International Oil Companies

Chevron may shed more of its portfolio

Anglo-Swiss multinational Glencore said Friday it was looking to spend close to $1 billion to buy most of U.S. supermajor Chevron’s assets in South Africa. Glencore said it was looking to take a 75 percent stake in Chevron’s subsidiary in South Africa, and all of Chevron’s unit in Botswana. Combined, Glencore put the value of the deals at $973 million. “Glencore believes that the assets provide an attractive downstream opportunity for its oil business,” the company said in a statement. “The acquisition will include undertakings as to retention of the local management team and workforce.” A minerals-focused company, Glencore has made strides into the energy sector given the overall improvement in commodity prices. In late September, the company signed a multi-year agreement with a […]

ExxonMobil Dethroned As Top Energy Company

Gazprom dethroned ExxonMobil as the top energy company in the world, according to the 2017 S&P Global Platts Top 250 Global Energy Company Rankings . The rankings measure the financial performance of energy firms on four key metrics: asset worth, revenues, profits, and return on invested capital. The list only includes companies that have assets greater than $5.5 billion. For 12 years, ExxonMobil was second to none. But that changed this year – Exxon was ejected from the top spot, and fell all the way to ninth place. Gazprom’s surge reflects its state ownership, its captured market in Europe for its natural gas, as well as the fall of some of its peers. But the Russian gas giant’s ability to weather sanctions, regulatory threats from the EU, low oil and gas prices, and the rise of competition from new supplies of LNG is impressive. The reshuffling was the result […]

Gazprom steals spotlight from Exxon Mobil

Russian energy company Gazprom was ranked by S&P Global Platts as the top financial performer of the year, ending the reign for Exxon Mobil. Only two U.S. companies were in the Top 10 list of the biggest financial performers, and Exxon’s move from No. 1 to No. 9 was the first time in 12 years it wasn’t ranked at the top. U.S. refiner Valero Energy Corp. was ranked No. 8, down from the No. 3 spot last year. Ed Hirs, an energy economist at the University of Houston, told Platts that government support may explain the change in rankings. “In an environment like we have had this past year, those companies such as ExxonMobil and Chevron […]

Goldman Turns Bullish On European Oil Majors

Goldman Sachs has raised its earnings per share (EPS) estimates for the European oil majors’ third-quarter results, and believes that the stocks will start reversing their underwhelming year-to-date performance when companies report higher Q3 cash flows from a year earlier, thanks to higher oil prices and increased production. The weak dollar against the euro and the reduction of the oil price estimates since the beginning of this year had prompted oil analysts to reduce their earnings estimates on Europe’s Big Oil by 24 percent. “Both these negative drivers [the dollar and oil prices] are coming to an end, with stable FX since the beginning of September and 2018 oil price expectations in line with the forward curve for the first time in over 12 months,” according to a Goldman Sachs note dated Thursday, as reported by The Street . “Our EPS estimates are currently 4% above… consensus expectations for […]

Is Big Oil Going Green?

Oil supermajors rank among the biggest polluters in the world—a hardly surprising fact. In recent years, however, Big Oil has reduced its greenhouse gas emissions, in what may come as a surprising fact about the dirtiest industry globally. The world’s five largest oil firms—ExxonMobil, Chevron, Royal Dutch Shell, BP, and Total—cut their combined emissions by 13 percent, starting from 2010 and ending in 2015, the latest year with available comprehensive data, a report by Bloomberg New Energy Finance (BNEF) released this week showed. BP cut its pollution the most, by 25.5 percent, while the largest polluter among listed companies—Exxon—reduced its emissions by 14 percent. The oil supermajors—excluding Chevron, which only started reporting emissions in 2012—reduced their combined greenhouse gas emissions by 56.7 million tons between 2010 and 2015, according to the BNEF report. The emissions reduction this decade is in stark contrast with the trends in previous decades, when […]

California cities sue big oil firms over climate change

California cities San Francisco and Oakland filed separate lawsuits against five oil companies on Wednesday seeking billions of dollars to protect against rising sea levels they blamed on climate change, according to public documents. The lawsuits, filed in state courts in San Francisco and Alameda Counties, alleged Chevron, ConocoPhillips, Exxon Mobil, BP, and Royal Dutch Shell, created a public nuisance and asked for funds to finance infrastructure to deal with rising sea levels. According to a press release by San Francisco city officials, the lawsuits mirror 1980s-era lawsuits against tobacco companies. They allege the oil giants “knowingly and recklessly created an ongoing public nuisance that is causing harm now and in the future risks catastrophic harm to human life and property.” “Chevron […]

