International Oil Companies

Big Oil Opposes Trump’s Budget Plans

In its recent 2018 budget, the Trump Administration included a huge energy announcement. While it went mostly under the radar, the budget included a proposal to sell half of the U.S. Strategic Petroleum Reserve (SPR) for some extra revenue. Now, the SPR was originally established by Congress in 1975 after the 1973-74 Arab Oil Embargo wreaked havoc on America’s fuel supply. It was designed to hold up to 729 million barrels of crude oil, and as of mid-May the SPR’s underground locations in Texas and Louisiana held about 688 million barrels. Selling 350 million or so of those barrels, as proposed, would save some $16.6 billion… But there’s a downside to it, too. A few years ago, I was called on to make an external value assessment of the storage volume contained in the SPR. In that report, I identified another crucial advantage to the SPR system. An advantage […]

BP pumps more capital into North Sea programs

British energy company BP is putting more capital into its North Sea program with nearly $200 million in contracts, an energy services company said. Cape Industrial Services said it secured 400 jobs in the North Sea energy sector in a contract that provides BP with storage tank services and other support across the regional exploration, production and transportation sector. “Cape Industrial Services Ltd. has secured two contracts to extend the group’s longstanding relationship with BP in the U.K. North Sea for a further three years,” the company said in a statement . “These contracts have a combined estimated value in excess of $190 million.” The contract marks a rebound for the North Sea portfolio of BP, which last […]

Oil in the $50s Is New Reality for CEOs Gathering in Russia

Rising shale production will offset OPEC cuts: Rosneft CEO Unclear how OPEC can phase out its curbs, say BP and Total A crude price in the $50s is the new reality for bosses of some of the world’s largest producers as output caps from OPEC and its allies are balanced out by rising U.S. shale. Executives of energy companies from Royal Dutch Shell Plc and BP Plc to Russia’s Lukoil PJSC and Gazprom PJSC , who gathered this week at the St. Petersburg International Economic Forum, see an oil price of $50 to $55 at least for this year. “Unless something extreme happens, we are not going to get back to much higher,” IHS Markit Ltd. Vice Chairman Daniel Yergin, author of the definitive history of the oil industry, said in an interview at the conference on Friday. “The exception was $100 per barrel, that was an aberrant period. […]

Investors expect to meet with Exxon on climate-impact report

Exxon Mobil Corp ( XOM.N ) investors will push to meet with oil company officials this summer to hash out elements of a climate-impact analysis following a shareholder vote calling for studies of technology and climate-related risks to its business. Exxon has said that it will reconsider its opposition to the request, not that it would begin discussions or initiate new studies. The shareholder proposal, filed by 54 groups including financial, religious and corporate governance activists, won the support on Wednesday of 62 percent of Exxon holders. “I anticipate we’ll be having a meeting this summer,” said Tracey Rembert, assistant director of Catholic Responsible Investing, one the 54 co-filers. The White House’s decision on Thursday to withdraw from the Paris agreement on climate […]

Exxon Investors to Company: Make Climate Curb Fallout Public

CEO Woods sees crude oil surviving Paris-driven carbon limits Vote comes amid reports U.S. to abandon Paris Climate Pact Exxon Mobil Corp. investors, in a split with the company, urged the explorer to publish a detailed analysis on how carbon curbs could affect the value of its oil fields, refineries and pipelines. The non-binding measure, backed by shareholders including the California Public Employees ’ Retirement System and the Church of England investment fund, comes amid reports President Donald Trump may soon abandon the 2015 Paris Climate Accord. More than 60 percent of voters approved the resolution during Exxon’s annual general meeting in Dallas on Wednesday. The vote was “an unprecedented victory for investors in the fight to ensure a smooth transition to a low-carbon economy,” New York State Comptroller Thomas P. DiNapoli said in a statement. “Climate change is one of the greatest long-term risks we face in our […]

Exxon Facing Off With Shareholders in Climate Showdown

CEO Darren Woods to helm his first annual meeting this week Calpers, New York pension line up to back green resolution This week will be a public trial by fire for new Exxon Mobil Corp. CEO Darren Woods. Presiding over his first annual meeting since predecessor Rex Tillerson left to become U.S. secretary of state, Woods will be tested Wednesday on everything from climate change to his own paycheck. Analysts and investors will be watching to see if he proves as adept as his mentor in striking a welcoming tone with restive activists while gently disagreeing with just about everything they say. So far, Woods has been a stabilizing presence. “He represents a continuation of what Mr. Tillerson was doing and so far we’ve seen no strategic shift,” said Brian Youngberg, an analyst at Edward Jones & Co. In St. Louis with a “hold” rating on Exxon’s stock. That’s […]

Has Big Oil Regained Its Pre-Crash Position?

