Canada in the coming months include:

* The reversal of Enbridge’s Line 9, which transports imported crude west from Montreal to Sarnia in southwestern Ontario. This flow is being reversed to give the eastern Canadian refineries access to western Canadian crudes, potentially cutting into U.S. crude exports.

* Increasing Canadian production combined with the U.S. lack of approval for TransCanada’s Keystone XL pipeline and Enbridge’s Alberta Clipper expansion has made producers more desperate to find a market for their crude.

* Price disparities caused by increased U.S. crude production and restricted exports could enable Canada to use Montreal as a hub for the exchange of heavy crude for light. Using cheaper, foreign flagged transport vessels, Canada could ship heavy oil sand crude to the U.S. Gulf Coast and have them return with light, sweet crudes.

The report concludes: “As North America continues toward energy independence, a reshuffling of crude flows will take place to balance crude qualities with refinery demands. The increase in U.S. production will continue to flow north as long as the economics drive it in that direction. With the pending reversal of Line 9, there will be a shift in those economics, although the impact is yet unknown.” [Read full story]

(Bakken oil production -- including Bakken, Spanish, Three Forks and Bakken/Three Forks Pools -- increased from 273,809 barrels a day in December 2010 to 1,028,352 barrels a day in June 2014 - D.R.)   

Energy Intelligence announces the PIW Top 50 ranking of the world's largest oil companies

Energy Intelligence via PR Log (Press Release), Nov. 18, 2013

Russia and US Shale Reshape Latest Annual Ranking of the World’s 50 Largest Oil Companies from Petroleum Intelligence Weekly. [Read more]

Please see  http://www2.energyintel.com/PIW_Top_50_ranking_about and the EI infographic below:
Source: www.energyintel.com
Note: The share permission provided by Helen Reddick, Database and Marketing Manager, Energy Intelligence

(The ranking is based on six operational criteria - oil and gas reserves, oil and gas production, refined product sales and refinery distillation - and, unlike other corporate ranking systems in this industry, it allows for comparisons of both national oil companies and private sector firms. These Top 50 companies represent over 70% of global oil production and fully two-thirds of global refined product sales, making these rankings truly comprehensive and global. The rankings are based on 2012 data, the latest annual figures available - my emphasis, D.R.)   

U.S. Considers Exporting More Oil for First Time Since ’70s

by Jim Efstathiou Jr. & Jim Snyder, Bloomberg, Jun 18, 2013

The U.S. oil boom is moving Congress closer than it has been in more than three decades to easing the ban on exporting crude imposed after the Arab embargo.

 

Advances such as hydraulic fracturing are leading to record production that may outstrip refinery capacity within 18 months to three years, said Benjamin Salisbury, a senior energy policy analyst at FBR Capital Markets Corp. in Arlington, Virginia. Net petroleum imports now account for about 40 percent of demand, down from 60 percent in 2005, according to the U.S. Energy Information Administration, the Energy Department research unit.

Congress has limited oil exports since the 1973-74 Arab oil embargo triggered shortages that pushed up prices and led to long lines at gas stations. An increase in domestic production last year by a record 766,000 barrels a day [please see my remark below - D.R.] is challenging a notion that Americans need foreign oil, while setting up a debate policy makers may be reluctant to begin.

“Americans are unbelievably politically sensitive to oil and more specifically to gasoline prices,” Salisbury said in an interview. “For politicians to do anything, the pain has to come first. You have to see the rig count fall and then and only then can we have a decision about whether we want to export crude.”  [...]

The U.S. sends about 120,000 barrels of crude a day to Canada under a Commerce Department license. Congress allows exports from Alaska’s Cook Inlet and for consumption in Canada, along with sales determined by the president to be in the national interest.

Exports must expand to sustain the boom that increased U.S. production last year by the most since the first commercial well was drilled in 1859, said Robin West, chairman of the oil consulting firm PFC Energy. Output is putting the nation on pace to surpass Saudi Arabia as the world’s largest producer by 2020, according to Energy Department data. [...]

The oil rush, spurred by technology that makes it cheaper and easier to extract oil from rock formations, has boosted U.S. stockpiles of light, sweet crude, which is less costly to process than high-sulfur grades pumped by Saudi Arabia and Venezuela, making it more profitable for export. Landlocked by the ban and limits on transportation, U.S. light oil trades at a discount to the European blend that sets prices for more than half the globe’s oil.

“If you have an opportunity to export the more expensive product and import the cheaper one, why not do it,” John Felmy, chief economist with the Washington-based American Petroleum Institute, said in a telephone interview. “It’s something that we as a country need to take a look at.”

