United Kingdom

British North Sea oil and gas sector still facing headwinds

8 Mar 2017   -, United Kingdom

An industry trade group sees confidence returning to the British North Sea, but lingering challenges remain for oil and natural gas. File photo by Maryam Rahmanian/UPI. March 7 (UPI) — Though the region is showing signs of recovery, a British oil and gas trade group said new investments in offshore activity are slow to emerge. A report from the trade group Oil & Gas U.K. finds total British offshore production up 5 percent from 2015 to 1.73 billion barrels of oil equivalent. That trend should continue short-term with output reaching 1.9 billion barrels of oil equivalent by 2018. That follows a 15-year period of steady declines from British waters. Deirdre Michie, the chief executive for the trade group, said confidence is returning to the North Sea. Cash flow generated by exploration and production companies is expected to move into positive territory for the first time since 2013. “However, this […]

U.K. Oil, Gas Output Set for Longest Expansion in Two Decades

7 Mar 2017   United Kingdom

U.K. oil and gas production will continue to grow through 2018, putting it on course for the longest expansion in almost two decades, amid project startups and productivity gains, an industry lobby said. “Production has now been rising since 2015, bucking a 15-year trend of decline, and should continue to rise over the next two years,” Oil & Gas U.K. said in a statement on Tuesday. Output in the U.K. Continental Shelf rose to 1.73 million barrels of oil equivalent a day last year and will peak at between 1.8 million and 1.9 million barrels in 2018, the group said. New developments as well as productivity gains are behind the increase after output in the basin peaked about 15 years ago, the lobby said. The slump in oil prices has forced the industry to become leaner, with average operating costs falling by almost half to about $15.30 a barrel […]

British oil and gas projects late and over budget, report says

4 Mar 2017   United Kingdom

Despite capital investments coming in at an all-time high, a British survey of oil and gas activity found few projects were delivered on time and under budget. The official British Oil & Gas Authority published its five-year review of oil and gas activity for the period ending in 2016. The review found less than 25 percent of oil and gas projects were delivered on time, with most running about 10 months behind schedule. OGA Operations Director Gunther Newcombe put a positive spin on the figures, noting investments came in at close to $50 billion over the last five years. “This brings considerable benefits in terms of financial contribution to the economy, supporting thousands of skilled jobs and safeguarding […]

BP Says Peak Oil Demand May Occur Post-2050, Plans to Increase Production

2 Mar 2017   United Kingdom

In the wake of the expected growth trends set out by its energy outlook, BP plc revealed in its latest strategy update that it anticipates production to increase by an average of 5 percent per year from 2016 to 2021. BP Group production, which includes BP’s share of production from Rosneft, is expected to be around 4 million barrels of oil equivalent per day (boepd) by 2021, the energy major said in a Feb. 28 company statement. According to BP: six projects began production in 2016 seven projects are scheduled to come online in 2017 nine projects are expected to come on-stream between 2018 to 2021 The projects coming online in 2016 and 2017 are said to be on track to deliver 500,000 boepd in new production capacity by the end of this year. Production ramping up from new upstream projects is expected to deliver a material improvement in […]

A Push for Diesel Leaves London Gasping Amid Record Pollution

Every winter, as if on cue, the coughing begins. As soon as the weather turns cold, Tara Carey, an international aid worker living in London, ritually places cough syrup on her bedside table because she knows her sleep will be punctuated by hacking coughs. She also coughs at work. And she coughs while cycling to her office, on a road so toxic that for a brief period last month the air pollution there was greater than in infamously smoggy Beijing.

Tidal Lagoon Energy in Wales

17 Feb 2017   Tidal, United Kingdom

The report of an independent review of UK tidal lagoon energy was published on 12 January 2017 by a former UK energy Minister Charles Hendry. The report praises the proposed ‘pathfinder’ tidal lagoon in Swansea Bay as a ‘no-regrets option’, and sets out a supportive case for developing the sector. The Hendry Review was commissioned in February 2016 by UK Government to assess the strategic case for tidal lagoon energy as a new industry in the UK. This followed a successful planning proposal by Tidal Lagoon Power (TLP) to develop the world’s first tidal lagoon in Swansea Bay, as well as a subsequent programme for a ‘fleet’ of five larger projects, including three in Welsh waters (Cardiff, Newport and Colwyn Bay). Despite the Swansea Bay project appearing in the 2015 UK Conservative Party manifesto and receiving development consent in June 2015, uncertainties around cost and subsidy subsequently prompted the […]

Decline of UK’s Rough storage site to raise gas import costs

17 Feb 2017   United Kingdom

The decline of Britain’s biggest gas storage site and the lack of new-build to replace it will increase dependency on imports over the next few years, boosting wholesale market volatility and consumer gas prices. Seasonal gas storage provides security and flexibility of supply. At times of low demand and therefore low gas prices in the summer, gas is injected into storage to be kept for when demand rises in the winter. Rough, the country’s only seasonal gas storage site, can usually meet around 10 percent of Britain’s peak daily gas demand but is currently capable only of handling 5 percent. At over 30 years old, the depleted gas field off England’s east coast has undergone prolonged outages over the past year due to problems with well pressure; six wells have permanently closed and […]

