Category:

Total’s First-Quarter Profit Slides 10% on Refining, Output

Total SA (FP) ’s first-quarter profit fell 10 percent as refining margins and output slumped at France ’s largest oil producer. Profit excluding changes in inventories dropped to $3.33 billion from $3.7 billion a year earlier, the Courbevoie, France-based company said today in a statement. The result compared with the $3.39 billion average of 10 analyst estimates compiled by Bloomberg. Production slid 6 percent to 2.179 million barrels of oil equivalent a day. Total declined 0.5 percent to 51.26 euros by 9:53 a.m. in Paris trading, paring gains for the year to 15 percent. The company follows BP Plc (BP/) and Italy ’s Eni SpA (ENI) in reporting lower first-quarter earnings. As the biggest refiner in western Europe , where it operates eight plants, Total has been hurt by lower crude-processing margins caused by overcapacity. Oil output fell after the loss of concessions in Abu Dhabi. Since the start […]

Posted On : Published By : Tom Whipple
Category:

Royal Dutch Shell Profit Falls on Refining Charge

Royal Dutch Shell PLC on Wednesday reported a fall in first-quarter profit after taking a $2.86 billion impairment charge largely on its refineries in Asia and Europe. The company also raised its dividend and said it is considering the sale of certain marketing assets in Norway. The results were the first for the oil giant under the leadership of Ben van Beurden, who took over as chief executive in January. "The impairments we have announced today in downstream reflect Shell’s updated views on the outlook for refining margins," Mr. van Beurden said. Shell first-quarter profit on a current cost of supplies basis—a figure that factors out the impact of inventories, making it equivalent to the net profit reported by U.S. oil companies—fell 44% to $4.47 billion. First-quarter revenue fell to $109.66 billion in the quarter, from $112.81 billion a year earlier, while net profit fell to $4.51 billion, compared […]

Posted On : Published By : Tom Whipple
Category:

Wrong Type of Ice Hampers the Northern Sea Route

Energy giants SA, Russia’s OAO Novatec and China National Petroleum Co. are investing $27 billion to develop Yamal LNG, one of the world’s biggest gas export facilities deep inside the Arctic Circle in western Siberia. Yamal, "the end of the earth," in the local Nenets language, will require building LNG tankers powerful enough to smash through heavy ice. But engineers still haven’t figured out how to evacuate crew from those tankers in an emergency—underscoring how some of the industry’s trickiest obstacles in the Arctic are also some of the most basic. As warming seas melt arctic ice, shipping executives have been exploring the prospect of more commercial voyages through once-impassable waters. One of the most promising new thoroughfares is the Northern Sea Route, a passage through one of Russia’s northernmost archipelagoes. During a few warm months of each year, the route is now increasingly passable to ship traffic. Traversing […]

Posted On : Published By : Tom Whipple
Category:

Russia Ships First Arctic Oil, Fortifies Oil Defenses

Riding on his pride in the first export of Russian Arctic oil earlier this month, President Vladimir Putin has signed a law that allows oil and gas corporations to establish private armed security forces to defend their infrastructure, upping the ante for protestors. On the same day, April 22, Earth Day, Putin also met with the Russian Security Council. There he said, “Oil and gas production facilities, loading terminals and pipelines should be reliably protected from terrorists and other potential threats. Nothing can be treated as trivia here.” Meeting of Russia’s Security Council on Arctic policy, The Kremlin, April 22, 2014 (Photo courtesy Presidential Press and Information Office) At the Russian Security Council meeting Putin detailed Russia’s Arctic policy, which includes strengthening military infrastructure in the region, “by restoring a number of airfields beyond the Arctic Circle and the military base on the New Siberian Islands.” Putin also said […]

Posted On : Published By : Tom Whipple
Category:

The Energy Independence Illusion

The roots of energy independence lie in the energy crises of the 1970s. US oil production peaked in 1970, and we became increasingly dependent on oil imported from the Middle East. In response to US support for Israel, OPEC cut production and doubled prices in 1973 and again in 1979. The economy stagnated for most of the decade, and Americans recoiled at the thought of the economy and foreign policy being held hostage by Arab sheiks. Independence from these threats then became a key national objective. An effort was made to increase domestic exploration, develop alternative fuels, and conserve energy. Automobile gas mileage standards were increased, natural gas displaced oil in industry and home heating, and the generation of electricity from oil was phased out. The Strategic Petroleum Reserve was put in place as a buffer against supply disruptions, and the Carter Doctrine in the wake of the Iranian […]