Still, Americans may balk at the idea of sending oil overseas because they’re concerned it may lead to higher gasoline prices, said David Goldwyn, president of Goldwyn Global Strategies LLC, a Washington-based energy consultant. [Read more]

(According to EIA data, U.S. crude oil production, including lease condensate, increased from 5.652 million barrels a day in 2011 to 6.505 million barrels a day in 2012, i.e., an increase of 853,000 barrels a day in just one year - the largest single-year increase in U.S. oil production ever recorded!---please see here - D.R.)

World's Top 25 Largest Refiners, Jan 1, 2013 -- OGJ

by David Rachovich

World's Top 25 Refining Companies 

Rank  Jan 1, 2013	Rank  Jan 1, 2012	Company	Crude Capacity, barrels per calendar day (b/cd)*
1.	1.	ExxonMobil Corp. [USA]	5,657,500
2.	2.	Royal Dutch/Shell [NL/UK]	4,194,239
3.	3.	Sinopec [China]	3,971,000
4.	4.	BP [UK]	3,322,170
5.	5.	Valero Energy Corp. [USA]	2,776,500
6.	6.	PDVSA [Venezuela]	2,678,000
7.	7.	CNPC [China]	2,675,000
8.	9.	Chevron Corp. [USA]**	2,584,600
9.	8.	Phillips 66 [USA]	2,504,200
10.	10.	Saudi Aramco [Saudi Arabia]	2,451,500
11.	11.	Total SA [France]	2,304,326
12.	12.	Petrobras [Brazil]	1,997,000
13.	13.	Pemex [Mexico]	1,703,000
14.	14.	NIOC [Iran]	1,451,000
15.	15.	JX Nippon Oil & Energy [Japan]	1,423,200
16.	16.	Rosneft [Russia]	1,293,000
17.	18.	Marathon Petroleum Co LP [USA]	1,248,000
18.	17.	OAO Lukoil [Russia]	1,217,000
19.	19.	SK Innovation [South Korea]	1,115,000
20.	20.	Repsol YPF SA [Spain]	1,105,500
21.	21.	KNPC [Kuwait]	1,085,000
22.	22.	Pertamina [Indonesia]	993,000
23.	23.	Agip Petroli SpA [Italy]	904,000
24.	24.	Flint Hills Resources [USA]	798,475
25.	25.	Sunoco Inc [USA]	505,000

Notes: Major changes in positions since Jan. 1, 2012, are few: Chevron and Phillips swapped ranks as well as Marathon and OAO Lukoil. Other changes in capacity are due to adjustments in declared capacity. – Please read Warren R. True and Leena Koottungal, "Asia, Middle East Lead Modest Recovery in Global Refining," OGJ, Dec 3, 2012, Table 1. Top 5 largest refiners (refining companies) in the USA are: Valero (12 refineries with 2,096,500 b/cd of crude capacity), Phillips 66, ExxonMobil, BP and Marathon---please see ibid., Table 2. For the USA, Valero has moved into the top spot for company-wide capacity, pushing Phillips 66 to No. 2. Also, please see my post "Top 20 Largest Refining Companies/Refiners in the U.S. as of Jan 1, 2011." -- D.R 

 *Includes partial interests in refineries not wholly owned by the company.

 **Includes holdings in Caltex Oil and GS Caltex.

Source: Oil & Gas Journal, Dec 3, 2012.

(Please see my posts: "World's Top 25 Largest Refining Companies, Jan 1, 2011 – OGJ, "World's Top 21 Largest Oil Refineries – OGJ," Jan 6, 2013; "World's Top 21 Largest Oil Refineries – OGJ," Feb 7, 2012; and Aaron & David Rachovich, "World's Top 21 Largest Oil Refineries – OGJ," Feb 19, 2011 – D.R.)

World's Top 21 Largest Oil Refineries -- OGJ

by David Rachovich

World's Largest Refineries (minimum capacity of 400,000 b/cd) 

 