The oil price crash battered the 2016 earnings of energy firms, but the usual suspects are still there in the rankings of the biggest oil and gas companies this year. And the largest oil companies started turning in much higher profits for the first quarter of 2017, thanks to the relative increase in oil prices this year compared to Q1 last year. ExxonMobil is still king on the Forbes list of the 25 largest oil and gas companies in 2017, part of the 2017 Global 2000 ranking of The World’s Biggest Public Companies. The ranking is a composite score of equally weighted measures of revenue, profits, assets, and market value. Forbes has estimated that the 25 biggest oil and gas companies on the Global 2000 list generated a combined US$2.2 trillion in sales during the 12-month measurement period, down compared to US$2.6 trillion in sales for the previous year. […]

Shell Profit Soars as Oil Sector Bounces Back

Royal Dutch Shell PLC Thursday reported a sharp increase in profit in the first quarter, rounding off a bumper set of results for the world’s biggest oil companies as years of cost-cutting and a fragile recovery in oil prices begin to pay off. The Anglo-Dutch oil and gas giant said profit more than quadrupled in the first three months of 2017 compared with a year ago, benefiting from a near-60% increase in oil prices, improved…

Exxon, Chevron Profit Up in Sign of Strengthening Oil Companies

The world’s biggest oil companies are seeing their highest profits in more than a year, an early signal that they may be turning a corner on their long path to recovery.  Exxon Mobil Corp. XOM 0.48% on Friday reported its best quarter since 2015, more than doubling profit from the first three months of 2016 when crude prices fell to the lowest level in more than a decade. The company also generated enough cash to pay for new investments and dividends, an increasingly important measure of resilience for big oil companies, which have been piling on debt.  Chevron Corp. CVX 1.17% , which reported a quarterly loss last year, on Friday posted a profit of $2.7 billion. The rosy results came a day after French energy company Total SA TOT -0.85% reported a 77% rise. Royal Dutch Shell RDS.B 0.09% PLC and BP BP -0.23% PLC, which will report next week, are expected to show sharp increases.

View full article at www.wsj.com

Big Oil Heads for Back-to-Back Profit Triumphs as Fortunes Turn

U.S. supermajors exceed analysts’ estimates with cost cuts Chevron turns corner after worst annual performance since 1980 Fresh off Big Oil’s best quarter in years, Exxon Mobil Corp . and Chevron Corp . may be poised for a repeat. One-third of the way into the second quarter, crude prices — the prime driver of explorers’ profits — are 25 percent higher than a year ago. If global supplies continue to contract and demand inches up through the end of June, the two dominant U.S. drillers will book a second straight quarterly victory in late July or early August. Already, analysts are forecasting profit blowouts even larger than those registered when Exxon and Chevron disclosed first-quarter results on Friday. Exxon is seen lifting per-share earnings by 132 percent while Chevron is expected to post its biggest second-quarter profit in three years. “It’s cutting costs, it’s getting more for every dollar […]

ExxonMobil’s Dividend Tradition Faces Challenge as Oil Sputters

ExxonMobil has boosted it’s dividend every April for at least a decade, delivering more than $98 billion directly to shareholders. (Bloomberg) — Exxon Mobil Corp. has boosted it’s dividend every April for at least a decade, delivering more than $98 billion directly to shareholders. This year, the payout will likely rise again. The open question is by how much. Exxon slowed quarterly dividend growth the last two years as the industry fought through the worst price rout in a generation. Now, with oil prices stuck at around $50 a barrel and with little guarantee they’ll rise by much, analysts are debating whether the company remains conservative, boosting its free cash flow, or if it will reward investors who stuck with it through the lean times. Exxon raised its dividend 2 cents a year ago to 75 cents. Now, Bloomberg Dividend Forecasts estimates the Irving, Texas-based company will announce a […]

Exxon probe is unconstitutional, Republican prosecutors say

A group of 11 Republican state attorneys general are protesting an investigation into whether Exxon Mobil Corp. ( XOM.N ) violated consumer protection laws when selling fossil fuel products, according to a court filing. Top prosecutors for Alabama, Arizona, Arkansas, Louisiana, Michigan, Nebraska, Oklahoma, South Carolina, Texas, Utah and Wisconsin, all of whom are Republicans, filed a brief in U.S. District Court in Manhattan supporting a lawsuit by Exxon to halt a probe by New York Attorney General Eric Schneiderman and Massachusetts Attorney General Maura Healey. Schneiderman and Healey, both Democrats, are looking at whether the company violated consumer protection laws by selling fossil fuels while failing to reveal information about the effects of burning them on the global climate. In their brief, the attorneys general said Healey and […]

