I hope this doesn't happen here. The Dutch are forcing XOM and Shell to slow operations because they have a study that says there is a link between gas production and earthquakes.

Will Exxon Mobil (XOM) Stock be Affected by Groningen Gas Field Output Reduction?

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http://www.reddit.com/r/Calgary/comments/3avflx/chevron_is_laying_off_130_people/

A few other Chevron BUs went through this last year. It was going to happen regardless of oil prices, though number let go may be higher now. There will most likely be Canadian expats being pulled home and US expats heading back to Texas (hopefully with a job).

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I was in the Canadian BU as an expat. Was supposed to be a 3-5 year assignment, but was pulled back to Houston after 9 months and now rotate to Gorgon from Houston. Never really wanted to have a rotational assignment, but was appointed this position. I also understand how important Gorgon is to CVX. All we really need to do is get our Australian projects online, and we will be good!

The debacle known as Bigfoot would like a word...

I've heard the real pain is yet to come.

I was part of that group laid off from cvx earlier this year. Still looking for work...

Are there and problems with Gorgon besides being way over budget?

With more LNG projects planned and coming online in Asia Pacific, at what point does that market fall with oversupply?

http://seekingalpha.com/article/3276745-market-chatter-eu-could-delay-halliburton-baker-hughes-merger

Hopefully gets pushed to next year because my employee stock purchase isn't until the end of the year.

No clue on Gorgon project issues.

But Watson would have you believe Asia won't be able to get enough NG in the future due to population/wealth growth.

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Are there and problems with Gorgon besides being way over budget?

With more LNG projects planned and coming online in Asia Pacific, at what point does that market fall with oversupply?

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Biggest problem with Gorgon is that it's in the middle of nowhere and a class A nature reserve. Need an extra bolt for commissioning? It's going to take a month to get there due to transport and extreme quarantine. Now multiply that across a project as big as Gorgon and you understand. There is nothing inherently complex about an LNG plant - it's just VERY large. I also agree about the demand for LNG. The project wouldn't have been approved without the economics being very viable - short term and long term.

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Are there and problems with Gorgon besides being way over budget?

With more LNG projects planned and coming online in Asia Pacific, at what point does that market fall with oversupply?

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Biggest problem with Gorgon is that it's in the middle of nowhere and a class A nature reserve. Need an extra bolt for commissioning? It's going to take a month to get there due to transport and extreme quarantine. Now multiply that across a project as big as Gorgon and you understand. There is nothing inherently complex about an LNG plant - it's just VERY large. I also agree about the demand for LNG. The project wouldn't have been approved without the economics being very viable - short term and long term.

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Was the remote location and nature reserve not known when the project was sanctioned? I would have a hard time believing that CVX will claim that to be the root cause.

And I am surprised at saying and LNG plant is not inherently complex. The levels of heat integration alone must be very impressive, and must represent a pretty good challenge to start up.

But like BigFoot the industry is waiting to hear the ROOT CAUSE of these setbacks.

Have CVX ever successfully executed a LNG project? Gorgon and Wheastone are both way over budget and worse than many want to admit and the Gorgon LNG sale contracts aren't great. ALNG is still offline. Kitimat was shelved.

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Are there and problems with Gorgon besides being way over budget?

With more LNG projects planned and coming online in Asia Pacific, at what point does that market fall with oversupply?

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Biggest problem with Gorgon is that it's in the middle of nowhere and a class A nature reserve. Need an extra bolt for commissioning? It's going to take a month to get there due to transport and extreme quarantine. Now multiply that across a project as big as Gorgon and you understand. There is nothing inherently complex about an LNG plant - it's just VERY large. I also agree about the demand for LNG. The project wouldn't have been approved without the economics being very viable - short term and long term.

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Was the remote location and nature reserve not known when the project was sanctioned? I would have a hard time believing that CVX will claim that to be the root cause.

And I am surprised at saying and LNG plant is not inherently complex. The levels of heat integration alone must be very impressive, and must represent a pretty good challenge to start up.

But like BigFoot the industry is waiting to hear the ROOT CAUSE of these setbacks.

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Pulling natural gas out of the ground with upwards of 15% CO2. Remove the co2, the water, fractionate all of the NGLS, the ethane to get the gas stream 99.999% (assumed mol% because I am not sure what the spec actually is) methane and then compress it 600x. Yeah not complex at all.

I think he was referring to the construction and not the process.

XOM is printing money with their Qatar and Papa New Guinea LNG projects online. I think 20% of XOM's net income in 2014 was from Qatar alone. XOM also has 25% interest in Gorgan. So once this come online it should be a cash machine for CVX and they will be cashflow positive and able to support their dividend. The scary thing is that if something goes wrong CVX is done. It really feels like the future success of the company is riding on this project.

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I think he was referring to the construction and not the process.

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I think the construction would be alot more complex. The engineering and design is usually 25-30% of one of our project cycles. But then again the longest project we have done is about a year long build of a cryogenic gas plant.

Yes but I don't believe that's the root cause of their issues. I do think the logistics issues were way underestimated.

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I think he was referring to the construction and not the process.

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Yes construction - it's modular.

Maybe, seems like if it as important as stated you'd have contingency spares built into your budget and execution strategy as a means of risk mitigation.

There's limited lay down and storage on barrow island. And. As I said, it was a bust.

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Yes but I don't believe that's the root cause of their issues. I do think the logistics issues were way underestimated.

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It's also public knowledge that the cost of labor was and still is a huge issue. Gorgon will be just fine - I have no doubt in my mind that we will get it up and running without any more issues.

When?

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Maybe, seems like if it as important as stated you'd have contingency spares built into your budget and execution strategy as a means of risk mitigation.

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There was plenty of contingency built in - It's the small stuff that you didn't account for that you need to clear a system for commissioning that really hurts.

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When?

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If I told you that.... Well you know the answer.

Would love to read the initial ESHIA/Environmental Risk Assessment reports for Gorgon & compare to what has become reality.

I'll try to find the clip, but Watson recently spoke to the necessity of partnerships in future projects like Gorgon & Wheatstone. I may be overly bullish on the remarks, but I thought it very interesting to hear him speak with such candor about just how costly these projects are to complete.

Thoughts on CQP?

So when do you expect Houston real estate to start dropping? Things have leveled off, it appears.

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This is the absolute best explanation of what drives commodity cycles that I've found during a year of research. If you want to figure out
what happens next, I'd suggest reading it. The only thing I don't
understand is why everything I've heard from the
industry/media/politicians/friends/texags is just so utterly freaking
wrong.


http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/wp109_mckinnon_web.pdf

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Look I don't have the time to read a 19 page article. Do I need to sell the boat or not?

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Just the motor, not the hull.

New 52 week low in CVX. It's been the worst of the majors. BP has been holding up pretty well.

another 52 week low CVX and XOM getting close

It looks like another extension for Iran deal. Oil isn't rebounding anytime soon. JP Morgan says $60 Brent remainder of year and $65 for next year.

I think a lot of companies thought this work be a V shape recovery and things would go up end of the year. It's looking more and more like that's not happening anytime soon.

A lot of companies have held up pretty well relatively speaking and have been overvaluing themselves when it comes to possible M&A. I think the pain is yet to come for them.

The Greek financial crisis is playing a pretty significant role on the Brent right now too.

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New 52 week low in CVX. It's been the worst of the majors. BP has been holding up pretty well.

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re- BP - Another big cut coming in August.

PXD
APC
APA

All are looking really tempting as they're back down to prices seen in January timeframe.

Thoughts?

I'm in PXD and would only consider it of those 3.