Volvo receives order for 8 all-electric buses in UK; OppCharge opportunity charging

Volvo Buses has received an order for eight electric buses, the Volvo 7900 electric, from Transdev Blazefield, the owner of the Harrogate Bus Company in the UK. Operations start in 2018 in Harrogate, 90 km northeast of Manchester. When the vehicles enter service in 2018, the project will be the first of its kind in the UK introducing full electric vehicles using opportunity charging via the common interface OppCharge, whereby the charging stations can also be used by electrified buses from other vehicle manufacturers. OppCharge is now starting to be used as a common interface in more than 12 countries. ( Earlier post .) Opportunity charging takes place via an overhead mast, which connects to the bus […]

BP may ‘incrementally’ increase U.S. shale portfolio: CEO

BP is looking at ways to incrementally increase its footprint in U.S. shale oil and gas production, its Chief Executive Officer Bob Dudley said on Tuesday. Dudley said the company will use “a lot of discipline” in investments in the sector as asset prices are high. Talking to analysts after reporting its 2016 results, Dudley also said the British oil and gas company was considering giving the green light to several projects around the world, including in Oman, Trinidad and Tobago and India. (Reporting by Ron Bousso; editing by Jason Neely)

Why Is This Private Equity Fund Scooping Up Billions In North Sea Assets

2 Feb 2017   United Kingdom

I’ve been discussing the return of big oil and gas M&A the last several weeks. And yesterday we got more confirmation it’s “money on” right now in the global petroleum sector — with one of the biggest single deals in years coming down in an unexpected place. From a virtually unknown acquirer — which has instantly become the largest independent producer in the neighborhood. That’s a London-based firm called Chrysaor Holdings. Which yesterday unveiled a $3.8 billion purchase of North Sea assets from Shell. Under the deal, Chrysaor is buying Shell’s working interest in seven North Sea projects. Coming with a current 115,000 b/d of oil equivalent production — plus another 13,000 b/d production in the Shetland Islands, which is expected to be onstream soon. In total, Chrysaor will acquire 350 million barrels of proven and probable reserves — making the firm the largest U.K. independent producer focused on […]

Shell Sells $4.7 Billion of Fields as Disposal Push Accelerated

31 Jan 2017   United Kingdom

Royal Dutch Shell Plc, looking to pare debt swollen by last year’s acquisition of BG Group Plc, accelerated its drive to shed assets on Tuesday by agreeing to the sale of fields in the North Sea and Thailand for as much as $4.7 billion. The disposals include the sale of about half the company’s North Sea oil and gas assets for as much as $3.8 billion to Chrysaor Holdings Ltd., Shell said. Earlier Tuesday, the company agreed to sell its stake in an offshore Thai gas field to a unit of Kuwait Petroleum Corp. for $900 million. Shell piled up borrowings following its biggest-ever acquisition, the $54 billion purchase of BG, and needs to hit disposal targets to stave off credit rating reviews and maintain dividend payouts. While Chief Executive Officer Ben van Beurden has made debt reduction a top priority, Shell missed its target for asset sales last […]

Fracking gets conditional endorsement from Church of England advisers: Kemp

20 Jan 2017   United Kingdom

Two groups of Church of England advisers have cautiously endorsed fracking for shale gas in the United Kingdom provided it does not conflict with climate change policy and robust regulations are put in place. If the Church’s advisory panel had come out against fracking, the decision would have been widely cited by lobbying groups active on climate issues as well as local issues to oppose further drilling and fracturing. Instead its cautious endorsement, subject to conditions, is in line with an evolving consensus that does not oppose fracking in principle but is likely to remain wary in practice for the time being. “Shale gas is a potentially useful element in achieving a transition to a much lower carbon economy,” church advisers wrote in a briefing paper […]

UK Is Europe’s Last Hope For A Fracking Success

19 Jan 2017   United Kingdom

Following poor success across Europe, including Poland, Ukraine, France, the Netherlands, and Denmark, the UK now remains the last candidate province for European shale gas and oil in the near term. And a fracking moratorium in Scotland has further reduced that to England & Wales. The British government is in favour of developing the resource and has opened up significant acreage in the 14th Onshore Round. Nonetheless, some resistance remains. Meanwhile, North Sea production has been waning and the current deficit amounts to around 1 trillion cubic feet (Tcf) per annum, with the figure set to double over the next 20 years. 1/3 of gas imports come from either Russian fields or LNG supplies of mixed provenance. And with ‘Brexit’ looming, it will be vital for the UK economy to secure long term, reliable energy. (Click to enlarge) Figure 1. Falling North Sea gas production could create a huge […]