Oil majors’ reserves are shrinking and investors don’t mind

As crude prices recover, oil majors face a dilemma – how quickly should they seek to replenish reserves? It’s the same question the cyclical oil industry has tackled many times before: go too fast and risk spending too much for little reward, go too slowly and your rivals will be better positioned to grab market share should oil prices rise. New data revealed by a Reuters analysis shows the oil and gas reserves of global majors have fallen sharply. Reserve life – the number of years that a company can keep production stable with its reserves – has decreased for Exxon Mobil, Shell, Total and Statoil, according to the Reuters analysis of the firms’ annual reports. BP and Italy’s Eni saw a slight increase. ( tmsnrt.rs/2nGfmte ) In the case of Exxon, the world’s top publicly listed oil company, reserve life dropped in 2016 to 13 years, the lowest […]

Major oil companies open their wallets in Gulf of Mexico bidding

Royal Dutch Shell plc, Chevron Corp and Exxon Mobil Corp signaled the oil industry’s return to the Gulf of Mexico’s deep waters with high bids in a government auction up 76 percent over a year ago. The auction of offshore oil and gas parcels received nearly $275 million in high bids, compared with $156.4 million a year ago. The year-ago auction drew the fourth lowest total bids for leases in the central Gulf. The oil industry had moved away from deep water projects as oil prices fell and regulatory scrutiny increased following the Deepwater Horizon disaster in April 2010, the largest accidental marine oil spill. The five-month-long spill, which spewed some 210 million U.S. gallons (780,000 m3) into the Gulf, caused extensive damage to marine and wildlife habitats, as well as […]

Exxon-BP Acquisition Talk Resurfaces: Is a Deal Really Likely?

BP Plc ’s shares surged the most this year after a London newspaper reported on rumors that Exxon Mobil Corp. sounded out major shareholders over a potential takeover. While a bid for BP can’t be ruled out, reports about Exxon’s interest have been around for years and analysts from Macquarie Capital Ltd. to Canaccord Genuity said a deal was unlikely. “The report about Exxon and BP seems to be just a rumor because because there doesn’t appear to be an obvious strategic fit,” said Anish Kapadia, a senior research analyst at Tudor, Pickering, Holt & Co International LLP. “It would create a company potentially too big and complex to be manageable.” Exxon and BP spokesmen declined to comment. Oil’s current downturn has resulted in just one big deal — Royal Dutch Shell Plc ’s $54 billion acquisition of BG Group Plc last year. Others have preferred to do smaller […]

Shell Becomes Gas Company With $7.25 Billion Oil-Sands Sale

Shell remaking itself for low-carbon world, but some want more Royal Dutch Shell Plc just took a big step toward remaking itself as a natural gas company. With Thursday’s deal to sell $7.25 billion of Canadian oil-sands assets, Shell will boost the share of cleaner-burning gas in its proven reserves from about half to 60 percent, Shell data show. It will also rid itself of some of the most polluting assets on its books. Chief Executive Officer Ben Van Beurden is reshaping Europe’s biggest oil company not just to survive lower crude prices but also to endure the transition to a low-carbon world. His record acquisition of BG Group Plc has given him gas deposits from Kazakhstan to Australia. On Thursday he sharpened Shell’s commitment to reducing pollution, changing executive pay policy to reward efforts to control it. The oil-sands divestment is a big step in “transforming the company […]

Oil majors still years from repairing balance sheets after price war

Financially strapped oil producers are spending billions to boost production before it’s clear that recent crude price gains brought on by OPEC output cuts can be sustained. Five of the largest publicly traded oil companies – BP, Chevron, Exxon Mobil, Royal Dutch Shell, and Total – are trying to work down debts that totaled $297 billion at the end of December. That nearly doubled the companies’ 2012 debt levels. But even with oil prices about 70 percent higher than a year ago, most companies have yet to reach the point where their cash flow covers annual shareholder payouts and expansion projects vital to the industry’s long-term survival. Add other expenses, such as the interest on debt, and the break-even point is pushed out until at least 2020, […]

Oil Majors To Boost Production As IEA Warns Of Supply Deficit

Oil prices traded sideways in a quiet market as traders digest the news coming from Houston where the world’s opinion leaders in oil & gas have gathered for this year’s CERA Week. (Click to enlarge) (Click to enlarge) Chart of the Week (Click to enlarge) • Total installed wind capacity surpassed hydropower in the U.S. for the first time last year. • Hydro has been a pillar of the U.S. electricity system for decades – not as large a share of the sector as coal, natural gas or nuclear, but hydro has held a sizable share since the post-WWII build out in the 1940s and 1950s. • On February 12, in the Southwest Power Pool, which covers North Dakota down to Northern Texas, wind accounted for half of the entire system’s generation, the first time that has occurred in one of the seven regional transmission organizations (RTOs). Market Movers […]