Big Oil Becomes Greener With Cuts to Greenhouse Gas Pollution

Oil majors reduced emissions by 13% in past five years Emissions at non-energy companies fell while revenue climbed It’s no secret that oil majors are among the biggest corporate emitters of pollution. What may be surprising is that they’re reducing their greenhouse-gas footprints every year, actively participating in a trend that’s swept up most corporate behemoths. Sixty-two of the world’s 100 largest companies consistently cut their emissions on an annual basis between 2010 and 2015, with an overall 12 percent decline during that period, according to a report from Bloomberg New Energy Finance released ahead of its conference in London on Monday. The findings suggest the most polluting industries had started fighting climate change before President Donald Trump took office and signaled he’d back out of U.S. participation in the Paris accord on limiting fossil fuel emissions. Now, as European officials say the White House may water down its […]

Schlumberger’s Gamble Could Change Oilfield Services Forever

The world’s largest oilfield services firm has decided that it should take an ownership stake in upstream oil and gas production, rather than simply provide the services for doing so. The new strategy is being closely watched as a potential model for the major oilfield services companies that have drilling prowess but struggle with lackluster activity in a world of $50 oil. Schlumberger has decided to put billions of dollars on the line to become an oil producer, not just a drilling servicer. Typically, Schlumberger and its peers provide equipment, or seismic testing, or well casing and fracking services, or the analysis of oilfield data, etc., while their clients—oil producers—have ownership over the oil and ultimately sell it into the market. By buying ownership into oilfields, Schlumberger can have “a say in drilling decisions, oilfield management and even on hiring other Schlumberger units for service contracts, the company has […]

For ConocoPhillips, Harvey a test of remote operations

ConocoPhillips is still shut out of its global headquarters nearly two weeks after Tropical Storm Harvey slammed into Houston, so Chief Executive Ryan Lance and thousands of employees are running the world’s largest independent oil and natural gas producer remotely. Lance, whose own Houston home was flooded by Harvey, has 2,800 employees in the region working at home or at smaller offices in Dallas or Bartlesville, Oklahoma, overseeing natural gas trading along with operations in the Texas Eagle Ford shale region and the Gulf of Mexico. Many were moved out of Harvey’s path before the storm. “You can run virtually for a long time if you’ve got the right systems and personnel,” Lance told Reuters on Wednesday. Conoco’s headquarters in west Houston sustained minor flooding damage, but roads to the campus are still submerged under several feet of water. Another nearby ConocoPhillips office was flooded. “Like […]

Lower-For-Longer Drives Leadership Shift In Big Oil

When the Wall Street Journal last week reported that Chevron’s chief executive John Watson would step down, the most likely replacement as a “new leadership for a changing oil world” was thought to be vice chairman Michael Wirth. Wirth’s background in refining and his experience in cost efficiency improvement, according to unnamed sources from the company, had tipped the scales. According to a Goldman Sachs note to investors, Chevron’s move is the latest sign that the oil and gas industry is making cost discipline and improved returns a top priority. Following the WSJ’s report on the Chevron regime change, MarketWatch published an analysis in which author Claudia Assis noted that several other Big Oil companies are also headed by downstream exports rather than upstream vets like Rex Tillerson, for example. Tillerson himself was replaced by a downstream vet, Darren Woods, when he became Secretary of State. A look at […]

Chevron CEO John Watson to Step Down

Chevron Corp. CVX 0.55% Chief Executive John Watson is planning to step down as the energy giant seeks new leadership for a changing oil world, according to people familiar with the matter.  The transition is expected to be announced next month, although Mr. Watson’s successor hasn’t yet been finalized by the board and plans could change, the people said. Mr. Watson isn’t expected to depart immediately and is likely to remain after the announcement for an orderly transition, the people said.  His likely departure underscores the dramatic shift under way at big oil companies as they adapt to a prolonged period of lower prices brought about by the U.S. shale boom. While the companies once favored swashbuckling leaders who bet billions on megamergers and pricey projects in far-flung regions, many are now turning to executives adept at squeezing every last dollar from a barrel through refining, and shorter-term investments that turn a profit faster.