Rank	Company	Location	Crude Capacity, barrels per calendar day (b/cd)*
1.	Paraguana Refining Center	Cardon/Judibana, Falcon, Venezuela	940,000
2.	SK Innovation	Ulsan, South Korea	840,000
3.	GS Caltex Corp.	Yeosu, South Korea	775,000
4.	S-Oil Corp.	Onsan, South Korea	669,000
5.	Reliance Petroleum Ltd.	Jamnagar, India	660,000
6.	ExxonMobil Refining & Supply Co.	Jurong/Pulau Ayer Chawan, Singapore	592,500
7.	Reliance Industries Ltd.	Jamnagar, India	580,000
8.	ExxonMobil Refining & Supply Co.	Baytown*, Texas, USA	560,500
9.	Saudi Arabian Oil Co. (Saudi Aramco)	Ras Tanura, Saudi Arabia	550,000
10.	Formosa Petrochemical Co.	Mailiao, Taiwan	540,000
11.	Marathon Petroleum Co. LLC	Garyville, Louisiana, USA	522,000
12.	ExxonMobil Refining & Supply Co.	Baton Rouge, Louisiana, USA	502,500
13.	Hovensa LLC	St. Croix**, Virgin Islands, USA	500,000
14.	Kuwait National Petroleum Co.	Mina Al-Ahmadi, Kuwait	466,000
15.	Shell Eastern Petroleum (Pte) Ltd.	Pulau, Bukom, Singapore	462,000
16.	BP PLC	Texas City, Texas, USA	451,250
17.	Citgo Petroleum Corp.	Lake Charles, Louisiana, USA	440,000
18.	Shell Nederland Raffinaderij B.V.	Pernis, Netherlands	404,000
19.	Sinopec	Zhenhai, China	403,000
20.	Saudi Arabian Oil Co. (Saudi Aramco)	Rabigh, Saudi Arabia	400,000
21.	Saudi Aramco-Mobil	Yanbu, Saudi Arabia	400,000

Notes: OGJ data show that S-Oil Corp.'s refinery in Onsan, South Korea, moved to No. 4 from No. 7 in 2011 on the strength of raising its crude capacity to 669,000 b/cd from 564,000 b/cd. And Marathon Petroleum Co. LLC's Garyville, La., plant moved to No. 11 from No. 13 after raising its crude capacity to 522,000 b/cd from 490,000 b/cd – please see my previous post "World's Top 21 Largest Oil Refineries – OGJ," Feb 7, 2012. Reliance Industries Limited (RIL) has 1.24 million barrels per day of crude processing capacity [i.e. No. 5 Jamnagar + No. 7 Jamnagar, above], the largest at any single location in the world – please see RIL's website here – D.R. For 2012, OGJ's survey data show total global capacity at slightly less than 89 million b/cd with no net gain in the number of plants. That's a growth of more than 700,000 b/cd from 2011. The data also show Western Europe continuing to lose plants, one more in 2012 after two closed in 2011; total capacity has fallen by more than 400,000 b/cd. North America's held in number, while capacity data even advanced, mostly with completion of a huge expansion at a Southeast Texas refinery [i.e., Motiva's Port Arthur, Texas, refinery--please see below - D.R.]—that almost immediately was forced to close for up to a year to deal with the effects of faulty design. New data for Asian refineries, however, show total regional capacity grew by more than 700,000 b/cd; Middle Eastern refineries, with several new plants and expansions under way, officially remained level with capacities for 2011. – Please read Warren R. True and Leena Koottungal, "Asia, Middle East Lead Modest Recovery in Global Refining," OGJ, Dec 3, 2012. South Korea is home to three of the five largest crude oil refineries in the world – SK Innovation's Ulsan (No. 2), GS Caltex's Yeosu (No. 3) and S-Oil's Onsan (No. 4), according to OGJ data above.

*By far the biggest refining story in North America in 2012 centered on the massive expansion at Motiva Enterprise LLC's Port Arthur, Texas refinery. The 325,000-b/d, $10 billion expansion, largest at a US refinery in nearly 40 years and designed for feedstock flexibility, was dedicated on May 31, raising capacity to 600,000 b/d, making it the largest US refinery and pushing ExxonMobil's Baytown refinery to No. 2 in the USA. On June 9, 2012, however, the new crude distillation unit sprung leaks traced to massive corrosion; a fire ensued and the expansion was shut down. Motiva has since traced the problem to faulty design. The unit will not restart before the end of first-quarter 2013, if then. Motiva Enterprises is a refining and marketing joint venture owned by affiliates of Royal Dutch Shell PLC and Saudi Aramco---please see Warren R. True and Leena Koottungal, "Asia, Middle East lead modest recovery in global refining," OGJ, Dec 3, 2012 - D.R.

**In February 2012, Hovensa LLC shut down its 350,000-b/d St. Croix, US Virgin Islands, refinery. The location is now an oil storage site. Operated by a joint venture of Hess Corp. and PDVSA, the state-owned oil company of Venezuela, the refinery could not stem losses in recent  years---Warren R. True and Leena Koottungal, "Asia, Middle East lead modest recovery in global refining," OGJ, Dec 3, 2012 - D.R..

Source: Oil & Gas Journal, Dec 3, 2012

(Also, please my post "World's Top 25 Largest Refiners, Jan 1, 2013 -- OGJ," -- D.R.)