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Suncor First-Quarter Profit Rises as Oil Prices Climb

Suncor Energy Inc. (SU) , Canada’s largest oil producer by market value, said first-quarter profit rose helped by higher crude prices and shipments of North American crude to the Gulf and Atlantic coasts. was C$1.49 billion ($1.35 billion), or $1.01 a share, compared with C$1.1 billion, or 72 cents, a year earlier, the Calgary-based company said today in a statement. Chief Executive Officer Steve Williams has focused on boosting earnings by canceling less profitable projects including the Voyageur upgrader and stepping back from a production target of 1 million barrels a day by 2020. The company has protected itself from more volatile Canadian crude prices during the past year with its refineries, which benefit from lower commodity prices. “Our integrated model combined with improved market access allowed us to maximize the value of every barrel we produced,” Williams said in the release. Average production was the equivalent of 545,300 […]

Posted On : Published By : Tom Whipple
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BP First-Quarter Profit Falls

BP PLC reported a fall in first-quarter profit as the energy giant continues to reshape itself in the aftermath of the Deepwater Horizon explosion and oil spill. BP’s production for the three months ended March 31 fell 8.5% to 2.13 million barrels of oil a day and the company warned that second-quarter production will be lower, mainly because of planned maintenance in the higher-margin North Sea and Gulf of Mexico regions. BP said underlying first-quarter replacement-cost profit, which strips out inventory gains or losses, fell to $3.23 billion, from $4.22 billion last year. Replacement-cost profit is similar to net profit, according to U.S. generally accepted accounting principles. Revenue slipped to $91.71 billion, from $94.11 billion a year earlier. Net profit was $3.53 billion, from $16.86 billion a year earlier, which was boosted by a $12.5 billion gain the sale of its stake in TNK-BP . BP increased its first-quarter […]

Posted On : Published By : Tom Whipple
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Global energy crunch: how different parts of the world would react to a peak oil scenario

Peak oil theory predicts that oil production will soon start a terminal decline. Most authors imply that no adequate alternate resource and technology will be available to replace oil as the backbone resource of industrial society. This article uses historical cases from countries that have gone through a similar experience as the best available analytical strategy to understand what will happen if the predictions of peak oil theorists are right. The author is not committed to a particular version of peak oil theory, but deems the issue important enough to explore how various parts of the world should be expected to react. From the historical record he is able to identify predatory militarism, totalitarian retrenchment,and socioeconomic adaptation as three possible trajectories The Stone Age came to an end not for a shortage of stones. The Coal Age came to an end not for a shortage of coal. But, contra […]

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Rosneft, Exxon to explore Russian arctic

Russian oil company Rosneft said it was moving ahead with a joint effort with Exxon Mobil to explore for hydrocarbons in the arctic waters of Russia. The board of directors said Monday they’d work to develop the Ust-Lensky reserve area in the northern Laptev Sea and the Severo-Vrangelevsky-1 in the Chukchi Sea in eastern Russia. Both sides would also explore parts of the Kara Sea under the terms of a joint venture operation, they said. Neither side offered a reserve estimated of the targeted areas. Changing weather patterns are leaving parts of the arctic ice-free for longer periods, giving energy companies a greater opportunity to explore frontier oil and natural gas basins. Environmental groups like Greenpeace have expressed concern about drilling campaigns in the pristine arctic environment. The environmental campaign group was critical during the weekend after it learned French energy company Total purchased […]

Posted On : Published By : Tom Whipple
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U.S. Drip-Feed of Sanctions Seen Risking Putin Backlash

The latest U.S. penalties against ’s inner circle may provoke the Russian president into escalating the Ukraine crisis without crippling key sectors of his nation’s economy. The sanctions imposed by the Obama administration yesterday on seven officials and 17 companies won’t go unanswered, Deputy Foreign Minister Sergei Ryabkov told Interfax. While markets showed relief as Russia ’s largest banks avoided U.S. measures, Putin may take this round personally, according to Konstantin Simonov, president of Russia’s National Energy Security Foundation. “Putin has been declared evil” and singled out personally by the U.S., Simonov said. “He won’t be able to respond economically, so he’ll retaliate politically. There will be escalation in the east of Ukraine and a new spiral of sanctions.” Warned by U.S. Secretary of State about making an “expensive mistake” in Ukraine, Putin has seen his approval rating at home soar to a six-year high after the seizure of […]

Posted On : Published By : Tom Whipple
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Exxon’s $900 Billion Arctic Prize at Risk After Ukraine