Saudi Aramco to Pay Royal Dutch Shell $2.2 Billion in Motiva Breakup

State-oil giant Saudi Arabian Oil Co. will pay Royal Dutch Shell PLC $2.2 billion to finalize the breakup of their two-decade Motiva Enterprises refining partnership in the U.S. The deal gives Saudi Arabia sole control over the largest refinery in the U.S., a 600,000-barrels-a-day facility in Port Arthur, Texas. The Saudi state oil company, known as Aramco, will take full ownership of the Motiva Enterprises LLC name and legal entity….

Exxon’s $20 Billion Spending Plan Points to U.S. Energy Surge

Exxon Mobil Corp. plans to spend about $20 billion on refineries, petrochemical plants and other projects in and around the Gulf of Mexico, Chief Executive Darren Woods said Monday, underscoring how the giants of the global energy industry are turning to America. Mr. Woods outlined the 11-project spending plan, largely aimed at creating new outlets for U.S. natural gas, in a speech at the annual CERAWeek conference. It came…

Exxon’s new chief forecasts higher production growth

ExxonMobil is expecting stronger production growth over the next few years as the world’s largest listed oil company steps up investment in its US shale reserves. Exxon projected its output in the shale oil regions of the US would grow an average of 20 per cent per year, in the latest sign of confidence that the industry is rebounding strongly after the downturn of 2014-16. Darren Woods, Exxon’s new chief executive who took over at the start of the year, told analysts in New York that “in the right market conditions” the company expected to increase its output of oil and gas by an average of 2 per cent per year over 2016-20.

Oil Majors’ Costs Have Risen 66% Since 2011

The oil majors reported poor earnings for the fourth quarter of last year, but many oil executives struck an optimistic tone about the road ahead. Oil prices have stabilized and the cost cutting measures implemented over the past three years should allow companies to turn a profit even though crude trades for about half of what it did back in 2014. The collapse of oil prices forced the majors to slash spending on exploration, cut employees, defer projects, and look for efficiencies. That allowed them to successfully lower their breakeven price for oil projects. However, some of that could be temporary, with oilfield services companies now demanding higher prices for equipment and drilling jobs, in some cases upping prices by as much as 20 percent. The result could be an uptick in the cost of producing oil for the first time in a few years. Rystad Energy estimated the […]

BP lifts outlook for core oil business after cost cuts

British oil major BP ( BP.L ) lifted the outlook for its core oil and gas divisions on Tuesday, saying it would be able to balance its books with crude prices as low as $35 to $40 a barrel by 2021 thanks to its tough spending cuts. BP said its upstream business, which includes its main oil and gas production fields, is expected to generate free cash flow of $13 billion to $14 billion by 2021, nearly double an outlook presented last year of $7 billion to $8 billion by 2020. The refining and marketing business, known as downstream, is expected to generate $9 billion to $10 billion of free cash flow by 2021, BP said. The oil major, which was forced to raise billions of dollars from asset sales to pay for the […]

BP Targets $40 Break-Even Oil Price to Reassure Investors

BP Plc said it will need a crude price of about $40 a barrel in 2021 to cover spending and dividends, down from $60 this year, as Chief Executive Officer Bob Dudley seeks to reassure investors on the oil major’s growth outlook and finances. The break-even level will fall as BP keeps capital spending at no more than $17 billion a year, the London-based company said Tuesday in a statement. It aims to raise output by 5 percent a year to 2021 and is targeting returns of more than 10 percent. Dudley, 61, is seeking to return BP to growth after the 2010 Gulf of Mexico oil spill and the market downturn of the past three years shrank the scale of its operations. The CEO must also show investors he’ll keep spending in check as crude prices remain at half the levels of 2012 and 2013. “We can see […]

Exxon Caves to Oil Crash With Historic Global Reserves Cut

No compatible source was found for this media. Citi’s Ed Morse Says OPEC Is Losing Its Clout Exxon Mobil Corp. disclosed the deepest reserves cut in its modern history as prolonged routs in oil and natural gas markets erased the value of a $16 billion oil-sands investment and other North American assets. The equivalent of about 3.3 billion barrels of untapped crude was removed from the so-called proved reserves category in Exxon’s books, the Irving, Texas-based explorer said in a statement. The revisions were triggered when low energy prices made it mathematically impossible to profitably harvest those fields within five years. The sprawling, 3.5-billion barrel Kearl oil-sands development in western Canada accounted for most of the hit. The 19 percent drop amounts to the largest annual cut since at least the 1999 merger that created the company in its modern form, according to data compiled by Bloomberg. That includes […]