Church of England weighs in on shale

19 Jan 2017   United Kingdom

The Church of England said Wednesday it added its voice to the chorus of those taking a stand on the fledgling shale natural gas industry in the country. “As more applications for test drilling and fracking are granted, some affected communities are looking to the Church of England for leadership and perspective on the many issues concerned,” it said in a briefing paper. Last year, Friends of the Earth and Greenpeace delivered a petition with 186,000 signatures to the British government expressing solidarity with a move by the Lancashire County Council to prohibit drilling in the area. Advocacy groups say there are indications the government aims to develop a commercial shale industry under the terms of a Nationally Significant Infrastructure Planning mechanism, a mechanism criticized […]

So-so future for British North Sea

18 Jan 2017   United Kingdom

Oil and natural gas activity off the British coast should wax and wane in the short-term after one of the industry’s worst years, Wood Mackenzie finds. Lower crude oil prices and an uncertain economic future in the wake of last year’s vote to leave the European Union put the British offshore oil and gas industry in “full survival mode,” according to a report from Wood Mackenzie. Fiona Legate, a senior analyst with the group, said in a statement that capital investments offshore last year declined 20 percent to just over $10 billion, a figure reflected in a lower appetite for new assessments offshore. That, however, masks otherwise upbeat performances. “Exploration and appraisal drilling hit a 50-year low in 2016, but despite this […]

Oil Price Rebound May Come Too Late For UK Oil Sector

9 Jan 2017   United Kingdom

The ‘lower for longer’ oil price reality of the past two years has spared virtually no one in the industry, and the UK’s oil and gas companies have been among the hardest hit, strained by the oil price slump in the high-cost production area of the North Sea. Troubles with refinancing and declining capital investment in North Sea projects have taken their toll, especially on smaller independents, a report by accountancy firm Moore Stephens shows. A total of 16 UK-based oil and gas companies became insolvent in 2016, compared to just 2 businesses that went bust in 2015, to 6 insolvencies in 2014, 1 in 2013, and not a single one in 2012. Moore Stephens flagged concerns that many hedging contracts – that had secured higher prices for some producers – now have expired. In addition, oil and gas companies have been facing problems with refinancing as banks are […]

Amid smoggy days in London, growing calls to clean up Europe’s toxic air

It’s Christmastime on Oxford Street. Brilliant displays of white lights rain from above. Decked-out shoppers dash from one gaudy sale to the next. And Johnny Conquest breathes in poison. “The air is horrible. The taxis stop right here, and when they take off, boom, you can taste it,” says the 67-year-old as the heavenly smell of the caramel peanuts he hawks from a humble street stall mingles with the sickly stench of diesel. “I’m on the worst corner in London.” In at least one important respect, it may be the worst in the world. London has come a long way since the days when its infamous coal-fired pollution shrouded Sherlock in a permanent haze or struck at least 4,000 residents dead in less than a week. But the city’s overreliance on diesel-powered vehicles […]

The End Of The Downturn? BP Steps Up Spending As Oil Prices Rise

20 Dec 2016   United Kingdom

With the rebound in oil prices underway and the astronomic costs stemming from the 2010 Deepwater Horizon disaster in the rear view mirror, BP is once again looking to make large investments. In just the past few days, BP announced a rash of deals in different parts of the world, signaling the British oil major’s intent to grow after several years of shrinking. Over the course of three days, BP announced a $2.2 billion expansion of its existing facility in Abu Dhabi, as well as a nearly $1 billion investment in natural gas fields off the coast of Mauritania and Senegal. Bloomberg calculates that BP has spent $3.8 billion on acquisitions in 2016, the highest tally in four years. BP’s CEO Bob Dudley finds himself in an unfamiliar position – the CEO of a growing company. He took the helm shortly after the Deepwater Horizon disaster, which saw nearly […]

UK High Court upholds shale gas permit for Third Energy: claimants

20 Dec 2016   United Kingdom

Britain’s High Court ruled on Tuesday that a local government’s shale gas fracking permit award to developer Third Energy was legal, claimants Friends of the Earth said in a statement. “The High Court has ruled that fracking can go ahead in beautiful Yorkshire,” said Donna Hume, campaigner for Friends of the Earth, an environmental group that had challenged the permit awarded in May. North Yorkshire County Council was the first local authority to grant a shale gas fracking permit since a moratorium was lifted in 2012. Other British shale gas developers include IGas, Egdon Resources and INEOS. (Reporting by Karolin Schaps, editing by Louise Heavens)