Exxon Mobil (XOM) Corp.’s dream of drilling in the Russian Arctic may risk running aground on the politics of Ukraine. The company plans to start drilling in August in the Arctic’s remote Kara Sea — the centerpiece of Exxon’s global alliance with Russian state-controlled OAO Rosneft. (ROSN) The partnership, which includes shale exploration in Siberia and joint venture fields in Texas , will come under greater scrutiny after the U.S. placed sanctions on Rosneft’s Chief Executive Officer Igor Sechin . “With Sechin being sanctioned it may complicate relations for Rosneft with western companies,” said Mattias Westman, who oversees about $3.3 billion in Russia assets as CEO of Prosperity Capital . “Maybe some transactions will be threatened as a result and perhaps Russia will counter and they will be less keen for American companies to work on Arctic projects.” Patrick McGinn, a spokesman for Exxon’s exploration arm, said on April […]

Posted On : Published By : Tom Whipple
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Sanctions on Rosneft's Sechin Muddy the Waters for Western Oil Majors

The U.S. Monday added Igor Sechin, a Putin ally and head of state-controlled oil giant , to its sanctions list, complicating the delicate dance U.S. and European energy giants have had to engage in amid the standoff between the West and Moscow. The most exposed company is U.K. oil company PLC, which has a 19.75% stake in Rosneft. Last year, it sold its stake in its previous Russian joint venture for $11.8 billion in cash plus shares in the state-controlled oil giant. Mr. Sechin owns 0.13% of Rosneft, making him the company’s third-largest shareholder after the Russian state and BP. BP also gained a seat on Rosneft’s nine-member board, currently held by BP Chief Executive Bob Dudley. Under the terms of the U.S. sanctions, BP wouldn’t be barred from dealing with Rosneft, though Mr Dudley, an American citizen, would be unable to have direct business dealings with Mr. Sechin. […]

Posted On : Published By : Tom Whipple
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Sanctions on Rosneft’s Sechin Muddy the Waters for Western Oil Majors

The U.S. Monday added Igor Sechin, a Putin ally and head of state-controlled oil giant , to its sanctions list, complicating the delicate dance U.S. and European energy giants have had to engage in amid the standoff between the West and Moscow. The most exposed company is U.K. oil company PLC, which has a 19.75% stake in Rosneft. Last year, it sold its stake in its previous Russian joint venture for $11.8 billion in cash plus shares in the state-controlled oil giant. Mr. Sechin owns 0.13% of Rosneft, making him the company’s third-largest shareholder after the Russian state and BP. BP also gained a seat on Rosneft’s nine-member board, currently held by BP Chief Executive Bob Dudley. Under the terms of the U.S. sanctions, BP wouldn’t be barred from dealing with Rosneft, though Mr Dudley, an American citizen, would be unable to have direct business dealings with Mr. Sechin. […]

Posted On : Published By : Tom Whipple
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The Gross Society

Seeing only its title, a prospective reader might guess this essay is about our nation’s epidemic of obesity. Or could it be a sarcastic observation on the evolution of Lyndon Johnson’s Great Society? Might it be a jeremiad about the gross (i.e., offensive and disgusting) ways we waste and over-consume natural resources, or a comment on current television trends? There’s plenty to be said on all those scores. No, the definition of gross I have in mind is “exclusive of deductions,” as in gross profits versus net profits. The profits we’ll be considering come in the forms not just of money but, more crucially, of energy. Sound boring? Well, you may be surprised. Here’s my thesis: As a society, we are entering the early stages of energy impoverishment. It’s hard to overstate just how serious a threat this is to every aspect of our current way of life. But […]

Posted On : Published By : Tom Whipple
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Quietly, America Takes 1 More Step to Becoming an Energy Export Superpower

America is fast becoming the world’s energy superpower. Thanks to shale production, it leads the world in natural gas production. By next year, the U.S. should pass both Russia and Saudi Arabia in oil production. On top of that, America is also a top producer of natural gas liquids like propane and ethane. Producing the most energy is just one step as America is looking to become a leader in exporting its energy riches across the world. While limited natural gas exports have been approved and oil exports remain banned, it has quietly become the world’s top exporter of propane thanks to Enterprise Products Partners (NYSE: EPD  ) . That title isn’t likely to be ceded anytime soon as competitors like Boardwalk Pipeline Partners (NYSE:  ) and Williams (NYSE: WMB  ) are teaming up to compete with Enterprise Products Partners to export America’s propane riches. That’s just the start […]

Posted On : Published By : Tom Whipple