Posted On : Published By : Tom Whipple
Category:

Oil Seen Stable on Iraq Election Uncertainty as Bombs Mar Vote

Oil markets will see little lasting reaction to the uncertainty around Iraq ’s next government amid elections this week that are expected to yield no clear majority, according to analysts at IHS Inc. and JBC Energy GmbH. Prime Minister Nouri al-Maliki is banking on revenue from the highest crude production in 35 years to win him a third term in office when voting takes place tomorrow, even as Iraq struggles to improve security and upgrade roads, ports and housing for its 33 million people. At least 50 were killed in bombings yesterday, some targeting polling stations. “Unfortunately, violence in Iraq is not a shock to the market,” Jim Burkhard, head of Global Oil Markets at IHS Energy, said yesterday in Dubai. “Unless there’s a debilitating attack on oil infrastructure, it wouldn’t have a lasting impact on oil prices.” Maliki first took power in 2006 and after the next vote […]

Posted On : Published By : Tom Whipple
Category:

Brent Rebounds on Ukraine After Biggest Loss in Month

Brent crude rebounded amid additional U.S. sanctions against Russia over the Ukraine crisis, after dropping the most in almost a month yesterday. West Texas Intermediate advanced before fuel inventory data. Brent climbed as much as 0.5 percent after declining yesterday as Libya prepared to resume oil exports from the eastern port of Zueitina. The U.S. added seven individuals to its sanctions list yesterday, including the chief executive officer of OAO Rosneft, the state-run Russian oil company . U.S. crude supplies probably expanded by 1.1 million barrels last week while gasoline inventories dropped, according to a Bloomberg News survey before an Energy Information Administration report tomorrow. “The crisis in Ukraine continues to pose a major risk,” Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said in a report. “It has not led to any interruption in oil supplies yet and this leaves the market exposed […]

Posted On : Published By : Tom Whipple
Category:

Russia and Iran Reported in Talks on Energy Deal Worth Billions

The Obama administration’s strategy of punishing Russia with economic sanctions over the Ukraine crisis encountered a new complication on Monday with word that the Russians are negotiating an $8 billion to $10 billion energy deal with Iran, another country ostracized by American-led sanctions, which partly depend on Moscow’s cooperation to be effective. The Russia-Iran energy deal, reported by the Iranian state news media, is the second significant economic collaboration under negotiation between the two countries that could undercut the efficacy of the sanctions on Iran. Those sanctions are widely credited with successfully pressuring the Iranians in the current talks over their disputed nuclear program. Officials at the United States Treasury Department, which enforces economic sanctions against Iran, did not immediately respond to queries about whether the Russia-Iran energy deal would technically violate those sanctions, which prohibit dealings with a range of Iranian government entities and industries and penalize foreigners […]

Posted On : Published By : Tom Whipple
Category:

Iran Cancels $2.5 Billion Deal With Chinese Oil Company

Tehran said Tuesday it was canceling a $2.5 billion deal with China National Petroleum Corp. for the development of a giant Iranian oil field, as privileged ties between both nations face mounting challenges. China had stepped in after Western oil companies pulled out of Iran following a European ban on investing in the Islamic Republic. But an interim nuclear deal between Iran and six world powers has led the Islamic Republic to be more assertive toward Beijing, which some officials say has unduly taken advantage of international sanctions. Following repeated delays, "termination of the company’s South Azadegan oil field development project has been issued," Iran’s oil ministry website Shana quoted Roknoddin Javadi, the managing director of the National Iranian Oil Co., as saying. CNPC didn’t return a request for comment. —Wayne Ma in Beijing contributed t this article

Posted On : Published By : Tom Whipple
Category:

Iran decides to take Azadegan oil field back from China's CNPC: report

Tehran (Platts)–29Apr2014/455 am EDT/855 GMT Iran will remove China National Petroleum Corp from the major Azadegan oil field project due to "lack of commitment," oil ministry news service Shana reported Tuesday. This follows an order from the Iranian oil minister Bijan Zanganeh. The Chinese company inked the deal with Iran more than four years ago. "Following repeated verbal and written warnings and a written warning issued last winter, CNPC promised to move the project forward," Rokneddin Javadi, managing director of National Iranian Oil Company, was quoted as saying. "Even though one month extra was given to this company after the 90-day ultimatum, no effective work has been done by this contractor. Therefore, since this Chinese contractor did not fulfill its commitments during this period, the order to end the company’s contract in the development of South Azadegan will be issued," Javadi said. He stressed that the oil ministry did […]

Posted On : Published By : Tom Whipple