Green Energy Firm Fights UK Fracking Plans

10 Dec 2016   United Kingdom

Green energy firm Ecotricity is challenging the fracking industry by submitting applications for its new Green Gas Mills on sites already proposed for fracking. Green energy firm Ecotricity is challenging the fracking industry by submitting applications for its new Green Gas Mills on sites already proposed for fracking. We’ve applied for planning permission for #GreenGas Mills at #fracking sites… https://t.co/2l64RYV0Et pic.twitter.com/7F1QnKvshs — ecotricity (@ecotricity) 8 December 2016 The company has put in applications at two potential Cuadrilla fracking sites in Lancashire – Preston New Road and Roseacre Wood. “We want to show that there‘s an alternative to fracking and start a local debate in the areas directly affected by it, in the same way we want to start a debate at the national level, including the House of Commons,” Dale Vince, Ecotricity founder, said. “It’s important not just to oppose fracking, but to have an answer as to where […]

BP CEO Dudley: We’ll Double Our North Sea Oil Production By 2020

9 Dec 2016   United Kingdom

Bob Dudley UK’s oil major BP (NYSE:BP) will double its production in the North Sea to 200,000 barrels of oil per day, chief executive Bob Dudley said in an interview with Energy Voice in Aberdeen on Wednesday. “You will see portfolio changes for us in the North Sea, but you may see us invest in other projects as people approach us about joining them. So I think there’s a mix, but we should double our production by 2020 from where it was in 2015,” Dudley said. The manager went on to add: “We should be over 200,000 barrels a day in 2020 and by then I’m hopeful our exploration program will lead to more things to do.” Even though he admitted that the North Sea is largely contains mature fields and things would never go back the way they were when oil was sitting comfortably at US$100, Dudley expects […]

UKCS Oil, Gas Extraction Drops 10%

9 Dec 2016   United Kingdom

Oil and gas extraction in the UKCS decreased by 10% year-on-year, and by 10.8% month-on-month, in October, according to the latest numbers from the Office for National Statistics (ONS). Oil and gas extraction in the UK Continental Shelf decreased by 10 percent year-on-year, and by 10.8 percent month-on-month, in October, according to the latest numbers from the Office for National Statistics (ONS). “Evidence from the Department for Business, Energy and Industrial Strategy (BEIS) attributed the decrease to continued maintenance at some of the largest oil fields in the North Sea,” the ONS report said. BEIS advised that the decrease could largely be attributed to continued maintenance to the Buzzard oil field, which is owned by Nexen Petroleum UK Limited, a wholly owned subsidiary of CNOOC Limited. The decline was the largest since September 2012, when it fell by 26.4 percent, according to the ONS. Buzzard also underwent extensive maintenance […]

London transport operator Go-Ahead adds two Irizar electric i2e buses to fleet after successful operating results

Based on the success of two Irizar 100% i2e electric buses that have been operating in London since June 2015, London’s largest transport operator, Go-Ahead, is incorporating the buses into its fleet and has signed an agreement with Irizar that includes service and maintenance. For over a year, these two buses have been operating on the busy routes 507, connecting Waterloo Station with Victoria Station, and 521, which connect Waterloo Station with London Bridge Station. The operating data has successfully fulfilled the objectives requested. With this change, both buses will begin to operate for longer periods on the 108 route which runs from Stratford International Station to Lewisham Station with different operating conditions. In addition, Irizar will offer comprehensive maintenance of the buses. The first of these two units was delivered to TFL (Transport for London) as part of the “Clean Bus Summit” which took place on 29 June […]

Coal price surge sets miners against activists by English seaside

28 Nov 2016   Coal, United Kingdom

In northeastern England, a battle is raging between grass roots campaigners and a company intent on digging a new open cast mine as world coal prices soar. A year after Britain closed its last deep coal mine and pledged to phase out coal-fired power generation, the economics of mining have been transformed. Coal prices have risen by well over 100 percent this year to $100 a tonne. Some mining stocks have risen even more, spurred by U.S. President-elect Donald Trump’s pledges to revive coal and pull out of the Paris Agreement on climate change. Some wonder how long the coal price surge will last, but in Northumberland, the Banks Group is pressing ahead with plans for a new mine despite opposition from local environmentalists. Northumberland […]

With a Meeting, Trump Renewed a British Wind Farm Fight

23 Nov 2016   United Kingdom, Wind

When President-elect Donald J. Trump met with the British politician Nigel Farage in recent days, he encouraged Mr. Farage and his entourage to oppose the kind of offshore wind farms that Mr. Trump believes will mar the pristine view from one of his two Scottish golf courses, according to one person present. The meeting, held shortly after the presidential election, raises new questions about Mr. Trump’s willingness to use the power of the presidency to advance his business interests. Mr. Trump has long opposed a wind farm planned near his course in Aberdeenshire, and he previously fought unsuccessfully all the way to Britain’s highest court to block it. The group that met with Mr. Trump in New York was led by Mr. Farage , the head of the U.K. Independence Party and a member of the European Parliament. Mr. Farage, who was a leading voice advocating Britain’s […]