Total CEO Says OPEC Needs to Prolong Cuts to Eliminate Surplus

Total SA CEO Calls U.S. Shale Oil Industry Dynamic OPEC and Russia will need to prolong their six-month deal to cut oil output if they plan to trim the global inventory glut that has kept a lid on prices, said Total SA Chief Executive Officer Patrick Pouyanne. “If they want really to have an impact on the market, which means to have the inventories going down because inventories are quite high, it will have to be extended beyond May,” Pouyanne said Tuesday in a Bloomberg television interview in New York. “I’m convinced that they will do it.” Total’s Pouyanne discusses his outlook for the oil industry, OPEC production cuts and U.S. and Russia relations The CEO of the French oil and gas company added that he plans to keep lowering its so-called break-even point — the oil price at which cash […]

This Is Where Oil Majors Expects The Next Big Efficiency Jump

The race for using high-performance computing in oil and gas reservoir simulation, management and development is on. Oil and gas supermajors are continuously pushing for higher efficiency and lower costs, all the more so since the oil price crash in 2014 caused them to cut exploration and production investments. The industry is increasingly relying on advanced technology in appraising oil and gas fields that would minimize downtime and maximize profits. Last week, ExxonMobil boasted that it had set a record in high-performance oil and gas reservoir computing. In cooperation with the National Center for Supercomputing Applications ( NCSA ), Exxon said it achieved parallel simulation using 716,800 processors, the equivalent of 22,400 computers with 32 processors each. The U.S. major claims that the data output is provided “thousands of times faster” than data received with typical oil and gas reservoir simulations. “As our industry looks for cost-effective and environmentally […]

Shell Shakes Up Oil Trading World With Brash Buying Sprees

The giant tankers anchored along the Scottish coast in the Firth of Forth weren’t going anywhere. They were just providing floating storage because there was no demand for their cargo, North Sea crude oil. But the flickering computer screens in the world’s trading rooms told a different story. Prices through the month of April were jumping, showing someone was buying, stunning traders and leaving some with heavy losses. That wasn’t the only bizarre gyration last year in the market for Brent, whose price determines the cost of just about every petroleum-based product, from jet fuel to plastic spoons. Such unusual moves damaged confidence so much that some traders retreated from the market. The buyer on virtually all those occasions was Royal Dutch Shell Plc, according to interviews with two dozen industry […]

Energy Companies Face Crude Reality: Better to Leave It in the Ground

A new era of low crude prices and stricter regulations on climate change is pushing energy companies and resource-rich governments to confront the possibility that some fossil-fuel resources are likely to be left in the ground. In a signal that the threat is growing more serious, Exxon Mobil Corp. is expected in the coming week to disclose that as much as 3.6 billion barrels of oil that it planned to produce in Canada in the next few…

THE BLOOD BATH CONTINUES IN THE U.S. MAJOR OIL INDUSTRY

The carnage continues in the U.S. major oil industry as they sink further and further in the RED. The top three U.S. oil companies, whose profits were once the envy of the energy sector, are now forced to borrow money to pay dividends or capital expenditures. The financial situation at ExxonMobil, Chevron and ConocoPhillips has become so dreadful, their total long-term debt surged 25% in just the past year. Unfortunately, the majority of financial analysts at CNBC, Bloomberg or Fox Business have no clue just how bad the situation will become for the United States as its energy sector continues to disintegrate. While the Federal Government could step in and bail out BIG OIL with printed money, they cannot print barrels of oil. Watch closely as the Thermodynamic Oil Collapse will […]

Big Oil Loses Its Mojo

The oil bust is over and producers are spending again to boost output, but the industry’s giants are changing how they replenish their reserves. That might make Big Oil less attractive to investors in the long run. The price of crude has doubled since its cyclical nadir a year ago and world’s two largest oil-field services companies, Schlumberger and Halliburton, both have called the bottom in exploration activity. The turnaround is…

BP Needs Oil to Rise to $60 to Break Even

BP PLC said it needs oil prices to rise to $60 a barrel in order to break even, as the British oil giant ramped up debt levels last year to fund spending, maintain its dividend and cope with costs associated with the 2010 Deepwater Horizon disaster. The company said Tuesday the blowout in the Gulf of Mexico cost it another $7.1 billion in pretax payments last year. The total pretax bill has now reached $62.6 billion for a disaster that killed 11 rig workers and spilled millions of barrels of oil into the Gulf, BP…