Goldman: $50 Oil More Profitable Than $100 Oil

Big international oil companies are currently generating more cash at around-US$50 oil price than they did when the price of oil exceeded US$100 in early 2014, Goldman Sachs reckons. “Simplification, standardization and deflation are repositioning the oil industry for better profitability and cash generation in the current environment than in 2013-14 when the oil price was above $100 a barrel,” Goldman Sachs analysts said in a research note on Wednesday, as quoted by Bloomberg . Cost cuts and refocusing strategies have allowed Big Oil to adapt to the lower-for-longer oil prices. At US$100 oil price, the majors were spending en masse on giant projects, but these mega projects are now coming online and are starting to produce oil, revenues, and cash, according to Goldman. At the same time, the big firms have slashed expenditure and costs since the price of oil started tumbling in the second half of 2014. […]

Big Oil Posts Healthy Profits

The largest U.S. energy companies reported robust earnings on Friday, continuing a quarter in which the world’s big oil firms have posted some of their strongest gains since a pronounced price crash began in 2014. Exxon Mobil Corp. nearly doubled its second-quarter profit compared with a year ago, to $3.35 billion, and Chevron Corp. jacked up its bottom line to $1.45 billion. The gains came even as oil prices fell again in…

Exxon Mobil profit disappoints Wall Street, Chevron shines

Exxon Mobil Corp (XOM.N) posted a rare earnings miss on Friday, the only international oil producer to do so last quarter, as production slipped in its African and Canadian operations. Exxon’s results were overshadowed by rival Chevron Corp (CVX.N), which easily exceeded Wall Street’s expectations with a double-digit percentage increase in production. Royal Dutch Shell Plc (RDSa.L), Total SA (TOTF.PA) and Statoil ASA (STL.OL) this week delivered profits that topped expectations also. Chevron for years has downplayed profits to spend heavily on megaprojects in Australia, the U.S. Gulf of Mexico and elsewhere. That spending now is boosting Chevron’s profit, whereas Exxon has fewer projects about to come online and many of its older assets require more capital to maintain. While profit rose sharply from a year earlier, the Irving, Texas-based company’s production slipped about 1.0 percent. “Exxon continues to really struggle on getting its output up,” […]

After false dawn, Big Oil to double down on cost cuts

After a brief respite at the start of the year, the world’s top oil and gas companies are set to double down on cost cutting as a recovery in crude prices after a three-year slump falters. Corporate hopes were raised by a deal between members of the Organization of Petroleum Exporting Countries and other non-OPEC producers to cut production, which lifted oil prices above $58 a barrel in January, after they had slid to as low as $27 in 2016. But Brent crude prices have since slipped back below $50 and banks have lowered price forecasts, amid surging output from the United States and other nations not bound by the global oil pact. Investors are again focusing on the ability of top oil firms such as Exxon Mobil (XOM.N), Royal Dutch Shell (RDSa.L) and Total (TOTF.PA) to live within their means and eke out profits when […]

Is Big Oil Betting On The Wrong Horse?

Many oil majors have steered their strategies and investments into natural gas, aiming to seize the projected global gas demand growth as the world shifts away from coal-fired power generation. Oil and gas supermajors are pitching natural gas as the ‘bridge fuel’ between coal and renewables, with the value proposition that even if it’s a fossil fuel, natural gas burns cleaner than coal and allows for stable power supply until storage solutions paves the way for renewables to become less intermittent. However, the cost of wind and solar is falling and is expected to drop sharply in the long term, and some analysts predict that there is not time enough for natural gas to assert itself as a true transition fuel before renewable energy takes over. Everyone agrees that natural gas demand will grow, but some analysts forecast that the growth may not be as high as it was […]

U.S. fines Exxon Mobil over Ukraine-related sanctions violations

The U.S. Treasury Department on Thursday announced a civil penalty against Exxon Mobil Corp (XOM.N) and its U.S. subsidiaries for violating sanctions regulations related to Ukraine in May 2014, fining the global oil company $2 million. Treasury’s Office of Foreign Assets Control (OFAC) found ExxonMobil had not voluntarily self-disclosed the violations, “and that the violations constitute an egregious case,” it said in a statement posted online. The heads of the company’s U.S. subsidiaries dealt with someone “whose property and interests in property were blocked, namely, by signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft OAO” and another sanctioned individual, Treasury said.

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.

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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 […]