With a Meeting, Trump Renewed a British Wind Farm Fight

22 Nov 2016   United Kingdom, Wind

When President-elect Donald J. Trump met with the British politician Nigel Farage in recent days, he encouraged Mr. Farage and his entourage to oppose the kind of offshore wind farms that Mr. Trump believes will mar the pristine view from one of his two Scottish golf courses, according to one person present. The meeting, held shortly after the presidential election, raises new questions about Mr. Trump’s willingness to use the power of the presidency to advance his business interests. Mr. Trump has long opposed a wind farm planned near his course in Aberdeenshire, and he previously fought unsuccessfully all the way to Britain’s highest court to block it. The group that met with Mr. Trump in New York was led by Mr. Farage , the head of the U.K. Independence Party and a member of the European Parliament. Mr. Farage, who was a leading voice advocating Britain’s […]

Britain to officially shutter all coal power plants by 2025

15 Nov 2016   Coal, United Kingdom

The last coal power station in Britain will be forced to close in 2025, the government said as it laid out its plan to phase-out the polluting fossil fuel. Ministers promised last year that the UK would close coal power within a decade and replace it with gas and other sources to meet its climate change commitments. But in a delayed consultation on the phase-out, published on Wednesday , officials admitted that the last coal power station was likely to shutter in 2022 even without government intervention, prompting calls from campaigners to bring forward the cut-off year. Greg Clark, the energy secretary, said the move sent a clear signal to the world that the UK was a good place to invest in clean energy. “Taking unabated coal power out of our energy […]

British Offshore Industry: Expect The Unexpected

The majority of us will say check out last year’s figures – only 13 exploratory wells were drilled in 2015. As energyvoice.com put it – “Exploration in British waters has absolutely crashed and is now at its worst ever in the entire history of our still strategically vital offshore oil and gas industry.” But that was before the closure of the latest government licensing rounds. Keen observers (they do say the geeks will inherit the Earth) noticed that for the first time in over twenty years the recent offshore licensing offers in the North Sea concerned what’s described as “frontier areas”. And guess what? Be still our beating hearts. It was “really positive”. 24 companies applied for licenses covering 113 blocks – BP alone made 29 applications. Nick Richardson, head of exploration and new ventures at the OGA said, “It is not much use comparing this to […]

Prepare for the North Sea Oil Flood

December flow set to increase to 2.16 million barrels a day U.K.’s Forties field, Norway’s Grane crude driving surge Oil producers in the North Sea, home to one of the world’s key crude-price benchmarks, are poised to ship the most crude in more than four years. The surge takes place just as OPEC tries to contain a global surplus with coordinated output cuts. Shipments of North Sea grades will increase 10 percent month-on-month to about 2.16 million barrels a day in December, according to data compiled by Bloomberg. If all the cargoes load as planned it would mark the most crude oil shipments from the region since May 2012. The increase just from September, when there was field maintenance, would be almost 360,000 barrels a day. The surge poses yet another challenge to the Organization of Petroleum Exporting Countries as it seeks to curb production to steady markets in […]

Energy Giant Shell Says Oil Demand Could Peak in Just Five Years

3 Nov 2016   United Kingdom

Demand to top out in 5-15 years, before supply peaks Royal Dutch Shell Plc, the world’s second-biggest energy company by market value, thinks demand for oil could peak in as little as five years, a rare statement in an industry that commonly forecasts decades of growth. “We’ve long been of the opinion that demand will peak before supply,” Chief Financial Officer Simon Henry said on a conference call on Tuesday. “And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport.” Shell’s view puts it at odds with some of its biggest competitors. Exxon Mobil Corp., the largest publicly traded oil company, said in its annual outlook that “global demand for oil and other liquids is projected to rise by about 20 percent from 2014 to 2040.” Saudi Arabia, the biggest […]

BP confirms joint venture with Rosneft

British energy company BP said Tuesday it confirmed a pledge to invest as much as $300 million in developing reserves in Russia alongside oil company Rosneft. BP issued a statement confirming a joint venture with Rosneft to carry out exploration work in two inland basins in Russia. Starting in late 2016, both sides working through the Yermak Neftegaz joint venture will carry out preliminary seismic surveys to get a better understanding of the resource potential there. “BP has committed to provide up to $300 million in two phases as its contribution to the cost of the joint venture’s activities at the exploration stage,” the British company said in a statement. Both companies have a turbulent past. BP CEO Bob Dudley […]

BP Beats Forecasts, But Earnings Slump On Weak Oil, Refining Margins

2 Nov 2016   United Kingdom

BP ( NYSE:BP ) reported on Tuesday a third-quarter profit that beat analyst estimates, but weaker oil prices and sharply lower refining margins dragged its earnings down by almost a half compared to the third quarter last year. Underlying replacement cost profit, BP’s definition of a net income, dropped to US$933 million for the third quarter from US$1.819 billion for the third quarter last year, “affected by a weaker price and margin environment”, BP said . In comparison, analysts polled by The Telegraph had expected BP’s third-quarter profit to come in at only US$780 million, while the average estimate of 14 analysts surveyed by Bloomberg had anticipated the earnings to stand even lower at US$719.2 million. Although BP beat earnings estimates at a consolidated group level, its upstream business suffered heavily from the ‘lower-for-longer’ oil prices. BP’s upstream segment booked an underlying pre-tax replacement cost loss of […]