OPEC Output Cuts End Big Oil’s Trading Bonanza

The oil-trading boom that cushioned the profits of Royal Dutch Shell Plc and BP Plc through the price slump of 2015 and early 2016 is over. BP said on Tuesday it made a “small” loss trading oil in the fourth quarter, while Shell last week said trading profits “flattened” in late 2016. The fall off in trading contributed to worse-than-expected fourth-quarter profits at Europe’s largest oil and gas producers. Although better known for their oilfields, refineries and gas stations, Shell and BP are the world’s top energy traders, handling about 20 percent of global oil demand between them and dwarfing independent trading houses such as Vitol Group BV, Trafigura Group and Glencore Plc. BP “simply had a weak fourth quarter” in oil trading, Brian Gilvary, the company’s chief financial officer, said in an interview, adding that BP managed to make a profit in overall trading once natural gas was […]

Shell To Sell Another $5B In Assets, Misses Profit Expectations

Royal Dutch Shell ( NYSE:RDS.A ) is making “significant progress” on selling another US$5 billion worth of assets, chief financial officer Simon Henry said on Thursday after the oil supermajor reported 2016 profits below analyst expectations. Shell’s current cost of supplies (CCS) – a key measure comparable with net income – came in at US$1.8 billion, excluding identified items, compared with US$1.6 billion for the fourth quarter 2015, the company said today. Full-year 2016 CCS earnings attributable to shareholders excluding identified items dropped to US$7.2 billion from US$11.4 billion in 2015. The fourth-quarter profit fell short of analyst estimates by around US$1 billion, according to Bloomberg . Shell was the third oil major in as many profit releases this earnings season so far that have missed analyst expectations, following Chevron and Exxon . Shell, however, had two brighter points in its earnings report: lowered debt and increased cash flow. […]

Tillerson Vow to Keep Away From Exxon Runs Into World of Oil

ExxonMobil’s global reach will pose a wealth of conflict-of-interest questions for former CEO Rex Tillerson now that he’s the US secretary of state. (Bloomberg) — Exxon Mobil Corp. boasts that it drills for oil and gas on six continents and sells fuel and chemicals in almost every country on the planet. That global reach will pose a wealth of conflict-of-interest questions for former CEO Rex Tillerson now that he’s the U.S. secretary of state. Tillerson, who spent his entire 41-year career at Exxon, cut his financial ties under an ethics agreement after Donald Trump nominated him, giving up deferred stock rights in return for a $180 million cash payout to an independently managed trust. Tillerson also must recuse himself from decisions “directly and substantially related to” his former employer for two years under the president’s ethics order for his appointees. “He has severed himself in a pretty final and […]

Shell’s Falling Debt Burden Shows Worst of Oil Slump May Be Over

Royal Dutch Shell Plc appeared to put the worst of the oil slump behind it as rising cash flow allowed Europe’s largest energy company to trim debt for the first time since the downturn began. Investors looked beyond a worse-than-expected fourth quarter profit, sending shares higher. Following billions of dollars of cost reductions and a recovery in oil prices just as production rose last last year, the company generated enough cash to cover spending and dividends for a second consecutive quarter — assuaging what has been a key concern for shareholders throughout the 2 1/2 year downturn. Ben Van Beurden Photographer: Chris Ratcliffe/Bloomberg “Our strategy is starting to pay off,” Chief Executive Officer Ben van Beurden said in a Bloomberg television interview. “Free cash flow is well above requirements, we have started to pay down our debt in the fourth quarter. I do think we are on track. But […]

Shell Profit Falls Short as Rising Crude Costs Sap Refining

Shell CEO on 4th-Qtr Profit, Strategy and Globalization Royal Dutch Shell Plc reported fourth-quarter profit that missed analyst estimates after crude’s recovery drove up costs for refining while earnings from production did little more than break even. Profit adjusted for one-time items and inventory changes totaled $1.8 billion, a billion dollars short of analyst estimates. The upstream, downstream and integrated-gas business units all missed company forecasts. Shell barely made any money from refining and trading: just $77 million, down 90 percent. Ben van Beurden, Royal Dutch Shell chief executive officer, discusses the company’s fourth-quarter earnings. Major oil companies are facing a complicated time. Crude prices have recovered, but only enough to push Shell’s exploration and production business back into the black, compared with a billion-dollar loss a year ago. At the same time, the rising cost of oil has hurt profit […]

It’s Still Not a Great Time to Be Big Oil

Crude prices may have stabilized, but it’s still not a great time to be Big Oil. Investors eliminated about $53 billion in market value for producers over three days as the twin titans of U.S. oil posted their worst annual financial outcomes in decades. With Royal Dutch Shell Plc, Total SA and BP Plc due to announce 2016 results in coming days, the grim headlines may not yet be over. Exxon Mobil Corp. reported Tuesday a $2 billion writedown of its natural-gas fields, lower-than-expected quarterly profit and a full-year result that was its worst since 1996. That followed Chevron Corp., which reported its first yearly loss in at least 37 years on Jan. 27. Drillers have responded to the 2 1/2-year slide in energy markets by firing hundreds of thousands of workers, auctioning off billions in assets, abandoning their riskiest projects and living on borrowed cash. The latest results, […]

Shell Sells $4.7 Billion of Fields as Disposal Push Accelerated

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 […]

Exxon’s Profit Miss Shows No One Immune From Market Ravages

Oil’s ‘New Normal’ at $60 in 2-3 Years: Fadel Gheit Exxon Mobil Corp.’s biggest profit miss in at least a decade is the starkest sign yet that major oil explorers remain mired in the deepest market slump in a generation. After resisting the industry trend of discounting the value of oil and natural gas fields that turned into money-losers amid the 2 1/2-year market slump, Exxon capitulated on Tuesday and took a $2 billion hit on the value of some Rocky Mountain gas. Shares fell 2 percent to $83.16 at 11:03 a.m. in New York. For Exxon, it was the ninth-straight quarter of year-over-year profit declines, the longest such streak since at least 1988. The bleak result in Rex Tillerson’s final quarter at the helm was presaged last week when Chevron Corp. disclosed its first annual loss in at least 37 […]

Shell to Sell U.K. North Sea Oil Fields for $3.8 Billion

LONDON—Royal Dutch Shell PLC is selling much of its British North Sea oil operations to a private-equity backed company for up to $3.8 billion, marking an important milestone in the oil giant’s move to offload $30 billion in assets. The Anglo-Dutch oil giant is in the process of selling assets to help pay for its acquisition of smaller rival BG Group last year. It was a transformative deal that boosted Shell’s dominant position in…

Exxon boosts capital budget but takes $2 billion charge from XTO deal

Exxon Mobil Corp ( XOM.N ) boosted its 2017 capital budget on Tuesday by about 14 percent on a bet that crude prices have stabilized, but posted its lowest quarterly profit since 1999 as it took a $2 billion charge from the purchase of natural gas producer XTO Energy. The world’s largest publicly traded oil producer wrote down more than $2 billion from its 2009 buyout of natural gas NGc1 producer XTO Energy, a deal worth roughly $30 billion at the time. The writedown is a tacit acknowledgement from Exxon that natural gas prices are not likely to rise substantially in the near future. The boost in capital expenditures and the writedown reflect a delicate balancing act by oil and natural gas companies […]

Chevron’s First Loss in Decades Signals Hard Time for Giants

Chevron Corp. posted its first annual loss since at least 1980 as the world’s biggest oil companies struggle to emerge from the worst collapse in a generation. Investors punished the stock, wiping out about $5 billion in market value. The company had a $497 million loss last year and failed to replace all of the crude and natural gas it pumped with new reserves, San Ramon, California-based Chevron said in a statement on Friday. As the first so-called supermajor oil company to post year-end results, Chevron’s earnings may herald bleak news for an industry battered by the oil-market crash that began in mid 2014. After hundreds of thousands of job cuts, billions of dollars in asset sales and the accumulation of staggering debt loads to endure the collapse, investors have been optimistic that oil producers who survived the darkest days are on the cusp of a new era of […]

Chevron’s Q4 Earnings Miss Estimates By A Mile

Chevron Corporation ( NYSE:CVX ) reported on Friday earnings of US$0.22 per share for the fourth quarter, compared with a loss of US$0.31 per share for the fourth quarter of 2015, in line with analyst expectations that it would return to profit, but missing the EPS estimates by a wide margin. According to analyst estimates compiled by Bloomberg , Chevron was expected to return to profit from a loss a year earlier, so the fourth-quarter profit was not a surprise. However, analysts had expected much higher EPS. Jefferies Group analyst J. Gammel last week raised his earnings per share (EPS) forecast to US$0.65, up from a previous forecast of US$0.58. Zacks Equity Research had said that Chevron was likely to beat on Q4 earnings and Wall Street analysts’ estimates had also pegged the EPS at US$0.65 for the fourth quarter. Wall Street had also expected Chevron’s revenues at around […]