Shell Swings to Profit as Operating Costs Fall but Remains Cautious

1 Nov 2016   United Kingdom

Royal Dutch Shell PLC reported a marked increase in third-quarter profit Tuesday, reversing a successive decline in earnings this year as its drive to lower costs to counter weak oil prices bore fruit. The company said its quarterly profit on a current cost-of-supplies basis—a number similar to the net income that U.S. oil companies report –was $1.4 billion, up from a loss of $6.1 billion in the third quarter of 2015 and sharply higher compared with the previous quarter. The improvement in earnings is an important victory for management, who must show they are taking steps to sustain the business through a t wo-year slump in oil prices and are able to deliver value after completing a roughly $50 billion acquisition of smaller rival BG Group earlier this year that many investors worried […]

BP Posts Sharp Rise in Profit as Cost Cuts Offset Weak Oil Prices

1 Nov 2016   United Kingdom

BP PLC’s third-quarter profit rose 35%, reversing three successive quarters of losses, as the company began to feel the benefits from cost reductions that are helping to offset continued weakness in oil prices and sliding refining margins. The British energy giant said Tuesday its replacement cost profit—a number analogous to the net income that U.S. oil companies report—totaled $1.66 billion, compared with a profit of $1.23 billion a year earlier. “We continue to make good progress in adapting to the challenging price and margin environment,” said BP Chief Financial Officer Brian Gilvary. Despite the rise in profit and upbeat comments from management, shares in the company dropped 3% in early trading in London. BP’s earnings come as oil executives have begun to sound rare notes of optimism that the worst of a two-year […]

The UK’s Oil And Gas Ultimatum: Exploration Or Bust

21 Oct 2016   United Kingdom

Here’s something that most of you probably knew but didn’t really want to see written in a report: the number of jobs in the UK’s oil and gas sector has dropped more than 25 percent over the last two years. It brings into sharp relief the real and absolute need for hands to shake on a deal in Vienna on November 30. The information comes from the annual economic report from Oil and Gas UK. It estimates that after two years of severe cuts, 120,000 jobs no longer exist – made up from 84,000 jobs in 2015 and 40,000 this year. The hardest hit were onshore jobs, due to what it says is “depressed upstream activity in the current economic climate.” It has noted that the “industry has experienced more turbulent industrial relations than has been the case for many years…at the time of writing there is industrial action […]

Royal Dutch Shell to Sell $1 Billion of Western Canadian Assets in Latest Divestment

Royal Dutch Shell has agreed to sell Western Canadian shale-oil and gas assets valued at… Shell said Thursday it would sell developed and undeveloped acreage in the Canadian provinces of Alberta and British Columbia to Calgary-based Tourmaline Oil Corp. TOU -1.83 % Those assets currently produce dry gas and natural-gas liquids equivalent to 24,850 barrels a day of oil. The deal comes as Shell seeks to shed $30 billion assets world-wide after its $50 billion acquisition of BG Group PLC in February. It represents a further retrenchment for Shell in Canada, where a year ago it shelved plans for a major new oil-sands project and took a $2 billion write-down. “We are strengthening our shales business and creating shareholder value by selling assets that do not fit our near-term development plans,” Andy Brown, the head of Shell’s exploration and production business, said in a statement. The oil-and-gas major called […]

Shell selling 16 upstream assets worth more than $500 million

Filled oil drums are seen at Royal Dutch Shell Plc’s lubricants blending plant in the town of Torzhok, north-west of Tver, November 7, 2014. Royal Dutch Shell is currently offering 16 assets worth more than $500 million for sale as part of its vast $30 billion three-year asset sales program, the oil and gas company’s head of upstream Andy Brown said on Wednesday. The Anglo-Dutch company launched the program to reduce its debt following the acquisition of BG Group earlier this year. Uncertainty over the future oil price has led to a sharp slowdown in deal making in the sector in recent years. “There are 16 assets currently in the market that are above $500 million in value,” Brown told the Oil and Money conference in London. (Reporting by Ron Bousso; Editing by Mark Potter)

BP says will break even with oil at $55/barrel in 2017: CEO

18 Oct 2016   United Kingdom

BP chief executive Bob Dudley expects oil to trade at $50-$60 a barrel next year, he said on Tuesday, adding that his company would break even at prices slightly below $55. “Last year we said we needed to balance at $60 and we had a job to get it there … Next year we will be able to balance south of $55,” he told the Oil & Money annual conference. He also said he does not see production rising fast in Iraq next year and that there is still no clarity on new contracts in Iran. (Reporting by Dmitry Zhdannikov; Editing by David Goodman)

Industry Body Gives ‘Positive Spin’ To 120,000 Lost Jobs

15 Oct 2016   United Kingdom

Oil harbour Industry body Oil & Gas UK has tried to put a positive spin on its own estimate that the UK offshore oil and gas sector would lose 120,000 jobs by the end of the year, with economics and intelligence manager Adam Davey saying that the number does not necessarily mean that 120,000 people are out of a job. “One thing I would like to get across is that doesn’t mean those 120,000 people are no longer in employment. It means some of them are even doing the same job that they were doing previously, but that job is no longer focusing on the oil and gas sector,” Energy Voice quoted Davey as saying at a meeting at the SNP conference on Friday. Back in June of this year, Oil & Gas UK issued the gloomy forecast that the persistently low crude prices would reduce to the number […]

British government sees future potential for shale oil

14 Oct 2016   United Kingdom

Shale oil has a place in the British energy mix, but exploitation will require environmental safeguards and industry expertise, a government agency said. The future of British energy is uncertain given the downturn in the global oil sector and maturation of fields in the North Sea. Oil & Gas U.K., the industry’s lobbying group, said the North Sea oil sector is in for a long period of decline, with less than $1.4 billion in new spending expected in 2016. The British Geological Survey, in coordination with the Oil and Gas Authority, said Thursday it completed a study of the shale reserves locked in the Weald basin in the southeast of the country. According to the […]

British policies short climate efforts

The British government needs a new set of guidelines to address shortfalls in policies in place to cut emissions, a government committee on climate change said. Britain under its Climate Change Act committed to cutting emissions by 80 percent of the benchmark level from 1990 by 2050. The British Committee on Climate Change said emissions are now 38 percent below 1990 levels even as the economy grew by 60 percent since then. John Gummer, the chairman of the committee, said the British government’s support for last year’s Paris climate agreement and steadfast support for low-carbon initiatives deserves credit, though ignoring things like drafty homes and heating systems means the targets could be out of reach. “Action is needed now to ensure the U.K. can deliver […]

North Sea Decommissioning Demand Increasing

13 Oct 2016   United Kingdom

The demand for North Sea decommissioning is increasing, says Jee Ltd.’s Jonathan McGregor. The demand for decommissioning work in the North Sea is increasing, Jonathan McGregor, head of engineering at oil and gas consultancy firm Jee Ltd, said. “I would say probably there’s been a 50 percent growth in requests for information or proposals coming in in the last six months alone,” McGregor told Rigzone. This demand will continue to increase over the next couple of years at least, McGregor said, whose sentiment was supported by oilfield services firm Subsea 7 S.A. – a company that has already completed over 20 North Sea decommissioning projects. “We are certainly seeing an increased interest in our decommissioning offering. Currently, we are working with a number of clients on future decommissioning opportunities,” a company spokesperson for Subsea 7 said. A total of 151 fields are expected to cease production within the UK […]

British Stocks Rise to Near All-Time High as Shell Surges on Oil

11 Oct 2016   United Kingdom

U.K. shares closed just 0.1 percent away from a record, amid surges in energy and commodity producers after President Vladimir Putin said Russia is ready to OPEC in limiting oil production. Royal Dutch Shell Plc climbed 2.8 percent, while BP Plc advanced 1.7 percent as crude climbed. Miners BHP Billiton Ltd. and Rio Tinto Group gained more than 2 percent. The moves pushed the FTSE 100 Index up 0.8 percent, erasing a slide of as much as 0.3 percent. U.K. equities have become this year’s best performers in the developed world, thanks to a tumbling pound and a recovery in commodities. The FTSE 100 has rallied 14 percent in 2016, closing just points away from the record it reached in April 2015. Among stocks falling, EasyJet Plc, which sank to its lowest price since 2013 on Friday, dropped another 2.3 percent after Societe Generale SA recommended selling the shares. […]

North Sea Oil and Gas Drilling Activity Plunges to All-Time Low

8 Oct 2016   United Kingdom

Baker Hughes says 27 rigs operate in region, below 1999 low North Sea has been badly hit by the slump in oil prices The number of rigs drilling for oil and gas in the North Sea, home of the Brent crude benchmark, plunged in September to the lowest in nearly 35 years as companies cut spending to weather low prices. Baker Hughes Inc., the services company that tracks drilling activity worldwide, said just 27 rigs operated last month in the North Sea, the lowest number since records started in January 1982. The previous low was set in October 1999, when oil prices plunged to $10 a barrel. The North Sea, which includes the shallow waters of the U.K., Norway, Denmark, Germany and the Netherlands, enjoyed its heyday in the 1970s and early 1980s, when a series of big oilfields, including Brent, Forties, Ekofisk and Oseberg, were discovered. The region, […]

Is A British Shale Boom Possible?