Is The Oil Crisis Over? Oil Majors Report Positive Cash Flow

Rising oil prices and spending cuts over the past two to three years have improved the cash flow position for many of the oil majors, lessening the prospects of a deeper debt spiral, credit downgrades and dividend reductions. As recently as a few months ago, debt among the largest oil companies was rising at a worrying pace , with ExxonMobil – usually considered the most financially sound out of its peers – reported an eye-watering $46 billion of debt at the end of the third quarter in 2016. Exxon even lost its coveted AAA credit rating last year as ratings agencies warned about its growing leverage. The other oil majors were not faring much better. Shell has a whopping $78 billion in debt, having borrowed heavily to finance its $50 billion purchase of BG Group. Chevron had $45 billion in debt at the end of the third quarter. All […]

Oil Supermajors’ Debt From the Crude Collapse May Have Peaked

Surging debt dogged the world’s largest oil companies during crude’s collapse. Now, sweeping cost cuts and rising prices have combined to lessen the need to borrow. Since prices began to sink in 2014, the five “supermajors” more than doubled their combined net debt to $220 billion. That may be as bad as it gets. At $50 a barrel, they can balance their books and pay dividends without borrowing for the first time in five years, according to analysts at Jefferies International Ltd. All of the drillers will probably report profit growth in the next two weeks. As the price of oil declined, producers saved billions of dollars by shedding jobs, renegotiating supplier contracts and canceling projects. BP Plc has said it plans to keep at least 75 percent of its cuts, and other companies have expressed similar sentiments. That strategy, combined with oil’s recovery, are allowing the majors to […]

ExxonMobil appoints climate scientist to board

ExxonMobil has appointed a leading atmospheric scientist to its board as it bolsters its response to concerns about climate change. Susan Avery, a former director of the Woods Hole Oceanographic Institution in Massachusetts, was on Wednesday elected a director with effect from February 1.  Ms Avery is a respected scientist who has specialised in atmospheric dynamics and variability, and has worked extensively on climate change.  She helped the US National Oceanic and Atmospheric Administration formulate a national plan for climate research and was a member of the scientific advisory board to Ban Ki-moon when he was secretary-general of the UN. Last June she was appointed to a new NOAA committee, advising on a project to monitor the impact of global warming on the US. Speaking at a renewable energy conference in Colorado in 2014, Ms Avery said: “Clearly climate science is telling us get off fossil fuels as much as possible.”  Her appointment to the board meets a demand raised by a number of investors — that Exxon should appoint a board director with expertise in climate change. Investors argued that Exxon’s board needed deep understanding of the implications of climate science and policy for its business.

Shell continues evolution by parting with Saudi corporation

Royal Dutch Shell said its move to sell off its share in a petrochemical joint venture with a Saudi partner is part of its effort to retool its regional focus. Shell sold its stake in a joint venture effort to Saudi Basic Industries Corp. for $820 million in a move that solidifies the Dutch supermajor’s shifting priorities in the wake of last year’s acquisition of BG Group. The agreement marks the end of a joint venture agreement that was set to expire in 2020. “This step will allow Shell to focus its downstream activities and make selective investments to support the growth of its global chemicals business,” the Dutch supermajor said in the weekend announcement. SABIC last week reported its full-year net profit in 2016 declined […]

Why Big Oil Is Unprepared For The Coming Energy War

Recently, I gave a presentation on the future of energy to an audience of about 250 oil and gas professionals. Halfway through, I asked the carbon crowd to, “Raise your hand if you have driven an electric vehicle.” It took me less than five seconds to squint and visually sift out the elevated hands. Five adventuresome people, or about 2 percent of the audience acknowledged that they had taken a ride on a lithium horse. “Isn’t that a bit disconcerting?” I asked. “By now all of you in the room should be aware that new-age electric vehicles represent the first meaningful threat to your monopoly in powering the transportation market.” I went on to ask, “Don’t you think you should at least go to a Tesla, Nissan or BMW dealership and test drive the looming adversary?” Silence. I wasn’t surprised by the results of my straw poll. Hear-nothing, see-nothing […]

The Rebound Is Here: Megaprojects Back On The Table

Hey 2017 – get you. Straight out of the box and it’s delivered some prestantious news, in the form of a Wood Mackenzie report. We don’t know how you feel, but we can’t get enough of the phrase: “The global investment cycle will show the first signs of growth in 2017, bring the crushing two-year investment slump to a close. ” With its author Malcolm Dickson swiftly becoming our Man of the Month, let’s look more closely at what WoodMac’s predicting. “Companies will get more bang for their buck,” reckons the company’s principal analyst for upstream oil and gas. “Development incremental internal rates of return will jump from 9 percent to 16 percent, comparing 2014 to 2017.” Ironically, this is partially brought about by the fact that companies have swung from the mega-projects when they were flush to simpler incremental options, with WoodMac highlighting projects in the Canadian oil […]