8 Oct 2016   United Kingdom

Steve Elliott, chief executive of the Chemical Industries Association, says Yes. Concerns that UK energy is expensive, and may be insecure, undermine investment. We need firms to invest in the UK, and fracking for shale will help. The UK chemical industry supports the development of unconventional gas (including shale gas) while protecting the environment, public health and ensuring that communities receive associated benefits. Extraction of shale gas will create skilled jobs, directly increase GDP and help to reduce our trade deficit. It is likely to bring downward pressure on energy prices, and lead to further gains in output in the rest of the economy – as in the U.S. – which is seeing a $150bn boom in petrochemicals investment. Shale gas producers will pay substantial taxes to the Treasury on their production income, and will also provide benefits to local communities. Investment in shale gas production could reach £3.7bn […]

As Fracking Gets UK Nod, a US-Inspired Boom Is Far Away

8 Oct 2016   United Kingdom

While the go-ahead for Cuadrilla is a chink in the armor, it’s nowhere close to what the country needs to replicate US success, according to analysts and academics. (Bloomberg) — Four wells are better than none if you’re trying to assess whether your country could host the next shale boom — but it’s not nearly enough. Cuadrilla Resources Ltd. on Thursday won the right to horizontally drill and hydraulically fracture the wells in northern England after a two-and-a-half year battle. If it can prove it won’t cause too many traffic problems, it could also get permission to drill another four. While the go-ahead for Cuadrilla is a chink in the armor that has so far stymied attempts to produce shale gas in the U.K., it’s nowhere close to what the country needs to replicate U.S. success in exploiting shale gas reserves using fracking, according to analysts and academics. The […]

UK Government Gives Go-Ahead for Fracking in NW England

7 Oct 2016   United Kingdom

The UK Department of Communities and Local Government rules that Cuadrilla Resources can proceed with shale gas exploration, including hydraulic fracturing, at its Preston New Road site in Lancashire. The UK Department of Communities and Local Government said Thursday that it has upheld three appeals related to shale gas exploration at the Preston New Road and Roseacre Wood sites in Lancashire, after the local authority opted to block applications to hydraulically fracture (frack) wells at the sites in June 2015. The move means that fracking can go ahead at least at the Preston New Road site. Cuadrilla Resources appealed the decision soon after Lancashire County Council’s Development Control Committee rejected its applications to drill on the grounds that there would be too much noise and traffic. The LCC’s own planning officer at the time had recommended approval of the Preston New Road exploration site application as it was acceptable […]

British shale gas work gets the green light

7 Oct 2016   United Kingdom

British government issues ruling on local appeals to hydraulic fracturing, siding in favor of the energy industry. Photo by photostock77/Shutterstock Industry appeals to local challenges to hydraulic fracturing operations were upheld and that work can now proceed, the British government said Thursday. The British Department for Communities and Local Government sided in favor of oil and gas companies, issuing a 600-page ruling that said shale natural gas work in the country was a national interest. “The need for shale gas exploration is a material consideration of great weight in these appeals, but that there is no such government support for shale gas development that would be unsafe and unsustainable,” the ruling read. The government overturned an appeal at the so-called Preston New Road site, but held off appeals for now on the separate Roseacre target. Campaigners opposed to hydraulic fracturing, known also as fracking, said national infrastructure policies were […]

Against All Odds, North Sea Proves Resilient to Oil-Price Slump

17 Sep 2016   United Kingdom

Output in U.K. North Sea will rise through 2018: WoodMac Region joins Russia, Norway in bringing down costs to survive Oil producers in the North Sea were supposed to be among the first victims of OPEC’s battle for market share. Instead their high-cost, decades-old facilities are proving surprisingly resilient to the price slump. Crude oil and condensate output is likely to continue rising in the U.K. North Sea until 2018 as projects that were sanctioned before crude’s plunge four years ago start up, according to estimates by industry consultant Wood Mackenzie Ltd. Even though production dips after that, output by the end of the decade will still be roughly equal to the 2015 level. Since 2014, the Organization of Petroleum Exporting Countries has pumped without limits and allowed prices to plunge to 12-year lows to squeeze higher-cost rivals. While the strategy is expected to reduce non-OPEC […]

Britain approves nuclear plant, easing Chinese, French ties

15 Sep 2016   United Kingdom

Britain gave the go-ahead on Thursday for a $24 billion nuclear power plant, ending weeks of uncertainty that strained ties with China and France and put a question mark over Prime Minister Theresa May’s investment policy. In a statement, her government said it had decided to proceed with the Hinkley Point C project in south-west England after a comprehensive review, but was clear Britain would have greater control over future deals when foreign states were involved in buying stakes in “critical infrastructure”. May stunned investors by putting Hinkley on hold in July, just hours before a deal was to be signed, saying she needed time to assess the project that would see French utility firm EDF build Britain’s first new nuclear reactor in decades, backed by $8 billion of Chinese cash. “Having thoroughly […]